St Kitts and Nevis
Trust and Asset Protection

5 examples of the best financial strategies and why they all involve a trust

11/10/2023 8:00:00 AM
Admin System

The best financial strategies can be found in the smallest details. Before getting a second citizenship, before enjoying the benefits of a trust, before opening accounts abroad, and before establishing your company, one must learn how to manage a budget.

If you're wondering “how to protect my finances”, you have to understand that no trust, no company, no advice, and no investment will help you if you have unhealthy habits when it comes to your money. 

Today, at Mundo, we want to talk about the Nevis trust and how it is one of the best financial strategies or, more specifically, one of the most relevant tools when it comes to asset protection.

However, before that, the Mundo editorial proposes simple, yet useful advice on “how to protect my finances”.

What are the best financial strategies to consider in your daily routine

We've set up 5 principles that we consider the basis of the best financial strategies. To illustrate this point, we invite you to imagine a luxurious and super-tall skyscraper that's built on weak foundations. It doesn't take a genius to predict that it will eventually fall and cause a disaster. In the same way a house must be built on solid ground, a financial strategy must be supported by healthy habits reflected in a person’s daily routine. Here are the main five points:

1-Diversify your money as much as you can

2-Save a percentage of your income

3-Have a fund for emergencies so these don’t affect your monthly balance

4-Control your credit card expenses

5-Organize your monthly costs according to your budget (allocating a percentage for every need)

Diversify your money as much as you can

Diversification is one of the keys to asset protection. That's why it's highly advisable that you open a bank account abroad. If this is still too far away in the future for you, at least try to open an account in U.S. dollars in your own country. Not for a second should you think that, if you already live in a country where the US dollar is the official currency, you can avoid diversification. In this case, it's interesting to open a multicurrency account so that you can save money in other strong currencies like, for example, the euro or the Swiss franc.

Contact us

Save a share of your income

Make sure to save a part of your income for future projects, or to reinvest in your financial plan. Usually, experts recommend allocating 10% percent of your income into savings, but this number may vary according to your plan, monthly expenses, responsibilities, and liabilities.

Keep aside a fund for emergencies so these don't affect your monthly balance

Nothing ruins a financial plan like an emergency. Therefore, make sure you have separated allocated funds for emergencies so, even if an event unexpected event occurs, you don't have to eat out of your monthly income. Speaking of which, keep in mind that your fund should be separated from your savings. In other words, an emergency must not affect your present situation or your future financial plan.

Control your debt and credit card expenses

Credit card is a useful tool if used wisely. If you're wondering “how to protect my finances”, you need to understand that credit card expenses must be under control. For example, never pay for your daily needs with a credit card, i.e., the children's school, food, or rent, because this will throw you into a vicious circle which is very hard to leave. With a credit card, you can pay for things that you like but that are not essential, for example, tech gadgets, home appliances, or vacations. Note: your credit card debt must never surpass your budget or disbalance your financial plan.

Organize your monthly expenses according to your budget 

Ideally, a budget must be organized in the following way:

  • A percentage for essential needs (tuition, children's schools, fixed expenses, utilities, rent, taxes, and food)
  • A percentage for leisure activities or things you enjoy (going to the movies, the theater, eating in restaurants, hobbies, etc.)
  • A percentage should go to your savings 
  • A percentage should go to the emergency fund

How to protect my finances: a trust is what you need

How can a trust help me? The trust is a way to protect your money because it separates the owner from the assets, which can be a property, a piece of jewelry, or a bank account. Thus, your goods won’t belong directly to you and can only be used by the beneficiaries which are established by the settlor (also, you).

Among other things, the trust will strengthen your financial security. For example, you can put your house under the trust so that nobody can touch it. This nobody includes creditors, ex-spouses, and, in some cases, claimants. Another benefit of the trust is the ability to organize your inheritance without needing a will. If you have family jewelry or real estate that you want to pass on to the next generations, you can simply put these under a trust and establish who, how, and when will benefit from such assets.

Moreover, some jurisdictions offer even greater protection because they enjoy quite solid legislation when it comes to trusts. Mundo recommends Nevis because this jurisdiction doesn't recognize foreign rulings. If established properly, a trust here constitutes a Fort Knox structure for your estate. Establishing a Nevis trust is thus one of the best financial strategies that one can choose.

Disclaimer: this article does not constitute financial advice. Financial affairs are complex and depend on a variety of details, circumstances, and the laws of each country. Therefore, if you want to establish a trust in Nevis or in any other country, make sure to consult with a certified professional before making any decisions.

The benefits of a trust through Mundo

The good news is that Mundo has close connections to the jurisdiction of Saint Kitts and Nevis as one of our main partners was founded here in 1994. Over the years, the Mundo Group has established strategic connections in different countries including Nevis. Are you wondering “how can a trust help me”? Get in touch with Mundo and find out what this island has to offer.

Get in touch with Mundo

All Countries
All Tags