You've saved for years and accumulated quite a pile of wealth. Congratulations!
Now your main concern may be keeping it. High net worth clients say their biggest worry is holding on to that pile of cash.
You got some dough, what are some ways to protect it? Here are six you can take to the bank:
1. Umbrella Insurance
If you have wealth then you are definitely a target for a lawsuit. Think about it. Who sues the financially challenged person? Umbrella insurance can cover your home and automobiles. It can cover you if someone slips and falls on your property or if you have a car accident. Most property casualty insurances have limits. The umbrella policy will extend those limits and cover you for millions. So protect that wealth and get this policy.
2. Tax Planning
You've heard the saying, "it's not what you make, but what you keep", right? Taxes can be a big drain on wealth. Switch taxable investments to tax-free or tax-deferred investments. Keep portfolio turnover low, which causes capital gains. Make sure you have a wealth advisor that will work with you to limit your tax liability with your investments. Your accountant can be a big benefit here too. Why not get them both working for you as a team?
3. Pay Off Liabilities
The wealthy often leverage their money and other people's money. So if you are using debt as a tool that's fine. Just be sure you don't get too far in over your head. Pay off all that you owe as soon as you can. Debt can be a serious drain on wealth.
4. Invest Prudently
One of the best ways to grow your wealth is by investing. So how do you protect your wealth through investing? By creating more in the first place. The key is to take the right amount of risk. It's not necessary to be aggressive in every investment you make.
5. Beware Of Scams
If you are wealthy you'll be the target of scams and con artists. Particularly if you have new wealth from a sudden event. Remember Bernie Madoff? He didn't scam poor people. You need to carefully research any investment opportunity that comes your way. Watch out for investments that guarantee a return after a certain time frame. Rarely does any growth investment come with guarantees.
6. Watch Out For Overconfidence
You deserve your success if you managed to become wealthy. However, some wealthy individuals start to get overconfident in their wealth-building skills. They start to become overconfident and take bigger and bigger risks. Thinking you can always pick a winner can be detrimental to long-term wealth.
Keeping wealth can be just as much of a challenge as growing it in the first place. All of these are solid ideas you can implement today.
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