Affluent individuals and families may have been self-made or could have received their fortune from a hefty inheritance. Either way, there is an obvious desire to protect assets and encourage future generations to secure funds and build their own wealth.
Early Financial Planning
Wealthy families understand the need to become steadfast and prudent stewards over their combined estates. Individuals undergo a crash course in financial planning, which usually begins at a very early age. This rich foundation encourages healthy spending and savings habits, as well as a philanthropic spirit. As wealth passes from one generation to the next, these lifestyle characteristics secure the family fortunes.
Compounding From Small Beginnings
For individuals who are building their own estate, consistency is the key to financial success. Even small investments, when made consistently over time, result in big wins. Young professionals who contribute to their employer sponsored retirement plans will quickly learn the benefits to making regular contributions into a savings account. Even if those new to the workforce only contribute a small percentage for a few years and then stop, the compounded interest alone could result in a significant portfolio. While there are a number of ways for individuals and families to accumulate wealth, there are also several areas in which fortunes can be broken down or dissolved.
Wealth and Estate Planning
Over the course of nearly two full years, and growing, a global pandemic has impacted the way virtually every country and every industry does business. It was only a matter of time before the implications of COVID-19 affected financial planning. Estate and tax planning during the pandemic could yield significant burdens on the wealthy. In an effort to recoup government expenditures due to the Coronavirus, some federal governments are targeting wealthy citizens.
The efforts of the aptly named Wealth Tax are based on a twofold concern. First, there is public pressure to reduce wealth inequality among the populations. Aside from the peer pressure, there are political concerns about balancing an increasingly negative budget. Increase taxes on the wealthy, and eliminating some well known tax breaks, could provide the necessary revenue to accomplish these goals. There has never been a more important time to seek expert advise and make crucial changes to estate planning.