Before you start worrying about how to manage and how to keep your fortune lets analyse the\u00a0 di erent ways in which people get rich (and how these influence the way in which we manage\u00a0 our money).<\/p>\n
How do people get rich?\u00a0<\/b>There are many ways, but striking six in the lo ery is not on top of the list.\u00a0 Let\u2019s examine four\u00a0 pes of ways of \u2018making it\u2019:<\/p>\n
The Tough\u00a0<\/b>\u2013 In the old economy to get rich, you needed a lot of persistence, luck, arbitration\u00a0 opportuni , insight, ingenui , some \u2018street-smarts\u2019, a good sense of the future development of\u00a0 the world economy and most of all:\u00a0a tough personali !\u00a0<\/i><\/p>\n
People of this category are o en \u2018accidentally\u2019 rich, since their goal was not to make a lot of\u00a0 money and get rich, but to earn a living and to provide for their family. Very o en these business\u00a0 start small \u2013 as the corner store, a li le manufacturing business, etc.. All resources available\u00a0 (family money and the inexpensive loyal labor of its members) are invested in the success of the\u00a0 business. The business grows in a generation or two and becomes an integral part of the family.\u00a0 It is taken for granted that the business will always be there.<\/p>\n
The Smart\u00a0<\/b>\u2013 In the new economy you need to be a visionary, ahead of your time, a financial wizard,\u00a0 an inventor, a dreamer, a futurist, maybe even a \u2018geek\u2019 but most importantly:\u00a0a smart operator.\u00a0<\/i><\/p>\n
This category includes some very determined individuals who are in it for the challenge \u2013 not\u00a0 just for the money. And the faster the concept is a success and the company can be taken public,\u00a0 the greater the recognition. Money is made very quickly and becomes secondary. The resources are raised from the public to leverage the thinking power, work and resolve of the people<\/p>\n
involved. Family members are (with some exceptions) not directly involved. The business is built\u00a0 to be integrated, taken over or changed completely within a short period of time. It is a tool.<\/p>\n
The Tame\u00a0<\/b>\u2013 These are o en the heirs of the Smart and the Tough. They are born into the<\/p>\n
business and the wealth. They do not choose it.<\/p>\n
Many of them are overwhelmed by the character and success of the previous generation and<\/p>\n
daunted by the expectations vested in them. And this despite the fact that many of them were a\u00a0 resource to the Tough. Success is part of their identi .<\/p>\n
The Surprised\u00a0<\/b>\u2013 Even when the odds are one in 14 million, there are those who strike it rich by\u00a0 chance. They win the lo ery for example. They become rich overnight to their bewilderment and\u00a0 total lack of expectation.<\/p>\n
Employees in the world of start-ups and fast-growing technology companies also fall into this\u00a0 category. They may realize options following a successful IPO that will diametrically change<\/p>\n
their way of life and perspective on the world. They are o en young when they come into money.\u00a0 Congratulations!<\/p>\n
All four character\u00a0 pes arrive at an important moment of realization:\u00a0I have made it!\u00a0<\/b>(or in the\u00a0 case of the Tame \u2018I\u2019ve inherited it!\u201d<\/p>\n
So there you are, enjoying the fruits of your labour; spending on a new house, anew car, a dream\u00a0 vacation\u2026 and then\u2026 you start worrying!<\/p>\n
Despite the applause and esteem you receive from the people around you, the very moment that\u00a0 you come into fortune and your life-s le begins to change, its time to start worrying.<\/p>\n
How do I keep all this wealth? How do I choose my closest advisors (bankers, lawyers, tax<\/p>\n
consultants, Investment Managers)? Should in invest? What\u00a0 pes of investments? How do I<\/p>\n
manage my liquidi ? etc., etc\u2026<\/p>\n
In my 28 years of experience as a \u2018personne de confiance\u2019 to wealthy families I have seen many\u00a0 members\/heads of families that have lost considerable money due to lack of suitable<\/p>\n
professional advice and planning.<\/p>\n
Let\u2019s use our four examples to illustrate:\u00a0<\/b><\/p>\n
The Tough, wanting to be in control and make decisions alone as he has always done, will not\u00a0 look to external advisors to cope with new realities. This person will o en prefer in-house CFOs\u00a0 and Legal Advisors to manage the wealth and deal with succession planning. And, despite<\/p>\n
loyal\u00a0 and the best of intentions, the la er are more o en than not, lacking specialized<\/p>\n
knowledge relative to the world of investment management and Estate Planning.<\/p>\n
The Smart, knows his way in the world of finance, having financed his start-up and successfully\u00a0 exited his company. But, besides investing in other start-ups, the Smart usually goes about the\u00a0\u00a0problem of handling\u00a0his wealth in a very analytic way; which bank is best in his class, which<\/p>\n
hedge fund is best in its category? They end up with the big banks and not necessarily with the\u00a0 right or suitable ones.<\/p>\n
The Smart o en prefers complicated, highly engineered Financial Products. Many Smarts lost\u00a0 money in 2008 with the Sub-Prime Crisis. The Smarts, without sound advice, are likely to find<\/p>\n
themselves in complicated deals and unsuitable investments due to over engineering and<\/p>\n
insu cient planning. They do not pay much a ention to estate planning.<\/p>\n
The Tame, wanting to prove himself to be a worthy person in his own right, is prone to risky<\/p>\n
investments and sometimes lacks the capaci\u00a0 of finding good advisors or heading the right advice.<\/p>\n
Finally, the Surprised, being completely unprepared, might think that he is so rich that he can<\/p>\n
spend and distribute wealth freely and remain rich. By the time they start understanding, many\u00a0 lo ery winners have lost their critical wealth.<\/p>\n
So, to successfully cope with some of these challenges it is very important to take a step back and\u00a0 see the big picture. It is the holistic approach of a family o ce that will successfully define,<\/p>\n
implement, monitor and guide the strategy for the preservation of the wealth for generations to come.<\/p>\n
A family o ce, like the one I founded 12 years ago, handles all issues for the wealthy family;<\/p>\n
Asset Management, Tax and Estate Planning, Family Dynamics and Governance, Conciergerie\u00a0 and Philanthropy with the guidance of specialists in each of the fields.<\/p>\n
You need a lot of know-how, motivation, and maybe even some luck to get rich; you need a lot of\u00a0 knowledge and trusted professional advice to stay rich!<\/p>\n","protected":false},"excerpt":{"rendered":"
Before you start worrying about how to manage and how to keep<\/p>\n","protected":false},"author":1,"featured_media":53,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-52","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-family-members"],"_links":{"self":[{"href":"https:\/\/ptbs.in\/clients\/priwexus\/wp-json\/wp\/v2\/posts\/52","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ptbs.in\/clients\/priwexus\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ptbs.in\/clients\/priwexus\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ptbs.in\/clients\/priwexus\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/ptbs.in\/clients\/priwexus\/wp-json\/wp\/v2\/comments?post=52"}],"version-history":[{"count":0,"href":"https:\/\/ptbs.in\/clients\/priwexus\/wp-json\/wp\/v2\/posts\/52\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/ptbs.in\/clients\/priwexus\/wp-json\/wp\/v2\/media\/53"}],"wp:attachment":[{"href":"https:\/\/ptbs.in\/clients\/priwexus\/wp-json\/wp\/v2\/media?parent=52"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ptbs.in\/clients\/priwexus\/wp-json\/wp\/v2\/categories?post=52"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ptbs.in\/clients\/priwexus\/wp-json\/wp\/v2\/tags?post=52"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}