What Would I Do with the $500 Million Powerball Jackpot? A Family Office Reveals Secrets of Wealthy Investors

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What’s the real difference between becoming a millionaire and remaining a millionaire? Employing a Family Office may just be the key to retaining wealth in the 21st century. The truly wealthy both grow and retain their fortunes. How? The professional investors working for them always have an eye on the future, always with their best interests and investment goals in mind. Plan first; extravagance second.

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“As investors are becoming increasingly mistrustful of Wall Street, they are seeking out alternatives that allow them to work with qualified professionals instead of salespeople,” says Steven Abernathy.

Luxurious homes. New cars. A private jet, a private chef—or both. No matter what your “if I won the Powerball lottery tomorrow” wish list contains, when it comes to spending our fortunes, real or imagined, very few people are at a loss; consulting a family office is not top of mind. The infinite ways to consume are glorified and celebrated with little or no attention placed on maintaining and managing assets or investing for future generations.

This is more complex than simply saving vs. spending. So, what’s the real difference between becoming a millionaire and remaining a millionaire? Employing a Family Office may just be the key to retaining wealth in the 21st century. The truly wealthy both grow and retain their fortunes. How? The professional investors working for them always have an eye on the future, always with their best interests and investment goals in mind. Plan first; extravagance second.

And, even for those with great fortunes, planning is imperative. According to The Money Alert, William Vanderbilt, who left his heirs $200 million upon his death in 1885, would be worth $4.8 billion in today’s dollars had the subsequent generation not spent so extravagantly. Ironically, while the Family Office has been around for centuries, most people outside of financial services and the world’s wealthiest people (i.e., “the 1%”) have never heard of the family office.

“There are any number of wealth management and investment options out there and it’s confusing for consumers,” says Steven Abernathy of the Abernathy Group II Family Office. “If you are trying to do everything yourself, particularly making intelligent investments which consistently grow faster than inflation, it is difficult to determine if the financial advisor you’re working with is truly working on your behalf. And even if he or she has your best intentions in mind, if “your people” that is—your lawyer, accountant, anyone who has sold you a financial product, and you are not all working toward the same objectives, it can be detrimental to your overall financial picture.”

Extravagant spending may be a significant cause behind a greatly diminished fortune; however, it does not reveal the whole picture. August 2011 Investment News estimated that the top wealth management firms retained $477 billion in investable assets within their family offices. Yet, many readers are still unaware of their existence. And, if they are, they may believe that one has to be a billionaire along the lines of Warren Buffett to participate. “Fortunately, technology has opened up a whole new world of investing options for people who may not have $50 million dollars. At our firm, qualified clients can have as little as $3 million in investable assets to join, and, some even have minimum accounts available for those with $1 million.

“As investors are becoming increasingly mistrustful of Wall Street, they are seeking out alternatives that allow them to work with qualified professionals instead of salespeople,” says Abernathy.

Steven Abernathy and Brian Luster co-founded The Abernathy Group II Family Office and the country's first Physician Family Office (PFO). The Abernathy Group Family Office sells no products, receives no commissions, and is independent, employee-owned, and governed by its Advisory Board comprised entirely of thought-leading professionals. Find them online at http://www.abernathygroupfamilyoffice.com.

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