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The evidence is that with the global slowdown, which has stemmed from the increase in oil prices and the credit crunch, Ultra High Net Worth Individuals are better placed than ever to take advantages of any opportunities.

Lower property prices are leading to new, previously unavailable, investment scenarios. This is just one area of potential wealth gain. Others are;

• Lower stock prices are leading to an impressive gain in share ownership
• Increases in the value of gold is giving a better return on previous investments

Companies that offer products and services to the Ultra Wealthy are also gaining at this time. As the markets polarise the wealthy are choosing to upgrade. The luxury yacht, car, and aircraft industries are all reporting growth in their high end products whilst middle range items stagnate.

Recessions’ also lead to the removal of the fat from the system. Investment channels become more direct; confusion is removed, and wealth creation becomes clearer.

Now is the time for us to consolidate our positions and snap up those bargains.

Ultra High Net Worth Individuals exploit the idea behind Compounding Wealth. Compounding wealth is a term I use for an investment that provides a return that, given time, multiplies greatly. It is the ability of reinvested returns on an investment to generate their own returns.

As the chart below shows, if you start out with an income generating investment of $1,000,000 and an annual return of 10% then at the end of seven years, with compounding, your investment would be worth $1,948,717 or nearly DOUBLE.

10% is a good return but with more risk the return could be even higher.

Although Compounding is associated with interest paid on capital over a period of time it can also apply to returns on ANY investment as long as the principal and the return are not touched and carried over to the next investment period.

As an example, a property investment of $1m could grow to $1.1m in a year (less charges). The property could then be sold and the whole $1.1m invested in another property related investment (or something else). In year 2, at the same growth rate, the investment would grow to $1.21m.

Using compounding wealth means you can become a lot richer a lot quicker.

One of the secrets of the wealthy is passive income. When they invest in anything it is with a view to generating passive income. Once this income stream is set up it requires little or no effort.

An example might be an investment in property. Once management charges are subtracted the investor receives a regular income without any further effort. The more of these types of investment the greater the levels of passive income received and the wealthier the individual becomes.