transformational growth gen wealth protection iii

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TRANSFORMATIONAL GROWTH It is health that is the real wealth not pieces of gold and silver.- Mahatma Gandhi The gratification of wealth is not found in mere possession or in lavish expenditure, but in its wise application. - Miguel de Cervantes In the Next Episode We finalize the Generational wealth Protection compo- nent. Sneak preview; The last four steps on Cre- ating a Comprehensive Wealth Plan with all the risks associated with it. Transformation literally means going beyond your form.Wayne Dyer Generational Wealth Protection W e started this series by looking at the different ways to create Generational Wealth. In this Episode we will focus on some measures that you can take to protect the wealth of the family enterprise once created. Many families would like to pass their wealth down to their chil- dren. In turn, their hope is that their children will be successful and can pass wealth down to the next generation, and so on. Un- fortunately, along the way, each transfer between generations gives the government the opportunity to levy and collect estate and or gift taxes, (depending on country) diminishing whats actu- ally left. That is institutional. There is equally the scenario where the one generation just depletes all what was handed down with- out any fore thought of the next and subsequent generations. It is therefore, my objective to attempt to start guiding you on how you can start maximizing and securing your familys wealth for subsequent generations to come. EPISODE 03 May 2016 By Mbi Mbapeh - My Reflections on Africas Transformational Growth

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#GENERATIONALWEALTHPROTECTION We started this series by looking at the different ways to create Generational Wealth. In this Episode we will focus on some measures that you can take to protect the wealth of the family enterprise once created. Many families would like to pass their wealth down to their children. In turn, their hope is that their children will be successful and can pass wealth down to the next generation, and so on. What structures do you have in place to protect your wealth from one generation to the next? Hope this helps.

TRANSCRIPT

TRANSFORMATIONAL GROWTH

“It is health that is the real

wealth not pieces of gold and

silver.”

- Mahatma Gandhi

The gratification of wealth is not

found in mere possession or in

lavish expenditure, but in its

wise application.

- Miguel de Cervantes

In the Next Episode

We finalize the Generational wealth Protection compo-nent.

Sneak preview;

The last four steps on Cre-ating a Comprehensive Wealth Plan with all the risks associated with it.

‘Transformation literally means going beyond your form.’ Wayne Dyer

Generational Wealth Protection

W e started this series by looking at the different ways

to create Generational Wealth. In this Episode we will

focus on some measures that you can take to protect the wealth

of the family enterprise once created.

Many families would like to pass their wealth down to their chil-

dren. In turn, their hope is that their children will be successful

and can pass wealth down to the next generation, and so on. Un-

fortunately, along the way, each transfer between generations

gives the government the opportunity to levy and collect estate

and or gift taxes, (depending on country) diminishing what’s actu-

ally left. That is institutional. There is equally the scenario where

the one generation just depletes all what was handed down with-

out any fore thought of the next and subsequent generations. It is

therefore, my objective to attempt to start guiding you on how

you can start maximizing and securing your family’s wealth for

subsequent generations to come.

EPISODE 03 May 2016

By Mbi Mbapeh - My Reflections on Africa’s Transformational Growth

Generational Wealth Protection Tools

Family Trust

M any of the wealthiest families often use a method for transfer-

ring wealth that permits the accumulation and distribution of

assets to multiple generations with the least amount of taxes and other

uncontrolled losses. This involves the use of “Family Trusts.” These trusts

enable families to benefit multiple generations with a single transfer of

property, and to make distributions to descendants for their needs.

There are no limits in some countries to the amount of property/assets

that could be left in trust for the benefit of multiple generations of family

members. Ultra-affluent families have used trusts to avoid the transfer

taxes that would otherwise apply when property was transferred down

successive generations. Many of the great family fortunes have been

passed down intact, over long periods of time, in this manner. But in oth-

er countries, this transfer has been regulated to take away the ability to

pass unlimited wealth to successive generations without tax consequenc-

es. In these countries, certain exemptions apply. Although this is the case

in these countries, careful planning must be made to ensure transfers fall

within the exemption. family Trusts are designed to take advantage of

this exemption.

Life Insurance

I t is difficult to predict if any assets will continue to appreciate over a

long period of time, therefore, a life insurance policy is often a better

funding vehicle for generational wealth transfer. The reason for this is the

leverage that a life insurance death benefit has relative to the premiums

that are paid over the lifetime of the first generation family member. The

death benefit is often a significant multiple over the total premiums paid.

In some countries, tax is only levied on premiums paid. The perpetuity

transfer rule is set from the onset and this could form part of the Trust

arrangement.

Without boring you with all the technicalities, in a simple structure, a Life

insurance policy is purchased through the Trust that would benefit your

family for multiple generations. A multigenerational Dynasty Trust is cre-

ated, and a donation is made each year to the trust in an amount that

would cover the life insurance that is purchased by the Trust.

Which Kind of Families do This?

The Family Trusts and the quest to

build a dynasty, can benefit all sorts

of families, not just the wealthy, par-

ticularly if their goals include:

A desire to provide for multiple

generations of family members;

An interest in protecting accumu-

lated assets from estate and gen-

eration skipping transfer taxes;

A concern about protecting accu-

mulated wealth from creditors

and ex-spouses; and

A desire to ensure the transfer of

family values to successive gener-

ations in the form of incentive

provisions

- DeRoss Financial Planning Group

Make Your Growth and Transformation Intentional - Mbi Mbapeh

Anyone who wants to sell you overnight success or wealth is not interested in your success; they are interested in your money. - Bo Bennett

In this episode, I would recommend the

following book by Roger Hamilton;

WINK

It is an extremely simple read but very

profound. It deals with the journey of

wealth creation. Please share your

thoughts with us or share your readings

with us as well.

Saving or Investing?

Everyone wants to be the genius

investor who takes a small bun-

dle of cash and transforms it into

a fortune. Unfortunately it's pret-

ty difficult to do that.

On a general note, there is a

better way for most people. Con-

sistent saving over time is much

more likely to pay off than com-

plicated investments or strate-

gies such as timing the market.

Risk-the-farm investing strate-

gies have a high probability of

failure, but saving always wins.

You can achieve your financial

goals by following a basic get-

rich-slowly scheme: save a lot

and let compound interest do the

heavy lifting over time.

While saving and investing go

together, accumulating money

through savings is the main

mechanism that makes investing

work.

An average saver will do better

than a great investor who

doesn't save.

Regular saving is only half the

battle. Investors need time for

compounding to work on their

money. Compounding occurs

when the earnings of an asset

are reinvested and then generate

their own earnings, creating a

snowball effect.

Courtesy of Bankrate.com—

Money Makeover.

Networking is an essential part of building wealth - Armstrong Williams

Creating A Comprehensive Generational Wealth Plan

M aximizing your wealth is not just about creating an invest-

ment plan, an insurance plan, a tax plan, a retirement plan

or an estate plan. These are just components that form part of a com-

prehensive wealth protection plan. A comprehensive wealth plan should

involve exploring all areas of your personal, family and business life that

have a financial impact on your wealth. A comprehensive wealth plan

should simplify your complex financial reality by creating a simple path

for you to follow through a single point of contact to achieve your gen-

erational wealth goals. Key to this process is having one central point

for the coordination of all the Advisors/professional who will help you

put the plan together. We have found components for these 8 steps

helpful some of which is courtesy of Assante Family Enterprise Advisors;

Visualization of your Desired Future

To be able to achieve this, your Wealth Coach will meet with you to get

to know you intimately by taking time to get to know your true fears,

challenges, advantages, excitements, opportunities, lifetime goals and

aspirations for you, your family and legacy. This meeting should result

in your Coach creating a summary report outlining the steps you should

take next to fulfill your life’s dreams.

Analyzing Your Current Reality

You could find this boring but it is a vital step in the wealth planning

process to ensure your Coach has a full understanding of all your finan-

cial resources so he can create your personal plan. This involves ex-

ploring all the areas of your personal, family and business life that have

a financial impact on your wealth. At the end of this phase, a high level

projection of your net wealth and sufficiency of financial resources to

help you meet your lifestyle and financial objectives.

Achieving Freedom in the Financial Compart-ment of your Wealth

People don’t become wealthy

by accident. Becoming rich in

the process of attaining a

wealthy status, takes serious

willpower and long-term vi-

sion. You have to be able to

keep your eye on the prize of

financial freedom, be willing

to sacrifice your present

wants for the sake of your

future and develop good hab-

its to win.

We will look at this in a bit

more details in future edi-

tions.

Contact Us

Give us a call for more infor-

mation about our services

and products

EndlessLife In-

vestment (Pty) Ltd.

No. 3 Linksfeild Road, Dunvegan,

Edenvale, Johannesburg 1906

RSA

+(27) 11 454-1393

[email protected]

Visit us on the web at www.endlesslifeinvestment.com

#eterprisedev

Generational Wealth Plan Continued

Commit to Building Your Wealth Plan

At this stage, nothing can be achieved without the full commitment of

the owner of the plan. Armed with the strategic model on how your

plan will be created with all professional inputs included, the owner has

to commit to allowing access for the teams and to a form of payment.

This can be up front or you implement the plan with their office and

pay over the execution period.

Transform Your Wealth

The preparation of your wealth plan is where the hard work begins.

Your Coach’s team and your own team of advisors should be prepared

to work closely together to analyze a variety of possible wealth preser-

vation and tax planning strategies across multiple generations to pro-

tect and enhance your wealth.

Conclusion

For the purpose of this episode, note that going through this process is

like going through a very undesirable surgical process. True to type,

humans treat anything related to their family, finances, business as

personal and shifting that paradigm to a place where you can fully

open—up to a team of people that you do not know is always the chal-

lenge. This is even more true for people with a light asset base who

should be rather looking at how to consolidate and grow what they

have.

In the next episode, we will finish off with the last four steps in your

Generational wealth Protection process.

EndlessLife Investment (Pty) Ltd. your Partner in Innovative Enterprise Development