I am Rich Yet Own NOTHING, Here’s What The Government Won’t Tell You About Wealth

About this video

• Video Title: I am Rich Yet Own NOTHING, Here’s What The Government Won’t Tell You About Wealth
• Channel: Ken McElroy
• Speakers: Ken McElroy
• Duration: 13:24

Overview

This video explains why the wealthy appear to "own nothing" by detailing asset protection strategies. It highlights the risks of holding assets in personal names, especially after an accident or lawsuit, and emphasizes the importance of using entities like LLCs to shield assets from creditors and judgments. The video also touches on insurance as a first line of defense but stresses that entity structuring is crucial for comprehensive protection.

Key takeaways

• Asset Ownership: The wealthy protect their assets by not owning them in their personal names. Instead, assets are held within legal entities (like LLCs) that act as a shield.
• Risk of Personal Ownership: Holding assets in a personal name makes them vulnerable to lawsuits and judgments. Even if insurance covers some damages, large claims can exceed policy limits, leading creditors to pursue personal assets.
• Insurance is Insufficient Alone: While insurance is a necessary first step, it may not cover all damages in catastrophic events. It's a "first line of defense" but not a complete solution.
• Entity Structuring is Key: Using entities like LLCs for assets (real estate, investments, etc.) creates a barrier between personal assets and potential liabilities. The entity, not the individual, legally owns the asset.
• Future Earning Power is an Asset: Even without current assets, a person's future income and earning potential can be subject to judgments for up to ten years (and renewable), making asset protection crucial regardless of current net worth.
• Title Transfer is Critical: Simply creating an LLC is not enough; the title of the asset must be legally transferred from the individual's name to the LLC's name to be effective for protection.
• Car Ownership Risks: Putting a car in an LLC primarily protects the vehicle itself, not the driver from liability. The driver remains personally responsible for accidents.
• Strategic Entity Use: While one entity per asset offers maximum protection, practical considerations like maintenance costs might lead individuals to group a few related assets (e.g., 2-3 rental properties) into a single LLC, understanding the increased risk if one property faces a claim.