Wealth Watch: 6 Effective ways of leveraging your Assets’ risks

José Santiago Worldwide Asset Protection Specialist

José Santiago
Worldwide Asset Protection Specialist

By José Santiago

It does not matter how much money you have earned during your lifetime, what matters is how much you managed to save for your own benefit and the benefit of your loved ones.

There is no RICH NATION with POOR CITIZENS! OUR FUTURE OUR CHOICE…

Once you have identified all risks involved in your assets, what to do?

During our journey so far, we have spoken about assets, types of assets, and different levels of risks associates with them; emotional and financial consequences they can have in a family if we are not careful enough to do what is necessary for our own benefit. Our children should be able to get a straight and fair answer once they ask the question. On our side we should be fair to answer consistently and robustly that all have been taken care of, so they should not worry.

Let’s remind ourselves again what asset is:

Asset – A resource with economic value that an individual, corporation or country owns or controls with the expectation that it will provide future benefit. The 2 types of assets are: tangible we can touch and feel and intangible which we might feel but not touch.

It is a known fact that wealth and wellbeing passed through generations have been considerable advantage in the world of capitalism we live in. Again we cannot complain about our bad luck if we do not take proper steps to protect ourselves and our children.  Our countries are known to have considerable wealth but when we drill down to individuals, families and businesses the spectrum is depressing. SO, what is missing?

Let’s look into major ways of assuring our assets are protected:

1.    Strategic and financial planning – these two tools are the most powerful weapons in protecting your assets. Why? Simply because they give you a snapshot of where you are now and where you are heading. They give you sense of direction, starting from your current position.

They are in fact a compass of your financial and professional wellbeing. In fact, there are not truly successful individuals or companies without strategic planning. You may have lottery winners, skillful athletes or similar, but these are short lived and what we can call “flash in a pan”.

Even for them to succeed they have to have a plan, for short, medium and long term. Having a plan requires you have a benchmark to make sure you gauge your progress or not. For a proper strategic and financial plan be put in place you require an experienced, knowledgeable professional to help you.

2.    TaxPlanning – some countries have higher taxes than others however if you want to accumulate wealth you need to plan for your taxes liabilities. Taxes have two facets: the first one it is source of income/revenue of the estate, so in a sense it is an asset for them. The other facet is liability for us, tax payers. The good thing about tax with a proper use it funds infrastructures (schools, hospitals, roads, etc.) that all of us require to have a successful lives or business. If we think about it, dependence on foreign donation is unsustainable, so maybe the best thing is for all of us create and maintain wealth so then we can contribute to development and wellbeing of our own soil.

3.    Protection – take life and critical illness insurance, because in case you die or if you suffer from cancer, stoke, loss of a limb the insurance company would either pay you (critical illness) or your family in order to avoid financial loss add to emotional loss. Many times unfortunately we overlook at this (again, because we believe that it will never happen to us, only to the neighbour) and the consequences are we become a “burden” to the entire family who have lost in all sense of the word. Why taking a risk? Why do you insure your car? Is your car more valuable to you than your life? What do you think your children will say? Think! Take the necessary care. Consider also your asset protection in business against creditors, bad faith partners, etc.

4.    Succession planning for your family and your business. Create a robust structure to secure your assets, no matter political or economic situation, your children’s future is guaranteed, no matter what happens. Make sure it is flexible enough to allow you increase or decrease, transfer or lock the amount or size or type of assets. Take a professional advice: truly wealth manager and I don’t mean a banker.

5.    Estate planning – make sure you define who gets what and when, once you have gone. It is nice to support the wider family however your prime responsibility is your children and wife. They should be secured first before you consider other members of your extended family. Yes, I know, I know, my brother needs me, my cousin also, etc. however so far the culture of dependency is hindering our progress. It is preventing us from going and getting it instead we sit and rely on scramble of a relative. Think!

6.    Diversification – make sure you do not put all your eggs in one single basket. If you do, and been lucky up to now, be careful because in a stroke you may be in serious trouble.

As a final note, GROW your assets as the only way to guarantee its protection. Invest rather than spend. By investing I mean, apply your money or wealth in things with appreciating value, not depreciating value. Depreciating value like cars and similar should only constitute a small percentage of your wealth value.

What should be the ideal distribution of your assets, best worldwide asset protection techniques used? Want to know, ask the editor…

Have you done all of the above? If not, do something today,

To be continued …. Next is: African Businesses… Value or Handicaps?

Want to know more? Just ask! Email: editor@zambianeye.com