EP194: Wealth Earned & Protected: Asset Secured
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▶️ Imagine laboring through the prime years of your life, meticulously building wealth brick by brick, only to witness it crumble to nothing due to unforeseen circumstances and poor planning.
This is not just a hypothetical scenario, but a stark reality that many individuals grapple with.
But fret not‼️
With the savvy insights we’re about to drop, you’ll not only shield your hard-earned wealth from disappearing acts but also fortify it, turning potential loss into unshakeable financial confidence.
But first, a little housekeeping. 🤓🤓
Look, we know some of you out there are legal eagles, and that’s awesome. So please understand that we could never pretend to be lawyers or legal subject matter experts of any kind. Far from it!
So while we are here to share and discuss what’s worked for us, always consult with a professional who DOES have that subject matter expertise.
〰️ Okay, so now that our disclaimers are out of the way, let’s start having some fun!
Today we want to talk about the unexpected twists and turns that produce some financial bumps in the road. More than just a little bump, these hazards actually threaten your wealth and financial well-being.
To get around that, we’ve come up with an outline of some of the most useful strategies and tips to help you navigate these like the professional boss you are.
But hey, before we do that, think back to what might be a childhood (or even adult) memory for you – sand castles. 🏝️
Yes, just like the 🎵 Beyonce song…Anyway, have you ever put real, solid thought into a sand castle?
Not just some haphazard attempt, we are talking about a mega, ultimate, caste-of-your-dreams castle that would make Rapunzel proud.
If you’ve ever seen or made a really awesome sand castle, you know the joy of the moment when you stand back and admire your word.
Wow, what a masterpiece! 🥳🥳
But then, just as you are congratulating yourself, you notice that while you are busy building the castle of your dreams, the ocean slowly crept closer and closer, threatening to destroy your visions in the sand.
And all it really takes is ONE wave, one sweeping rush of the tide, and just like that, all your hard work is swept away in the blink of an eye.
This friends, is a salty lesson served up by nature, and we can learn a thing or two from it.
You see, just like your sand castle, your wealth can be just as finite as a sand castle.
So wouldn’t you rather build your financial kingdom on solid ground? We sure would, so let’s talk about how to do exactly that.
Unforeseen Circumstances
Life doesn’t always go as planned, and unexpected challenges arise.
👉 Case in point: lawsuits. 👈
No one likes to think about them, but being prepared is crucial.
Speaking of surprises, we once went to a Guardians of the 💫 Galaxy ride at California Adventure thinking it was a simple kid’s ride.
But soon, we found ourselves plunging from great heights at thrilling speeds.
This sudden jolt is akin to facing an unforeseen financial crisis. One day you’re on top, the next, you’re grappling with life’s financial blows.
Let’s not have that happen to you – instead, you should always be hopeful for the best yet prepared for the worst.
And when you have wealth at any level, unfortunately, there are vultures out there looking for a quick and easy payday.
So don’t be their next victim and risk exposing your assets. Ambulance chasers and creditors both tend to target based on what you seemingly “own”.
The scary thing is that if you don’t set yourself up for success with a proper wealth structure, you can expose your assets, allowing these predators to claim your fortune. It’s kind of like credit card fraud but on a much, much bigger and scarier scale.
This applies to both entrepreneurs and investors, so don’t just assume that you’re safe. Asset protection is the name of the game here, so protect your assets, your home, your business, and your real estate, especially if the assets are under your name.
Now, let’s look into these useful strategies and tips ⏬
1️⃣ Automatic Protection
Different states have varied rules for asset protection, with minimal effort offering significant benefits. Consider homestead exemptions; they protect a part of your home’s value.
Some states shield only $35,000, while places like Florida protect your entire home value. Plus, 401Ks and pensions often have protections. Depending on your location and assets, they might be more secure than you realize!
2️⃣ Insurance: The First Line of Defense
Insurance is a must, and it’s smart to get the most out of it within your budget. But, it’s equally important to understand where it falls short. Here are three key things to keep in mind when it comes to insurance:
- Insufficient Coverage: Sometimes, your insurance might not cover the full extent of a claim, especially if it’s a big one.
- Exclusions: There could be situations where you expect to be covered, but the policy doesn’t include them.
- Solvency Issues: If there’s a wave of claims, your insurance might not have enough funds to meet all of them.
3️⃣ The Power of Privacy
Privacy works best when you’ve got insurance on your side. When you use privacy strategies, it can throw a wrench in the works for those lawyers trying to figure out if it’s worth going after your assets.
See, these legal eagles only get their payday if they successfully recover your assets.
4️⃣ LLCs & Entity Structuring
When insurance just doesn’t cut it—maybe there are exclusions or your claims blow past the limits—entity structuring steps up as your backup plan.
It’s like an extra safety net, adding another layer of protection when your insurance doesn’t hold up.
But, you know, it’s not foolproof.
Depending on where you are and how the judges swing, some judges might poke holes in your business’s defenses, and others might throw unexpected state laws your way, which could mess with the assets you’ve got locked down.
So, while entity structuring is helpful, it’s not a guarantee, and it does bring its own batch of challenges.
Your Pro Dream Team
So, while entity structuring is helpful, it’s not a guarantee, and it does bring its own batch of challenges. 🤟
Now, when it comes to making sure your assets are rock-solid, connecting with the right legal and tax pros is key. Start by tapping into your trusty networks—ask friends, family, coworkers, and especially those who’ve got some real experience in investment properties. They usually know the best people to go to.
Thanks for tuning in today. Until next time, dream big, and keep making those dreams a reality! 🌈
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