Richard Cayne Meyer International Ltd Protect & Grow Your Wealth

As we have discussed in previous articles the importance of having a financial plan lets look at some reasons the wealthy are very interested in protecting and growing their wealth. Richard Cayne at Meyer International Ltd in Bangkok Thailand says many assume that the very wealthy don’t need to or have to think about their money or wealth but that is not true.  In fact most high net worth individuals defined as having investable assets over US$1million think about their portfolio more than those who don’t have any money saved up because they know that through inflation can erode their hard earned savings if they aren’t careful. They very much want to grow their assets and keep a watchful eye on preserving them as well. Those who are slightly higher up the food chain in the ultra high net worth class defined as having over US$50million are even more concerned about inflation and want very much to preserve the store of value and are less concerned about really growing it and more focused with just keeping up with inflation.

Richard Cayne having worked in Tokyo Japan Meyer Asset Management for over 15 years and servicing many high net worth individuals and even ultra high net worth individuals can certainly say that everyone regardless of the size of their portfolio should be concerned about inflation and keeping pace with it at the very least.  Inflation is certainly a form of wealth destruction and should be one of the most important considerations to any investor.

If it wasn’t for inflation then the need to grow your savings would not be as pronounced as it currently is.  Imagine for example if prices would never change and the cost of higher education currently around US$80,000 for four years ( see fastfacts ) would still be the same in 15 years.  That is a nice thought but is not the world we live in.  In our world we would need to target a sum closer to US$150,000 to get the same value in 15 years as now.  That is assuming of course inflation does not escalate further.
Loosing Your Store Of Value By Doing Nothing Or Achieving No Growth

Richard Cayne Meyer International Bangkok Thailand says that his wealthier clients actually look at it as if they are loosing money every year they don’t achieve growth same or greater than inflation. If for example their net worth is US$20,000,000 and they achieve only 2% growth on their portfolio they see their purchasing parity next year of only US$19,600,000 that they are down US$400,000 assuming a 4% inflation rate.  This is a very unsettling feeling for them and as such the main objective is to not loose their store of wealth and keep up with inflation.  Anything beyond the inflation rate is seen to be their real return.

Real Estate is another area which despite some downturns even though significant in size is still on the rise over time and needs to be considered,  particularly in Asia, where property prices have risen at an extremely fast pace.  Certainly property if bought at the right time can play a meaningful part in someone’s portfolio right along with equities, bonds and commodities says Cayne.

Choosing to invest in assets that will grow in value outpacing that of inflation is key.  Particularly in the US these days it is getting more and more obvious that the government is doing what it can to stimulate the economy and inflate asset prices of both equity markets and property markets.  This means keeping your cash in near zero interest bearing accounts will be the worst thing you can do for your financial plan.  It’s a guaranteed looser over time.

So whether you are just starting on your road to financial freedom or already there consider your options carefully as inflation is a force that affects us all.  Everyone needs to plan carefully and consulting with a firm that can help you define and stay on track of your financial plan would be a recommended and valuable decision to make.

Richard Cayne has been involved with offshore funds and structures in Asia for over 17 years.  He is currently Managing Director of the Meyer Group consisting of Meyer International Ltd and Meyer Asset Management Ltd. The Meyer Group is wholly owned by Asia Wealth Group Holdings a London, UK listed company with ties to over 200 global financial institutions.

Article Source: http://richardcaynes.wordpress.com/2012/08/28/richard-cayne-meyer-international-ltd-protect-grow-your-wealth/