John Mickelson, founding partner of Wealth Advocates in Logan, Utah, has spent more than three decades helping retirees and small business owners coordinate retirement and estate planning strategies. A Chartered Financial Consultant and Advanced Estate Planner, Mickelson has led Wealth Advocates since 1995, drawing on an international finance degree from Brigham Young University and a graduate degree in financial services from The American College. His professional recognition includes two decades as a Million Dollar Round Table life member with multiple Top of the Table and Court of the Table honors, along with past leadership roles as president of the Cache Association of Insurance and Financial Professionals and the Estate Planning Council of Northern Utah. Away from the office, Mickelson stays active as a cyclist and tennis coach at Green Canyon High School, interests that mirror the discipline he brings to long-term financial planning.
Building long-term financial security involves more than earning income, saving consistently, and choosing investments with growth potential. It also requires identifying events that could disrupt financial progress and deciding how those risks should be reduced, transferred, accepted, or prepared for. Within a personal financial plan, risk management can help households protect important assets, absorb unexpected costs, and avoid having short-term shocks derail longer-term goals.
A practical first step in personal risk management is identifying events that could significantly affect household finances. These might include a loss of income, unexpected medical or property expenses, investment losses, disability, or the death of someone whose earnings support the household. Reviewing current income, regular expenses, debt obligations, available savings, and insurance coverage can help reveal which financial shocks would be hardest to absorb and where additional preparation may be useful.
Health, life, disability, homeowners, renters, and auto insurance can help protect individuals from financial losses that might otherwise be difficult to absorb. For families with dependents, life insurance may provide financial support if an income earner dies unexpectedly. Disability coverage can help replace part of a person’s income if an illness or injury prevents them from working.
Reviewing coverage periodically is important because insurance needs may change as families grow, assets increase, or financial obligations evolve.
Financial markets fluctuate, and investments offering greater potential returns often involve greater risk. Holding a large share of a portfolio in one company, industry, or narrow market segment can make losses in that area disproportionately damaging.
Diversification can reduce concentration risk by spreading investments among different holdings and, where appropriate, across asset classes, sectors, and other categories. It cannot prevent market losses, but it can reduce dependence on the performance of any single investment.
Investment risk should also be considered in relation to an investor’s time horizon and ability and willingness to tolerate losses. Someone investing for a goal several decades away may have more time to recover from market declines than someone who expects to need the money soon.
As the time to a financial goal shortens, a different asset mix may become appropriate, although the correct balance depends on the individual rather than age alone. Taking too little investment risk can also carry a cost because inflation can gradually reduce the purchasing power of money whose returns fail to keep pace with rising prices.
Debt management is equally important. High-interest debt can limit a household’s ability to save, invest, and respond to unexpected expenses.
Developing a repayment strategy, avoiding unnecessary borrowing, and maintaining manageable monthly obligations can strengthen financial resilience. Individuals should also consider how interest rate changes might affect variable-rate loans and whether their current debt levels remain sustainable if income decreases.
For business owners, risk management may involve additional considerations, including business continuity, liability protection, succession planning, and the separation of personal and business finances. A disruption to business operations can affect household income, retirement contributions, and long-term wealth accumulation. Preparing for these possibilities can help protect both the business and the owner’s personal financial future.
Estate planning provides another layer of protection by clarifying how assets should be managed or transferred in the event of death or incapacity. Wills, appropriate trusts, beneficiary designations, and powers of attorney can help ensure that financial arrangements reflect an individual’s intentions. Reviewing these documents after major life changes can prevent outdated instructions from creating unnecessary complications for loved ones.
About John Mickelson
John Mickelson is the founding partner of Wealth Advocates in Logan, Utah, a firm he has led since 1995 providing retirement, estate, and investment planning services to retirees and small business owners. A Chartered Financial Consultant and Advanced Estate Planner, he earned an international finance degree from Brigham Young University and a graduate degree from The American College. He has been a Million Dollar Round Table life member for 20 years and has served as president of two regional financial planning associations.