Are You Protecting Your Liquid Assets?
Wealth has a different meaning from one person to the next because not everyone’s wealth is the same. However, one person’s wealth is no more significant than another person’s wealth even if the assets equated to a greater amount of worth. For example, one person who loses $30,000 of his net worth may suffer a far greater devastation and adjustment in life style than someone who has lost $300,000 of their net worth. While some may argue that the person losing $30,000 did not have true wealth and may have been living above his means, that amount of money could easily equal wealth if handled properly. In our current real estate market that cash could buy a 2-3 bedroom condo outright in many areas and create a very comfortable lifestyle for a family. The bottom line is that wealth has a different meaning for people in different financial situations, but it is still important to protect wealth of any amount if it means something to you.
While it is important to protect wealth by separating assets and placing them into individual trusts, it is also very important to protect your cash assets. Believe it or not, personal and sometimes business bank accounts can put your liquidity in immediate jeopardy. Anyone who has ever had a bank account garnished from an unexpected lien from the state, the IRS, or even a credit company, can relate to the feeling of being violated that comes with that. For this reason we suggest setting up trust bank accounts for your liquid assets and limiting the funds in any personal accounts should you choose to have any.