Good things take time, but you have to start somewhere
We tend to underestimate how long it takes to build the fundamental pillars of our lives. Or perhaps when we don’t fully understand something, we simply assume, and hope, that it can be done quickly.
Over the years of running Family Office Partners, a true multi-family office in the Czech Republic, we have observed the same fascinating patterns again and again. Our work with families extends beyond investing their wealth according to the Endowment Model. It also includes areas such as succession and education, generational transition, second citizenship and residency, health, and longevity.
And across all these areas, a few things keep repeating:
- They take years to build into something that truly works.
- At the same time, we tend to put them off because, let’s be honest, the process is often tedious and full of administration.
- Most importantly, these things are not really urgent. Until suddenly they are, and we need them that very same day.
- Paradoxically, we often need some kind of trigger, usually a significant life event, before we finally get started.
Let’s look at a few simplified examples. They are written from the perspective of issues faced by ultra-high-net-worth individuals and families, but the recurring patterns will be familiar to a much broader audience.
Succession and generational transition
Consider succession and generational transition, or more broadly, putting our legal and ownership affairs in order so that everyone knows what should happen to the family wealth and assets if something happens to us.
This is not something that can be resolved in a single meeting with an expert. Nor is it settled in one conversation around the family table.
In reality, it can take two or three years for everything to fall into place and for everyone involved to become comfortable with the plan, at least as far as anyone can plan for the future. And it is rarely an easy process. Quite the opposite. It can stir up powerful emotions within a family.
Perhaps unsurprisingly, most people are not particularly eager to begin. And after all, it is not something we need today or tomorrow. It can wait until we have more time, or are in a better frame of mind to deal with it.
Until something happens.
A serious illness or unexpected event can suddenly push succession and ownership planning to the very top of the priority list. Now, on top of dealing with an already difficult life situation, the family must urgently address sensitive legal and financial matters.
Why didn’t I start earlier, when I had a clearer head and enough time to find a solution everyone could be comfortable with?
Building an investment system
Now consider an investment system, a way of organizing part of the family wealth so that it can serve us effectively over the long term.
In a traditional multi-family office relationship with a UHNW family, this typically means building an investment portfolio with an effectively unlimited time horizon: an endowment-style portfolio based on the Endowment Model.
Building a functioning endowment takes years.
Finding the right balance between cash-flow-generating investments and long-term holdings, establishing appropriate allocations across asset classes, and achieving genuine currency, geographic, and sector diversification all take time.
And again, the process is not always particularly enjoyable.
Investing involves a great deal of administration, endless forms, AML and KYC requirements, and plenty of documentation. On top of that, understanding an investment, assessing it properly, and comparing it with the alternatives takes time.
If a typical endowment-style portfolio ultimately contains, say, 15 to 20 investments, it is unrealistic to expect to build it properly within six months. Three to four years is a much more reasonable horizon.
When building an endowment, we often encounter what we call the “entrepreneur’s paradox.” In business, we are accustomed to speed, immediate feedback, and even a certain dopamine rush from the daily battle. Managing family wealth is a different mental discipline. It is about planting trees, not chopping wood. It is not trading. It is investing with a very long time horizon. It can even feel a little boring. It takes time, and the results are not immediately visible.
And perhaps we don’t really need that endowment, or a “master plan” for our investments, just yet. We can deal with it later, when we have more capital available and, perhaps more importantly, more time. Right now, we are fully immersed in running the business.
But then the business may begin to struggle.
Suddenly, having part of the family wealth systematically structured to provide financial support independently of the core business starts to look extremely useful.
Or, just as with succession planning, something unexpected happens and the family suddenly needs another source of income beyond the business run by the head of the family.
Why didn’t I start building Plan B earlier, even on a smaller scale?
By now, I would already have a functioning structure in place. I could simply allocate more capital to the individual components of an established investment ecosystem.
Preparing the next generation
Closely connected to both the investment system and generational transition is another question: how and when should we involve our children in understanding and gradually participating in the management of family wealth?
Again, this can be a sensitive process. Not every child inherits an entrepreneurial mindset or a natural interest in managing wealth.
Starting at the age of five is hardly realistic. But suddenly introducing a 19-year-old to all of these responsibilities may already be too late.
It may sound surprising, but our experience at Family Office Partners shows that significant wealth and income can themselves become a source of stress within a family.
Once again, the lesson is that it is better to begin educating children, and indeed life partners, earlier rather than later, even if the process moves slowly.
Wealth should serve us, not enslave us.
But for wealth to serve us, we first need to understand it and give it a structure that makes it manageable.
Second citizenship and residency
Another topic that frequently comes up in conversations within our multi-family office is second citizenship, or alternatively a legal second residency outside the country where a family currently lives.
Recent geopolitical developments have only made this topic more relevant.
But obtaining a second citizenship can take four to six years. There is paperwork, bureaucracy, regular travel, and yet another process to manage on top of everything else.
So perhaps we will wait.
After all, the probability that we will ever genuinely need a second residency, let alone second citizenship, may be relatively small.
But if that low-probability event does occur, the ability to live somewhere else may suddenly become extraordinarily valuable, potentially even a matter of personal and family safety.
And by the time the house is on fire, it is far too late to start building the escape route.
Starting the process several years earlier might not have been particularly difficult. Especially if we can combine the useful with the enjoyable. Travelling with the family to Panama or Mauritius once a year is hardly the worst burden imaginable.
And once we have made the first trip, perhaps only another three or four remain.
Which brings us back to the same point: the crucial thing is to take the first step.
Health and longevity
One final example is something close to all of us: health and longevity.
Physical health has many parallels with financial health.
We all understand that good health does not simply happen by itself and that taking care of it over the long term is worthwhile. It requires time, discipline, and sometimes sacrifice.
It is not always fun. Often, it would be easier to ignore the issue and assume that somehow everything will work out.
And besides, we feel reasonably healthy. Why look for problems where there appear to be none?
Until those problems arrive.
Perhaps some of them could have been prevented. If only we had paid a little more attention years ago to what we ate, how we exercised, how we slept, and how we generally treated our bodies.
By the time the consequences become visible, catching up can be difficult. The cost of procrastination can be remarkably high.
The pattern is always the same
We could continue with better lifestyles, strong relationships in both our private and professional lives, and many other examples.
This article has focused primarily on issues faced by very wealthy individuals and families. But as we said at the beginning, the parallels are everywhere.
The same clear and unforgiving pattern keeps repeating:
We know that these important life tasks will need to be addressed sooner or later. We also know that the benefits will last far longer than the initial investment of our time, attention, and money. We know that getting started will be uncomfortable and require considerable effort. But eventually, we will have to begin. The choice is whether we do so voluntarily, while we still have the time and peace of mind to make thoughtful decisions, or under pressure when the situation has become urgent, or perhaps when it is already too late.
The hardest part is starting.
Kicking the ball into motion. Overcoming the initial inertia, or the instinctive resistance that tells us: “I don’t understand this. It will be difficult. It will be annoying.”
And stopping ourselves from saying that we don’t really need it yet.
Once we begin, however, things usually start moving. Other people become involved, whether family members or the supporting team, and gradually we begin to see light at the end of the tunnel.
At the same time, there is a growing sense of reassurance that we have begun addressing the things that genuinely matter.
At worst, the process can always be slowed down or paused for a while. And importantly, the benefits often extend far beyond ourselves. We are putting things in order for the people closest to us as well.
Although we have mostly been talking about processes, forms, and investment structures, the end product is not a binder full of documents.
The real return is peace of mind. We might call it emotional ROI: that difficult-to-describe but very tangible feeling that whatever happens in the world, my family has somewhere to go, something to live on, and knows how to communicate with one another. That peace of mind cannot be bought overnight. It takes time and effort to build.
This article reflects both the author’s long-term personal experience and the lessons we have learned from others over many years of running our multi-family office at Family Office Partners.
Being UHNWI certainly does not mean that difficult, long-term challenges somehow resolve themselves without effort or resistance.
The solution, however, is remarkably simple: processes that can have a lasting impact need to be started.
Our future selves, ten or twenty years from now, may be very grateful that we did.
Or, as the saying goes:
The best time to plant a tree was twenty years ago. The second-best time is now.