The Family Office Publishes Its “Cheat Sheet": Five Secrets of Wealthy Families

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Family Office settings worldwide oversee what amounts to potentially trillions, yet, what the wealthy do and how they do it is a relative mystery outside of privileged circles—until now—as The Abernathy Group II Family Office reveals their top secrets.

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A winning effort begins with preparation.—Joe Gibbs, American football coach, NASCAR Championship team owner

Are the secrets--and habits--of wealthy families within reach? According to Steven Abernathy, Chairman and co-founder of The Abernathy Group II Family Office, it’s not only possible—it’s the future. “The days of the ultra-rich being the only ones with access to the best wealth management tools available are over,” asserts Abernathy. “With a few million dollars rather than billions, investors can access the services of billionaires.”

Many investors, however, continue to be unaware of these tools. “Taking investment advice from brokers who are incentivized to recommend products laden with fees is like taking dietary advice from Ronald McDonald,” says Brian Luster, CEO and co-founder of the Abernathy Group II Family Office. “Sure a burger and fries might sustain you for a couple of years, but the safer bet is that the guy who listens to a nutritionist; it’s more than likely his health will be far better off long term. The same is true when it comes to retirement. Fee-laden products, just like fat-laden burgers, do not add to the robust health of your retirement accounts.”

What are the top five secrets?

Secret #1: Successful investors only hire professionals to manage their assets. Following the herd or trusting the wrong sources of information can be detrimental—just because everyone jumps on a particular bandwagon doesn’t make something true.

Secret #2: Successful investors understand risk. Skip a vital step and risk increases; work with someone who isn’t a professional, it is likely to increase some more. While investing is probability based, weighing key factors is likely to assess and mitigate risk, but, it’s important to know how to choose those factors since analysis is a process that is open-ended. Warren Buffett famously said, “You’re neither right nor wrong because other people agree with you. You’re right because your facts are right and your reasoning is right – that’s the only thing that makes you right. And if your facts and reasoning are right, you don’t have to worry about anybody else.”

Secret #3: Successful investors know the value of integration—their tax, investment, legal, and estate decisions are overseen by someone who knows about each area.
Before every major investment decision, the wealthy want to know what the net/net will be regarding tax liabilities and changes. Misinformation about legal structures, going up (or down) a tax bracket without making the proper adjustments, and not being clear on current tax law are mistakes which can dramatically impact wealth; tax implications must be taken into account from the get go. Successful investors employ those who know how to assess changes as they happen and make any needed adjustments.

Secret #4: Successful Investors see the big picture—and understand that dramatic gains statistically are wed to dramatic losses since “timing the market” is a myth.
The typical investor tends to dwell on how much he/she will earn and ignore how much they might lose. Banks and insurance companies focus strategic planning meetings not on how much might gain on an investment but rather on how much they might lose. Since losses are a likely result of the investment process, successful investors aim to create investment mixes with the highest probability of mitigating losses—this is quite different than selecting stocks a la carte.

Secret #5: In a domain-specific sector, successful investors consult several domain experts. New technology abounds creating new investment opportunities every day. To have the informational edge, the successful investor is in contact those who have the institutional knowledge to understand their area intimately—and inform the investor’s decision with facts. Mr. Abernathy has been doing this for years; he was profiled in Business Week about pioneering this practice in medical technology.

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About The Abernathy Group II Family Office:
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. They are regular contributors to several publications and blogs including The Huffington Post.

The information contained in this press release is provided solely for convenience purposes only and all users thereof should be guided accordingly. The Abernathy Group II does not hold itself out as a legal or tax adviser. If you wish to receive a legal opinion or tax advice on the matter(s) in this report please contact our offices and we will refer you to an appropriate legal practitioner.

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Kira Citron
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