Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

How the 0.001% invest

economist.com

Post reply on HN
Print view View original

201–210 of 216 posts

Re: How the 0.001% invest

#201

Post by lokidokiro »

drewrv wrote: post #129
dgudkov wrote: post #112

I struggle to understand the point of the article. >Rich clients have taken a closer look at private banks’ high fees and murky incentives, and balked. OK. Rich clients were not happy with the way external managers managed their funds and decided to do it themselves. I get it. >As they grow even bigger in an era of populism, family offices are destined to face uncomfortable questions about how they concentrate power…

At a micro level, taking money out of a deposit and investing it does not create inequality. At a macro level, the fact that simply having wealth begets more wealth in a way that labor cannot accomplish is a driving force behind inequality.

Labor begets wealth. What are you trying to say here?

Re: How the 0.001% invest

#202

Post by hippich »

known wrote: post #53

"If you invested in a very low cost index fund — where you don’t put the money in at one time, but average in over 10 years — you’ll do better than 90% of people who start investing at the same time" --Buffett

I guess depends on which 10 years you pick and whom you compare yourself with - https://www.portfoliovisualizer.com/backtest-portfolio?s=y&t...

Re: How the 0.001% invest

#203

Post by infradig »

gnu8 wrote: post #160
throwizzle wrote: post #149

Earlier quoted context omitted.

A close friend of mine works for the Rothschild family office. He described to me how Lord R and his son don't see eye-to-eye on the family money. A lot of time has apparently been spent on reports making Lord R look better than his son at investing.

I am profoundly unable to take seriously anyone who calls themself a “lord”. What time period are these people from?

My preferred personal pronoun is "lord". Pretty soon it will be required that people call me "lord" or I will get offended and take them to whatever human rights commision is appropriate.

Re: How the 0.001% invest

#204

Post by charlesdm »

Scoundreller wrote: post #195
whitepoplar wrote: post #68

Earlier quoted context omitted.

My guess is that most UHNWIs would do better to simply park their money in Vanguard index funds and call it a day.

Risky if you’re non-American but could be liable for US estate taxes if you die before you move everything ex-US. You may have a local equivalent, but you may not.

UHNWIs don't invest in their own name, they generally use investment vehicles.

Re: How the 0.001% invest

#205

Post by whitepoplar »

charlesdm wrote: post #204
Scoundreller wrote: post #195

Earlier quoted context omitted.

Risky if you’re non-American but could be liable for US estate taxes if you die before you move everything ex-US. You may have a local equivalent, but you may not.

UHNWIs don't invest in their own name, they generally use investment vehicles.

What are some reasons for this?

Re: How the 0.001% invest

#206

Post by ars »

superhuzza wrote: post #174
thaumasiotes wrote: post #158

Earlier quoted context omitted.

> Donald Trump, if his public finances are to be believed, would have roughly the same net worth had he just invested the money his dad gave him in mutual funds. There was a factoid going around years ago that said Donald Trump's net worth was equal to the value of his inheritance if it had been invested in an index fund. But note that under that hypothetical, he never would have spent any of it. Do you think the his…

>that said Donald Trump's net worth was equal to the value of his inheritance if it had been invested in an index fund. Incorrect, it would have been worth substantially more, at about 13 billion (his current wealth is around 3-4 billion). So he still would have been able to spend billions and be further ahead than he is today. Source: https://www.forbes.com/sites/katestalter/2016/09/01/would-do...

You clearly did not read your own article. He would only be worth that if he was margined to the hilt.

If he invested without margin then he would have made half of what he actually made. And that's without any spending at all.

Re: How the 0.001% invest

#207

Post by charlesdm »

whitepoplar wrote: post #205
charlesdm wrote: post #204

Earlier quoted context omitted.

UHNWIs don't invest in their own name, they generally use investment vehicles.

What are some reasons for this?

Often tax (depending on where they're resident)

1. Companies don't die, so are not liable to inheritance tax.

2. (Holding) companies often don't pay capital gains taxes, so money can compound tax free. You only pay tax at the end, when you take it out of the company.

3. If they're using (some) debt to invest, using a company shields them from liability and bankruptcy (Google Einar Aas, he bankrupted himself in personal name because he traded using a personal account with leverage)

Re: How the 0.001% invest

#208

Post by thesausageking »

ThrustVectoring wrote: post #157
thesausageking wrote: post #126

Earlier quoted context omitted.

> The standard passive indexing approach used by middle class individuals scales in a cost-effective manner to the billions of dollars of assets Family offices are more like endowments and follow similar strategies that will have a portfolio that includes a mix of public equities, bonds, private equity, hedge funds, and real estate. Many of these investments are illiquid and have long holding periods, so aren't avail…

>Many of these investments are illiquid and have long holding periods, so aren't available to normal investors but can provide much better returns than index funds. They can also provide worse returns. You don't know which. You can guess that they'll provide average returns, because the average investment gets average returns. After all, not everyone can be above average. Passive indexing guarantees average returns.…

> They can also provide worse returns. You don't know which.

You do. That's the whole point. If you invest in a basket of top tier VC and PE funds, they will destroy indexes over the next 10 years. Yale is a great example of this; over the last 20 years their average returns are 12% which is 50% more than what an index did (7-8%):

https://www.institutionalinvestor.com/article/b17qpx3nyyqywd...

Re: How the 0.001% invest

#209

Post by lordnacho »

lighttower wrote: post #162
lordnacho wrote: post #49

The family offices I've worked with do pretty much everything. Part of the reason to do everything is that you have the freedom to do so. I literally called a friend on behalf of another friend to get him a bridge loan for a house once. A free mandate makes for more interesting work, plus as the manager you can stick things in illiquids that have no mark-to-market. That's the uncharitable view, of course. The charita…

How do these guys find deals to invest into? How do the deals find them?

They are eternally chatting with all sorts of people about potential deals. It's not that hard to get a load of people to offer you stuff.

Re: How the 0.001% invest

#210

Post by spaceman_2020 »

philwelch wrote: post #184
thaumasiotes wrote: post #158

Earlier quoted context omitted.

> Donald Trump, if his public finances are to be believed, would have roughly the same net worth had he just invested the money his dad gave him in mutual funds. There was a factoid going around years ago that said Donald Trump's net worth was equal to the value of his inheritance if it had been invested in an index fund. But note that under that hypothetical, he never would have spent any of it. Do you think the his…

Trump's net worth is actually measurably lower than what his inheritance would have been worth if it were invested in index funds. Also, while some of Trump's lavish expenses are pretty much just lavish expenses (business jets and the like), some of his superficially ridiculous personal expenses, like gold-plating half of his entire penthouse apartment in Trump Tower[1], don't necessarily hurt his net worth that much…

Of all the very rightful criticisms leveled at Trump, ridiculing him for not putting his money into index funds is one of the worse ones. Building businesses is its own reward. People don't get it that just like painting or writing, people can get satisfaction from seeing a venture to completion or inking a good deal
Post reply on HN