Luxury vs. Longevity: Wealth Tips for Affluent Families
By Daniel Baumgartner & Petra Peters
The art of affluence is not just about acquiring it but also about maintaining it. As a result, wealth tips for affluent families have a unique requirement: balancing the moral obligation to preserve money for future generations, alongside the desire to enjoy life’s finer things now.
For people who have cross-border relationships between Europe and the United States, this balancing act becomes even more difficult as navigating varied legal and economic environments makes it harder to pursue long-term financial stability while simultaneously enjoying the rewards of their hard work.
This article provides insight into smart ways to balance these competing priorities.
The Psychology of Wealth: Balancing Enjoyment and Preservation
Before we get into specific wealth tips for affluent families, it’s important to take a look at the psychology behind this fascinating duality.
For affluent families, the psychology of wealth often presents an intriguing contrast: the innate desire for instant gratification through the enjoyment of luxury vs. the focused, long-term mindset necessary for true wealth preservation.
This dilemma is amplified by the challenge of managing large assets in a globally interconnected world.
Imagine the story of the European art collector who, despite his passion for collecting masterpieces, failed to recognize the necessity for complex estate planning for his heirs who lived in the United States.
Or the American entrepreneur who struggled to balance his desire to provide luxuries for his children with the need to teach them to be financially responsible for the future.
These real-life scenarios illustrate the delicate balance between living in the moment and carefully leaving a legacy for future generations.
Specific Wealth Tips for Affluent Families to Balance Luxury and Longevity
Now let’s explore four strategies for reconciling this balancing act.
1. Strategic Investment Approaches
The long-term wealth preservation gains of a globally diversified investment strategy cannot be overstated. A diversified portfolio provides access to worldwide growth opportunities.
For families with cross-border wealth, strategic investment strategies must carefully approach the challenges of controlling exchange rates and avoiding possible geopolitical risks in various countries.
Ultimately, a well-built portfolio balances traditional asset classes with alternative investment vehicles in an effort to pursue a well-rounded strategy that aligns with individual risk tolerance and long-term financial objectives.
2. Estate and Succession Planning
For affluent families looking to preserve their wealth and establish a seamless transfer to future generations, a thoughtfully crafted estate plan is essential for providing transparency and mitigating potential tax obligations.
Implementing strategies that handle the intricacies of disparate legal and tax systems across varied jurisdictions is critical for individuals with assets spread across Europe and the United States.
Tools like complex trusts, the creation of family offices, and other specially designed legal and financial arrangements, play an essential role in supporting a smooth succession process.
3. Lifestyle Integration: Enjoying Luxury Responsibly
Another wealth tip for affluent families is incorporating luxury living into their lives responsibly.
This entails making thoughtful decisions on asset allocation and discretionary spending to verify that enjoying luxury remains an element of, rather than a drawback to, their financial strategy.
Examples of responsible wealth management include prioritizing experiences over depreciating assets, investing in sustainable luxury items, and setting aside a specific percentage of wealth for charitable causes, all while maintaining a clear focus on a solid financial future.
4. Holistic Wealth Management
Lastly, truly managing money effectively, especially across international borders, requires a customized approach that considers the unique circumstances, goals, and complexities of each client.
In this holistic process, a professional financial advisor is essential because they can skillfully match complex investment strategies with the family’s long-term legacy goals as well as their current lifestyle preferences.
This ongoing relationship, which includes proactive strategy modifications and regular portfolio assessment, confirms that the wealth plan continues to be robust and flexible in the face of constantly changing domestic and global market conditions.
Reach Out for Professional Guidance
For affluent families, especially those with cross-border interests, consulting with a professional investment advisor offers the dedicated guidance needed to pursue unique financial goals.
Our team at Terra Nova Asset Management prioritizes forming loyal and long-term relationships with our clients. In many cases we have the next generation on board so we can take care of families for multiple generations.
Does it seem like we may be a good fit? Reach out to us directly at 212-355-1234 or ppeters@terranovausa.com for the New York office (Petra) or 855-248-6630 or baumgartner@terranovausa.com for the New Jersey office (Daniel). You may also contact us here to schedule a meeting and we’ll get in touch with you soon!
About Daniel
Daniel Baumgartner is a founding partner of Terra Nova Asset Management LLC, a partner-owned investment advisory firm that manages individual portfolios for clients. Daniel has extensive experience in marketing, development of special U.S.-investment products, as well as customer acquisition and relationship management. His ultimate goal is to make a difference in his clients’ financial lives through honest investment advice. He strives to provide high-touch, personalized service and enjoys getting to know a client’s personality as it relates to their financial circumstances before crafting the right solutions. As money is a very personal subject, Daniel takes his responsibility as an advisor very seriously, forming long-term relationships with clients based on trust.
Daniel received his degree in finance and international business from New York University. Outside of the office, he is a hobby landscape, street photographer, and has a great interest in U.S. and European history (16th-19th centuries), believing it helps him answer the question “Why is something the way it is?”
About Petra
Petra Peters is a founding partner and the Chief Executive Officer of Terra Nova Asset Management LLC, a partner-owned investment advisory firm that manages individual portfolios for clients. Petra has decades of experience in the banking industry, asset management, overseeing the administration of individual accounts, and designing and advising specialized funds tailored to the requirements of international private and institutional clients. With extensive knowledge of both Europe and the U.S., she’s able to provide advice and services beyond the typical investment advisor. Petra desires for her clients to live a financially care-free life so they can pursue their passions, and she values their trust and gratitude. Creating invaluable friendships formed over years of partnership, some clients even consider her part of their family.
Petra’s interests outside of work include classical music, history, travel, charities, motorcycling, and golf. She is also on the board of a German charity.