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Monday, July 22, 2013

Generational Wealth Part 1 of a series. How to obtain it and how to keep it.

This will be one in a series of post regarding the strategy for generational wealth.  There are multiple strategies for this result, some are riskier than others.  A true generational wealth plan in my strategy should have a spending period that offsets total tax liability, converts what you are spending to investments or a safe vehicle that can grow, give you access to this money after a seasoning period or at some point in the future without having a taxable event, provide cash flows that sustain wealthy lifestyle for your life cycle, provide cash flow for your offspring during their life cycle, and provide a lump sum payout to a third, fourth and fifth generation as well as a re-visitation of the cycle you initiated. Generational wealth is not a new concept. 

The need for capitalization is a standard among anyone starting a business or acquiring a business, or expanding an existing business.  Chances are; most business owners will retire from their business not as well off as they began and most have businesses that are not designed to operate if they are not working in the business.  Most small business models are designed with the owner as the central figure in the operation.  That is a scary thought because it is hard to wear all those hats and get truly wealthy.  You might have huge lump sums of cash or continual cash flow over the business life cycle, but so many people that have successfully generated cash flow do not have long term stability and find themselves without cash before retirement or having to come out of the retirement that was the result of the payoff.  This false since of security has set a lot of people up for monetary failure because of the financial instability and a self-destructive strategy.   

Most, if not all individual’s desire wealth, a wealthy retirement, and security of their current lifestyle as they age as well as security for those they leave behind.  So how do you go about attaining such a thing as security for yourself and off-spring?  Many people might perceive such a thing as financial security as an illusion.  Of course the major reason is because it has eluded so many and even when some have found security they have lost it.  Financial security for many is perceived as something that is attainable by individuals and corporations that are already wealthy, but not for themselves; not for their organizations.  Many have bought into vehicles that just don’t cut the muster, so to speak.  Many have been deceived for so long and have been taught so wrong that even if I showed them a way to generational wealth that can be used right now today and used by their family in the future, then they would not move forward with a since of urgency that the subject deserves.  Many would rather trick themselves into believing that they are safe when they are not.  The adage goes, “you can lead a horse to water, but you can’t make him drink”; to elaborate, “even if they are thirsty and about to die”. 

Most individuals have a financial blueprint that will self-destruct long before they figure out that they have been bamboozled.  Most financial plans associated with big corporations are setup to benefit the company more than the employees they pilfer for deposits into 401K’s, IRA’s, and Pensions.  Most of these vehicles have taxable when money is disbursed.  These vehicles have a low threshold for tax avoidance approximately $6,000 X 25% or $12,000 X 25% if married filing joint.  These vehicles defer taxes to future periods and that means that you will pay a higher tax rate, after all, taxes are increasing not decreasing.  Many who are invested in these vehicles need to go to the next step by investigating how to avoid a taxable event and move out of these vehicles.  I am pretty much a self-proclaimed expert in this area because I don’t know of many that are versed and as experienced as my organization is regarding the steps taken to disburse and move money out of these vehicles into other investments that provide a better hedge for your money and basically has the ability to put you in an arbitrage position by leveraging your cash.  Make sure you follow these series for more information on this subject as we provide information on the subjects of tax avoidance and reveal strategies that work.  Contact me at 888-753-2521 or email questions at .

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