The ultra wealthy often utilize a “family office” to deploy capital. A family office is a business that manages large sums of money for wealth families.
People with a lot of money, aren’t investing it in stocks, bonds, and mutual funds! They are investing in real things like businesses and real estate.
The job of the family office is really just to find deals and vet them based on the parameters set by the wealthy person or family wishing to deploy capital.
If the concept of the family office sounds interesting to you, and you want to better understand the investment philosophies of the uber wealthy, I recommend listening to Wealth Formula Episode 61, an interview with the founder of the family office club, Richard Wilson.
One of my take-away from that interview was that the uber wealthy usually make their money as entrepreneurs, not as professionals.
So, if you want to be uber wealthy, you might consider going all-in by quitting your day job and trying to start a multimillion dollar business that you can one day sell for $100 million.
For some of you, that might be where you are headed already. Good for you!
But what if you’re a doctor making mid six figures with kids and a mortgage? Maybe disrupting all that you have already going for you might not be the best option.
Either way, just because you are not an uber wealthy entrepreneur with $100 million in assets to deploy doesn’t mean you can’t invest like one.
In fact, in my opinion, everyone should be looking at investing like a business—like a family office.
Listen, I know a lot of interesting people out there making a lot of money in incredibly creative ways that, when it comes to investing, revert back to the way grandma did it. They had their money off to a wealth advisor.
THE UBER WEALTHY SEE THE MANAGEMENT OF THEIR MONEY AS A BUSINESS, NOT AS A PASSIVE ACTIVITY.
If you want to be wealthy, you need to start thinking and acting like the wealthy.
So does it make sense to start your own “family office?” Of course it does! Start an entity and run all of your investments through it.
It will help you start seeing your investment activity as a business and it will also serve to create a layer of asset protection that you may need.
You might also be able to write off your car lease and your cell phone in the process!