Group discussions in March covered a broad range of topics. As always we and other members are grateful for information on how much one pays its wealth managers and we got several new postings, the latest on all-in fees (”Fixed income €2.000.000: 0,6% all in Equities and options €2.000.000: 0,8% all in”) by CDrewing. Still the differences between the providers are very high and we congratulate 7chiffres for his excellent negotiations skills: For currency exchanges exceeding USD 20k he pays only 10 basis points on transactions. A number we have so far only seen for amount of USD 100k and more.
7chiffres is not only a good negotiator, but also follows a sound strategy and has a good reasoning on why he manages his assets himself.
“(..) It helps to remember you don’t have to give 1% or more every year to some 3rd party, and will most likely end up with better returns. If, like me you made your money yourself (vs. inherit), it also helps to remember that in comparison with the effort to earn the money, the effort to preserve it (my goal is preservation with moderate growth) is really not that big. Another way to think about it if you have built a business yourself, is this: would you just give control of that business to someone else based on a few meetings and no public track record and then stay away from that business hoping for the best? Probably not” (read full post)
It is worthwhile to also read his other post on his experience and usage of wealth managers and as well investment strategy,
Talking about avoiding the pitfalls and hidden cost of investment vehicles. Our member Obsidian gave other members an excellent recommendation on how to design a contract so that an investments does not only pay-off for the Private Equity Company, but also the investors.
“Always build a minimum floor return exclusive of fees, costs and commissions. If you deposit a substantial principal amount, normally in excess of $3M, your fund manager will agree to a floor. This is normally never discussed but it is available to the savvy investor. Remember the fund agreement is merely the starting point of your negotiation and engagement with your fund manager. In a market where cash is king you have more negotiating leverage than you can imagine.” (read full post)
Our very active member Solarcell brought to the attention the harsh consequences new US regulations have on investors. Thanks! In fact we also felt that these changes in regulation deserve a far higher publicity than they got so far and published our analysis and opinion on the site.
While the interest and inflation rates are still close to record lows our members are rightly looking ahead and continue to discuss ways on how to avoid the negative effect of future inflation on their wealth. Our member Pedro was so kind to share his strategy:
“(..) I bought some real return bonds, paid down my mortgage and actualized future projected consumptions (major renovations on our principal residence, and I am planning to be purchasing land for a possible future second home as soon as the renovations are over). Some wrote about investment real estate, I would be careful about that because of its inherent negative carry. If it procures you some positive marginal utility then go for it, but if you are only going to worry about it and do not enjoy having to maintain it (like I would) then I would not do that.” (read full post)
Thanks to all of you for sharing your experiences and insights ! Every post helps fellow members to gain transparency in the rather opaque wealth management market.