Today’s blog is meant to stimulate the thoughts of readers to take a wholistic view on building their wealth and finance. As we live in a flex society, one where people pride on displaying their financial success by posting pictures on social media, displaying the new cars, expensive jewelry, large checks, it is a known fact that we enjoy earning money. Why wouldn’t we? Even for the modest person who is financially free and have built a formidable nest egg for themselves and their family, they still desire more income. The generic population’s motivation to earning money might be different, but the goal of a better life, family vacation, or just providing more for your children and family are all common. As we earn more, buy more, and spend more, we must take a moment to talk about wealth preservation.
Studies show that the average person works a job thirty-four hours per week. This equates to one thousand, seven hundred sixty-eight hours per year. When you consider why most people work, their goal is usually to earn income to support themselves, family, or others. With the average person entering the workplace at around 16 years of age and retiring around 66 years of age, that totals to about fifty years of work and eighty-eight thousand, four hundred hours traded for hard earned dollars. But, to what end are these hours invested?
Some people would say it is the way of life, you work to earn money and survive. Other folks submit to the school of thought that eventually the goal is to stop solely trading time for money and to start building wealth. In 2022, more than ever you’re finding individuals with multiple streams of income. People would have their standard 9-5 job and find other ways to supplement their income. It is becoming the norm to have multiple streams of income, whether that’s investing in stocks, bonds, real estate, cryptocurrency, or starting a business. With rising inflation and the average cost of living in places like Florida increasing to $43,615 per year, having one stream of income just isn’t enough anymore.
With the focus geared totally on growing wealth and adding assets to the portfolio over time, many people have lost sight on taking the necessary steps to safeguard that wealth so they don’t lose money in a litigious society. One of the main keys to financial success is wealth preservation. As Asset Protection Attorney, Hillel L. Presser says, “for every 60 minutes you spend making money, spend 60 seconds thinking about how to protect it”. One must ask, what am I doing to protect my wealth? The reasonable person doesn’t work fifty years earning a W-2 income or build lucrative businesses only to see it vanish. With one frivolous lawsuit, one’s financial legacy could dwindle into ashes for failure to implement proper planning. After all the hard work, establishing systems and processes to build wealth, you want to see your assets and values passed to the people you care about. If you’re building wealth, you must preserve it. The preservation of wealth becomes part of your legacy for generations to come.
Success always leaves clues. When evaluating the footprints of wealthy people throughout history, you find that there are principles that guarantees the safety of your wealth. These principles should be religiously followed and incorporated in your wealth planning. The first step to wealth preservation is to take charge and to do it early. You must be intentional about what you are doing with every dollar you earn. You don’t purchase insurance after you’ve gotten into a car accident, you do it before. Therefore, you don’t start educating yourself about the methodologies to wealth preservation once you have accumulated millions, you do it as you earn every dollar.
By starting early, as time evolves with you making an intentional effort to continuously educate yourself, you will exhibit the necessary core values of knowing what to do, how to do it, and when to do it. Such discipline will allow you to not only have the prerequisite knowledge but also the ability to pass the knowledge down to your family. Nothing is worse than having a tool but not knowing how to use it. Take charge of your family’s financial future. Building a financial empire is great but what happens next when your family knows nothing on how to properly maintain the empire — it comes tumbling down. So, consider what you can do today to begin educating yourself and take charge in preserving your wealth.
In addition to starting early, you must align your family and business interests around wealth- building allies. To align means to consult the proper experts and surround yourself with a team. This team should consists of experts who can advise and guide you to not only continue building but ensure the proper foundation is built to withstand all storms that can come in the form of judgment creditors, divorce, tenant injury, or disgruntled business partners. Often, the first thought to wealth preservation is estate planning. While estate planning is important for passing the baton, it does not carry with it the guarantee of protection. A fully integrated estate and Asset Protection planning is the key to safeguarding and passing down wealth. An athlete signs a contract worth millions of dollars and the first person they provide their bank account number and routing number to is their financial advisor. Financial advisors are important in building and multiplying your wealth but not as effective when it comes to knowing how to protect and preserve your wealth. It is important to have a team.
Even though experts will advise and guide, the ultimate decision maker is you. You cannot be reckless with management. This would be the next principle. Poor management will only leave you vulnerable, susceptible to lawsuits, and potentially allow creditors to pierce the corporate veil. Ignorance is not a defense and juries won’t sympathize if you willingly open your doors to a thief who robs you of your life’s legacy. A culture of accountability is of upmost importance to prevent a catastrophe. As you began implementing the protection walls by setting up companies, bank accounts, and trust agreements, proper management is necessary. Remembering to maintain practices like transferring money from the proper account, renewing company annual reports, funding business accounts, and never commingling are few of the management habits that must be incessant.
Here’s a summary of 4 simple steps of growing and preserving your wealth:
Step 1: Educate yourself and your family. Step 2: Have the right team.
Step 3: Manage properly.
Step 4: Continue building.
If you want to be remembered for more than the dollar per hour you earned, you must start thinking strategically about preserving your wealth. Many people I’ve come across with a lot of wealth didn’t start off that way. As they started from a net worth of zero and learned how to earn money, they simultaneously inhabited the principles of a wealth builder. Whether you have millions in the bank or just a couple thousand dollars, what do you have to lose? It hurts more to lose a lot when you have little then it does to lose a lot when you have plenty. Build the security you need to ensure the preservation of your wealth for generations to come.
If you’re still reading, it is clear that you are ready to have us on your team. At The Presser Law Firm, P.A. we specialize in building the best infrastructure to house our clients’ assets. Tailored to each individual’s goals, we can guide you and make your assets resistant to creditor claims. The Presser Law Firm, P.A. can be the architect to your wealth protection.