Protect Your King, Protect Your Assets

The goal in chess is to capture your opponent’s king before your opponent can capture yours. So what’s more important, moves that hunt down your opponent’s king, or moves that protect your king? Well, they’re both important, which brings us to today’s topic–castling. In chess, you must protect your king, which is most often accomplished through castling. As with chess, you must also protect your assets in the game of life. Well come back to that in a minute, but let’s first take a look at castling, which may involve more than you think.

Castling is the only time in chess when you get to move two pieces in one move. Here is what castling looks like. From this position,

White can castle by moving his king two squares to the right (g1) and his rook three squares the the left (f1):

Now, there are several rules to castling that you might not be aware of, such as:

  • A player can castle either king-side or queen-side (called long castling). The diagram above shows king-side castling. To long-castle with the White pieces, a player would move the king to c1 and the rook to d1.
  • A player cannot castle if he or she has already moved the king or the rook on the side they want to castle.
  • A player cannot castle if their king is in check.
  • A player cannot castle if any of the squares the king would cross over to castle are under fire by an enemy piece.
  • A player must move the king first (not the rook) when castling. Tournament chess uses the “touch rule,” meaning that once you touch a piece, you must move it. Touching the rook first indicates you only plan to move the rook, even if castling was your intention.

Now what does all of this have to do with finances? It underscores the importance of protecting your assets. And just like there are more rules to castling than you might have realized, there are many rules when it comes to protecting your finances. Here are several questions to ask yourself to see just how safe your finances are:

  • Do you have a will? A will is important for many reasons. It determines the disposition of your assets and the guardian of your children, among other things.
  • Do you have life insurance? Particularly if your family will need to replace your income, life insurance will protect those you love should you get checkmated (so to speak). I have term life insurance and pay the premiums annually because it reduces my rate. I believe that 10x my salary is the minimum for me, particularly because we have young children.
  • Are your investments well diversified? Putting all your eggs in one basket is a recipe for disaster. Holding too much of your company’s stock puts you at a double risk. If the company folds, you lose your job and your investments all at once.
  • Do you have adequate property and car insurance? Quick, what’s your deductible per incident for bodily injury on your car insurance? If you don’t know, maybe it’s time to look at the semi-annual statement your insurance company sends you. Buying the minimum insurance to comply with state laws can leave you exposed to significant liability in case of an accident.
  • Do you have an umbrella if it rains? A $1 million umbrella insurance policy costs me less than $200 per year. It provides piggy-back insurance on top of my auto and home insurance to protect us in case of a major problem. I hope I’ll never need it, but it’s comforting to know it’s there just in case.

Some folks, particularly the younger generations, think they don’t need all this protection. Some great chess players have often thought the same thing about their king, and had to learn the hard way. Our last chess puzzle of the week involves just that, a great chess player who didn’t protect his king. See if you can find the best move for White (it isn’t easy). And as a bonus, can you identify the players and circumstances of this game? (Hint: The player with the black pieces was not just playing for himself; he was playing for all of mankind.) Here is the position:

Good luck, and I’ll post the answers to this week’s chess combinations tomorrow.

Topics: Personal Finance

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