Extractive summaries and key takeaways from the articles curated from TOP TEN BUSINESS MAGAZINES to promote informed business decision-making | Week 305 | July 14-20, 2023
Advisor to the ultra-rich offers 6 strategies you can steal to build wealth
Secrets to how the ultrawealthy got that way, as told by their advisors.
By Nicole Gull McElroy | Fortune Magazine | July 13, 2023
If there’s anything Heather Loomis Tighe has learned in more than 20 years managing money for the ultra-rich, it’s that there is no single portfolio allocation that all billionaires employ. Her best advice for anyone hoping to apply her clients’ expertise to their own much smaller honeypot is to lean on these six tenets to manage investments, maintain and build wealth.
Be optimistic. “A common thread present among the wealthiest people that I have worked with over the years is that they are inherently optimistic people,” says Tighe. “While this doesn’t not imply that they turn a blind eye to risk, they do believe that reward over the long term will outweigh risk. They are excited about the future and see potential where others see ruin.” This comes down to erring on the side of ingenuity, entrepreneurship and sheer hustle.
Demonstrate confidence. The richest people Tighe knows, she says, didn’t become rich because they operate in a vacuum. They trust their own abilities to solve problems and rely on other smart, capable people in their corner to support them and their plans. “Importantly, they run their businesses and their investment portfolios not for the love of money, but for the love of the game,” she says. “As a result, they know, deep down, that if they lost it all they could do it again.
Become an expert. Tighe is clear that her clients are often experts in a specific area or two. “They typically own or operate companies or large investments in their area of expertise.” For that reason, they’re able to take big, calculated bets in the space, framing it up as the nucleus of their wealth: a collection of hotels, a tech company, oil wells, a fashion brand.
Stay frugal. “I have never met a billionaire who will willingly pay an ATM fee or spend $35 for a hamburger without wincing,” says Tighe. “The one percent watch the back door. If you spend what you make, or more than you make, you will not harness the full power of compounding.” The end goal, she says, is to work less, allowing your money to work for you. “And if you want your money to start working for you, you want to keep most of that invested.”
Think orthogonally. Tighe has long made a practice of showing up for client meetings ready for just about anything. They don’t think like financial advisors, but more out of the box in order to be entrepreneurs, solving problems others yet weren’t or launching companies that hadn’t previously existed. Her clients are interested in understanding how the world works today and what factors and problems will influence the way it works in the future? Being able to explore answers to those questions has allowed her clients to anticipate opportunities.
Seize opportunity. When things are tumultuous in the market, the wealthiest investors step into the spotlight and truly shine. “The top one percent investors are not afraid to be the salmon,” says Tighe. “These investors wait and watch, and if they know they are able to buy something at an attractive price, they are not worried if it falls another 10 to 20 percent before the bottom or they miss the first 10 to 20 percent of upside.”
3 key takeaways from the article
- If there’s anything Heather Loomis Tighe has learned in more than 20 years managing money for the ultra-rich, it’s that there is no single portfolio allocation that all billionaires employ. Tighe, who has traded stocks, managed a bond portfolio, and served as CIO, is now a family office advisor and venture capital partner based in Jackson, Wyo.
- If you look across the portfolios of the top one percent investors, they’re all strikingly different.” Still, says Tighe, even with so much variation across portfolios, there are valuable constants to glean from the USA’s wealthiest investors.0
- Her best advice for anyone hoping to apply her clients’ expertise to their own much smaller honeypot is to lean on these six tenets to manage investments, maintain and build wealth. These are: be optimistic, demonstrate confidence, become an expert, stay frugal, think orthogonally, and seize the opportunity.
Topics: Investment, Strategy, Business Model, Decision-making