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$900 Million Wealth Advisor Is Top Choice For Wealthy Asian Immigrants

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The Los Angeles area is home to the third largest Chinese population in the U.S. behind New York and the San Francisco Bay Area, and it’s the perfect place for Sean Yu’s $900 million business.

Yu, 42, is managing director of The Sean Yu Group at Morgan Stanley Private Wealth Management where he oversees money for first-generation immigrants from China and Taiwan. Yu, who immigrated to the U.S. from Taiwan at the age of 12, says many of his clients are doctors living the American dream, and looking for ways to grow and maintain their wealth.

That particular segment of clients helped grow his business when he first launched it in 2003. More recently, he’s added clients from a new wave of immigrants who, unlike his early clients, are arriving to the U.S. with loads of money ready to be invested. Yu says they are typically Chinese nationals looking to access U.S. markets to help diversify their portfolios.

For the full list of Forbes‘ Best In-State Wealth Advisors and more, click here.

Managing money for international clients can be tricky. “Immigrants to this country are more used to brokerage-style advice from Singapore or Hong Kong” that tends to be more transactional, he says. “I tell them we are more like an endowment, looking at asset allocation and risk among varied factors,” Yu adds.

Wealthy clients often have high expectations from their financial advisors, and investors from China are accustom to big returns. Yu makes sure these clients know what they’re getting into as he aims to create a long-term relationship. “It is much harder to make money here, compared to in China, so in addition to focusing on that, I talk to clients a lot about adding community value with their money through a donor advised fund or similar type of vehicle. If they want to stay here for the long run, I want to help them make sure they know what is important to them and what isn’t.”

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It seems to be working. Yu estimates his average client, typically worth $30 to $50 million, gives him roughly $10 million to invest and manage. The firm, ten employees including Yu, works with 100 households and new clients are required to have at least $5 million in assets to join.

Yu relies on two investment advisors to help with retirement and other financial planning aspects of the business while he focuses primarily on client portfolios. Yu says his current asset allocation mix is 60% in bonds and 40% in stocks. Yu plans to allocate more assets towards private equity through trusts which he hopes will benefit his next generation of clients: the children and grandchildren of existing clients.

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I’m a wealth management staff writer at Forbes based in New York. Prior to joining Forbes, I was on the same beat for Private Asset Management. I also covered public policy and compliance for compliance reporter and the auto industry for the New York Daily News. A lifelong New Yorker, I got my M.A. from the Craig Newmark Graduate School of Journalism at the City University of New York. Email thoughts and tips to JBisnoff@Forbes.com. Follow me on Twitter at @JBisnoff.

Source:https://www.forbes.com/sites/jasonbisnoff/2020/02/10/900-million-wealth-advisor-is-top-choice-for-wealthy-asian-immigrants

 

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Why Inheritance Is Mostly Overrated As A Reason For Wealth

Perhaps more than ever before, people claim that almost the only way to join the ranks of the rich is through inheritance. Apparently, in the good old days, it was still possible build a fortune from the ground up—but not anymore. Such claims discourage people who have set themselves the goal of becoming wealthy as entrepreneurs or investors.

The message, whether explicit or unspoken, is as clear as it is sad: “Don’t even bother trying—those days are long gone.” There are even so-called classism researchers who criticize the media for reporting on people who have ascended from humble beginnings to become rich. Such articles, the researchers claim, only perpetuate a false illusion that capitalism, in reality, can never live up to.

The Buddenbrooks: An Exemplary Tale

One measure of the percentage of the wealthy who are self-made is Forbes’ own Forbes 400 list.  In 1984, less than half the people on The Forbes 400 list of richest Americans were self-made. By 2018, in stark contrast, this same figure had risen to 67%.

The importance of inheritance is overestimated because, in reality, most heirs are unable to preserve let alone expand their assets. In 1901, the German writer Thomas Mann published one of his most celebrated novels, Buddenbrooks: The Decline of a Family, which tells the story of how a rich merchant family, the Buddenbrooks, slowly but surely squandered its fortune over the course of four generations.

As is so often the case, fact mirrors fiction, as demonstrated by the scientists Robert Arnott, William Bernstein and Lillian Wu in their research paper “The Myth of Dynastic Wealth: The Rich Get Poorer.” Their key findings include the following: “The average wealth erosion for the 10 wealthiest families of 1930, 1957, and 1968… was 6.6 percent, 5.3 percent, and 8.7 percent, respectively. These figures correspond to a half-life of wealth—the length of time it takes for half of the family fortune to be redistributed within society through taxation, spending, and charitable giving—of 10 years, 13 years, and (remarkably) 8 years, respectively.”

Great Ideas And Personality Traits Are Not Necessarily Passed On To The Next Generation

One glance at the list of the richest people in the world is enough to see that the vast majority—insofar as they have not inherited their wealth—have earned their fortunes as entrepreneurs. And according to the findings of entrepreneurship research, successful entrepreneurs become rich because they have a very specific combination of personality traits. However, these personality traits cannot simply be passed on to the next generation.

The super rich became rich because they had incredibly good ideas. Why is it that Jeff Bezos, Bill Gates, Mark Zuckerberg, Sergej Brin and Larry Page are among the richest people in the world? Because they had great ideas, founded Amazon, Microsoft, Facebook and Google and knew how to turn them into extremely profitable companies. It’s very unlikely that their children will have the same personality traits or such brilliant ideas.

Left-wing economists, such as the Frenchman Thomas Piketty, believe that the rich have access to particularly profitable investments—some would even call them a license to print money—which allow them to automatically increase their wealth even without their own entrepreneurial ideas.

Just like left-wing anti-capitalists, family offices that earn their money by promising to increase the wealth of rich families have a vested interest in maintaining the myth that there are secret, extremely lucrative investment opportunities that are reserved only for the superrich. This is, after all, the basis of their entire business model. But there are very good reasons to doubt that this is the case. It is more likely that most of these exclusive asset managers deliver even worse results for their superrich clients than an average investor would achieve by investing in an index fund.

For example, hedge funds have enjoyed an almost legendary reputation as the super-secret weapons of the rich for many years. And yes, some hedge funds have achieved extremely high returns, for which they have received a great deal of celebratory media attention. On average, however, they have performed worse than an index fund that absolutely anyone can buy on the internet. In 2007, Warren Buffett entered a million-dollar bet with fund manager Protége Partners that the S&P 500 Index would outperform a portfolio of hedge funds over the next ten years.

Buffett was right and donated his winnings to Girls Incorporated of Omaha. The S&P 500 Index fund in which he invested delivered a compound annual return of 7.1%, outperforming the return on the funds selected by Protégé Partners (2.2%). The extent of the difference is really put into perspective when you compare the actual monetary returns: Anyone who invested a million dollars in hedge funds before 2008 would have made a profit of $220,000 by 2017. S&P 500 investors, on the other hand, would have collected $854,000. So much for the supposed license to print money and “secret weapons” of the super rich.

How People Inherit Money And Lose It Again

Many rich heirs could actually live very well off their inheritances if only they followed the advice Warren Buffett has already given his wife for when she inherits (a minor part) of his fortune: Simply invest the money in an index tracker fund. But most people think they are smarter and believe they can make particularly canny investments—which all too often turn out to be flops.

Or they inherit a company but do not have the entrepreneurial talent of their predecessors. Others overestimate themselves, start new companies and lose money. Still others go through expensive divorces or simply spend far more each year than their inheritances would sensibly allow. There are countless examples that show just how difficult it is to manage an inheritance. Many heirs have more in common with lottery winners who, by a stroke of luck, win massive fortunes, but lose them again because they lack the requisite skills to handle money.

Welcome To The Self-Made Billionaires’ Club, Jay Z

In reality, the chances of getting rich, even at a young age or as someone who comes from a humble background, have never been so good. Recent headlines have trumpeted the fact that Jay Z, who was raised by a single working mother, has become the world’s first hip-hop billionaire and the latest member of the Self-Made Billionaires’ Club.

Of course, very few people will ever make it quite so far. But what helps more? Telling someone “You have no chance anyway. If you don’t inherit money, you’ll never get rich,” or, “Forget it! Capitalism only makes the rich even richer.” Or saying, “You probably won’t become a billionaire, but look at the people who started out at the very bottom and made it to the top. Seize your opportunities!”

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I was awarded my first doctorate in history in 1986 and my second, this time in sociology, in 2016. I started my career at the Central Institute for Social Sciences Research at the Free University of Berlin and went on to become department head at one of Germany’s leading daily newspapers, Die Welt. In 2000, I founded my own company, which I established as the market leader in the field of communication consultancy for real estate companies in Germany, with a roster of clients that included Ernst & Young Real Estate, CBRE and Jamestown. I sold the company in 2016 and have focused on academic research and writing books ever since. In total, I have written and edited 22 books, the most recent of which are The Wealth Elite and The Power of Capitalism. My books on the psychology of success and wealth have been translated into a host of languages and have enjoyed notable success in China, India and South Korea. I am also a regular contributor to numerous prestigious European media outlets, including the Neue Zürcher Zeitung in Switzerland, The Daily Telegraph in the UK and the Frankfurter Allgemeine Zeitung in Germany.

Source: Why Inheritance Is Mostly Overrated As A Reason For Wealth

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If you’re stuck paying off credit card debt and balancing two jobs, the idea of having extra money to spend on vacations and luxury cars may seem like a pipe dream. But honestly, acquiring wealth is simply about sacrifices. What would you be willing to give up? Sleeping in on the weekends? Ohhh, that one hurts! It’s ideal to get 7 to 8 hours of sleep, but working hard at your craft or career often requires sleepless nights. Entertainment like movies, TV shows, concerts also waste valuable time. And your money, too. And what about family life? What if you dream of having a wedding and lots of kids? It’s all about prioritizing. Yeah, that’s tough! But let’s try to figure out how you can deal with all that. Other videos you might like: 7 Main Differences Between Rich and Poor People https://www.youtube.com/watch?v=gsTjM… Salaries of 13 Country Leaders — From $1 to More Than $2 Million https://www.youtube.com/watch?v=Oq7Mq… 14 Facts About Money You Should Know by Age 30 https://www.youtube.com/watch?v=dLbBF… TIMESTAMPS: Boredom 0:48 Family life 2:09 A flashy lifestyle 3:18 Sleep 4:03 Distracting entertainment 5:03 Predictability 6:06 Making life cushy 7:03 Caring about what other people think 8:06 #wealth #richpeople #success Music by Epidemic Sound https://www.epidemicsound.com/ SUMMARY: – You know those days where you have nothing to do, so you just binge watch your favorite Netflix show until you begin to melt into your couch? Instead of wasting this free time, use it to acquire a new skill. – Wealthy people often value self- improvement and are always trying to make the most of themselves. Often this means learning a new skill that you can use to make more money in the future. – As you’ve probably come to realize, financial success doesn’t just happen. Unless you were born into extreme wealth like Paris Hilton, you need to devote lots of time to working on your business and lifestyle to achieve the level of wealth you want. – Sure, there are plenty of rich people who love flaunting their wealth, but they didn’t get to that level of financial freedom by doing so. Don’t spend money on things you don’t really need. – Billionaire Elon Musk says he sleeps only about 6 hours a night – and he’s already made his money. But if you’re one of those people who really needs time to rest when they’re working hard – you know, as most humans do – then you can schedule your rest just like you would important meetings or deadlines. – Think about it: in one month, going to the movies a couple times, and maybe a concert or two can literally cost you hundreds of dollars, not to mention the fact that it took up tons of your time. – If you want to be rolling in the big bucks one day, you’ve got to let go of the idea that you’ll live a stable, comfortable life. Part of earning success is being able to take advantage of opportunities as they’re presented to you. – The sacrifices may seem insignificant, but it really adds up and you’re better off putting that money toward growing your business or whatever other goals you’re trying to reach. – Life isn’t like high school – it’s not a popularity contest! If people don’t like you, you shouldn’t stress too much about it. While it’s important to be respectful of others, there’s no need for you to go out of your way to appease them, especially if it hinders your growth. Subscribe to Bright Side : https://goo.gl/rQTJZz —————————————————————————————- Our Social Media: Facebook: https://www.facebook.com/brightside/ Instagram: https://www.instagram.com/brightgram/ 5-Minute Crafts Youtube: https://www.goo.gl/8JVmuC Stock materials (photos, footages and other): https://www.depositphotos.com https://www.shutterstock.com https://www.eastnews.ru —————————————————————————————- For more videos and articles visit: http://www.brightside.me/

New Psychological Studies: How The Wealthy Really Are Different From Everyone Else

"The rich don’t go with the flow"

The author F. Scott Fitzgerald is credited with saying: “The rich are different from you and me.” And Ernest Hemingway is supposed to have responded: “Yes, they have more money.” In fact, the actual words Fitzgerald used in his short story “The Rich Boy” (1926) are: “Let me tell you about the very rich. They are different from you and me. They possess and enjoy early, and it does something to them, makes them soft, where we are hard, cynical where we are trustful, in a way that, unless you were born rich, it is very difficult to understand.”

People have always suspected that the rich are somehow ‘different,’ not only in terms of what they possess, but in their personalities. However, there are not many scientific studies that can either confirm or refute this thesis – neither in the United States, nor in Europe. Now, a team of six German economists and psychologists has conducted a large-scale study: They interviewed 130 wealthy individuals and used the results to derive a psychological profile, which they compared with the population as a whole.

Big Five Test

Of the various models developed by psychological researchers to describe personality types, it is the Big Five model that has largely come to dominate over the past few decades. This latest wealth study used a condensed version of the Big Five test to distinguish between five core personality traits:

Conscientious: Describes people who are thorough, meticulous, diligent, efficient, well organized,  punctual, ambitious and persevering.

Neuroticism: Individuals with a high degree of Neuroticism tend to be nervous and frequently worry about everything and anything that could possibly go wrong. They tend to react impulsively and, overall, are not particularly psychologically stable.

Agreeableness: Individuals with high levels of Agreeableness have a pronounced desire for harmony; they have a tendency to back down too quickly and are frequently too trusting.

Extraversion: Individuals with high Extraversion are talkative, determined, enterprising, energetic, and courageous.

Openness to Experience: Individuals with high Openness to Experience are imaginative, creative, and curious.

When you compare the personality traits of the general population with those of the researchers’ wealthy interviewees, the following patterns emerge:

  • The rich are emotionally more stable, and therefore less neurotic
  • The rich are especially extraverted
  • The rich are more open to new experiences
  • The rich are less agreeable, which means they less likely to shy away from conflicts
  • The rich are more conscientious.

In addition to the Big Five test, the researchers also investigated two other personality traits: narcissism and internal locus of control. Their findings:

  • The rich are more narcissistic
  • The rich exhibit a stronger internal locus of control. This means that they are more likely to agree with statements such as “I determine how my life turns out” than they are with statements like “What you achieve in life is mainly a question of luck or fate.”

What Makes the Superrich Tick

The results of this latest wealth study are consistent with those of my doctoral dissertation on “The Wealth Elite,” which was based on interviews with 45 wealthy individuals. With only a few exceptions, most of the interviewees were self-made millionaires, and the ‘poorest’ were worth between 10 million and 30 million euros. Most, however, were worth significantly more, between 30 million and one billion euros, and some even more.

This study on the psychology of the superrich also came to the conclusion that the rich are psychologically very stable (i.e. not very neurotic). It also showed that they are particularly open to new experiences, more extraverted, more conscientious – but not necessarily agreeable.

In contrast to the recent survey of 130 wealthy individuals mentioned above, the study of the superrich involved in-depth interviews of between one and two hours each. In addition, the superrich interviewees not only completed a condensed version of the Big Five test, they took the detailed version with 50 questions.

One of the key findings was that the superrich are frequently nonconformists. They enjoy swimming against the prevailing current and have no problem contradicting prevailing opinion. Another result: the superrich are more likely than others to make decisions based on gut feeling. They tend to rely more on intuition than on detailed analysis.

And, most importantly, they have a completely different approach to dealing with defeats and setbacks than most people. Across the population at large, people like to take credit for their successes while looking to assign the blame to others for defeats and setbacks. In this, the superrich are quite different, as the interviews showed: They seek to identify the causes of setbacks in themselves, not in external circumstances or other people. This gives them a feeling of power: “If the fault lies with me, I can change it. I am in control of my own life.” There are many reasons why some people succeed in becoming rich and others don’t, but the specific combination of personality traits that both studies identified is certainly one of the reasons. Rich people become rich because they act differently from others. And they act differently because they think, make decisions and react differently than most people. Apparently, Fitzgerald was right: “The rich are different from you and me.”

I was awarded my first doctorate in history in 1986 and my second, this time in sociology, in 2016.

Source: New Psychological Studies: How The Wealthy Really Are Different From Everyone Else

4 Simple Habits to Build Wealth Faster

As a young child, did you ever dream of having $1 million in the bank?I used to think that way, but my perspective changed over the years. $1 million is no longer a guarantee of financial freedom. For someone spending $200,000 a year in good health, $1 million won’t go very far during retirement. For someone else who spends $40,000 annually and has Social Security income, saving less than $1 million may be appropriate……….

Source: 4 Simple Habits to Build Wealth Faster

The Definitive Ranking Of The Wealthiest Americans – Luisa Kroll & Kerry A. Dolan

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Seemingly as inevitable as death and taxes, the rich once again have grown richer. For the first time since 1994, there is a new No. 1, as Amazon.com founder and CEO Jeff Bezos breaks Bill Gates’ 24 year run at the top. Bezos is also the first person to appear in the ranks with a fortune of more than $100 billion –he clocked in at $160 billion, thanks to an astonishing one year gain of $78.5 billion. The minimum net worth to join this exclusive club hit an all-time high of $2.1 billion while the average net worth for a Forbes 400 member rose half a billion to a record $7.2 billion…….

Read more: https://www.forbes.com/forbes-400/#775ea7c67e2f

 

 

 

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