Why do very few of today's wealthiest families trace their fortune back to the magnates of 1900, despite the high investment returns since then?

In this episode, Brian delves into wealth sustainability and financial decision-making with Victor Haghani, founder and CIO of Elm Wealth and co-author of "The Missing Billionaires: A Guide to Better Financial Decisions." He shares insights into why many fortunes don't survive across generations, highlighting the importance of smart investment strategies, risk management, and adaptable spending policies. Through an engaging conversation, listeners gain a deeper understanding of the empirical facts and strategic decisions crucial for long-term wealth preservation.

[00:01 - 06:34] The Genesis of "The Missing Billionaires"

How Victor identified a gap in the financial decision-making literature
The surprising historical fade of wealth across generations
The book's impact and relevance

[06:35 - 12:16] Deciphering Wealth Dissipation

The phenomenon of wealth not persisting across generations
Rigid spending policies exacerbate financial vulnerability over time
The role of risk management and spending policies in preserving wealth

[12:17 - 17:59] Risk, Return, and Spending: The Critical Triad

How to diversify investments and avoid overly concentrated portfolios
The danger of rigid spending policies and the need for adaptability
A utility function to make informed risk-taking decisions

[18:00 - 24:14] The Cultural Aspect of Financial Decisions

Generational differences in approach to wealth can lead to its dissipation
The importance of entrepreneurial spirit in sustaining family wealth
Balancing between growing and preserving wealth across generations

[24:15 - 29:06] Future-Proofing Wealth: Strategies and Reflections

The importance of aligning investment strategies with personal and familial goals
Practical advice for those facing a liquidity event or starting a family office
The societal implications of wealth accumulation and preservation

Key Quotes:

"Every author finds the motivation in feeling that there's a gap that's crying out to be filled." - Victor Haghani

"The more risk that you take, the more that you're eating into your compound returns." - Victor Haghani

Connect with Victor!

Website: www.elmwealth.com

LinkedIn: https://www.linkedin.com/in/victorhaghani

This episode is sponsored by Mack International, a specialized executive search and human capital consulting firm serving the family office/wealth management markets. Please visit their website here for more information.

Connect with me:

https://www.linkedin.com/in/brian-c-adams/ (LinkedIn)

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