Safeguarding Your Assets

During the recent economic meltdown, many hard working Americans witnessed their assets devalued. Bad mortgage notes carried most of the blame while crude oil was blamed for driving the American Consumer Market to a standing halt. In reaction, the government – on various levels – enacted measures to stimulate the market.

Most of the people affected had none or little proper asset management. According to recent economic data, most 401K account holders tied their assets to one type of investment such as crude oil prices or mortgages. In order to safeguard assets properly, individuals need to diversify their portfolios into at least three separate independent sections. On section must be invested in guaranteed assets (government bonds for example), while the other two sections can be composed of more profit bearing investments. This allows individuals to maintain a balance within their portfolios.

Moreover, proper safeguarding of assets requires looking ahead to the future. In most cases, individuals invest towards their retirement accounts, with 401K being the most utilized financial product. Individuals ought to consider IRA account as well as establishing a will or a living trust. Introduced in 1974, IRA – Individual Retirement Account – permits taxpayers to shield up to $5000 from their gross income annually, which in turn, reduces income taxes. IRA accounts are collected under the supervision of custodian to manage through orders and restrictions from IRA owners.

Becoming more of a reality than an option, many asset holders are either drafting a will or forming living trusts. Not only do such legal tools save time and money, wills and trusts establish long term control over assets as individuals become dependent on their retirement accounts. For example, in case of death, a living trust names the next person to take control over the trusted assets.

Finally, safeguarding your assets requires long term planning. There are various variables to consider from the size of your portfolio to expected retirement. Sound legal counseling is a must as every signature carries lifelong implications. Usually, the collective education of a consulting firm provides a good measure for a firm’s ability to advise and direct your assets towards stable financial growth.