What is a “Wealth Transfer”?  The definition used here for “Wealth Transfers” is and unknowingly or unnecessary transfer of wealth (income) out of the family.  A wealth transfer can be the way we pay our taxes, mortgage, even our credit card bills or any other expenditure we may have.  The point; is there a more efficient means of handling this outflow and was it necessary in the first place?  The average American may have as much as 20% of income lost to Wealth Transfer without his or her knowledge.

Even the most astute money handlers have wealth transfers they do not recognize.  The largest cause of wealth transfers is Inattention.  Something like our phone bill may have wealth transfers called “cramming” where two or three dollars are lost each month.  Perhaps two or three dollars a month is not worth worrying about but it is thirty-six ($36) dollars per year and may be a great deal more.  Regardless of claims to the contrary most of us have little idea how much discretionary income we have each month or where it goes, it just goes.  The other principal cause of Wealth Transfers is Conventional Wisdom.  Conventional Wisdom is something we take for truth because everyone else does.  Madoff and Enron are only two examples of Conventional Wisdom going awry.  However, the most costly to Americans when added together is handling of our mortgages.

Stopping wealth transfers is THE most effective way to increase Wealth Accumulation and Life Style.  Termination of wealth transfers is usually more effective building wealth than increasing rates of return on investments and comes with no risk in doing so.   The loss of a dollar to a wealth transfer is not just the loss of the dollar but the future Opportunity cost that dollar had.  That is the money that dollar could have returned if it had not been loss.