Young: Strategizing to protect accumulated business wealth

I’m absolutely thrilled that you have chosen to explore my column this week to arouse your curiosity about my shining light on your desire to honour your entrepreneurial dream. Marvelous.

I’m absolutely thrilled that you have chosen to explore my column this week to arouse your curiosity about my shining light on your desire to honour your entrepreneurial dream. Marvelous.

For many reasons I believe taking this entrepreneurial step is a cause for celebration. Let me highlights two of those reasons:

One, you are absolutely, positively meant to live your dreams…period.

Two, the world is waiting to receive your unique entrepreneurial gifts.

For those of you entering this mindset, it’s fair to say your entrepreneurial spirit has been ignited.

And not only that, the dream of having your own heart-centered venture has probably been getting stronger and stronger, lighting you up inside in a way that seems indescribable. Let’s delve a little deeper.

A short time ago, you embraced an epiphany moment that would change your life journey forever—you decided to become an entrepreneur.

Perhaps you have already achieved some level of entrepreneurial success, and now hope to reap the overriding benefit of that move.

As your entrepreneurial experience may have shown you to date, nothing comes free of risk. Indeed, you can name many examples of Okanagan families where one generation has lost the wealth it took previous generations to build.

So, how do you guarantee that the legacy you worked so hard to attain will be there long after you’ve gone?

It begins, my friends, by recognizing that the Joel Young wealth left behind is as much a result of my mindset as it is my knowledge and skills.

Now, here is where it becomes fun folks, as central to that proper mindset is a master plan and my commitment to govern my behaviour accordingly.

In essence, the same rules that apply to identifying my personal net worth apply to the assets that I may have invested in my entrepreneurial dream.

When dealing with my personal and family wealth, we must understand, painful as it may seem, that there are three key phases to consider as we move through our wealth cycles.

In the first phase, our wealth gets created (we hope). In the second phase, our wealth must be protected.

I enjoyed a recent  experience of participating in a brainstorming session with an investment banker from Manulife Bank at our home.

The investment banker explained to my wife and I how we might change our lifeplan game productively with financial options we didn’t know existed.

So, in the third phase, we truly begin to live the entrepreneurial dream, as we can now finally put our net worth to full use to realize our life goals and objectives.

While typical affluent families put most (if not all) of their focus on creating and growing wealth in their entrepreneurial dance, this aspect is probably the part that may come most naturally to each of you.

You get wealthy, as a result of your hard work and the determination you have put into running a successful dream.

In addition, you may grow the wealth by investing it wisely, either on your own or with the help of professionals such as asset management firms or investment advisers.

The more disciplined and structured you are in the way you deal with your venture and your investments, the more successful you will be in creating and growing your assets.

However, as we all know only too well, how much you actually make isn’t really all that counts.

Successful wealth management looks just as much as how much you get to keep after all expenses are factored in.

Hence, this is the essence of net worth and this is where the most difficult phase of your personal dream plan comes into play.

In order to keep the new-found wealth you have created with your entrepreneurial dream machine, you will need to continuously protect it from a variety of risks.

It makes sense to me that you might choose to put a “protection plan” in place in the early stages of your successes to ensure risk minimization when needed.

Some techniques I discovered when researching this topic follow:

• tax-smart investing by make tax-exempt life insurance part of your asset allocation

• using trusts and other estate planning measures to protect your family and facilitate the transfer of your accumulated wealth (can’t tell you enough how important and, at the same time, ignored…is this aspect)

• managing your personal liability for venture risks through offshore trust structures

• limiting the Canadian tax exposure of any international business by structuring part of your business in tax treaty jurisdictions offshore.

The last element of this tidy treatise this week deals with optimizing the structure of your net worth to ensure it can be put to full use in realizing your life objectives.

Protecting the wealth you have acquired through your dream machine is almost a fundamental law of nature.

As once created, the fruits of your labour will be attacked on a variety of fronts by a variety of predators—multiple layers of taxation, personal liability related to your venture as well as the spending demands of your new lifestyle to name a few.

To start with the obvious, you will need to articulate your plan early in the process.

By doing so, ensure that the measures you choose to put in place fit into an overall plan.

Joel Young is an entrepreneurial leadership advisor, coach and educator and founder of the Okanogan Valley Entrepreneurs Society.



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