Affluent for Life
09/01/2006 12:00 am EST
When I first began reading this book, I thought it would be aptly suited to folks who had managed to earn—and keep—a significant amount of their wealth.
Yet, as I made my way through what turned out to be a very enlightening to me, I realized that—while the book certainly covers topics of interest to the wealthiest of families—it also was chock full of information that most people—wealthy and not-so-wealthy—could use to successfully plan their financial lives.
Ted Ridlehuber has spent more than 35 years counseling individuals and families on how to successfully plan for their demises, in terms of preserving the wealth they have worked so hard to create. And his book offers tangible, concrete steps on how to go about doing just that. And unlike many books on wealth preservation, he delivers his recommendations by way of examples that even a novice at finances can understand.
He emphasizes that the biggest threat to wealth preservation is a lack of planning. And he offers the statistic that only 5% of the wealth accumulated in family businesses in this country lasts beyond the third generation. Shocking, but true. But Mr. Ridlehuber's suggestions to correct that problem are pragmatic, and make a lot of sense.
Some of his suggestions run counter to conventional wisdom. For example, he recommends using just one wealth manager, but a professional who is free to recommend products outside of his own company's proprietary investments. The reason is simple: here is one person who has complete knowledge of your finances, rather than the little here and the little there strategy that many investors adhere to, which quite often leads to total confusion and a smaller estate for your heirs. Within this same framework, I found his idea of creating two portfolios—one for lifetime capital needs and one for your surplus wealth—to be very attractive.
Mr. Ridlehuber also makes a good case for incorporating several types of insurance into your overall plan. And he spends quite a bit of time discussing the most tax-efficient methods of distributing retirement assets, including a sizeable variety of trusts.
One area he notes that is often neglected is planning for stock options as well as restricted stock, both of which require special funding strategies, as well as significant tax planning. And his chapter on business succession planning is a must-read for anyone with his own business, and will assist even the most controlling of owners in thinking carefully about the who's, what's, and how's that will affect the preservation or sale of his livelihood.
I also found his chapters on gifting to children, descendents, and charities particularly helpful, especially regarding the numerous trusts available to assist you in preserving and controlling the preservation of your wealth.
And his explanation of how titling your assets can negate your will should be of interest to all.
I would highly recommend that anyone who would like to leave any assets behind get a copy of this book, sit down with your family, and make a plan. It will be worth it—for generations to come.