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So far in this series, we have taught on the importance of learning how to build wealth, but just as important, you need to spend some time learning how to protect that wealth through asset protection and tax savings. Because the two biggest threats to your assets are lawsuits and taxes.
Im not going to gloss over and tell you there are no risks in owning real estate or operating your own business, especially in todays litigious society, because a new lawsuit is filed on average about every two seconds of every day of the year. But you can be in so much fear about the what ifs that its easy to think of all the excuses why you shouldnt get into any meaningful wealth-building rather than focusing on the positive reasons why you should.
However, the Scriptures say in II Timothy 1:7, God has not given us a spirit of fear, but of power and of love and of a sound mind.
Yes, there are risks in owning real estate or your own business, but if you set up appropriate entities and structures such as corporations, limited liability companies (LLCs), land trusts, etc., instead of you owning your assets in your personal name, you establish a shield between you and your liabilities. So while you dont have spirit of fear on you, you should indeed use wisdom in protecting yourself, and thats what this teaching is about.
Take advantage of the legal systems that have been put in place by the laws of the land. God himself even gave measures of protection to the Israelites through the six cities of refuge mentioned in at least five chapters in the Old Testament
- Exodus 21:12-14
- Numbers 35
- Deuteronomy 4:41-43
- Deuteronomy 19
- Joshua 20
Without getting into a deep study of Scripture, these cities of refuge were basically used as a means of escape and protection by someone who had killed someone else unintentionally or ignorantly. Under these circumstances, it was considered an honest mistake and provisions were made for their protection.
Its okay to take advantage of the law and take precautions even in cases of our negligence, as long as there is no malice in your heart. The Bible is extremely clear on the distinction between causing something to happen unintentionally and carrying out a malicious act with premeditated evil intent.
If you dont protect yourself and your family, you are not being wise, and you know what the opposite of wise is, dont you? Remember the wise man built his house on the rock, but the foolish man built his house on the sand, as you read about in Matthew 7:24-27. You should build your businesses and your real estate on a solid foundation that cant be shaken when the winds blow.
Dont put this aspect of the business on the back burner and get to it when you have time. Dont have the mindset that you will wait until you have more assets or income before you begin laying the solid foundation and implementing the strategies you can learn through the resources we have available.
Not everything has to be completed and done perfectly before you start, but at least begin the process, the foundation. You need to plan ahead. Take the necessary steps to protect and preserve your assets now, so that as they grow, you and your familys financial future will be shielded.
Believe for the best and prepare for the worst. Just as a police officer wouldnt go into a situation without a bullet-proof vest, you shouldnt enter business or real estate ventures without appropriate protection. It is wise to take preventative measures. Sure, that police officer could say, God will protect me. Well, God does protect us, but He expects us to use wisdom and the tools He has given to us. Maybe none of us should carry insurance of any kind, if we feel that God will protect us anyway. Yet, most of us do have insurance because we feel it is the wise thing to do. Paying for insurance and taking steps to protect your wealth doesnt mean we dont trust God.
Again, my intention is not to cause you fear, but at the same time I want you to understand the importance of asset protection. If there is a lawsuit related to one of your businesses, all of your personal assets, including your home, your cars, and your bank accounts, could then be tied to the suit and you could lose it all. Likewise, if you are sued personally, that suit could then be tied to your business. The liability shield you need to put up works in both directions.
You cant wait until you are sued to start placing your properties and your businesses in legal entity structures. Thats like the police officer putting on his bullet-proof vest after he has been shot!
I pray that none of you listening to this CD will ever have a lawsuit filed against you, but if you do, youll be glad you have taken the time to get your asset protection strategies in order. I sure can sleep better at night knowing I have the appropriate structures in place in case something ever does arise.
