What are the Four Phases of Wealth?

What are the Four Phases of Wealth?

April 27, 2023

What are the four phases of wealth? Paul L. Moffat, President and Senior Financial Planner at Arista Wealth Management, explains in the newest episode of Arista Advice!

Hello, welcome to Arista Advice! Question of the week is: "Paul, what are the four stages of our wealth?"

First one is accumulation. 
The second phase is the preservation.
Third stage is decumulation, and fourth stage, transfer.

We have clients that make a thousand dollars a month, and we have clients that make $3 million a month. And we work with all of them and have great conversations with all of them, and we find that everybody is somewhere between $1000 a month and $3 million a month, but the conversation still centers around these four stages of their wealth.

Let's talk about the first stage, which is the accumulation. We can't overemphasize the importance of individuals, both our clients and their children, and their children getting educated, learning a vocation, learning a skill, saving money, putting money aside, investing in themselves to get better educated. The second phase is the preservation. Growing their wealth, expanding it, making it grow, finding assets that have high expected returns, and the third stage is the decumulation - making purchases, making investments, putting contributions to charities, other 501(c)(3)s, 529 accounts, and many other things. And the final stage is the wealth transfer. Transferring those assets to well intended charities and individuals, and sometimes providing and taking care of children. We're seeing more and more children that are having disabilities. That's where it's important to do some planning and creating special needs trust and other estate planning vehicles to provide for these children. 

Remember, the four stages of wealth is accumulation, preservation, decumulation and eventually transfer. Hope this information is helpful. Please remember to go to AristaWealth.com to get other videos, tools, tips, and resources to help you live a life of significance.