{"id":22863,"date":"2008-06-12T08:00:00","date_gmt":"2008-06-12T08:00:00","guid":{"rendered":"https:\/\/clusterfamilyoffice.com\/blog\/?p=500"},"modified":"2008-06-12T08:00:00","modified_gmt":"2008-06-12T08:00:00","slug":"no-es-facil-ser-menos-rico","status":"publish","type":"post","link":"https:\/\/clusterfamilyoffice.com\/en\/no-es-facil-ser-menos-rico\/","title":{"rendered":"It\u2019s not easy being less wealthy"},"content":{"rendered":"<\/p>\n

\u00a0\u00abIf the nerve centre of corporate power, home to the largest and most successful multinationals, has disappeared, what might happen to our wealth, which is infinitely more vulnerable?\u00bb Ever since the Family Office was founded, we have used this phrase \u2013 which refers to the tragic destruction of the World Trade Centre \u2013 as an example to highlight the need to safeguard our wealth and consolidate it over time. It has often been said that large fortunes are also exposed to all manner of adversity that can erode their wealth and, if anything, require even more, if possible, proper\u00a0financial planning<\/a>\u00a0aimed at meeting the family\u2019s personal needs (P.G.R.<\/b>). We have usually referred to people who have received a sudden windfall without being prepared to manage it, such as lottery winners, recipients of large inheritances or even owners of farmland that has suddenly been rezoned, but on other occasions we have also referred to wealthy individuals who have earned their money and believe they will also be able to preserve it and make it grow. However difficult it may be to understand, earning money and managing wealth are entirely different disciplines.<\/p>\n<\/p>\n

And what better way to demonstrate the need for such planning \u2013 even for Manhattan\u2019s wealthiest families \u2013 than by drawing on an article published in The New York Times last Sunday?.\u00a0<\/span>It recounts anecdotes that may seem trivial, such as the fact that the wealthy are cutting back on luxury expenses (haircuts costing 350$ or private jet hire at 10,000$ an hour) due to the current crisis, but which conceal a serious underlying problem: the complete absence of a \u2018Vital Balance\u2019 that\u00a0<\/span>had taken those expenses into account and had adjusted his assets and income to be able to afford those whims.<\/span><\/p>\n

Continuing with the article, I am going to highlight the paragraphs that I find most significant and which clearly demonstrate that any fortune, however large, is vulnerable to economic fluctuations if it has not been managed properly. Furthermore, I also want to emphasise the distress involved in finding oneself in such a situation.<\/p>\n

\"\"<\/a><\/p>\n

A divorce lawyer, Nancy Chemtob, says that a client of hers recently confessed to her that his assets had fallen from $20 million to $8 million, and that he was worried his wife might leave him. \u00abThe man had gone into debt in order to maintain his standard of living and avoid telling his wife about this loss of wealth.\u00bb Another professional who provides services to high-net-worth individuals, Cassie Rosenthal, a gallery owner in Chelsea, says that \u00absince the subprime crisis began, and particularly since the start of the year, some collectors have been looking to sell pieces that were previously prohibitively expensive\u00bb. She also commented that \u00abwhen deals are wrapped up quickly, they\u2019re happy, because they urgently need that money.\u00bb A nutritionist who works with many Wall Street executives admits that his clients \u00abhave been eating and drinking more over the last six months.\u00bb Finally, Clay Burwell, a personal trainer to executives, states that \u00aba year of eating more, drinking more and working longer hours has started to take its toll on their health\u00bb, adding: \u00abI see them arriving at the gym as if they had a dark cloud hanging over their heads\u00bb.<\/span><\/p>\n

\"\"<\/a><\/p>\n

All these misfortunes \u2013 because finding oneself in financial difficulty is always a misfortune, whatever the size of one\u2019s fortune \u2013 could easily have been avoided. The aim of drawing up a \u2018Life Balance Sheet\u2019 is to identify the family\u2019s present and future needs, so that subsequently, through optimal management of their assets and income, these needs can be met, whilst always adhering to the principle of long-term wealth growth. Finding oneself in the position of having to part with cherished works of art or give up lavish indulgences in order to free up more cash \u2013 not to mention the deterioration in personal health caused by these financial worries \u2013 is something that should never have happened had these people received the right advice. The most glaring example, without a doubt, is the failure to safeguard a fortune, as mentioned in the example at the beginning. The example refers to an American millionaire whose wealth has fallen by $12 million. Surely, in these times of crisis and uncertainty, this example will strike a chord with more than a few people (unfortunately), either because they have experienced it first-hand or because they know someone in this situation.\u00a0\"\"<\/a><\/p>\n

I am not suggesting that a portfolio can never decrease in value. In financial planning, there may be a portion allocated to riskier investments, which are susceptible to losses. What is being criticised here is the lack of a strategy setting out what percentage of one\u2019s wealth is allocated to each investment profile and, above all, the lack of safeguards for the bulk of one\u2019s wealth, which would enable it to be preserved and grow at a steady rate over time.<\/p>","protected":false},"excerpt":{"rendered":"

\u00a0\u00abSi el centro neur\u00e1lgico del poder empresarial con las mayores y mejores multinacionales ha desaparecido, \u00bfqu\u00e9 no le podr\u00eda suceder a nuestro patrimonio que es infinitamente m\u00e1s vulnerable?\u00bb Desde los inicios del Family Office tomamos esta frase, que se refiere a la tr\u00e1gica destrucci\u00f3n del World Trade Center, como ejemplo para tratar de hacer ver […]<\/p>\n","protected":false},"author":6,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[],"class_list":["post-22863","post","type-post","status-publish","format-standard","hentry","category-sin-categorizar"],"_links":{"self":[{"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/posts\/22863","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/comments?post=22863"}],"version-history":[{"count":0,"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/posts\/22863\/revisions"}],"wp:attachment":[{"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/media?parent=22863"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/categories?post=22863"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/tags?post=22863"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}