5 Strategies the Rich Use To Protect Their Assets, From Expert Jaspreet Singh

Growing your wealth is one thing, but what about what to do when you gain a lot of assets? You’ve worked so hard to earn what you have that you don’t want to lose it or put it in any danger, so you need to take steps to protect your assets. One of the better approaches for this would be to model your financial plans after strategies the rich use.

Jaspreet Singh, a financial expert and attorney who specializes in investing and entrepreneurship, offers these five strategies the rich use to protect their assets .

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1. Make Your Assets Invisible

Not having all your assets in your name, or under a business umbrella, can save you the hassle of having both a price tag and a target on your back.

“Let’s just say you are worth hypothetically $1 million,” Singh said. “That might make you feel rich but the problem with that is that also exposes you to liabilities because now if somebody’s walking across your lawn and they break their leg because they fell onto a ditch or whatever, and then they sue you, well now they see that you have these assets that they can come after you for.”

He continued, “So what wealthy people want to do is they want to have […] this wealth but they don’t want anybody to be able to see it. That way if somebody’s walking across your lawn and they hurt themselves you are only worth $0 on paper so they can’t really sue you for anything.”

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2. Hire Smart People

Whether you majored in business or came into a ton of money suddenly, you need to know how to organize your finances and potentially maximize them. Hiring the right people for the right areas of your financial planning can go a long way to not only protect your assets but also grow them.

“There are three types of smart people that you want to consider investing in. Number one is an attorney, number two is a financial adviser and number three is an accountant,” Singh advised.

These are just the basic hires of professionals to surround yourself with, but there are other areas where you may need the advice of smart money experts. For example, Singh also said, “If you have any sort of wealth you want to consider getting an estate planning attorney because their job is to help plan your estate. Meaning that when you die there’s a plan on what happens with the assets, because the last thing that you want is for the government to tell your family what is going to happen with your assets.”

3. Practice Real Diversification

All diversification is not created equal in the eyes of many investors, including Singh. When it comes to your investment strategy, you might not be diversifying your assets in the best way. Here is what Singh said about “fake diversification.”

“You have your money in the stock market and it’s diversified across a broad array of stocks and ETFs and index funds. You might have some blue chip ETFs, you might have some growth stocks, you might have some international stocks and ETFs and maybe you’re investing in some gold companies. But the problem with this is, yes, you’re diversified in different types of companies, however, all of your money is tied up in one asset class — which is paper assets and stocks.”

This is not to say you shouldn’t invest in stocks — it’s to say you shouldn’t just invest in stocks. If you have a mix of assets then all your eggs aren’t in one basket.

Singh added, “The reason why wealthy people want to diversify away from this is because of two things. Number one is you are at risk for a stock market crash; if you start to see a major recession you could see the broad stock market fall. Number two is all of your assets are very liquid, which means if something were to happen to you [or] something were to happen to your family, now you lose full control over how your money is used.

“Real diversification is investing in completely different asset classes. So maybe you own some stocks, but then you also have some cash and then you own some physical real estate — this is now a hard asset. Different asset classes mean you protect yourself in different phases of the economy, because there will be phases in the economy where stocks do bad and real estate does good.”

4. Own Real Estate

One of the better hard assets to invest in across the board would be real estate. Whether it’s to live in, work in or rent out, there are endless possibilities to appreciate.

“The reason why wealthy people love investing in real estate isn’t just because you have the ability to make money, which is one reason you get cash flow, but it’s also because of the tax benefits and the estate planning benefits that you get with real estate,” Singh said.

5. Get Insurance Protection

The notions of insurance and protection are often synonymous, especially when it comes to your assets. Sometimes it takes money to protect your money, and the long run has proven that many times over for varying financial shocks and situations.

“Nobody wants to pay for insurance, but the reality is it is a necessity that you need in order to protect you,” Singh said. “It’s a small price you paid today to protect you against a big headache in the future. I know insurance is expensive — there are so many different types of insurance and it feels like there’s always just a new type of insurance that you need, but I’ll tell you from experience if you don’t get insurance it can end up costing you a whole lot more.”

This article originally appeared on GOBankingRates.com : 5 Strategies the Rich Use To Protect Their Assets, From Expert Jaspreet Singh