Creating & Securing Your Wealth

For some people wealth is an acquisition of material possessions that they believe are necessary for their happiness. Wealth to them means owning a number of cars, houses and the latest gadgets and accessories. For others, wealth is having everything that is necessary to ensure that they live a relatively comfortable life, without having to worry about meeting their basic needs.

If you fall into any of the above categories or if you aspire to be wealthy in the future, it is important to ensure that you set realistic goals and make wise financial decisions at all times. Ensure that you do what is necessary to create sustainable wealth. That is, put plans in place to safeguard against whimsical spending.

One way to guarantee the sustainability of your wealth is to invest in capital-generating enterprises. Whether you decide to invest in bonds, stocks or real estate, it is important for you to seek professional financial advice regarding the potential for these entities to give you a good return on your investment.

Also, it is crucial that you put some amount of your wealth in a savings account. Banks and credit unions are usually ideal avenues to save, offering interest on your money. By saving you ensure that you have enough capital to meet unforeseen financial demands in the future. If you’re not the most disciplined person, then it is advisable that you save in a fixed deposit account. This way you place a limit on the time frame within which you will be allowed to make withdrawals from the account. By depositing a fixed amount per month, you will be in control of the amount you can withdraw at the end of the time period.

One sure way to squander wealth that you’ve acquired is to spend unwisely without putting any ‘back-up’ plans in place. Don’t let this happen to you! Its your wealth, make it last!

Why Insurance Should Be Part of Corporate Financial Planning

Unforeseen losses can have a devastating financial impact on corporate entities if there is no insurance protection. It is, therefore, prudent for entrepreneurs to include insurance as a part of their financial planning for the following reasons:

1. Insurance minimizes loss to the business and entrepreneur, arising from fires, natural disasters, subsequent business interruption, robbery, employee dishonesty, and legal liabilities or responsibilities among other risks.

2. It reduces the disruption of cash flow due to losses as insurance helps to quickly restore the business to its prior position before the loss occurred.

3. Insurance helps to ensure the continuity of your business by providing funds to rebuild the business operation after a major loss or total loss.

4. By selecting insurance as a method of transferring risk, vital capital can be better instead of being put aside to fund the uncertainty of loss. The insurance carrier relieves the business of this burden.

5. Insurance is a cost-effective method of managing risk. The cost of annual insurance is minimal (often less than one percent of the limit insured) when compared to interest rates on a bank loan (20 percent), to restore the business in the event of loss.

6. Insurance acts as a guarantee for financial institutions whenever the business assets are used as security for a loan.

7. Insurance protects the business and individuals from extraordinary losses that can arise from their legal liabilities (obligations) to employees and third parties out of the operation of the business.

8. An insurance partner can assist the entrepreneur to improve management of the business operation by providing expert advice and prevention and control of risk factors, and the improvement of processes. This can ultimately result in reduced susceptibility to losses and reduction in certain operating costs.

9. Insurance coverage provides a level of comfort and trust among your business partners and clients that the business partners and clients that the business will honor its obligations even in the event of unforeseen circumstances.

10. Insurance protection helps to preserve and maintain the profitability and financial viability of corporate entities as losses do not have to be borne from business earnings.