Are You Getting Paid Appropriately?

As an asset protection attorney, my job is to help you assess and mitigate risk.  In large part, my job is to help you fully comprehend where your assets are vulnerable to attack and then to advise you on strategies that can either reduce the risks or remove the assets from a position of vulnerability.

But Not All Risk Is Bad

Yes, you read that correctly.  Risk is what leads to new developments and improvements.  Without risk, we would live in a stagnant world.  The question is not whether you should take risk (because we are all taking risks every day).  Rather, the question are:

• Are you fully aware of the risks you take?, and
• Are you being appropriately compensated for those risks?

These are important questions that many of us fail to ask, but recent events make this an important topic.

Municipal Bonds: Are They Risky?

You might be thinking “no way, munis are incredibly safe.”  The correct answer, however, is “yes, municipal bonds are risky.”  That’s not to say they are unreasonably risky.  All asset classes carry with them some risk.  Even the cash in your wallet is at risk.  You could lose your wallet, you could get mugged, or the value of the dollars you’re carrying could decrease relative to other currencies.  Those things happen every day, so to think your immune is unreasonable.

There are also risks associated with real estate, stocks, cash, and yes . . . municipal bonds.  The questions you need to ask with respect to any portfolio are the two questions above: (i) are you aware of the risk, and (ii) are you being appropriately compensated for it?

It’s not the intent of this article to pick on municipal bonds, but because munis are traditionally viewed as ultra-safe investments, they provide an opportunity for reflection.  You see, Jefferson County, Alabama filed for bankruptcy protection.  It is one of the largest municipal bankruptcy in U.S. history, and cost creditors (bond investors) billions, not to mention higher burdens on taxpayers and residents for years to come.

Back to Asset Protection

Again, you should constantly be looking at the level of income you’re receiving relative to the risk you’re being asked to take.  Don’t accept less than reasonable compensation.  This is just a wake up call to those who believe that they are making “totally safe” investments.  In very simple terms, there is no such thing.  If you’re curious to read more about the Jefferson County Bankruptcy, the Wall Street Journal has a good article on the topic: Largest Municipal Bankruptcy Filed

If you have questions about asset protection or asset protection strategies, contact Lodmell & Lodmell today to schedule a consultation.  We’ll help you assess and understand the risks you’re taking, and we’ll help you protect your assets against potentially devastating events.