Wealth Accumulation in These Difficult Times

1. Wealth accumulation begins as an effort to regularly save that small amount known as your income-expense remainder. From there, beginning as a  “crumbs” fund, it can graduate into a formal wealth accumulation program with a set amount deposited regularly.

8-Step Accumulation Process

2. If you have not begun a wealth accumulation program, here is a suggested 8-step process of setting it up. 

• Decide that you want to have a wealth accumulation program.
• Examine your financial needs and determine your priorities using the Trigon as a financial needs model. A trigon is a 3-sided triangular structure with a triangular base. It is a structure that does not crumble. The Trigon wealth model arranges the financial needs according to their importance and urgency from the base to the apex. Most financial experts advise to begin with the three foundational priorities: money for you, money for the children’s education and money for the family, whatever happens.
• Label and quantify these priorities and every other priority you choose.
• Seek the advice or help of a financial advisor, preferably with a life insurance orientation.
• Establish your seed fund and source. This fund is best initially put up in a savings account with checking convenience. Determine how much regularly you will put into this fund.
• Formulate your accumulation strategies, focusing on your chosen priorities. For example, if your top priority is retirement, what accumulation instrument will you use?
• Implement your strategies.
• Track your program to completion. Review and update valuation every year.

3. If you already have begun an accumulation program, these difficult times are inviting you to have a close look at what you have. Is it what you really want to have? Does it cover all your financial needs? Are you satisfied with your financial model?

Recession Is Relative

4. So times are difficult. Everybody is talking about recession. But recession is a relative thing. Recession does not impact in the same way to all people. Some are seriously affected, some slightly, some are not.

5. If you are seriously affected, as in your business is going down, then your wealth program should be able to do yourself a favor right now. It can be a partial savior, in contingencies and emergencies such as this.

6. If you are slightly or least affected, recession can only affirm what you are doing. Recession should not change your discipline; it should strengthen it.

7. One of the immediate consequences of recession is the freezing of the use of money, thereby lessening market activity. If you will ever consider, for very serious reasons, to freeze some of your regular accumulation fundings for the future, you should be guided only by your Trigon priority-needs setting. You must protect your wealth base.

Crisis Validates Wealth Accumulation

The financial crisis does not invalidate the need for an organized system of wealth accumulation. On the contrary, it makes the system imperative. With or without the crisis, the process must proceed. It is unthinkable not to have financial wellness at a time when one cannot earn anymore.

And because wealth accumulation does not happen instantly, or magically, as it is a process involving the intelligent deployment and marshalling of your resources, begin as early as you can, according to your means, and gradually build your accumulations into the fund structure that will sustain you and your family into the future. The times do not offer the luxury of waiting. You must begin right now!

And so you have it. The critical question still remains,  ”Is it enough?”