If you have been successful in making money, you may have only won half the battle. You can only win the other half of it if you succeed in preserving the wealth that you have earned over those harder working years.
Even though most of us are aware of the importance of preserving wealth, more than 50 percent of the articles that can be found on the internet are about making money.
It is perfectly understandable as saving money isn’t exactly a headline that can grab attention, but it is a topic which must be addressed nevertheless.
Following are some ways in which you can preserve your wealth:
Setting up SPE
It has become quite easy for a person to file a lawsuit against another irrespective of whether they have a good reason or not. Therefore it becomes important for you to protect yourself against liability.
SPE or SPV (special purpose vehicle) is an entity which you can form to minimise the risk of bankruptcy and isolate the financial risk while developing, owning and operating a special project.
It is advisable to have the businesses and properties that you own in their separate Single Purpose Entity as it offers another layer of protection. How the assets are held is crucial too. You must get in touch with a solicitor to get advice on what suits your circumstances the best.
Diversification spreads the risk factor across your portfolio. A certain percentage of your assets must be owned in the stock market which should diversified into several different channels such as emerging markets, bonds, tech stocks, fixed income, etc.
You must also own a percentage of your assets in cash. Having liquidity gives you the ability to take advantage of any opportunity that may present itself at a later stage. Real estate investments can also be a great way to hold assets in your portfolio.
Don’t Jump on the Bandwagon
The latest money making trends are fundamentally flawed in the sense that they do not have a history that you can look back at to gauge whether it will provide good returns in the future or not.
These money making techniques also attract a huge crowd of investors who are looking to make some quick money. If possible one must not invest in oversaturated investment vehicles as it is unlikely that every investor will make profits.
Insuring your assets is perhaps the most important bit of advice that one can give you when it comes to preserving your wealth. It is common for business professionals to be not insured or underinsured for the different catastrophes that may strike such as high winds, hail, hurricanes, flooding, etc. Having a reputable and experienced insurance broker can help you find policies that are best suited for your circumstances.
Finding a good CPA
Accountants are often the best people to turn to if you wish to save some money. Tax advisers are generally up-to-date with changes in tax laws and can find legal ways to reduce the tax bills that you owe to the HMRC.
The accountant you work with should be credible and also somebody who has a good reputation. Trying to hide money from authorities or getting bad tax advice can be a counter productive effort to preserve wealth.
Seeking good Legal Advice
Good legal advice can go a long way when it comes to preserving your wealth. As you begin to earn more, you also become a target and this necessitates protection of your assets against prospective predators.
Having a solicitor who can review your business contracts can minimise the possibility of conflict. If a dispute arises you must always ask the solicitor before taking any action that you may regret later.
Estate Plan and Trust
Planning your estate is extremely important and it is a task for which you may need the assistance of a solicitor who specialises in estate planning. Putting in place a family trust and writing a Will using a free Will kit can be important for several reasons and these include asset protection, providing for your family, supporting your favourite cause, availing tax benefits, ensuring that your legacy is rightfully distributed after your death and many more.