In my article dated February 2017, I discusse d several characteristics of rich clients I had observed over the years. I mentioned that rich people were optimists, long-term thinkers, they followed their passions, they loved money and they were not afraid to use other people’s money.

 

The article generated some fun discussions, with lots of people adding additional insights that they had observed.

Now in this follow-up article, I am exploring their investment habits rather than their characteristics. Hopefully, you will find it instructive as you seek to build wealth for yourself.

 

STRONG RELATIONSHIP WITH THEIR INVESTMENT ADVISOR

Have you ever found yourself calling a financial institution and asking to speak to an agent? That wouldn’t happen with a rich person. They are usually closer to their advisor than their own family. They speak to their advisor almost daily. They have formed a relationship with that person who understands their investments needs and quirks.

RISK-TAKING

I recall a client saying that he took quite a lot of risk in handling his business on a day-to-day basis, therefore he absolutely did not want to take risks with his money.

In other words, despite his obvious ability to take risks, he had a distinct unwillingness to take what was perceived as additional risk with his hard-earned money.

This is a little ironic, as often it is the people who have much less money who are willing to give their money to people they don’t know and take very high-risk positions.

PROFESSIONALS

Rich people almost always have an attorney and accountant on their payroll. Similar to their relationship with their investment advisor, they tend to be very close to these professionals with personal friendships being par for the course.

There is a synergy to be had when they maximise the strengths of these three professionals. This is the reason they create companies with the most efficient tax structures for their businesses and investments, while utilising the most efficient regions with the most friendly investment environments.

Depending on the strength of the relationship, they may prefer to follow the advisor as he or she moves to different institutions. They generally expect special treatment and they get it.

An investment advisor is an integral part of their daily life. Their investment advisor keeps them informed about the latest investment offerings, and updates on their portfolio. However, most rich people have strong ideas about the investments that they prefer.

 

RISK-TAKING

I recall a client saying that he took quite a lot of risk in handling his business on a day-to-day basis, therefore he absolutely did not want to take risks with his money.

In other words, despite his obvious ability to take risks, he had a distinct unwillingness to take what was perceived as additional risk with his hard-earned money.

This is a little ironic, as often it is the people who have much less money who are willing to give their money to people they don’t know and take very high-risk positions.

PROFESSIONALS

Rich people almost always have an attorney and accountant on their payroll. Similar to their relationship with their investment advisor, they tend to be very close to these professionals with personal friendships being par for the course.

There is a synergy to be had when they maximise the strengths of these three professionals. This is the reason they create companies with the most efficient tax structures for their businesses and investments, while utilising the most efficient regions with the most friendly investment environments.

http://www.jamaicaobserver.com/sunday-finance/rich-people-part-2_143669