Buhay Petiks

Diversification of investments and property sanctuaries may be overrated. Go ask Warren Buffett who said that diversification is merely a protection against ignorance: it makes very little sense for those who know what they are doing. It is possible that Twain may have literally referred to farm (chicken) eggs and baskets. But even in the figurative sense, watching the basket always makes sense from the standpoint of asset protection. You may have heard your mother echo the words of Cervantes instead of Twain. Diane Kennedy in Loopholes of the Rich (2001) advises that if you have businesses that could create liability, such as commercial buildings and apartments, you may consider separating these assets. For example, you have three office buildings, you could form a limited partnership for each of the three structures to curb liability exposure. That way, if a lawsuit arises. from one of the buildings, the others would not be at risk.