Many of us will get money by inheritance from parents; as a result of an accident, or we may sell a piece of land or property. What is the best way to preserve that money?

People get grandiose ideas about investing that money in the stock market, hoping to get rich quick. While it might happen on very rare occasions, the usual scenario is disaster and most times people who gamble that way, become losers.

Wealth preservation is based on the philosophy that it is more important not to lose money than it is to make money. Wealth can be preserved in two ways; you can grow net wealth at a rate greater than inflation or you can ensure that wealth is preserved by limiting the charges on wealth.

During the Celtic Tiger years there was a blind pursuit of capital appreciation and growth. The old wisdom of protecting wealth was forgotten as investors looked to make large capital gains from stocks and particularly property. It seemed that the business and economic cycle had been banished forever with a blind acceptance that stock and property markets were a one-way bet.

“This time it is different” are the five most expensive words in the English language. To their detriment many investors have learned the hard way that the old cliché of not having all your eggs in any one basket remains absolutely true. Business and economic cycles with good and bad economic times remain, that is why we must always be prepared for the rainy day and why investment portfolios and wealth should always be truly diversified and have a healthy allocation of a variety of different assets.

The tax charge on wealth plays a significant role in preserving wealth.  Ireland had become a low tax regime for individual wealth but that has changed in recent years as government seek to increase the tax take to plug our fiscal deficit. Consequently, the tax planning required in today’s tax environment differs from the tax planning required 4 or 5 years ago.