Why Rich People Actually Own Nothing
Rich people have it all, don’t they? You’ve seen them on T.V. with the great houses, swanky cars, and fancy jets. It seems as though they own everything from vineyards to villas.
At times you may have wondered what it would be like to own a jet, a distillery in Dublin, or a chateau in the south of France.
You imagine pulling up to your little castle in Toulouse after jet-setting around the world. It’s all yours! It has your name on it.
But, is owning things in your name a good idea?
It makes sense to have your house in your name and other effects of the wealth you have built. Your house is your biggest investment of all, certainly if having your name on the title wasn’t a good idea someone would have told you.
Yet, no one tells you any different. Family and friends celebrate your achievement of home ownership. After all they too own in their name. Everyone around you is doing the same thing so it must be right.
However, not everyone is doing the same thing. Wealthy people don’t own much, if anything at all.
Yes, on T.V. you see interviews of them from their palatial estates, but the property isn’t owned by them personally but by an entity they control.
They know that having their name on their assets makes them vulnerable.
What You Don’t Own Cannot Be Taken From You
It is unfortunate but we live in a litigious society. Many people think that a lawsuit is a quick way to wealth.
While wealthy people and business owners are wise to have insurance which serve to protect against accidents, injured parties can be lured to seek payouts greater than the damages they incurred.
Ads promising “to fight” for them for the “compensation they deserve”, complete with testimonials of client’s impressive settlements, are very enticing.
The just compensation sought often involves going after anything of value in the defendant’s portfolio. Many think if they have insurance that will cover it. Not so, all their assets, their house, house’s equity, business, stock portfolio, anything owned in their name personally is up for grabs.
Imagine you’re at fault in a car accident, the victim seeks damages beyond the insurance payout and sues you.
If the judgement in the lawsuit goes against you, then all personal assets, must be liquidated to pay it. This means if you own a profitable coffee shop in your name it could be sold to pay the judgement.
No one want to believe these things happen. It is difficult to acknowledge the harsh realities of the world but in so doing we can prepare ahead of any unjust onslaughts.
Being aware that the assets you have built can be targeted for dissolution gives you an advantage, with this realization you can be preemptive in establishing the necessary safeguards to protect yourself from frivolous litigation.
Without knowing about risks to which you are exposed you can’t protect yourself against them.
I was introduced to the book Inc. and Grow Rich by C.W. Allen; Cheri Hill, et al, that gave me a start to understanding asset protection. It’s worth a read.
A New Understanding Gives You Power
You cannot live without taking a risk but failing to prepare for a known risks is lunacy.
You can’t afford not to prepare.
For a small investment you can receive advice on entities that can be created to protect the assets you have built.
It’s likely that nothing will happen but the cost of preparing for this possibility is minimal compared to the cost of defending your assets from liquidation by court judgement.
You’ve worked hard to create what you have. You have sweated and saved to build your financial legacy. Now learn how to protect it. Don’t leave it susceptible to the whims of an unfortunate incident.
