Wealth Watch: 28 Assets biggest enemies

José Santiago Worldwide Asset Protection Specialist

José Santiago
Worldwide Asset Protection Specialist

Part 3

By José Santiago

Did you know that the assets you have today you may not have it tomorrow, if you don’t take care of it today?

28 Biggest Risks to your assets. How protected are you against each and everyone of these risks?

Answers you must have ready for your children and spouse.

As we saw before there are two major types of assets: tangible and intangible. Again the major difference between them is that intangible assets are hardly (if not impossible) replaceable by money and by the same token quite hard to value.

Have this in mind we tend to talk most of the time in term of tangible assets. And this is where our focus is going to be when we refer to “risks to your assets”.

There might be far more than 28 however these are what I have identified and consider to be the major ones. We will be delighted if you kindly are able to point out any other event which could be considered asset risk.

Here they are:

1.    Tax – in countries where there taxes like income tax, property taxes, capital gain taxes, inheritance taxes, etc – bad or no tax planning can have sever negative consequences to your assets or to assets allocated to your loved ones.

2.    Inflation – is rise in price of goods and services over time; inflation is necessary in a capitalist economy however hyperinflation has a devastating effect on your asset pricing

3.    Death – many families rely on single or two breadwinners; death of one or both has negative consequences particularly if there are debt and no life insurance to cover the liability. Also loss of life can bring about family disintegration and with it the negative consequences in asset pricing.

4.    Sickness & Accident – long term sickness again can cause family income to be stopped and worse drain any savings towards treatment and maintenance of the sick.

5.    Family break up – can cause the asset disintegration for instance where there is a family business or joint assets. Family feud could be the main cause, but the asset always suffers.

6.    Creditors – high level of debt and lack of liquidity (cash) can cause creditors to demand forced sales meaning the right price may not be achieved.

7.    Succession planning – if you fail to do it or if done poorly then the next generation in many occasions squander the entire value or most of it.

8.    Estate planning – you need to know what you have, how to properly plan its transfer to beneficiaries and taking into considerations all factions including taxes to be paid

9.    Interest rates – particularly where the inflation is high the interest rate tend to follow, meaning the cost of money is high and for geared assets like mortgaged houses, loans, debts, just make the cost of servicing impossible to sustain.

10.    Market volatility – volatility is required in a competitive market however too volatile it, hurts is your assets as well as the economy.

11.    Currency exchange – if your transaction are done in foreign currencies or based in a foreign currency jurisdiction.

12.    Country laws – when a country is unstable there are constant changes and variation of laws but also in stable countries many times government bring about laws which can negatively affect your assets. For example: law to tax properties.

13.    Political instability – this affects the pricing many times in a way where there is less demand to the asset consequently drive down the price.

14.    War and civil unrest – Has the same effect as #13 above plus the added consequence of possible destruction.

To be continued … 28 Biggest Assets Enemies….

José Santiago BSc, BA (Hon), MIoD, ACSI, ICWM a Worldwide Asset Protection Specialist

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