I once did accounting and tax returns for a guy with a $30M portfolio. What was special about him?
The portfolio was invested in a single stock: Apple.
Relatively low cost base as he held for over 10 years. Most was accrued gains.
By the way, this was 10+ years ago, which means the portfolio would now be $420M based on how much Apple share price has increased.
How do I know he didn’t sell? I don’t. Maybe he did sell, and cashed out at $40M. Who knows?
The first time I came across his file, my mind was blown.
What about all of the FINANCE THEORY?!?!
A lot of independently wealthy don’t follow a lot of the “rules” or “finance theory” taught in textbooks.
This guy was independently wealthy, lived off investments in the corp, paid himself a salary just enough to max out on tax-advantaged accounts.
There are actually tons of people out there in the world like this, especially in regions with a lot of old money.
Whether they live in Canada, US, London, Singapore, or Dubai, the common themes are the same.
This guy gave no F’s about portfolio management. Probably doesn’t even know what portfolio management is.
In fact, since he did not have a finance background, I can guarantee you that he does not know the following answers about Apple, or for any other stock for that matter:
How do we calculated unlevered vs levered cash?
How much of capex is growth vs maintenance?
How do they treat finance leases in the FCF calc?
How is convertible debt treated in share count?
Are non-recurring add-backs actually non-recurring?
He bought Apple stock because he was an Apple fanboy. He did not own real estate or any other stocks. He went all in on what he believed in.
If I recall correctly, he didn’t even write emails with proper white spacing or “business communication etiquette”.
Whenever I came across cases like this I would just think to myself “Damn this guy is so freaking cool. How do I BECOME HIM?!”
This email wasn’t so much about gossiping about a random dude in the world as it was to hopefully give my readers a paradigm shift.
It was this type of exposure in my career early on that changed my worldview for the better.
There is nothing special or romantic about rich people. They just have a few more zeros behind their bank statements and tax returns than you.
Many of them are boring retirees, hate paying taxes, and have the same likes and fears that you do.
By the way, this was a very very rare case. Most UHNW do have diversified portfolios that follow traditional portfolio management principles.
Just some mid week food for thought.
Best,
Alice
P.S. For legal reasons I have to mention that this email is not financial advice by any means.