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Protect My Principal


Subject: A Request for Your Assistance

There are a variety of ways to protect your principal. I have found the best way to start with is asking my clients the question what is your income and what are your expenses. How much money do you need to put into a principal protected investment to cover your fixed expenses. These questions help us to determine how much is enough and how much is too much to put into a principal protected investment. Then we are able to lock up the proper amount for meeting your expenses for a longer period of time. For example, if you had $2 million at 5% interest you invest in a principal protected investment you would earn $100K a year. If your expenses were only $50K you would only need to lock up 1 million into the investment leaving you with another million for other options. But we need to be cautious! Uncertainty, emergencies and unexpected life situation often get in the way. When that happens, we need what we call in the business “liquidity” or with other words access to ready cash without penalties or fees. 

An emergency by definition is something that unknown and unexpected otherwise it wouldn’t be called an emergency. That being said there’s a variety of features available to all clients depending upon your investment objectives that would protect your principal. When we talk about protecting your principal, I’m referring to how to assure the principal. Is there someone or something, or an entity that is offering some sort of assurance that the principal would be returned. For example, there are life insurance companies that provide investment options like annuities. There are also US treasuries that are bonds issued by the federal government, and they have the assurance of the full faith and credit of the United States government. Further there are municipal bonds and behind them insurers that ensure a municipal bond against default. In other words, if the bond does not pay the insurance company assures uninterrupted interest payment and the face value of the bond. In addition to all these there are your every day, checking and savings accounts and CDs as well that will protect your principal through the Bank being insured by the FDIC. Also called Federal Deposit Insurance Corporation which covers our bank accounts up to $250K. Consequently, as you can see there is a variety of ways to protect your principal.


Please click below and add your name for more information and/or schedule an appointment with me at my Palo Alto office if you wish to learn more about all the options available to you.

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