Wealth Accumulation – do you have enough?
Everyone has a different perspective on what wealth is. How much wealth do you need? How much wealth do you want? Some see accumulating wealth as necessary to allow them to live the life they want, to be independent and free from commitments. Others spend their whole lives focused on wealth accumulation.
Are you accumulating wealth? Do you have a plan in place to accumulate wealth tax effectively? Are you getting wealthier each year? Do you need to be?
Too many people will not have enough to achieve their goals. Too many people have not increased their wealth from one year to the next.
Having enough wealth and particularly cash available for discretionary spending allows you to plan your business and life to be in a position to do this.
All business owners should have a wealth accumulation plan. All too often successful businesses grow and all profits are reinvested in the business or drained out by the owners and mismanaged. A downturn comes and the businesses fail leaving the owners with nothing to show for all the successful years the business had.
Ask yourself this question. As at 30 June this year, was or will my wealth be greater than as at 30 June a year earlier? Do you know the answer? If it decreased, why? Is this a trend? If it increased, are you happy with the amount it increased? If it increased by the same amount each year will that be enough to meet your goals.
Apart from winning lotto or receiving gifts or inheritances, there are two ways to accumulate wealth. The first is to generate surpluses each year from your business. The second is what you do with these surpluses. If you invest the surpluses in growth assets such as property and shares then your wealth should grow with capital growth over time (albeit with some capital decreases along the way). If the surpluses are used to reduce debt, your net wealth will have grown and your surpluses each year will be better from the interest savings. If you reinvest the surpluses back into the business you may increase it’s future profitability and therefore it’s value.
The Money Edge works with clients to help them focus on accumulating wealth tax effectively over time to allow them to meet their goals and allow them to do “what they want, when they want, with whom they want, in a manner that they want”.
Disclaimer: This content provides general information only, current at the time of production. Any advice in it has been prepared without taking into account your personal circumstances. You should seek professional advice before acting on any material.
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