English
**A single brilliant decision can create wealth. However, the best way to preserve one's fortune over the course of a century is not through a single brilliant decision, but through hundreds of sound decisions made over many years.**
**Cultivating the Right Family Culture**
-
The most successful families instill a sense of purpose in subsequent generations. They create an environment in which children and grandchildren **do not feel entitled to their inheritance**, but are instead motivated to forge their own paths and create value for the world.
In these families, subsequent generations view their wealth not as their personal property, but as something they are stewarding for the future.
**Viewing Tax Planning as an Ongoing Process**
-
The second most important factor these families utilize to preserve their wealth is a highly deliberate and thoughtful approach to expenses and costs.
**Typically, in such situations, taxes represent one of the largest cost factors; moreover, the manner in which one invests one's money can be either incredibly tax-efficient or incredibly tax-inefficient.**
For instance, one might purchase an equity fund where the fund manager is constantly buying and selling. One would have to anticipate that a significant portion of the short-term capital gains would be subject to taxation each year—thereby eroding the client's net return.
An alternative is a tax-loss harvesting strategy, in which—rather than purchasing a mutual fund—one acquires a basket of individual stocks and sells positions trading at a loss to offset gains elsewhere. The expected gross return remains the same, but the after-tax returns are significantly higher.
These wealthy families invest considerable time in engaging professional advisors to ensure they avoid making tax-inefficient decisions. They view tax planning not as a one-time event, but as an ongoing process. **Long-Term Investing**
-
Another common practice involves buying and holding core assets over extended periods to minimize taxes and transaction costs.
The same principle applies to financial assets. Ultra-high-net-worth individuals with well-structured stock portfolios almost never pay taxes on them, simply because they buy and hold.
For instance, if they require $1 million (approximately €920,000) to purchase a property, they do not sell off assets and thereby incur a tax liability. Instead, they take out a loan against their portfolio or secure a mortgage. Wealthy individuals generally avoid paying for their homes in cash, as this is rarely the most prudent financial strategy.
**Being Frugal**
-
It may come as a surprise, but ultra-high-net-worth individuals can be remarkably frugal. While most people assume that having such vast wealth would mean never having to worry about the small things, I believe that one key to preserving wealth lies in being highly frugal and keeping a close eye on expenses.
**The right approach is to make every financial decision with consistent, conscious intent—and that is precisely how wealthy families remain wealthy.**
My personal conclusion:
My wife and I now sit down together every Sunday and consciously discuss which major expenses are truly worthwhile. It's not just about spending money, but about strategically deciding which investments will create long-term value.
For example, it's about time I replaced my old van with a modern electric one. While there are no longer any government subsidies for electric vehicles for businesses, manufacturers and dealers often offer attractive discounts. At the same time, such an investment also has tax advantages: The higher operating expenses reduce my taxable income, saving me on income tax, business tax, and even health insurance contributions – costs that private individuals cannot claim in this way.
Of course, we also regularly discuss how we can best transfer our properties to our children later on without incurring unnecessary inheritance tax. One thing is already clear to us: These properties should remain in the family for the long term and not end up on the open market. One possibility would be a tax-free sale within the family or the establishment of a family foundation. However, we won't be able to decide which solution is ultimately best until the coming years.
Since I invest not only in my company and real estate but also in cryptocurrencies, the issue of taxes plays a significant role there as well. Should the one-year holding period be abolished at some point and profits no longer be tax-free, new strategies would have to be considered. One option, for example, would be to use cryptocurrencies as collateral and take out a loan against them instead of selling the positions directly. The resulting interest could then be tax-deductible.
I'm already trying to instill this kind of long-term, strategic thinking in my children.
https://ecency.com/hive-167922/@der-prophet/wie-du-es-schaffst-das-deine-familie-wohlhabend-wirdhow-to-make-your-family-wealthy--5kg