Once you start getting ahead a bit, you’re going to find out that a lot of people want to take a cut of your wealth. The IRS will be first in line, followed by folks who want to make a million off of spilling a cup of hot coffee in their laps. Long-lost relatives will come crawling out of the woodwork and estranged spouses will start eyeing your assets.
Here is your basic asset fortress: be personally “broke”, heavily-insured, and willing to cut your losses in bankruptcy.
To that end:
- Never own anything individually, if you can help it. Wrap it up in an LLC and transfer that to an S corporation at the earliest time possible. Use a separate LLC for different businesses and split off parts of it into separate LLCs.
- Buy lots of liability insurance, including a high-value umbrella rider for your home and your car.
- Put your assets somewhere that a bankruptcy court can’t reach them, and KNOW what the limits and exemptions are for bankruptcy in your state.
Keep those three strategies in mind constantly.