When it comes to your personal financial life, following in the well-worn path of the super-rich (net worth= US $500 million or more) can likely enable you to significantly increase and protect your wealth. In evaluating the way these hyper-successful individuals think and act to maximize their personal fortunes, it’s clear they are—first and foremost—concentrating on the bigger picture. For them, it’s not about a particular investment or a specific tax strategy. Instead, it’s about how they are as confident as possible knowing that they’re working with the best-of-the-best financial and legal professionals.
In studying the super-rich, the following are four of the most critical financial lessons you probably need to follow to be able to optimize your financial world.
Lesson #1: Work With Top-of-the-Line Experts
This sounds like a “no-brainer.” Who wants to work with second, let alone third-stringers? Still, based on extensive studies of extremely successful individuals and families a great many of them are working with less than the best financial and legal professionals possible.
According to Anthony Glomski, President and Founder of AG Asset Advisory Family Office and author of Liquidity and You: A Personal Guide for Tech and Business Entrepreneurs Approaching an Exit, “Being methodical and thoughtful can help you find the best of the best experts who can deliver the greatest value. A solid practice is to concentrate your search on experts who are prominent in their fields. These professionals are often thought leaders who share their state-of-the-art insights and strategies with their peers including competitors to raise all boats.”
Very importantly, talk to other professionals you trust. The super-rich source most of their new professional relationships from professionals they were currently engaging. By getting referrals from professionals who have proven themselves, you can significantly increase the probability of working with an extremely talented, sincere, and reliable expert.
Lesson #2: Make Sure Your Experts Are Focused On You
Far too many professionals are enamored with their technical prowess. While top-of-the-line expertise is essential, unless these professionals truly understand your needs and wants, your expectations and concerns, all that expertise will not produce superior outcomes.
With legal strategies and financial products being increasingly commoditized, professionals who strongly focus on you and your world are the ones most likely to produce ideal results. Therefore, you need to find and work with outstanding professionals who are intensely focused on you and your world.
There are proven methodologies and approaches these talented professionals can employ to ensure they have a deep understanding of what matters to you and the parameters you need to work within. For example, being highly empathetic is a must. According to Homer Smith, Managing Director of the Integrated Family Office, Founder of Konvergent Wealth Partners, and co-author of Optimizing the Financial Lives of Clients: Harness the Power of an Accounting Firm’s Elite Wealth Management Practice, “Empathy is a mindset and the primary value orientation as well as a skill set. It’s core to the way every professional you employ should work with you. If the professionals you work with are not empathetic, the probability of you getting the best solutions decreases exponentially.”
Lesson #3: Negotiate
In the process of identifying and screening exceptional professionals to work with, you can subtly begin the negotiation process. The super-rich are, generally speaking, very adept at working with a range of professionals to get the best reasonable deal possible for themselves.
Justin Breen, the driving force behind the exclusive BrEpic Network and co-author of Superior Results: Maximizing the Value of Your High-Performing Family Office Just Like the Super-Rich, “A critical role of high-performing single-family offices is to negotiate with the array of external experts exceptionally wealthy families need and want. Bargaining aims to get greater value such as receiving more services more cost-effectively. The result of effective negotiations between the super-rich and the professionals they engage is lower costs, more results for the monies paid, or both. What’s important to keep in mind is that the super-rich smartly does not beat down their providers. Instead, they make sure their providers exit the negotiations with a solid profit albeit a slightly lower one than they initially proposed.”
Lesson #4: Trust But Verify
For the most part, the super-rich are big proponents of Ronald Reagan’s dictum, “Trust but verify.” Even when you carefully choose financial and legal professionals this doesn’t mean all of them are going to be as good as you need them to be. There are many well-intentioned financial and legal professionals who are just not up to the job. Sometimes it’s hard to initially discern these professionals from consummate experts. Thus, the super-rich regularly has other professionals evaluate the actions they’ve taken or are considering.
“There are proven processes employed by the super-rich which you can also use that those less wealthy to ensure they’re not making mistakes and that they’re taking advantage of all potentially viable opportunities,” says Peter Sasaki, Managing Member and Family Office expert at Odeon Capital Advisors and co-author of Maximizing Your Single-Family Office: Leveraging the Power of Outsourcing and Stress Testing. “If someone is at all unsure or the least bit uncomfortable about a proposed financial or legal solution or one that you are currently using, they should attain verification.”
By applying these four lessons—regularly followed by the super-rich—you will more likely maximize the probability of achieving the personal financial results that are most important to you. This may be taking care of the people you love, helping the causes you care about most, and making a difference in the world.
Russ Alan Prince is the executive director of Private Wealth magazine and chief content officer for High-Net-Worth Genius. He consults with family offices, the wealthy, fast-tracking entrepreneurs, and select professionals.