Wealth protection or Asset protection what is the difference?
Wealth Protection may come with the question: What is wealth? The dictionary definition says it is an abundance of worldly possessions. I comprehend this as being rich (possessing great wealth), certainly more than money.
To comprehend the wealth protection will be easier if we study Napoleon Hill's ideas from his book "The Master-Key to Riches." To come to what to protect we need first to know what are:
The Twelve Riches of Life:
A positive mental attitude is the starting point of all riches;
Sound physical and consciousness health produced by a mind which thinks in term of health not illness;
Harmony in human relationships, harmony with others begins with one's self;
Freedom from Fear of poverty, criticism, ill health, loss of love, the loss of liberty, old age, death;
The Hope of achievement of some yet unattained desire;
The capacity for Faith the connecting link between the mind and the Infinite Intelligence;
Willingness to share, happiness comes only by sharing;
To be engaged in labor of Love the highest form of human expression of desire; (not greed, my knowledgeable comment you may ignore)
An open mind on all subjects. Tolerance is an attribute of culture and education;
Self-discipline. The person that do not master himself may never become master of anything;
The capacity of understanding people, because we all are alike and motivated by emotions and desires: love, sex, material gain, self-preservation, freedom of body and mind, self-expression, perpetuation of life after death, anger, fear;
Financial freedom is not attained by possession of money alone; it is attained by the service one does to society.
Now, we can choose what to protect, because we know better what it is to be wealthy. Wealth protection means to defend all 12 reaches of life.
Money are in the 12th position, and enjoyable only after doing a service to society!
Personally I am working on this list for some time now and I fill at peace with me more often.
What is Asset Protection?
Assets are all material and intangible possessions of value that an accountant can list on your Balance Sheet at the end of the year each year.
Now we come to the subject of how some bad people, trumps always want to separate you from your assets making it in their favor.
Have you ever heard about this Murphy's Lows?
"It is morally wrong to allow suckers to keep their money." or Murphy's golden rule: "Whoever has the gold makes the rules."
When I heard them first time I took them as jokes.
We all arrived candid in this world. By the time we get old we should become enlightened on how to protect against swindlers.
In real life, the people in retirement as a group are the biggest target for swindlers according to AARP magazine.
Does this statement alone protects better the retired? No, because the retired people take risks with their money when they should not. Living on fix income or the perspective of that, not the greed, is responsible for making them as a group a natural easy target.
When somebody is promising 30% return on your money and you trust that person, because a good friend recommendation, you are an easy pray too. Today I gave up to good recommendations also.
The greed, our greed is our number one enemy that sometimes shuts the light of rationality off. We end up making decisions based on emotions most of the time, but it should be different with our hard achieved assets. This is my point here.
Asset protection with one or multiple Limited Liability Companies?
The U.S. is the most litigious nation in the world. The business assets need to be protected from you or your family and lawsuits related to the business. Some prefer to carry $1 million to $5 millions umbrella policy insurance.
There are three basic considerations for determining the correct structure for your business:
Tax planning;
How big the company;
Asset protection needs;
The specialists recommend to asses your risk and your own risk tolerance, because people are different. Certainly on recommendation list are S-corporation, C corporations, limited partnership, or limited liability company.
Loop-Holes of the Rich
book by Diane Kennedy may help you better with you decision.
It is about time to think how to protect or optimize our portfolios and control inflation damages. Here are some ideas:
Control Inflation
Cash flow management and discipline can change debt into wealth
If currently you do not have this problem of protecting your assets and consider it is about time to built some wealth start saving for investing.
Having a system to payoff current debt and build new financial habits, managing personal finance better is what we all need at some point in our road to financial freedom.
