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Lesson 2: The 5 Building Blocks of Finance
📺 Recommended Video Resource
Watch IMG Educator Dr. Jaime Lorenzo explain how to properly build a solid financial house using the 5 building blocks of finance:
Click the image above to watch the video on YouTube: Money Tips: 6 Steps para Umasenso I IMG Financial Coaching
Welcome to Lesson 2. To build a solid financial house, you must build from the ground up to ensure it withstands unexpected storms.
The 5 Building Blocks
1. 🛡️ Healthcare
- Foundation: A medical emergency can wipe out your savings instantly. Secure reliable short-term and long-term healthcare first.
2. 👥 Income Protection (Life Insurance)
- Protection: If you are the breadwinner, your family depends on your income. Insurance ensures your loved ones are covered if you disappear too soon.
3. 📉 Debt Management
- Control: High-interest bad debt is like a leak in your boat. Eliminate it to free up cash flow for building wealth.
4. 💰 Emergency Fund
- Cushion: Save 3 to 6 months of expenses in an accessible account so you never have to borrow money for unexpected emergencies.
5. 📈 Investments
- The Roof: Once your foundation is safe, invest surplus funds into mutual funds or stocks to outpace inflation and grow wealth.