TFA Part 2, Prosperity Asset Preservation
- September 1, 2016
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by Matthew K Palfreyman, Esq.
Asset erosion comes from neglect. Why do so many lottery winners become broke after obtaining their newfound fortune? Because the forces that erode prosperity are not removed from that person’s daily life. The abundance of the new resources actually amplifies the destructive forces that are present from habitual neglect. Except for forces for which there is no control (more on this in Part 3), if a prosperity asset is eroding in value it is because of neglect. I believe everyone struggles with this principle in one way or another. Prosperity is more than about developing wealth. Our client’s health, emotional, and spiritual prosperity are very important to our firm and what we do for them as well.
Invest time and resources wisely in the prosperity assets. In my last post, I redefined the term asset in prosperity terms as assets that generate consistent income. Assets that generate consistent income often have the potential to grow exponentially. That is why prosperity assets are the most important. To grow exponentially, prosperity assets require wise investment of time, resources, and planning. If neglected, they lose value and become a very different type of asset, a service or maintenance asset.
These assets serve or maintain the prosperity assets. Note the difference. The value exchanged or obtained from service/maintenance assets may not create financial gain, but this category includes many traditional assets. Common Examples: Food and drink for our bodies to properly function. Shelter that protects us from the environment and allows us to recover. Transportation to and from the activities which create income. Items of personal property used in a business. And so on. Sales professionals for these kinds of assets will say that quality is the most important consideration. In my opinion, efficiency should be the focus. Although quality often contributes to efficiency, efficiency does not always depend on quality.
Efficiency depends on the context. The equipment for the business needs to function properly and efficiently for its intended purposes only, avoid paying extra for features which are not critical. Match food quality and quantity to physiological demands, anything more is inefficient. If someone lives close to their primary place of business, the fuel efficiency of a work vehicle is less significant than its ability to get to and from work safely. For this category of assets, the difference between it being productive or wasteful is RAZOR thin.
Here is one important piece of legal advice for these assets: if a service/maintenance asset is critical for the maintenance of a prosperity asset, get the underlying guaranty, warranty, employment contract, or service contract, etc in writing. The writing is clear evidence of the agreement, and is the efficient way to explain and enforce the contract in court, any other method is inefficient and much more expensive.
For Part 3, the discussion will be about one final category of assets: those that protect prosperity assets to deal with the unexpected.
Thanks for reading!