Ring Fence

If we grew up anywhere near a farm and a friend asks us what a “ring fence” is, we’ll probably tell them it’s a fence built to protect the animals from their predators. If that friend was looking for financial advice, they’d probably find that answer a little strange. But, in the financial world, just as in the agricultural one, a “ring fence” is designed to protect a portion of our assets from outside factors.

Ring-fencing can take on a number of forms. It could be as simple as setting up a separate savings account where we can stash extra cash as we try to save up for a new couch. Or it could be more complex, like moving part of an estate’s assets to an offshore account to reduce its tax liability.

The whole point is to make sure that that money is largely untouchable…until we want to touch it.