Leveraging Your Wealth

by Sherman Titens

The classic statement, “It’s not just what you have, but what you do with what you have” is especially true when you are dealing with the preservation and growth of your wealth.

There are a variety of ways to handle the challenge of creating and dealing with your wealth, often depending on your tolerance for risk.

Experienced professionals whose role is providing financial counsel and assistance are readily available and can offer meaningful assistance. As David B. Anderson, Investment Advisor of Financial Counselors, Inc/ Midwest Trust has said, “the first job of the professional money manager is to make sure that you don’t lose what you have.”

Imagine your business or personal deposit accounts earning additional returns while you sleep. According to Jennifer Bailey, Managing Director of The PrivateBank, “It is now possible by using a Sweep Account in conjunction with your personal or commercial deposit accounts to have your designated funds move electronically into tax free overnight fund accounts and still be available to you by simply writing a check on your account.”

Whether you want to purchase a yacht or jet, help a family member launch an entrepreneurial venture or monetize your liquid assets, you have to decide whether to use cash resources or credit. Properly handled, using credit wisely can be one of your most effective financial leveraging tools.

When deciding how to raise needed capital, you often face a choice between liquidating invested assets and using leverage. Compare the costs and risks associated with both alternatives. Consider interest expense, transaction costs, capital gains tax exposure, and the potential loss of alternative investment opportunities that might come from using your resources rather than credit. Generally, you can obtain credit secured by almost any type

of unencumbered real assets.

Consulting with a bank commercial lender, accountant or attorney specialized in financial and estate planning and a capable financial planner and money manager are excellent ways to be sure that your ideas make good business sense and can be implemented with a reasonable opportunity for success.

Here’s another well-known statement—“If you don’t quite know where you are

or where you want to go, then any road will get you there, but you won’t know that you have arrived.”

Wealth is usually developed starting with the mindset that your financial goal is to build your wealth. Developing your personal wealth plan requires specific answers to questions like:

•  What are my financial goals?

•  How can I best leverage and build wealth?

•  What steps do I have to take to make it work?    

Nationally recognized speaker Jim Rohn said, “You cannot change your destination overnight, but you can change your direction overnight.”

Ask yourself:

•     Is your wealth highly liquid, overly concentrated, or is it tied up in one or more businesses or partnership?

•     How is your wealth structured?

•     Is the return generated by your portfolio appropriate for the amount of risk you bear?

•     What is your time horizon for achieving your investment goals?

•     How directly do you want to be involved in managing your investments?

Proper planning can help you prepare for the final transfer of your assets. Sound wealth planning strategies helps preserve and grow your wealth during your lifetime and allow you to enjoy it along the way.

 

Sherman Titens is co-founder and Advisory Director, The PrivateBank.
P | 816.286.1500
E | stitens@thePrivateBank.com