All of us want to be rich or in some way “wealthy”. Anyone can accumulate wealth to enjoy life and provide a good future for ourselves or our offspring, but not everyone can keep such wealth.
One of the biggest components of wealth management is wealth preservation. Here are some strategies for you to consider to help you keep your assets and estate protected from the different challenges you would encounter as you grow, accumulate and manage your wealth.
Beware and be aware of inflation - Inflation is the increase in the prices of goods and services over time. It increases the cost of living while it decreases the purchasing power of each unit of currency. This is something beyond our control but we can definitely mitigate it.
One way to mitigate this is to keep cash to a minimum. How? By investing most of the cash you gain while investing the rest (Say invest 80% while keep 20% for needs and emergencies). Of course, don’t forget to invest in the right assets depending on your risk tolerance and always conduct due diligence in your investments.
Minimize expenses - This is often overlooked because sometimes the costs seem low but when accumulated over time it has a massive impact and opportunity losses due to the amount spent from various expenses like vices (smoking, drinking), unnecessary items (items we can all live without like excess clothes, unused gadgets or even random items and the like), online purchases (just because there’s an online sale or book sale doesn’t mean you need it).
Get the right insurance coverage - Life is unpredictable and full of uncertainties. No matter how much we prepare we really have no control over any natural, man-made disasters that come our way.
Insure yourself with life insurance. This is to protect yourself, the one who produces the income. Illness or disability may also occur and this will greatly affect your finances as well. Aside from yourself, also insure your properties from the perils of fire and other calamities.
Minimize your tax - Specifically the estate tax liability upon one’s death. To do this, consider donating while you are still alive. Donation amounting to Php250,000 or less within the calendar year is exempted from donor’s tax. Of course, be careful of donating too much as well for you do not want to end up homeless or begging money from your heirs later on when you need some yourself.
Life insurance is also another tool to save on estate tax. Also, setting up a trust is a good tool for estate planning especially for those with minor children who do not have the capacity to manage their own finances. It is better to seek more details regarding this from financial planning, tax or legal professionals.
Tax amnesty is another option many are not aware of. However this is only available for a limited time as it is only available until June 16, 2021. This is for families that have properties titled in the name of deceased ancestors or relatives who died on or before December 31, 2017, whose estates have remained unsettled (under R.A. 11213).
Seek expert advice - Protecting your wealth requires multiple fields to consider as mentioned above such as taxation, finances, real estate considerations, legal and so forth. You have to seek expert advice from several fields to come up with a plan and execute accordingly.
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Iggy Go is a Public Speaker & Content Creator >> www.youtube.com/iggygo