Money can buy us many things; safety, security, and – yes – even happiness. But despite what many people assume, wealth often comes with new worries.
For those achieving a high net worth, peace of mind can still feel elusive. You may constantly question:
“How do I protect what I have?”
“Could I lose it all?”
Or, “What else can I do to grow my wealth?”
Our problems don’t disappear with money, they simply change.
As Biggie Smalls famously said: “Mo money, mo problems.” Greater wealth creates greater responsibility around issues of asset protection, political impacts, data security, financial partnerships, and more. Even day-to-day spending now requires new strategies.
The good news is that while protecting substantial assets does present unique challenges, there are a few practical management approaches you can start using right away. It is possible to conserve your wealth and improve your peace of mind.
One of the best practices for protecting your assets from prying eyes? Keep them on a need-to-know basis.
There’s no reason to advertise your spending power to the world when you don’t have to. Take steps to stay off the grid by using smart money management techniques:
- Keep a low profile by limiting your spending to $10k or less. This doesn’t mean you can’t buy luxury items—but it does mean you should use financing when making big purchases like fine jewelry, a car, or a yacht. Afterward, pay the loan off promptly and enjoy a boost to your credit score.
- Alternatively, when you’re purchasing an item that you expect will increase in value, you can leverage wealth and maximize gains by borrowing money to pay for it. The asset’s value increase will be greater than the interest on the loan.
Mitigate Threats Through Asset Diversification
The best way to manage your assets is by controlling them, rather than owning them.
Asset protection consists of legal techniques used to shield assets from lawsuits, debts, and taxes by moving them into various entities such as trusts. This diversification is critical, as it protects you personally if any one asset is frozen in legal proceedings.
Another factor that can affect your assets is political and social unrest. Political unrest leads to sub-optimal short term macroeconomic policies which can hurt businesses in the long run. Maintaining relationships with policymakers provides influence to improve policies over time.
If there’s any asset that is as important as money today, it’s data. Criminals are constantly developing new cyber theft tactics, making cybersecurity essential.
Studies show cybercrime cost the global economy nearly $1 trillion in 2020 alone, with the average cyber insurance claim rising from $145,000 in 2019 to $359,000 in 2020. This demonstrates the growing need for robust cyber defenses, according to multiple reports.
It’s also crucial you learn to manage and safeguard sensitive data. Look out for rogue employees attempting theft and establish clear security protocols. Examine company devices and data accessibility regularly to prevent issues.
No business can thrive alone. Small and medium-sized banks can be hesitant to work with smaller firms. However, choosing the right financial institution is critical for growth.
Consider factors like the bank’s assets managed, global footprint, and investment options when deciding on a partner aligned with your vision for expansion.
Money inevitably causes some anxiety. However, studies show you can mitigate stress by focusing on controlling the things within your power according to psychology research. Working with financial and legal experts also provides confidence and a higher likelihood of success.
With the right team behind you, and the right approach – the path to both wealth and peace of mind is wide open.