Posted on: August 1st, 2019
The self-made Super Rich—those people with a net worth of at least $500 million that they built through their own hard work—often possess a treasure trove of knowledge, insights and actionable strategies that the rest of us can adopt in our own lives.
This is especially true when it comes to managing our wealth so we can grow it, protect it and use it to achieve our many goals—for ourselves, our families and even the world around us. Of the many lessons that the Super Rich have to teach us, here are the four we think are most impactful as you endeavor to maximize your wealth, success and peace of mind.
Everyone wants to work with top-of-the-line experts. No one we know has ever said, “I want someone who’s inferior!” However, many professionals who want to do business with you may very well be the professionals you want to avoid. Some are Pretenders who are well-meaning, but who lack the skills needed to bring significant value to your life. Then there are the Exploiters. They’re very capable, but too willing to push aggressive solutions that run the very real risk of blowing up down the road. Finally, Predators are criminals, plain and simple, who want to take your wealth.
By and large, the Super Rich avoid these inferior professionals by working with people who are recognized as experts by other professionals and by other wealthy and successful individuals. In short, referrals from high-quality sources are key.
These prominent authorities are not famous because they say they are. They are renowned among their select wealthy cohorts and other high-quality professionals because they share meaningful insights, methodologies and potent solutions with others—even their competitors. For these elite professionals, it’s all about raising the bar for everyone.
The upshot: Being methodical and thoughtful can help you find the top-of-the-line experts who can deliver the greatest value. Concentrate your search on experts who are prominent in their fields. Very important, talk to other professionals you trust. You can also solicit recommendations from your peers. These actions can dramatically increase the probability of working with an extremely talented, sincere and trustworthy professional.
Attentiveness to the human element—the personal and emotional components of financial and wealth planning—is essential. That’s because most, if not all, legal strategies and financial products have become commoditized. Focusing on the human element is what truly produces optimal results today. Therefore, you need to find and work with outstanding professionals who are intensely focused on you and your world—not simply on financial tools and solutions.
This means the professionals you work with should be taking five key action steps in their dealings with you:
Notice that the first four action steps deal with the human element—understanding you, your goals, your preferences and your values. It is not until the last step that a professional’s technical expertise should be brought to bear. Only by truly understanding their clients will professionals be in a position to produce truly outstanding results.
The Super Rich make sure they have a very good grasp of what they agree to when it comes to their financial and legal decisions. You should, too, of course!
Important: This doesn’t mean being cognizant of every little technical aspect of your financial plan. Rather, it’s about understanding the benefits, limitations and implications of the legal strategies and financial products you are using (or are considering).
Example: When people use irrevocable trusts, it means they cannot completely change their minds. For instance, when a person sets up a charitable trust, there are tax benefits. But he or she cannot, some years later, decide to just cancel the trust and take back the money.
Too often, individuals and families with significant wealth don’t really understand what they’re signing up for when they agree to implement a particular financial solution or tool or strategy. It can be extremely problematic, of course, to not understand the assured, likely or even long-shot consequences of actions taken with your wealth.
It’s the responsibility of any professional you work with to make sure you know what the outcomes of a solution should be as well as the limitations it may place on you and your agenda (again, the human element plays a key role here). The conundrum is that a great many professionals are not that good at communicating their expertise in a way that makes sense to people outside their field.
Advice: Be ready and willing to be assertive with financial professionals. If you don’t understand the big picture of a strategy or solution—such as why it’s being proposed or how it might behave in a variety of possible scenarios—get the answers. It’s perfectly fine to say that you can’t move forward until you are comfortable that you understand the implications and potential implications of a proposed strategy. Indeed, the Super Rich have no problem being assertive in this way with their professionals.
The Super Rich are big proponents of Ronald Reagan’s dictum “Trust but verify.” If you’re unsure or uncomfortable about a proposed wealth management solution, you should look for verification. This is especially true if the proposed solution comes from someone other than a trusted advisor you already work with. In such cases, it’s often smart to get a second opinion from a trusted advisor with high-level capabilities.
Along the same lines, it’s generally a good idea to, when appropriate, stress test your wealth plan to determine whether it’s still likely to deliver the results you want in the way you want. Stress testing can uncover errors before they become costly—potentially saving you substantial sums and emotional turmoil.
Ultimately, the key is to adopt the best practices of the Super Rich if you seek to join their ranks—or even to just become significantly more successful than you are today.
Best practices are ways of thinking and approaching situations, including strategic and tactical activities, that produce superior results. From the perspective of empirical and ethnological research, best practices determine the independent variables and how to manipulate them, so that the outcomes—the dependent variables—are the ones that are greatly desired. The bottom line is that best practices are causal relationships that can be strongly influenced.
The ways the Super Rich find and work with professionals, for example, are best practices. We understand how they get enormous value from their relationships with these professionals. It is not only because many of them hire talented experts, but also because of how they structure and manage those relationships to achieve their agendas.
Applying these four lessons as you work with financial and legal professionals will help you maximize the probability of achieving all that is most important to you. Regardless of what or who motivates you, we encourage you to use these lessons to the extent that is right for you and receive the greatest possible benefits from wealth management in your own life.
This report was prepared by, and is reprinted with permission from, VFO Inner Circle. AES Nation, LLC is the creator and publisher of VFO Inner Circle reports.
Disclosure: The opinions expressed in this commentary are those of the author and may not necessarily reflect those held by Kestra IS or Kestra AS. The material is for informational purposes only. It represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. It is not guaranteed by Kestra IS or Kestra AS for accuracy, does not purport to be complete and is not intended to be used as a primary basis for investment decisions. It should also not be construed as advice meeting the particular investment needs of any investor. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS.
Fusion Wealth Management is not affiliated with Kestra IS or Kestra AS. https://www.kestrafinancial.com/disclosures
VFO Inner Circle Special Report
By Russ Alan Prince and John J. Bowen Jr.
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