Insurance is not one of the discretionary items your stealthy wealthy friend has cut back on. It doesn't do you much good to diligently work at getting rich slowly only to lose it all to illness, disability or someone tripping over the rosebushes at the end of your front walk.
Disability insurance above and beyond what might be available from your employer will ensure that your earnings don't take a hit if you become too ill or injured to work. And as your tangible and liquid assets grow thanks to your smart investing and everyday savings, a personal liability umbrella policy that extends the coverage of your auto and homeowner's insurance will protect you from the legal fees (and potential judgments) of a civil lawsuit.
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