In economics, wealth is defined as the net worth of an individual, that is, the value of assets owned by the individual net of all liabilities owed at a given point of time. For a layman, wealth could simply mean being rich. Well, wealth is much beyond these two definitions.

Deloitte, the audit, tax, consulting, enterprise risk and financial advisory services provider defines wealth as follows:

Wealth is the ownership of valuable resources. Wealth creation involves the building of assets by means of careful investment, usually over a long period so as to achieve an income stream that will ensure a continuation of a high-quality lifestyle in the years beyond retirement.

In a nutshell, wealth creation should give you the financial freedom to do what you want to do. For the purpose of long term wealth creation you need to carefully invest your savings over a long period of time so as to ensure that you have a sufficient corpus to meet your financial goals at different milestones of your life child education and marriage, home, and retirement. Hence, a disciplined and systematic investment approach is necessary for wealth creation.

Now, the question is where to invest for wealth creation. The answer to this question really depends on various factors such as your financial goals, age, number of dependents and risk appetite.

There is no one approach for creating wealth but it depends on every individual circumstances and personal choices. Various factors such as financial goals, market risk, return on investments, market volatility should be considered while investing. Your investment is likely to fall in four major asset categories over your lifetime.

Equity

Equity includes any money invested in direct equity, mutual funds, exchange traded funds (ETF) and unit linked plans. The value of equity investment fluctuates as per the performance of funds. They can give high returns in the long run, however, they are highly volatile too, especially in the short term. Moreover, you need to be an experienced investor to ensure you are picking up right equity funds.

Debt

Also known as fixed income funds, they mainly comprise of Fixed Deposits (FDs), Public Provident Fund (PPF), National Saving Certificate (NSC) and government bonds to name a few. They give a fixed interest every year, along with the return of the principal amount at the time of maturity. Safety of principal amount and the regular income are the two important features of investment in debt. While the returns are fixed and guaranteed, but they are not high enough to give you edge after discounting for inflation and taxation.

Real Estate

Investment in real estate includes every property that you buy residential, commercial or land as well as the real estate mutual funds. The gradual increase in prices gives more stability to investment. Moreover, regular income can be earned if the property is rented out and the returns on investment can be increased by renovations and repairs. While the real estate market is less volatile compared to the equity market, there might be phases when real estate prices experience volatility. Also, you need to make large capital investments in real estate and it is difficult to sell property quickly. The sale of property is subject to capital gain tax, TDS and some other taxes (depending if the property being sold is constructed or under construction), which eventually lower the net returns from real estate investment. This makes real estate investment rank lower on liquidity and returns on investment parameter.

Commodities

Commodities include precious metals such as silver and gold in the form of coins, bars, ETF and mutual funds. Commodity investment is perhaps the easiest form of investment and can be bought or sold at any point of time as per your financial requirements. Over the long-term, investment in gold and silver can give high dividends and they can be easily mortgaged for availing loans. However, there are no tax advantages and fixed or regular income. Further, people have a tendency to stock up gold and silver rather than selling it. So, that makes commodities a less liquid investment.

Every asset category has its own risk and return profile, so does an investor. There are several investment plans to consider if you plan to invest in equity and debt instruments.

Mutual Funds

A mutual fund is an investment option in which money obtained from various individuals is invested in the securities like stocks, shares, bonds or commodities. Mutual fund schemes charge a small percentage of your investment as fees each year for professional and expert management of your investment. So your risk of losing money through investments is reduced in compared to if you decide to invest directly in the market without having the requisite expertise. There are different kinds of mutual funds such as equity, debt and balanced funds. So, you can accelerate your wealth management goal by investing in different mutual fund schemes depending on the risk you can bear.

However, returns on a mutual fund are by no means guaranteed as they are subject to the performance of funds. If you want to switch from one fund to another, there is no such option available. The only way to protect your investment is to completely exit by paying an exit load and then pay an entry load again if you wish to re-invest. So, if your investment amount in mutual funds is huge, the net returns will get affected.

Public Provident Fund (PPF)

One of the safest debt instruments, PPF investment currently gives an annual interest of 8.75% on deposit amount between Rs500 to Rs1,50,000 every year. The interest and returns on maturity amount is not taxable. However, the downside is that there is a lock in period of 15 years. The only option is partial withdrawal after after completion of 5 years from the date of opening this account.

Fixed Deposits (FDs)

FDs are a safe investment for a conservative investor since it provides a fixed rate of interest and can be easily converted to cash in case of emergency. But, the actual benefits or income from fixed deposit are annulled by the increasing inflation and tax cut. Let’s take an example here. You invested Rs 1,00,000 in tax saving fixed deposits five years back.

Principal Amount Invested (A)	1,00,0000
Interest Rate (B)	10% per annum
Current Inflation Rate (C)	5%
Net Interest Yield (B – C)	4%

Though you will get returns @ 10%, effectively you will get only 4% after factoring in inflation. The final effective return would be even lesser after deducting tax.

Term Insurance Plans

A term Insurance plan is the purest and simplest insurance plan that provides a huge life insurance cover at a very low cost for the specified period of time. If the policyholder dies during the policy term, the death benefit (sum assured or life cover amount) is paid to the nominee. The premium as well as death benefit are tax-free. There is no maturity benefit, though. An investment in a term insurance plan is highly recommended for your peace of mind and to ensure financial security of your dependents after you are not around.

Unit Linked Insurance Plans (ULIPs)

ULIPs are a goal-based investment that provides the benefit of insurance protection with strong wealth creation opportunities. A part of money invested in ULIPs is directed towards your life cover and the residual portion is invested in equity, debt or balanced funds of your choice. Though the returns on your investment is market-linked, you have a control over it since you have the flexibility to switch funds from equity to debt or vice versa at no cost, as per your financial goals and market fluctuations.

ULIPs have given steady returns over the last few years. ULIPs with an aggressive fund allocation (50-75% of the portfolio in stocks) have risen to 28.62% from 9.73% in the last five years.

Source

ULIPs have a greater tax advantage too. Under Section 80C of the Income Tax of India a deduction (maximum of Rs 1,50,000) from the taxable income of individual is provided for the premium paid on ULIPs. The capital gains, maturity benefit and death benefits are also exempted from tax under Section 10(10D). ULIPs from reputed private insurers like ICICI Prudential have proven performance and track record, thereby commanding a trust and respect of investors.

Ideally, your wealth portfolio should be a healthy mix of equity, debt, real estate and commodities. But, again how and where you invest depends on your wealth creation goals and risk-return trade-off you are willing to take off. What you must remember is that wealth creation is not an overnight phenomenon. You must be disciplined, systematic and committed in your wealth creation approach.

If you trade in the traditional markets, Stamp Duty and Capital Gains Tax can eat into your profits. In the UK, financial spread betting is not subject to the taxes that traditional trading is:

UK Capital Gains Tax

When you sell an asset the profit you make is liable to Capital Gains Tax (CGT). This tax is also levied when you sell securities on the traditional market. All profit over the Annual Exempt Amount (AEA) is liable to CGT. In 2015/16, the AEA is set at £11,100 for an individual.

For example, you sell £40,000 of shares that you purchased for £20,000 and make a pre-tax profit of £20,000. When the AEA is subtracted (£20,000 – £11,100), the amount liable to Capital Gains Tax is £8,900.

CGT is normally charged at two separate rates, dependant on your income:

Basic rate taxpayers pay the Standard Rate, levied at 18%, for individuals with a total taxable income and gains up to £31,786.

Higher rate taxpayers pay the Higher Rate, levied at 28%, for individuals with a total taxable income and gains in excess of £31,786.

Using the example above, as a Standard Rate taxpayer you would pay £1,602 of your profit to the taxman.

Assuming you are liable for the Higher Rate of CGT, you would pay tax of £2,492 on your gains.

If you placed identical trades using a financial spread betting provider you would usually be exempt from CGT and can keep the £20,000 profit.

UK Stamp Duty

As a normal UK taxpayer, you will pay a 0.5% rate of Stamp Duty at the point of purchase when you trade on the traditional market. In the above example you would pay £100 of your profits to the taxman by way of Stamp Duty.

In financial spread betting, because you never own the underlying asset, you would not be liable to pay Stamp Duty on your profits.

With Stamp Duty and CGT added together, in the above scenario you stand to lose £1,702 as a basic rate taxpayer, or £2,592 as a higher rate taxpayer. In financial spread betting, you can trade on the same markets but keep 100% of your profits.

Tax laws are subject to change and depend on individual circumstances, we encourage you to seek independent tax advice. If spread betting is your main income you may be liable to pay tax on your earnings.

Because your spread betting gains are treated as tax-free, your losses are not deductible against other income.

Risk Warning: Spread betting is a leveraged product. Losses may exceed deposits.

Like all states across the nation, California has regulations and laws regarding car insurance that relate to drivers and the insurance companies that insure them. California has minimum coverage laws regarding driver liability and property and casualty damage.

California’s car insurance laws are outlined in the California Insurance Code. These laws include requirements for drivers’ financial responsibility. Drivers are required to register their vehicles and provide proof of insurance coverage under California law. Drivers looking for auto insurance Downey CA can get same day insurance when they need it.

Driver Financial Responsibility

California’s financial responsibilities laws require that drivers on California roads have auto insurance. If a traffic accident happens, the driver must provide necessary financial responsibility.

Minimum responsibility is established with car insurance policy coverage or a deposit of $35,000 in cash to the Department of Motor Vehicles in California. The driver can also provide a surety bond of this amount and/or offer a self-insurance certificate to meet these requirements.

Drivers are most likely to offer an insurance certificate as proof of financial responsibility in California. The certificate may be requested on demand in certain conditions, such as when the police request the driver’s registration in a traffic accident. An authorized letter provided by California’s Department of Motor Vehicles is sufficient if the driver is self-insured.

Driver Liability

California requires minimum liability coverage of all drivers. Drivers in California frequently use car insurance to meet these minimum liability coverage amounts of $15,000 for a single person or $30,000 for two or more people. Liability and bodily injury cover pay for injuries or death that occur when one or more people are involved in an accident with the insured driver.

Property and Casualty Coverage

California law also requires minimum coverage amounts for property and casualty damage. This provision covers damages caused to other persons’ property when the insured driver is involved in an accident. California’s minimum property damage coverage per vehicle is $5,000.

Uninsured Driver Insurance

Uninsured drivers are a problem in California. The state does not require insured drivers to carry uninsured motorist coverage (UM) but certain limits must be observed when it is applied. Uninsured coverage amounts must be equal to bodily injury or liability limits carried by the insured. When an insured driver elects UM cover, California’s insurers limit amounts to $30,000 per person or $60,000 for two or more people injured by an uninsured motorist in an accident.

Under-insured Driver Coverage

Underinsured motorist (UIM) coverage must be purchased when the California driver purchases uninsured motorist insurance. Car insurers in the state of California must offer an equal amount of UIM insurance. The insurer may also offer UIM coverage that is higher than the insured’s uninsured motorist cover.

As with most states, Iowa has implemented a Workers’ Compensation Act that is designed to help workers injured on the job. The basic idea of workers compensation is to ensure employees receive the care they need for certain workplace injuries. The situations covered by the Act include injuries on the job (section 85), occupational diseases (section 85A), and hearing losses attributed to occupational conditions (85B).

The law requires an employer to pay all medical care costs that are considered reasonable and necessary for the treatment of any injury. The types of compensation may include payment of lost wages and even a reimbursement for travel necessary to get the proper care.

An additional protection for every worker is prohibiting a medical care provider from seeking payment of charges for treatment while the claim is unresolved. Such workers’ comp claims may be contested over the total amount of the costs for care, the type of care, or the reasonableness of the care.

There are limits on the amount of compensation an employee is eligible to receive, currently 80 percent of total spendable earnings of the employee. This is normally understood to mean the net pay after deducting taxes from the weekly earning. The law provides a formula for calculating this amount, and it takes into consideration such things as total income tax exemptions and marital status. In addition to these factors, there is currently a limit of $1,498 weekly for PPD and a maximum of $1,628 weekly for TTD, HP, PTD and death benefits.

There are additional considerations and rules when it comes to determining the total disability payment a worker will receive, including whether the disability is temporary or permanent.

Under the law, employees must file a claim, and their situation will be evaluated by the staff of the Workers’ Compensation Commissioner. There are six different types of settlements that can be approved and awarded by the Commissioner, and the situation and facts of each case decides which type of settlement is appropriate. This process can sometimes be complicated and even intimidating, and it oftentimes takes a qualified workmans comp lawyer to help with the process.

For example, there are two basic Agreements for Settlement and Compromise, and the four other types of settlement are used in conjunction with these. Selecting and working with the right form of settlement will determine how much money is paid out and when, including the potential for a lump payment of funds to be received.