Now that you have become wildly successful financially and made hundreds of millions if not billions on an exit by selling your company and are now able to step back from the day-to-day grind of running a big business, how are you going to preserve and grow your hard-earned $ for generations to come in the best, most favorable and risk-adjusted way? Let’s dig into that.
As investors with diversified portfolios of public and private market investments, we understand that the true value of any business can be deduced down to the free cash flow, and this blog post touches a little more on that.
One of the most popular strategies for family offices is the buy, borrow and die strategy targeting the purchase of high-quality assets, pledging them as collateral for loans then repeatedly rolling over the loans until death.
After death once the assets are transferred to their heirs, any capital gains from asset appreciation become zeroed out and reset in what is known as the “step up in basis”.
Another strategy for family offices is to establish their residency in tax friendly states with favorable business climates like Florida, Nevada and Texas.
And third, targeting investment strategies around holding assets for greater than one year before a sale and from capturing qualified dividends – both which maximize free cash flow at the more favorable long-term capital gains rate.
Are you a family office seeking to maximize free cash flow for generations to come? Let’s connect and explore.