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Forbes
4 days ago
- Business
- Forbes
A Golden Age For Advice: Rethinking What It Means To Serve Generational Wealth
Over the next two decades, the role of the wealth advisor will undergo a significant transformation, and I'm not talking about artificial intelligence. I'm talking about how we advise clients and how that advice is delivered. This transformation is a call to action: a chance for advisors to elevate their craft and rethink what it truly means to serve families across to Cerulli Associates, an estimated $124 trillion is projected to transfer hands by 2048, largely from Baby Boomers and the Silent Generation to Gen X, Millennials, and Gen Z. Of that, approximately $105 trillion will be passed to heirs, with another $18 trillion expected to support philanthropic causes. These numbers are significant, but the story goes far beyond the dollars. This moment marks a generational shift in values, expectations, and priorities that will challenge advisors to prove they are the best steward of a family's financial the past decade, I've had the privilege of working with individuals and families across the country. From those focused on securing a comfortable retirement to centimillionaire entrepreneurs navigating complex transitions. What I've observed is an increasing demand for advice that is independent of where their assets are custodied or how they are invested. They want advice that is comprehensive, strategic, and deeply personal. That's why we've built a multi-family office model—one that integrates wealth management, trust and estate planning, tax strategy, and family office consulting into one client must ask themselves: How are you creating value beyond managing a portfolio of stocks and bonds?We're already seeing a shift in investment preferences. Clients are increasingly drawn to private markets such as seed-stage, venture capital, and late-stage growth equity seeking asymmetric returns in companies that align with their personal missions. This marks a clear departure from the traditional 60/40 public equity and fixed income allocations that once dominated high-net-worth portfolios. While each investment style has a role to play in a diversified strategy, it's the advisor's responsibility to strike the right balance between managing the client's risk appetite with longer-term return expectations, liquidity needs, taxes, and time this environment, there's no shortage of funds or managers competing for capital. But identifying the right opportunities takes experience and discipline. Conducting thorough due diligence, questioning investment assumptions and fee structures, and evaluating the long-term alignment with a client's objectives is time-consuming; however, it is essential. Providing this level of guidance is at the core of quality wealth advisory and must be a high as investment selection requires thoughtfulness, so does how this wealth is owned and passed on to heirs. Effective estate planning starts with intentional design by reviewing a family's assets, details of the operating business, interpersonal dynamics, and long-term wealth is transferred over the next two decades, it will require intensive discussions around how best to optimize for estate planning and taxes. For instance, transferring assets with high appreciation potential outside of a taxable estate can unlock significant tax savings over time. But those decisions must be weighed carefully against liquidity needs, family governance, charitable goals, and control considerations. Advisors must regularly revisit trust and estate structures to ensure they remain aligned with shifting laws, evolving family circumstances, and asset today's world, clients are more attuned than ever to their tax exposure and rightly so. We've seen substantial shifts in lifestyle choices, including the migration to lower or no income-tax states, driven in part by the desire to reduce tax drag and preserve long-term wealth. We've also seen a growing number of strategies claiming to deliver tax alpha or greater tax efficiency. While in some cases this may be true, it's not always the case. These developments underscore the importance of advisors staying educated and always doing the work to effectively assess which strategies are truly appropriate for their strategy touches every part of a high-net-worth client's financial life. Every investment, estate planning decision, and philanthropic strategy should be evaluated on an after-tax basis to assess its real value. In our view, too often tax planning is reactive and limited to an annual year-end meeting. The true value comes from proactive, ongoing coordination between the advisor, CPA, attorney, and client. In practice, this has been proven to be easier said than done. The advisor must carry the weight of execution on this because it is a significant value creator for the level of advice and planning requires time, coordination, and a deep understanding of each client's personal and business situation. There are no next generation of wealth holders is asking for something different. They want more than traditional wealth management. They want a trusted partner. Someone who sees the full picture and understands their values, their family, their business, and their ambitions. They want advice that is not fragmented. They want integration of their investments, taxes, trust and estate strategy and philanthropic see this shift happening every day in our work with families, entrepreneurs, and business leaders across the country. Our view is that next generation wealth advisors won't be defined by who is at the largest firm or who delivers the highest returns in a given quarter or year. It will be defined by who listens well, rolls up their sleeves and creates the most value. Performance and great client experiences will follow those advisors who do this and will be the ones families turn to, not just today, but for generations to come.
Yahoo
15-07-2025
- Business
- Yahoo
If you'd invested $1,000 in gold 10 years ago, here's how much you'd have now
The price of gold has been hitting all-time highs for more than a year, and it seems like its momentum won't slow down. But just how good have gold's returns been over time? Here's how much money you'd have now if you invested $1,000 in gold 10 years ago, as well as the average annual returns over a variety of other periods. But there's more than one way to invest in gold — and if you choose a bad way to buy it, you can lose a huge chunk of your gains. Let's get down to the cold hard returns right away, before discussing what it all means. The table below shows how much money you'd have today if you purchased $1,000 in gold at the spot price at the time noted in each column. The table also provides the total return, as well as the compound average annual growth rate, which can help make comparisons easier. Time period 1 year ago 3 years ago 5 years ago 10 years ago 15 years ago 25 years ago Total value $1,404.18 $1,903.94 $1,841.93 $2,859.36 $2,739.75 $11,683.41 Total return 40.4% 90.4% 84.2% 185.9% 174.0% 1,068.3% Compound average growth rate 40.4% 23.9% 13.0% 11.1% 7.0% 10.3% Source: as of July 9, 2025 For example, if you'd invested $1,000 in gold three years ago, you'd now have nearly $1,904. That translates into a 90.4 percent total return and a 23.9 percent average annual return. Over the 10-year period ending July 9, 2025, gold returned about 11.1 percent per year on average. MORE: How to turn $1,000 into $1 million, according to a top wealth advisor But for some long periods, gold had low average annual returns. For example, in the five years starting July 9, 2010, gold lost more than 1 percent per year on average (or about 4 percent total). In the 10 years starting July 9, 2010, gold returned just above 4.0 percent annually on average. In other words, gold had a miserable decade from July 2010 to July 2020. So it's important to note how gold's recent massive run, which began around the start of 2024, is so key to the average annual return figures in the table above. The starting and ending points can be huge factors in how good or poor the returns look. So let's look at the same time periods, but before gold began its latest run, with returns in the table below going to the end of 2023. Time period 1 year 3 years 5 years 10 years 15 years 25 years Compound average growth rate 9.1% 2.9% 10.0% 5.5% 5.8% 8.2% Source: Returns to Dec. 29, 2023 What were quite good average annual returns though mid-2025 suddenly become middling returns for many periods. For example, in the three years to the end of 2023, gold returned just 2.9 percent per year, while in the 10-year and 15-year periods to 2023 year-end, gold returned a respectable but less impressive 5.5 percent and 5.8 percent annually on average, respectively. It's also important to note that these are the returns that you would have received if you had been able to buy and sell at the spot price of gold, without any further incremental costs, such as storage or insurance. But you may end up paying huge fees if you invest in gold the wrong way. None of this applies to the most popular valuable coins, where the price drivers are scarcity, though it may apply to the most popular gold bullion coins. MORE: 7 warning signs that you may need to choose a new financial advisor The worst way to invest in gold is to buy physical bullion. The key reason is that you'll never be able to transact at the spot price of gold. A dealer will always charge customers more than the spot price to buy gold and will always offer clients less than the spot price to sell it. That's how the gold dealer makes money, and it's just how the business works, because the dealer needs a spread to make a profit. That spread has to come from the buyers and sellers of the product. Just how much does this cost you in terms of total returns? It's enormous in even the best case. Using the same returns as the first table, let's assume that you paid a 5 percent premium when buying and sold at a 5 percent discount. Here's how much you'd have over the same periods. Time period 1 year 3 years 5 years 10 years 15 years 25 years Total value $1,270.45 $1,722.61 $1,666.51 $2,587.04 $2,478.82 $10,570.71 Difference due to spread -$133.73 -$181.33 -$175.42 -$272.32 -$260.93 -$1,112.71 Total return 27.0% 72.3% 66.7% 158.7% 147.9% 957.1% For example, if you bought gold a year ago and then sold it, you'd have a value of $1,270.45 after factoring in the spread. You'd effectively lose $133.73 in value to the spread, turning what had been a 40.4 percent gain into a 27 percent gain — costing basically one-third of your gain. Over a 10-year period, you would have effectively lost $272.32 due to the spread, turning what had been a 185.9 percent gain into a 158.7 percent gain. That spread ate up nearly 15 percent of the total profit on the trade. It's a similar situation with the 25-year period, where the difference is more than $1,112. Here the spread would cost you more than 10 percent of your profit. In even the best case, you wind up paying a huge chunk of your profit to the dealer. But you may end up paying even higher spreads if you're trying to sell your gold quickly, you sell to a dealer with a high spread or it occurs during a time when dealers can increase their spread. Incredibly, you'll need gold to increase nearly 10 percent just to break even on your purchase! For these reasons, buying gold bullion is a sucker's bet on gold prices. Here's a better option. Get started: Match with an advisor who can help you achieve your financial goals If you're looking to invest in physical gold, a better way to do it is to buy a gold exchange-traded fund (ETF). With a gold ETF that invests in physical gold, you avoid the worst elements of buying physical bullion — storing and insuring it, the huge spreads — while being able to buy and sell it at fair market value at any time the market is open. Of course, you'll pay something for these advantages — namely, the ETF's expense ratio. The expense ratio is calculated as a percentage of your investment in the fund, and it's deducted seamlessly from the fund for each day that you own it. One of the best physical gold funds is the SPDR Gold Shares ETF (GLD), which charges a 0.4 percent expense ratio. Let's do a quick comparison between the returns on this fund and those of buying bullion yourself over the past year. Buying physical bullion Buying a gold ETF Difference After-fee returns over 1 year $1.270.45 $1,398.56 $128.11 Effective percentage return 27.0% 39.9% 12.9 percentage points As you can see in the table above, you'll lose 0.4 percent of your total investment in the fund, which is calculated here as a 0.4 percent reduction in the overall value at year-end for simplicity. In other words, with the ETF, you get to keep nearly 99% of your profits, whereas by buying gold bullion, you'd need to give up about one-third of your gains over this past year. Now, it's not all peaches and cream with the ETF, either. Over time, the expense ratio will eat at your returns, too — in the case of the fund mentioned above, 0.4 percent per year. But that beats the heck out of paying 5 percent extra on the buy and losing 5 percent on the sell — effectively many years' worth of the fund's expense ratio — every time you want to transact. Of course, there are other ways to wager on gold, including futures, as well as gold miners' stocks. But in the head-to-head matchup for investing in physical bullion, buying gold through an ETF is so much better than buying the bullion yourself and getting taken to the cleaners on the spread. Gold has long been known as a store of value, particularly in harder economic times, but many investors prefer to invest in cash-generating investments. The legendary superinvestor Warren Buffett has long recommended that investors purchase a low-cost index fund based on the S&P 500 stock index, which has a strong record of returns over long periods. Editorial Disclaimer: All investors are advised to conduct their own independent research into investment strategies before making an investment decision. In addition, investors are advised that past investment product performance is no guarantee of future price appreciation. 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Yahoo
29-06-2025
- Business
- Yahoo
Most Retirees Follow This One Simple Spending Rule — but Experts Don't Think They Should
Deciding how to most efficiently spend your money in retirement can be tricky. Many experts have long touted the effectiveness of the '4% rule,' which suggests that retirees withdraw 4% of their savings in the first year of retirement, then adjust that amount for inflation annually. Find Out: Read Next: However, many retirees are eschewing this approach. According to a report from the Investments & Wealth Institute, only 1 in 7 retirees (14%) ever touch their investment principal during retirement. The majority live on just their income — or less than their income — during their golden years. While this might be the simplest approach to retirement spending, it may not be the best one — here's why. While the idea of living solely off income generated by retirement assets, without ever touching the principal, is often seen as the holy grail of retirement, it's not always the most efficient or beneficial retirement strategy, said Nikhil Agharkar, wealth advisor and managing member at Crowne Point Tax. 'This strategy can lead to the underutilization of savings,' he said. 'If you have saved diligently, lived frugally and have entered retirement with a strong portfolio, why not derive more fulfillment from those funds? 'Rigidly avoiding principal could mean denying yourself meaningful experiences, such as travel, family support or home improvements,' Agharkar continued. 'Plus, as you get older, you will be less physically able to do things. Spend the money when you're able to enjoy it the most!' Aaron Brask, principal at Aaron Brask Capital, has seen firsthand how this can play out. 'In my experience, many retirees have taken this mentality too far — that is, they do not spend and enjoy the bulk of their hard-earned savings,' he said. Be Aware: If you are reliant on income from investments only, you may make riskier investments than is necessary. 'It may place undue pressure on your portfolio to generate high income, potentially pushing you into riskier investments, like high-yield bonds or dividend stocks, that might not align with your risk tolerance or tax strategy,' Agharkar said. The broader economic climate can also affect how useful this strategy is. 'In a low-interest environment, income-only strategies can become increasingly difficult to sustain without reducing your standard of living,' Agharkar said. Some retirees who choose to live solely off income may see this as the safest strategy, but this isn't necessarily the case. 'When retiring on investment income alone, it is important to address all the risks,' said Asher Rogovy, chief investment officer of Magnifina, an SEC registered investment advisor firm. 'Most people are concerned with stock market risk, and might allocate to bonds in order to secure their retirement income. However, bonds are exposed to inflation risk, which can decrease real spending during retirement. Finally, there is longevity risk, but retiring purely from anticipated income should help minimize this risk. An investment advisor can help design a portfolio to balance these risks.' Agharkar believes that following strategies like the 4% rule do ultimately provide better outcomes. 'The 4% rule, derived from historical modeling, offers a more balanced approach,' he said. 'This approach assumes both income and principal will be used strategically. 'Rather than trying to live exclusively off interest and dividends, retirees should think in terms of a total return strategy, balancing income and growth and drawing down principal in a disciplined manner,' Agharkar continued. 'This allows for more diversified investments, improved flexibility and better alignment with personal goals.' More From GOBankingRates 3 Luxury SUVs That Will Have Massive Price Drops in Summer 2025 10 Genius Things Warren Buffett Says To Do With Your Money 5 Cities You Need To Consider If You're Retiring in 2025 This article originally appeared on Most Retirees Follow This One Simple Spending Rule — but Experts Don't Think They Should Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
