How to prepare for the Greatest Wealth Transfer in History
The largest wealth transfer in history will occur during the next three years. What does this mean? It suggests that now is not the time to put your faith in Wall Street or bury your head in the sand.
As long as money is pushed into our system, it will land in the hands of a few, redistributing wealth and widening the wealth disparity. Do you know where your money will be spent? Into the hands of those who know how to get rich.
What follows are three ways to take into consideration as you prepare for this historic moment in finance.
Prioritize Cash flow and Reinvest
Have you ever wondered why so many lottery winners become bankrupt just five years after winning? It’s because people aren’t taught how to make money work for them. When it comes to investing in things other than their firm, entrepreneurs aren’t much better. They believe it’s all about accumulating wealth, putting money aside, taking excessive risks, and putting their faith in financial experts.
It’s one thing to make money. Keeping it is a completely different story. Cash will be king as we negotiate this historic wealth transfer. Opportunities will be accessible, but only to those with enough liquid resources to bail out struggling businesses or homeowners. Plan on a rocky (and unsatisfactory) journey if you are automatically allocating money to schemes that lock your money away or require performance from a stock market over which you have no control or experience.
Save automatically, but invest consciously. It’s not about setting it and forgetting it, or about investing early, often, and always; it’s about having cash on hand to take advantage of chances. You must concentrate on cash management and cash flow.
We’ve broken it down into five levers you can pull to improve your cash flow investing—these are all about leveraging knowledge rather than capital.
1. Plug the Leaks
You can keep more of what you make without having to cut back. Taxes, interest, investment fees (particularly on non-performing investments), and insurance are all areas where you might save money. Check to see if you have duplicate coverage or structures that are costing you additional money. There is a significant possibility to save money on taxes.
2. Know your costs
How much does it cost you monthly? It is not necessary to thrive, but it is necessary to live. You won’t be able to achieve financial independence—having assets generate enough income to cover your basic expenses—until you know what those expenses are. Once you’ve got that, you can work backwards to generate the cash flow you’ll need to cover your expenses and reinvest your profits. Distinguish your spending once you’ve determined your costs.
There are four distinct types:
● Destructive, get rid of them.
● Lifestyle, manage your lifestyle and pay cash.
● Protective; having cash, as well as asset protection and insurance, are all part of this.
● Productive, productive investments are those in which you invest a dollar and receive more than a dollar in return.
3. Accelerate Investment Income
Too many people have been taught to save 10% of their income and try to achieve a 10% return on that money. For decades, this method has left people far short of their retirement aspirations, and it’s only going to grow worse in the modern era.
So, instead of seeking for easy or automatic investments like mutual funds, start looking for assets that provide cash flow right away. Another thing to keep in mind is to safeguard the negative. Place a strong emphasis on risk management and mitigation. Stop putting your money on the line.
4. Scale Business Revenue
Your business is most likely your finest investment. You might also investigate purchasing complementary businesses from people who have retired or who have simply failed to manage their firms successfully and can be purchased at a significant discount. The economic instability and struggle is just getting started. The next few years will be full of opportunities.
5. Make it Count
When it comes to finding ways to better your life, money is a fantastic standard. What is the most significant aspect of money to you? What are the greatest ways for you to spend your money? Invest in yourself again. Invest in the things that matter: marketing expertise, emotional intelligence, financial IQ, and other skills that will help you add significant value to your wealth.
Ensure your Wealth is Sustainable
Examine your risks in addition to prioritizing cash flow. The professionals learn to manage and minimize risk in this way. Inflation is going to be a part of the new reality we’ll have to deal with. The government is pushing trillions of dollars into the economy without creating any value for those dollars, therefore depreciating your currency. You don’t have to be an economist to see that there will be a day of reckoning.
It’s now or never to secure your profits. How do you go about doing that? By looking for assets rather than mutual funds or stocks. In the upcoming years, a lot of businesses will be sold. Are you able to purchase one? If the infrastructure is in place already and you can add value with your knowledge, the investment could be beneficial straight away. You may also invest in real estate, though we would recommend residential real estate because it is always in demand, regardless of the economy.
The stock market is artificially inflated, as are the price to earnings and multiplies with the creation of money and automated contributions from retirement accounts. Those sitting on money will lose. Hedge funds will sell short and take those bucks, so it’s important to be cautious.
About Xanara
Xanara is a private banking and wealth advisory focused on developing and implementing transparent and client-centric, financial solutions that are backed by expertise. We understand the weight of our solutions and act with the utmost care, resilience, and most importantly, integrity.