the challenges of being a billionaire -- 1/24/17
Today's selection -- from Brazillionaires by Alex Cuadros. The challenges of being a billionaire, as shown by the services offered to Latin American billionaires by private bankers in Miami, as described by business reporter Alex Cuadros:
"Miami is a major private banking hub. ... On my first trip to Miami, I met Santiago Ulloa, a Spaniard who works for several rich families from Latin America and Europe. Santiago spoke in heavily accented English and listened with a smile that conveyed goodwill and calm. He dressed immaculately, in a well-tailored navy blue suit, crisp tie, and fashionable rimmed glasses. ...
"Santiago runs a 'multifamily office.' His job is to help UHNW families maintain their money from generation to generation -- I had to learn acronyms like this: ultra-high-net-worth. His company created games to teach young heirs to deal with the burdens of wealth. For five-year-olds, he has a sectioned piggy bank with slots labeled SAVE, SPEND, DONATE, and INVEST. For ages eight and up, he has a Monopoly-like game called 'Shirtsleeves to Shirtsleeves' -- a reference to how fortunes built in the first generation tend to dissipate in the third. The board game's cover asks How Long Will Your Money Last?
" 'The biggest thing that upsets these people is if money is going to be good or bad for their kids,' Santiago told me. He gives his clients a deck of cards titled 'Keeps Me Up at Night,' which works as a brainstorming exercise for family patriarchs who need help giving voice to their concerns. Each card carries a theme like 'Trust' or 'Second Home' and questions like 'How will the age difference between me and my spouse affect my wealth planning?' or 'How can I make sure that my values live on after I'm gone?'
"Santiago also arranges kidnapping insurance and prenup lawyers. He hooks his clients up with the best investment people too. You can't just let all that money sit there. Bloomberg built a calculator to estimate the growth of a billionaire's investment portfolio over time. Even with a basket of generic index funds, it amazed me to see how fast a billion dollars could become two billion. ...
"The problem becomes taking care of your stuff. With a hundred million dollars, you might have bodyguards and assistants and a permanent staff to care for your homes. With a billion, you need someone like Santiago. With a few billion, you need a family office of your own, a whole company to manage your assets and affairs. ... I met a former management consultant named Natasha Pearl who tends to the trickier aspects of life for the ultrarich. She knows what numbers to call if you want to buy a racehorse or sell a diamond necklace. She knows discreet psychiatrists for troubled heirs and heiresses. She can ensure that every one of a billionaire's homes stocks the exact same outfits, so that he never has to pack much when traveling."