Richard Wilson, Family Office Club
Richard Wilson is the founder and CEO of the Family Office Club, a club with over 4,000 registered ultra-high-net-worth investors and family offices.
How do you define success as a family and as a family office?
For many of our clients, they are living a kind of success that goes way beyond financial success. Some interpret this as a chance to finally fulfill their vision, and they work harder than ever. Many keep working long hours but add in constant heavy travel as well. Many times, they don’t just take it easy after having an exit; they look for another project or company to scale.
And what concerns do you have?
Interestingly, many of them do not focus on their health as a top-three investment of energy, despite the fact that they already are way ahead on the wealth game. They spend $100K-plus a year on airplane tickets, wealth advisory and dozens of other things; but they often do not spend even $20K a year on their health. We often point this out. And even if you are the most money-focused person on planet Earth, ignoring your health means you are more easily hospitalized and taken offline, or you may die early. And that creates a taxable event and means you will not reach your potential in business.
What do you know now that you wish you had known 10 years ago?
I now know how critical it is to focus on just one to three niches and to go very deep in those niches — knowing them cold, having superior distribution, a good reputation, an understanding and the ability to navigate those niches fluidly and assess opportunities and seize them as they come up. The wealthiest families I know who do this grow and keep their wealth. For Family Office Club, we have decided on multi-location medical practices which are profitable and want to grow further before selling to private equity and short-term rental properties, as that niche is less than 1% owned by institutions. The more that families can play a strong offense in one to three niches and let others passively play defense for them, the faster they become specialized.
What’s the biggest advantage you have in making investment decisions for the long term?
We look to acquire strategic chokepoints, think very long term and have a thought leadership/add-value approach to business. Combined with seeing deals first, exclusively and on better terms, that is our largest advantage.
The most powerful thing for an investor is to be seeing deals first, exclusively and at a better valuation. For example, I invested to acquire 2.5% of a company last year, but they gave me 5% equity. And another group is giving us a 16.5%-a-year preferred return plus 50-50 profit split after that on a real estate portfolio deal. This year I was gifted 33% of a company without having to pay for the equity, and we also are being shown a portfolio of 40 assets in a very valuable location off-market from another group.