Family Office Blog

The dream of retirement is a finish line, a rest from decades of work, and a reward for good behavior—after all, you’ve arranged things so that you won’t need to work again.
Unfortunately, for most Americans, retirement is not a finish line—it’s the beginning of a new phase of life filled with threats to their security and without the comfort that comes in the form of a paycheck.

For many business owners, taxes can be their largest single expense—larger than qualified plan contributions, larger than their mortgage, and sometimes even larger than the kids’ college education. If taxes take the biggest bite out of your nest egg, your tax strategy should be upstream from your investment policy statement.

Taxes First, Then Math is the decision-making paradigm of the ultra-wealthy, and for good reason. For several reasons, actually, and this blog will highlight some of them. Let’s begin with the core premise that the richest Americans overwhelmingly employ family offices to handle their financial affairs, and it’s hard to imagine a family office that does not have one or more tax professionals in a key client-facing role.

As we learned in Hemingway’s The Sun Also Rises, life-changing events can happen in two ways: gradually, then suddenly. That is certainly the case for passive versus active investing. Vanguard launched its first version of an S&P 500 index fund in May of 1976, and it took nearly 40 years for index funds to claim a 30% share of the funds marketplace. Last month, passive investing finally claimed a majority of the fund assets under management in America. In the storm of cultural, economic, and geopolitical news, you may have missed the story, but for the investment industry, it’s a very big deal. It’s an even bigger deal for the American family.

Whatever your wealth journey has been, whether you’ve enjoyed strong year-over-year compounding or found yourself wondering if your nest egg will ever grow to a comfortable number, your mutual fund salesperson has done just fine, thank you. In this blog, we’ll provide four crucial questions you can ask your rep, but we’ll go one better: we’ll give you the answers you would really want to hear.

Organizational research has shown that a culture of transparency in the workplace is worth the investment. Data shows transparency fosters greater job satisfaction, employee retention, and trust, while a lack of transparency can lead to a breakdown in collaboration and disharmony. These same dynamics are in play in the relationship between financial advisors and their clients; trust in your strategy and in the motives of your advisors is downstream from transparency.

The guidance of professionals isn’t free—and it should not be. Achieving lifetime income security is no mean feat, given that 62% of Americans live paycheck to paycheck. The guidance of seasoned financial planners and tax experts is vital and worth the fees. But there is one quality of advice that should be free, and it may be the most important single success factor for an investor seeking to navigate the noisy and confusing world of financial solutions.

This is the third in our end-of-year series on New Year’s resolutions. We encourage you to make and stick with a solid financial plan, but we caution you not to base your investing decisions on things that cannot be predicted or controlled.

The majority of New Year’s resolutions, particularly those regarding fitness and finance, often fail rapidly, a trend reflecting our overestimation of a new year’s transformative power.

Researchers have found that fewer than 10% of Americans who make a New Year’s resolution successfully complete them. About a quarter give up in the first week. This can be a problem if the resolution is about something hugely consequential, like your security in retirement. The problem may not be your resolve; it may be that you’re focused on behaviors that won’t really change things.

Cheaper, more tax efficient, less risky, more flexible, and more transparent investing vehicles should do for the mutual fund what the light bulb did for the oil lamp.

Cheaper, more tax efficient, less risky, more flexible, and more transparent investing vehicles should do for the mutual fund what the light bulb did for the oil lamp.

Some investors may be familiar with the asset management terms alpha and beta, but few have ever heard of gamma. Yet gamma may be the most important driver of value in the relationship between investor and advisor. Gamma should be the measure by which investors select, hire, and evaluate their advisors.

If you want to win Wimbledon, you should figure out what Serena Williams has for breakfast. If you want to maximize your portfolio efficiency, you should learn from family office best practices. In this blog, we’ll focus on a little-known but important discipline known as asset location.

For many business owners, taxes are their largest single expense. Larger than qualified plan contributions, larger than their mortgage, sometimes even larger than the kids’ college education. If taxes take the biggest bite out of your working capital, your tax strategy may be as important as your go-to-market strategy.

According to the IRS, the “tax gap is the difference between the estimated ‘true’ tax liability for a given period and the amount of tax that is paid on time.” The amount collected by the IRS includes billions of dollars in taxes that were overpaid due to mistakes and misunderstandings of the tax laws. As tax professionals, we are concerned about both of these gaps.

Risk and return are two sides of the same coin. There simply is no prospect of meaningful, real return without exposure to some risk. Experienced investors understand this, and accept the reality that successful investing will require both patience and discipline. Although there is no way to predict or control the ups and downs of markets, there are four controllables that can have a profound impact on real returns.

Stoicism, the ancient Hellenistic philosophy, is making a comeback these days. Warren Buffett, Jeff Bezos, and Mark Zuckerberg are among a large and growing number of super-wealthy people who have embraced the tenets of Stoicism. If you’re concerned about your investment portfolio, it might be a good idea for you to look into it as well.