For Gen Z, asset protection might not be top of mind, but taking early steps can secure your financial future. Asset protection involves safeguarding your wealth from creditors, lawsuits, and financial risks. Starting now, even with small steps, can pay off as you build your financial foundation.
Staying Ahead of Financial Risks
Whether you’re a student, entrepreneur, or pushing through your first office job, the risk of legal challenges or financial setbacks is real. Starting a business, managing student debt, or facing unexpected life events can all put your assets at risk – regardless of their value. Using basic strategies like forming an LLC can shield your personal assets from all sorts of liabilities. This means if your new startup business faces a lawsuit, your personal property, like your car, remains safe. It’s like building a financial bubble around your personal wealth.
Why Starting Financial Planning Early is a Game Changer
Even small actions can go a long way in building financial resilience. Educating yourself about financial management – like setting up savings, an LLC, or retirement accounts (yes, we’ll get old one day, too) – helps prevent future setbacks. The earlier you start, the more options you’ll have down the road. In fact, studies show that individuals who start retirement planning in their twenties are more likely to reach their financial goals compared to those who wait (Financial Planning Association, 2023). So, starting early isn’t just about building savings; it’s about giving yourself more freedom later on.
Creating Wealth That Lasts for Generations
Asset protection isn’t just about securing your wealth today; it’s about building wealth for future generations. Protecting your assets now ensures that your family can inherit your wealth with minimal financial risk or tax burden. As experts from Fidelity note, tax-efficient wealth strategies can help preserve wealth for future generations, avoiding unnecessary tax liabilities (Fidelity, 2023). For example, in the U.S., the estate tax exemption is $13.99 million in 2025 (Internal Revenue Service, 2025). This means that if you build wealth wisely, you can pass it on to your family without them facing hefty taxes, so long as you take the right steps. By protecting your assets now, you’re setting your family up to thrive, even after you're gone.
While you can learn everything there is to know about protecting your assets, knowing the right answers won’t be enough. You need to practice good financial habits if you want to see results.
You’ve practiced other good habits, whether it’s brushing your teeth or making your bed every morning. Spending less money than you earn and allocating a portion of it to a savings account each month are financial equivalents of those habits. These are preliminary habits to set you up for success in the future – at the bare minimum, these are the things you should be doing. However, neither will protect you if you get in a car accident or face other major financial emergencies. If your assets are held in an LLC, though, you gain an extra layer of protection that can help shield you from personal liability in such situations.
2 Simple Steps to Kickstart Your Financial Journey
- Open a Retirement Fund: Roth IRAs let your money grow tax-free, and you can withdraw earnings tax-free in retirement if you follow the rules. Did I mention it’s tax-free?
- Form an LLC Holding Company: Shield your personal assets by holding investments, vehicles, or your new post-grad start up business under an LLC.