How do you Protect your Wealth Properly?
When you have significant wealth, you have a lot more options to protect it while still building more
The first thing most advisors will mention outright in a risk management setting in insurance, and they aren’t wrong, but it’s more nuanced than that. Insurance is straightforward, proven and easy to apply. True risk management is a much broader topic landscape than an insurance product. Risk management for vast wealth also usually requires several trusted advisors, or a team of people. At minimum, you need access to risk management professionals that have true experience. If your wealth is beyond a couple million dollars, it is generally very important to have risk management tools and planning in place. These risk management tools and techniques may include insurance, spread risk planning, specialized tax treatment, and legal entity formation, among other concepts. It may also include things like futures and options trading; risk hedging and depending on the correlation or integration into your business endeavors, it may include a lot of human capital and custom built platforms and protocols that can help build specialty risk management options for your unique needs.
Additionally, every case is different, and in the USA, for example regulations change and vary form time to time and locale to locale. Having the mindset that risk management is an absolute must-have for your wealth above the estate planning threshold (and often far below it), is the best way to approach the concept initially. We have a lot of content about risk management and we work with trusted advisors that help affluent individuals build strong risk management programs.
You’ve built generational wealth – now it’s time to protect it
Clicking one of these buttons will take you to a page that highlights wealth protection concepts.
I’m Interested in Risk Management Techniques
I don’t want to lose my Wealth – What to do
Some more about Protecting Wealth:
Protecting wealth, once you have it, is perhaps the most important part of the entire Generational Wealth concept. Many people come into wealth unexpectedly – or at least have not had adequate time to protect that wealth while it was being created – at least not to the point where it is truly protected. This could mean that they are a business owner and built a successful business that had a few years of intense growth, and now they have to take time and thought to begin to protect it. It could be a windfall, or inheritance. It could be a smart play in the stock market, or an opportunity that turned out to grow exponentially. Even those who are building wealth for decades may not be sufficiently protected. And that risk management and protection may not be as clearcut as it seems. It’s not jsut about buying more bonds to diversify your securities portfolio so you aren’t at risk of losing a lot off the top in a market downturn. It’s not just about buying an insurance product to ensure that you have coverage against the unexpected. It may not even mean that you can rest easy if you have a lot of planning in place already. Risk evolves and things change, and periodic review of your risk management planning is important. You maybe hedging against levered positions on stock equities through futures or options. You may be preparing your estate transition planning using insurance products. You may be divesting of a business through an installment sale, or any number of other concerns that require a more holistic approach. That’s why this is such an important part: It’s broad and deep, and you need to know what’s out there.
Please be sure to note our disclaimer: This is not Investment Advice, we are not your Advisor.
The Components of Building Generational Wealth
CREATING WEALTH
AMASSING WEALTH
PROTECTING WEALTH
TRANSFERRING WEALTH
Some interesting concepts about Protection of Wealth:
You’re good at building wealth – but are you good at Keeping it?
How to build a team of dedicated trusted advisors
What’s a family office – is it applicable to me?
Risk management overview from a securities perspective
Hedging for market conditions, changes in mindset or specific goals
How to the big companies and endowments hedge against wealth deterioration?
Getting a seat at the table for change using your wealth
Teaching the next generation how to protect the wealth you’ve built
Optimal asset allocations to protect your wealth
Why every plan is bespoke when you’re talking about protection of large amounts of wealth
Building a Moat around your wealth to ensure it lasts for many generations
Important Financial Aspects of Generational Wealth
Business
Strategic Planning
Insurance
Taxation
Frequently Asked Questions about Protection of Wealth and Broad Risk Management
How can I trust that a team of advisors has my best interests in mind?
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How can I hedge against risk in my existing asset base?
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If my wealth is diversified how do I address risk on all facets of it?
The shortest answer is an emphatic YES! You’re not going to risk all that time and effort, and money that you built up over the years by cutting corners with your planning – it’s just not that smart. That said, it can be annoying to pay such high fees to specialty strategists, lawyers, accountants and other professional services people. We think you’d be better off if you plan early, to get ready for your wealth transfer strategy – long before you have to spend the money on legal entities, advice and taxes to ensure your goals are met. We’ve got a page that talks about wealth transfer teams, and what you should be looking for when it comes to hiring professional advisors.