A Cutting Edge

Wealth Distribution begins with providing for the golden years of life. This is then followed by bequeathing assets to loved ones.

This stage deals with protecting wealth. Wealth includes both non-material and material wealth. Non-material wealth consists of you and your near and dear ones.

On the path to achieving goals, there could be instances of job loss, migration, illness, disability, accidents, and death. We need to have a strategy to deal with these eventualities. Though the emotional pain can take long to come to terms with, being at our wits end can be of huge help. In order to mitigate financial stress, structured planning is vital. This kind of backing gives us confidence on a rainy day and prevents us from acting out of fear, impulse or pressure.

Protecting material wealth is also important. This consists of a house, an office, a shop, other real estate, a car or other vehicles of transport, jewellery, etc. They need to be protected from fire, theft, burglary, cyclone and many other perils.

Lastly, you need to protect yourself from liabilities as well, e.g. If a maid servant gets an electric shock while working in the house then the expenses have to be borne by the employer. The employer becomes liable to pay for her.

All these can erode wealth and hence a wealth protection strategy is the first step in any financial planning process.

After wealth protection strategies are in place, the focus should be on accumulating wealth.

One of the biggest hurdles in wealth accumulation is borrowing. Further taking a loan on one hand and making an investment on the other hand is like pouring water into a bottom less jar. Irrespective of the amount of effort put in, you cannot succeed in filling the jar up. Therefore, the first step in wealth accumulation is to control debt.

After paying off debts the focus then shifts on investments, based on the financial goals. Wealth accumulation is also the first step towards Retirement planning, a plan to ensure a good life even at your old age.