As published in The Q Review Spring 2020 Magazine.  Follow the link to Subscribe and receive your FREE copy each quarter!

We identified six primary characteristics of the affairs of the financially successful in Part 1 and spelled out 1, 2 and 3.  Here we continue with 4,5 and 6…

4. An ever-evolving Asset Protection Strategy, implemented from the beginning of each new chapter in life, not left till when needed, which is ALWAYS too late.

Most people are eager to implement an asset protection strategy to minimise the risk of a mistake or piece of bad luck bringing them completely undone.

But few are prepared to incur the (usually modest) additional upfront cost when it appears things are going okay and disaster is not immediately foreseeable.

Of course, there are two big problems with this approach.

First, an asset protection strategy is (much) more effective, and usually less costly, the sooner it is implemented.

Second, by the time you realise you need it, it is generally too late and the law will operate to undo any action you take at that time to try and salvage the situation.

5. Consistent Wealth Building Strategy, utilising Superannuation to the maximum possible level

This comes down to a combination of compounding, mixed with the tax effectiveness (and safety from creditors) of the superannuation environment.

The longer your money has to grow, coupled with consistent additions to the pool of investments, creates the benefit of compounding. And eventually your patience will be rewarded.Superannuation in Australia is a low tax environment.

Wealth accumulated within superannuation is also protected against most creditor claims in the event of personal financial disaster.

This means there is no better place than within superannuation to build wealth and take advantage of that magical compounding effect.

6. Implemented Estate Planning Strategy addressing both death AND incapacity and covering all facets of their affairs (ie. not just a Will)

Estate Planning is naturally left till last, but those who have their financial affairs in order and who enjoy financial success invariably have a comprehensive Estate Plan in place.

This ensures they are taken care of as they wish in the event of incapacity, and that in the event of their passing, they do not leave a mess for their loved ones (a mess that can very often result in a breakdown in the family unit’s relationships).

Estate Planning is so much more than just having a simple Will, even for those with simple financial affairs.

At the very least it includes a modern Will that provides flexibility for your Executor to create testamentary trusts should it be advantageous for your beneficiaries.

It also includes an Enduring Power of Attorney (“EPA”), an Enduring Power of Guardianship (otherwise known as a Medical Power of Attorney or “EPG”), a considered Life Insurance Beneficiary Nomination and a strategised Superannuation Death Benefit Nomination.

For those with complex affairs, including trusts and companies, and those with substantial self-managed superannuation savings, it will also include a formalised Entity Control Succession Plan and potentially a non-lapsing Death Benefit Agreement incorporating reversionary pensions.

In Summary

A little bit of forethought, planning and investment of time and money can go a long way to ensuring your finances are not a burden, and are instead a positive contributor to your, and your loved ones, futures.CapitalQ can assist you to tick the boxes in these key areas, with the assistance of our partner advisers and service providers, so contact our offices for a Free, No Risk, Initial Consultation.