Avoiding the Upset: How to Preserve Your Wealth from Unexpected Events

Eric Berner

By 

Eric Berner

Published 

Apr 1, 2025

Avoiding the Upset: How to Preserve Your Wealth from Unexpected Events

Life is like basketball in March—full of surprises! Just when you think you have a winning bracket, an upset can change everything. The question is: Is your financial game plan ready for the unexpected? Whether it’s a sudden job loss, medical emergency, market downturn, or even an unforeseen family crisis, financial security can quickly feel like it’s slipping away. The good news? With the right planning, you can shield your wealth from these surprises and stay on solid financial ground.

As a financial planner working with families in Middle Tennessee, I often hear concerns about how to safeguard hard-earned savings from life’s uncertainties. Here are some key strategies to help preserve your wealth, no matter what comes your way.

1. Build a Strong Emergency Fund

A well-funded emergency savings account is your first line of defense against unexpected financial stress. Ideally, aim for three to six months’ worth of living expenses in a high-yield savings account. This safety net ensures you won’t have to dip into investments or take on high-interest debt when life throws a curveball.

2. Get the Right Insurance Coverage

Insurance is one of the most effective tools for managing financial risk. Make sure you have:

· Health Insurance: To cover unexpected medical bills and avoid significant financial strain.

· Life Insurance: Especially important for families, this protects your loved ones financially in case something happens to you.

· Disability Insurance: If an illness or injury prevents you from working, this policy replaces lost income.

3. Diversify Your Investments

A diversified investment portfolio can help mitigate risk during market fluctuations. Instead of putting all your assets into one type of investment, spread them across different asset classes such as stocks, bonds, real estate, and alternative investments. This way, if one area takes a hit, the others can help balance out your overall portfolio.

4. Have a Solid Estate Plan

An estate plan isn’t just for the wealthy—it’s essential for anyone who wants to protect their family’s financial future. A will, trust, and proper beneficiary designations ensure your assets are distributed according to your wishes and not tied up in legal battles. Powers of attorney and healthcare directives also ensure your financial and medical decisions are handled as you’d like if you become unable to make them yourself.

5. Stay on Top of Debt Management

High-interest debt can quickly erode wealth, especially during financial hardship. Prioritize paying down credit card balances and other costly debts while maintaining a manageable level of good debt, such as a mortgage. Consider refinancing options to reduce interest rates and free up cash flow if needed.

6. Plan for Taxes

Unexpected tax bills can put a dent in your finances. Work with a financial planner and a tax professional to implement strategies such as tax-efficient investing, maximizing retirement contributions, and leveraging deductions and credits to minimize your tax burden.

7. Regularly Review and Update Your Financial Plan

Life changes—so should your financial plan. Marriage, children, career shifts, and economic conditions all impact your wealth strategy. Conduct regular check-ins with a financial professional to ensure your plan remains aligned with your goals and current circumstances.

By proactively preparing for life’s uncertainties, you can turn potential financial upsets into manageable situations. With the right financial safeguards in place, you’ll have the confidence and independence to navigate whatever comes your way.

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. Investing involves risks including possible loss of principal.

Alternative investments may not be suitable for all investors and should be considered as an investment for the risk capital portion of the investor’s portfolio. The strategies employed in the management of alternative investments may accelerate the velocity of potential losses.

There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.

Rock Castle Wealth Advisors and LPL Financial do not provide legal advice or tax services. Please consult your legal advisor or tax advisor regarding your specific situation.

Email Eric here or visit his website.

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