The Wikipedia definition of estate planning is deceptively simple – it is “the process of disposing of an estate”. Estate planning typically attempts to eliminate any uncertainties over the administration of probate and to maximise the value of the estate by reducing taxes and other expenses. This is something anyone who has built up an estate with assets wishes to do; after all this is the legacy that is left to the immediate family.
The idea is to protect it to the best of our ability while we are still alive and able.
Reasons to plan
Estate planning can be divided into five elements:
- Protect the value of growth assets in the estate
- Protect assets from forced sale by assessing the availability of liquidity in the estate
- Reduce exposure to taxes such a capital gains tax (CGT) and estate duty
- Limit estate expenses
- Ensure the smooth transition of the client’s estate on death
Many believe that estate planning is more about avoiding estate duty than anything else. However, it is so much more than that; it is an holistic process, encompassing all the relevant values of a person’s assets and liabilities at a given time. From this information, an individually customised and suitable plan needs to be developed.
An estate plan should also be flexible enough to ensure that future adjustments, resulting from such things as changing laws, financial situations and family needs, can be made.
What to look out for
An estate plan should take into account these aspects:
- Your will; and, for the record, there is no such things as an old will
- Any trusts (if applicable) and any relevant loan accounts
- Life policies showing nominated beneficiaries
- Liquidity required to fund CGT, executors fees and estate duty
- All assets and liabilities and, most important, shares in private firms
- Any sureties that have been signed
Efficient use of all available estate planning tools will ensure estate duty is kept to a minimum. Individual cases will determine whether a particular method is suitable or not. Most people who think that estate planning is just worrying about assets or minimising outgoings, should realise that it is more about achieving the goals set during one’s life and beyond.
Many are unaware of the available estate planning opportunities. Having a Will is just one part of estate planning. One must always ensure there is sufficient liquidity in the estate to meet any liabilities without compromising your dependents.
A trust is certainly not always the answer to everyone’s circumstances but before forming a trust or, perhaps, terminating one, I would suggest you talk this over with a professional.
A costly oversight
A colleague of mine often says that people spend a lifetime building up their estate, but how much time do they spend on preserving it? I read recently in the Glacier-Sanlam financial proposal that it is estimated that a person spends about 76 800 hours building their estate. If you do not spend at least two hours planning it, it could cost up to 30% of your estate in unnecessary expenses and taxes and your heirs and dependents may not receive what is due to them.
Estate planning is often overlooked when more emphasis is placed on investment strategy and the creation of wealth. However, estate planning actually forms one of the supporting pillars of a sound financial plan. Rich or poor, everyone needs to plan their estates. It can be as simple as drawing up a will in which all your worldly possessions are left to your spouse, or as complex as establishing a local or offshore trust.
Inefficient planning reduced Elvis Presley’s estate by 73% and because the amount paid is on public record, there is no truth in the rumour that Elvis is alive and kicking in Memphis. The last place I would want my heirs to end up is in Heartbreak Hotel.
7 Steps To Achieve Financial Freedom
Achieving financial freedom doesn’t necessarily mean becoming filthy rich – not that that hurts.
In this video, Entrepreneur Network partner Brian Tracy explains the seven steps you need to take to achieve financial freedom. Now, financial freedom doesn’t mean becoming filthy rich – lottery winners go bankrupt all the time. Instead, financial freedom is about becoming disciplined and using your money in a way that ensures you can live the sort of life you want both now and in the future.
That’s why the first step isn’t about getting a lot of money. Instead, it’s about teaching yourself to think positively about money. That way, you’ll be in the right mindset to move forward.
Click play to learn more.
This article was originally posted here on Entrepreneur.com.
4 Ways To Become A Millionaire Even When You Start With Little
It costs nothing to take advantage of the limitless opportunities online.
The hardest part of becoming successful is getting started to begin with. But despite the challenges ahead of you, there’s a way to become a millionaire when starting with little. I’m going to show you four reasons why you can become a millionaire with just a small investment.
1First focus on learning, not big gain
Education is your greatest weapon. Focus on learning in the beginning. Don’t make the mistake of focusing on making huge gains in the beginning. Learn everything you can because this is how you build the foundations for long-term gains.
They say that if a millionaire goes bankrupt they’ll nearly always be able to get it back. And that’s because they might have lost their money, but they have the knowledge of how to get back to where they need to be.
2You can learn loads about any topic online
I’m grateful for the internet. It’s the single biggest library in the world. You’re reading this article right now and you’re acquiring knowledge you wouldn’t have been able to acquire 40 years ago. Use the internet to its fullest extent, whether that’s through reading books, browsing articles or watching video tutorials.
Set some time aside every day to learn something online. It could be a video series or a favorite blog. When you get into the habit of learning regularly you’ll find that you advance much faster.
3Focus on the niche you love
These days you can learn about anything and target the niche you’re passionate about. This is what I was able to do with penny stocks. I found a gap in the market and provided knowledge to people who wouldn’t have otherwise being able to access this sort of information.
You can do that with absolutely any niche. When you find a niche you’re passionate about and you use the reach of the Internet you start to make huge gains.
4Prove your expertise by creating free content
Your reputation as an authority is the new business card. There’s a reason I created a penny stock guide and made it free for all. You may have already seen ads for it on social media. The way to succeed with little is to create a reputation through your content.
It’s the gateway to success because through free content you start to build relationships with others who value your work. And from there everyone gets richer.
You can do lots with a little
The days when you needed a huge investment to become successful are long gone. These days you can do so much with just a little. Find what you love, advance your knowledge in that area, and create a product that fulfills a need. Finally, work on building up relationships through portraying yourself as an authority on your subject.
Combine everything together and you can accomplish anything.
This article was originally posted here on Entrepreneur.com.
12 Millionaire Habits To Start Making Serious Money Soon And Build Wealth In A Hurry
Get-rich-quick schemes rarely work but doing the right things every day rarely fails.
There’s a mindset that’s prevalent these days. It’s one of instant gratification in an on-demand society that looks for quick results with very little effort. Entrepreneurs know that life doesn’t work that way. You need to put in the sweat equity if you’re looking to gain serious results.
When it comes to making money, certain good habits push us forward while some bad habits deter us from getting rich or even making any semblance of serious money.
Clearly, many people are making money and some are making lots, but if they mismanage it and pilfer it away on mindless pursuits, building the proverbial empire is going to be far harder.
Making money is one thing, but creating wealth is an entirely different thing. Obviously, most people can quickly make an extra $100 by selling used items or doing a small gig on a site like Fiverr, but if you’re looking for the kind of cash that can make a significant difference in your life, embrace these 12 millionaire habits. They are sure to drive you in the right direction. You’ll find ways to create real wealth by beckoning financial opportunity and potential windfalls through a positive mindset and a sound emotional, spiritual and mental state. That is quite literally the most powerful mixture of habits that exists for entrepreneurs.
1Always add value
Value makes the world go round. Everyone wants to get value out of an exchange. The most successful entrepreneurs in the world know that if you’re going to make lots of money, then you need to always be adding value. Always seek to add more value to whatever services, information or products you’re selling.
2Wake up early
The early morning hours are replete with quiet solitude. It’s when you can refine your thoughts and implement your plans before all the distractions of the day. If you are constantly dealing with interruptions throughout your day, find your happy place in the morning. Wake up early so you can plan whatever will advance you toward your goals.
Making money isn’t just about implementing good career or business habits. You need to be fit emotionally and physically to fire on all pistons. Exercise in the morning, even if briefly. Exercising gets the blood flowing and oxygenation to the cells, helping you to think clearly and be laser-focused. This habit is implemented by some of the world’s richest entrepreneurs.
4Daily goal setting
You have your long-term goals in place but, if you’re looking to make serious money and quickly, you have to set goals every single day. These are milestones on your way to your biggest and most outlandish goals. Do this when you wake up, first thing in the morning, so that you stay on track and on target. Decide what will move you closer to those financial goals by the end of the day, then go out there and do it.
5Effective time management
Everyone in this world has the same amount of time. The 24 hours of each day is life’s greatest equaliser. It doesn’t matter what we do, where we’re from or how much money we have, we all have the same amount of time.
Effective time management is a must for those looking to get ahead. Whether your goal is to earn a lot of money over time or you just need to earn a little bit of extra cash quickly, properly managing your finite time is what makes it possible to succeed.
Networking is one of the most important habits to have in life. The sayings go, your network is your net worth, and if you lie down with dogs, you’ll definitely come up with fleas. Reach out to others and find out what you can do to add value to their world.
Don’t ask for anything in return, especially not right away. Just insert yourself into the mix, and eventually the opportunities will find you.
John Assaraf, who built up a billion-dollar real estate business and is featured in the movie The Secret, preaches the importance of “innercising” in his NeuroGym system. Innercising is mental exercise to reprogram subliminal conditioning deeply embedded in our subconscious. The goal is to frame the mind with a positive financial outlook which attracts money and opportunities to our lives, rather than pushing them away.
Will eating healthier help you to attract more wealth or make more money in the interim? You can bet it will. Sound body, sound mind. To have the precision thinking and focus of a highly-trained athlete, you need to eat healthily. Our bodies spend a large amount of their energy on processing foods. Unhealthy eating leaves us with less energy for achieving our goals, whatever they are.
9Saving and investing
Obviously, saving and investing is fundamental to building wealth. It won’t happen as fast as you’d like, but the larger component at play is having moment-of-the-opportunity cash to invest when something requires your attention immediately. When you have capital and are no longer living paycheck-to-paycheck, you’re ready to earn more money when the opportunity presents.
If you play a cutthroat game and walk all over people, few opportunities will come your way. Being mindful and respectful of others attracts opportunities that you can eventually convert into cash. Be mindful about how you act and what you say so it doesn’t come back to bite you in the butt.
11Work with a mentor
Mentors are great for helping you to earn extra income, whether small or large. A mentor who’s achieved outlandish goals in your industry will offer guidance to help you get where you’re looking to go.
Find a mentor and work with them daily. Ask for their help and guidance as you navigate the choppy waters towards success.
12Contribute to others
Contribution is born from an abundant mindset. When you are sated and have enough for yourself, look to contribute. You can trick your mind into an abundant mindset by simply contributing your time to others. You don’t have to give money. Only time. It’s a subconscious mind trick that moves you away from scarcity to attract more money and opportunities into your life.
This article was originally posted here on Entrepreneur.com.
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