The Secret of Asset Protection Planning: Compartmentalization

The secret of great asset protection is not secrecy or privacy, but “compartmentalization“.

This means that your assets are separated and protected from your liabilities and risks.

The ultimate example of the successful implementation of compartmentalization can be found in the USS Missouri, one of the most powerful battleships ever created and based upon the powerful Iowa Class Battleship model.

The Iowa Class Battleship was designed during World War II to be fast and nimble yet tough and reliable. Too much armor would make the ship slow and cumbersome, so the US Navy focused instead on compartmentalizing the ship so that no single strike could cripple or sink the ship.

The ship was divided into separate compartments protected by fire walls limiting any damage to the particular compartment that was hit. It was designed to withstand multiple strikes from torpedoes and shells without sinking.

In 1989, this compartmentalization unfortunately underwent its ultimate test when an explosion in one of the gun turrets set off the magazine (ammunition supply) below the turret. This explosion was catastrophic and killed everyone inside the turret compartment, but the ship itself was able to survive the blast intact; a blast that would likely have obliterated lesser ships.

This was because the explosion and fire that occurred could not spread to the other compartments.

This same concept can be applied to your business and personal assets. You NEED to separate your liabilities from your assets. Protect the sources of your income and wealth from the dangers inherent in doing business and simply living.

Wordle: The Secret of Asset Protection Planning: Compartmentalization