Sustainability: An Important Word in 2012

Our family had a wonderful Christmas in Asia this year, reuniting with our son who has been working in Cambodia. While we were there, the Cambodia Daily News ran an interesting article written by Al Gore and David Blood entitled "Sustainable Capitalism in a Global Economy.î In it, the authors made the following observations:

1. It's important to abandon short-term economic thinking in favor of "sustainable capitalism,î which maximizes long-term economic value by reforming markets to address real needs while integrating environmental, social and governance metrics in the decision-making process.
2. We are at a rare turning point in history when dangerous challenges and limitless opportunities require clear, long-term thinking to solve disruptive threats such as climate change, water scarcity, poverty, disease, growing income inequality and massive economic volatility, to name a view.
3. Companies and investors will ultimately be the ones to mobilize the capital needed to overcome these challenges.

I found this extremely interesting. At the Knowledge Bureau, we have pioneered the development and implementation of a framework for building sustainable family wealth. We call it Real Wealth Managementô and thousands of students from across Canada ó most of them tax and financial advisors ó have taken our certificate programs over the past eight years. Real Wealth Management training facilitates joint decision-making between clients and their advisors following a strategic framework within which families accumulate, grow, preserve and transition wealth with future purchasing power, that is, after taxes, inflation and fees.

Authors Gore and Blood argue that integrating sustainability into business practices enhances profitability. It helps companies save money by reducing waste and increasing efficiencies throughout their supply chains, and it improves human relations thereby increasing employee retention and reducing the cost of employee training. Sustainability modeling also helps companies achieve higher compliance standards and manage risk because they have a better and more holistic understanding of the issues that affect their businesses.

This is entirely true of the Real Wealth Management framework for building sustainable family wealth. It challenges those who have trouble managing their income and creating capital to understand how they use their money and encourages them to take a future-oriented approach rather than a short-term, reactive response. Building individual and family net worth over the long term involves following Real Wealth Management's consistent strategy and measurable process.

Taxation is an important factor in building sustainable family wealth because it can erode both income and capital over time. With tax season upon us, it makes sense to begin now to plan, so you can increase after-tax income for 2012 and accumulate and grow intact capital that will reliably produce income for the future.

It's your money, your life. In a volatile economic environment, it makes sense to learn about the Real Wealth Management framework so you can better accumulate, grow, preserve and transition wealth. Given that it's the start of a brand new year, you may find yourself creating new opportunities for a brighter, more secure financial future. Wouldn't it be good to replace financial worries with peace of mind? Happy New Year!

Evelyn Jacks is President of Knowledge Bureau, an educational institute that focuses on excellence in financial education. For more information on Real Wealth Management, please see http://www.knowledgebureau.com/. Evelyn is the author of 48 books; her latest is Essential Tax Facts 2012. She is also the co-author of Financial Recovery in a Fragile World with Robert Ironside and Al Emid.