Finance Nook Logo

Got Wealth?

By Expert Author: Richard A. Chapo
Word Count: 517 words | Views: 1449 view(s)
The last ten years has seen massive wealth growth in the United States. This brings up the issue of wealth planning, particularly from a tax perspective.

Got Wealth?

There is little doubt that the overall wealth of a significant percentage of Americans has grown like a weed in your garden over the last 10 years. There are a variety of reasons for this growth. Real estate appreciation has set historical records. Stock options are creating massive paper wealth, while also creating tax nightmares. Demographically, a bulge in our population, the baby boomers, are reaching retirement age. Regardless of the reason, wealth planning is becoming a big issue for many people.

Wealth planning strategies tend to be very detail oriented. They also tend to be an option only for certain situations. As a result, you need to speak with a professional regarding each particular strategy to determine if they are of assistance to your situation. These techniques are not universal solutions like stuffing money into a 401k, so don’t take them as such. Let’s take a look at one popular strategy.

Once wealth planning strategy that is very popular deals with real estate. The strategy focuses on making a fixed asset, the equity in your home, grow. Many homeowners do not realize that the equity in their home is not growing. Instead, it is the value of your home that grows, which creates ADDITIONAL equity. Let’s look at an example.

Assume I own a home worth $1,000,000 and have $500,000 in equity. The equity is just sitting there. It does not grow. If the value of the home drops to $900,000, I still have the same amount of equity. If the home appreciates by $100,000, I get an additional $100,000 in equity because the house increased in value, not because my original $500,000 grew in any way. If you can get your mind around this concept, you will realize the problem.

The strategy for this situation involves turning the equity in your home into a growing asset without taking on any additional risk. The process is very simple, but a masterful one. You refinance the home to remove as much of the equity as possible. The equity is then put into no risk custom life insurance product. It grows tax free in the product, which is based on the performance of the stock market. If the stock market has a negative annual return, the insurance policy is tailored to eliminate the risk by setting your annual gain or loss at zero. Put another way, if the market loses 10 percent this year, you lose nothing.

This simple strategy is a tremendous way to double the wealth you gain on your home. Instead of just being happy with the appreciation, you get both appreciation and the tax free gains in the insurance policy. In laymen’s terms, this lets you leverage your property for double gains.

Wealth planning strategies are very subject specific. The above one works with real estate, but no other subject. To identify the best solutions for your situation, you should consult with a top tax attorney, financial planner or accountant.
About the Author/Author Bio

Richard A. Chapo is with BusinessTaxRecovery.com - providing information on taxes.

Article Source: http://www.financenook.com/Article/Got-Wealth-/28476

This Article has been viewed 1449 times.

 
Related Videos

Small Business Advice - Financial Health
How to Apply Feng Shui to a Hair Salon
How to Sell: Attitude and Positive Mental Attitude
Rocking with Winamp - #6 - Internet Radio in Winamp
How Not to Mix Up Strategy and Planning
 

More "Wealth Building" Related Articles

 
 

Listed below are more articles related to the above article from the "Wealth Building" article category.

People interested in the above article "Got Wealth?" are also interested in the related articles listed below:

 
Can you really build wealth automatically?

The answer is yes... you just need to acquire a new wealth building habit.

You are going to love this habit because you do not even have to remember it... a banking computer remembers the habit for you! How is that possible? Read on and you will soon see.
The wealthiest and most successful people don’t run themselves ragged. They stop long before running out of steam, taking small- and large-scale breaks to re-charge when needed. You can’t do your best thinking when you’re running at 80 percent.
Learn a trading system that will make you richer than if you'd bought Google as an IPO. Foreign Exchange trading is a smart, lucrative and accessible way to invest your money; as long as you know what you're doing. Here are the Five Steps you need to take to start getting monster returns by trading.
Getting a job and not spending all the money each month is the slowest, hardest, and least efficient way to build up a big pile of money. Saving money is a worthwhile net worth building activity, but it doesn’t offer much more than that unless your goal is only to have a little cash at the ever-increasing age of retirement.
If you will find your calculator during your inspection of this article you will get more out of it. Numbers don't lie and you will take a glimpse into your future inside the little screen of your calculator. So, dig it up now.
Looking for something unique? Something that nobody knows about? You are a shrewd customer aren't you. It takes a certain kind of individual to seek this out and you have found exactly what you are looking for in this article....you just don't know it yet.
Building wealth takes time and having an effective plan in place can ensure that the monies you save now, will be there later and in a sizable amount.
 
Article Directory Home > Finance > Wealth Building
 

Can't find what you're looking for? Try Google Search!
 
 
Copyright © 2005 - by FinanceNook.com™ All Rights Reserved Worldwide.
All Trademarks and Servicemarks are the property of the respective owners.
Synergy Singapore