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- Apr 5, 2011
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Would someone mind clearing up this popular Rockefeller quote for me?
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Free registration at the forum removes this block.I would be interested in GlobalWealth's take on this quote.
I would be interested in GlobalWealth's take on this quote.
True power does not require you to hold something down (owning something) to be able to remain in control.
You as the owner of the trust or hedgefund do not personally own any of the hard assets but you control them.
I believe that the Rockefeller's put a large majority of their fortunes into trusts as asset protection.
But isn't ownership the big rule of entrepreneurship? If you don't have equity, you don't technically have a business, ya know?
I'm not sure how much more I can add to this as there are several excellent examples and descriptions here.
Essentially the idea is to control the asset without direct ownership. When you directly own something you open yourself up to liability. You also have limitations and sometimes can lack the ability to scale.
For example, a hedge fund manager controls 100's of millions or billions in assets, but likely owns a very small percentage. But his income is derived from the portfolio under control.
Another example is using investor or bank money to build a real estate portfolio. In a simple example you may have 10 rental houses worth $100k each but you may only have 5% equity in each house. This means you control $1m in assets but only have $50k in equity (ownership).
Using companies and trust is a great way to create a veil of privacy around your assets to shield ownership. For example with US real estate investors we frequently set up land trusts for clients to own their properties. This means they don't personally own the asset, but control them indirectly through their trustee (which we usually establish as a Private Wyoming LLC which they do own).
This minimizes their personal exposure and liability without giving up any control.
Not necessarily. If you run an online company that earns $500k/y and you reap 100% of the reward, does it really matter who owns it?
For example, your online company could be a Delaware LLC. That LLC could be owned by a Cook Islands Trust with you as beneficiary of the trust. You would also be the manager of the Delaware LLC. In this case you have now ownership (the Cook Islands Trust owns the company), but you have complete control.
If you chose to sell the company, your Cook Islands Trust would be the receiver of funds from the sale, but you get to direct the use of those funds.
Per your last example, you would still actually own it, but just through proxy... a legal loophole to minimize or eliminate liability. Is this accurate?
I have heard (could quite possibly not be true I don't know for sure) that the Kennedy Compound has over 50 Trusts. For example the driveway has its own trust, the pool has its own trust etc.
I agree with Global Wealth that this quote refers to trusts, but I also think that Rockefeller is pointing towards a broader view and a mindset and not just referring to finances. The Rockefeller family managed to form a vast amount of indirect ownership over national and global economics, organized religion, foreign policy, and more than 100 schools and universities via non-profits, trusts, councils, groups, and corporations.
When you have the ability to make money via a corporation...minimize taxable profit via non-profit...control competition and trade via council (Council of Foreign Relations, Council of Americas)...control public opinion via political connections...and finally control and shelter gained assets via Trusts then you have really "Owned Nothing, But Controlled Everything".
Rockefeller takes that quote to a whole new level.
how you can give up control to a trustee or manager that is truly removed far enough from your circle of contacts to allow for a clean defense should it ever come to a court battle or some type of liability suit.
Thanks + Speed.
GlobalWealth, assuming you utilize this trust technique, and in the event of a lawsuit, is it possible that you could just get a lien slapped against you (where they simply steal a percentage of your income, as you no longer technically own the asset) since they won't be able to outright take your asset?
Does this strategy really protect your wealth, or does it just make it harder for someone to rob you blind in court?
is it possible that you could just get a lien slapped against you (where they simply steal a percentage of your income, as you no longer technically own the asset) since they won't be able to outright take your asset?
Does this strategy really protect your wealth, or does it just make it harder for someone to rob you blind in court?
But if you trust owns the real estate, you have no real estate to attach a lien to. You can get a wage garnishment, but this is inconsequential if you are a business owner. There are a multitude of ways you can take money from your company as an entrepreneur -only one way as an employee.
What are you or your company doing that you think someone will sue you and win?
Seriously lawsuits are not something an atty takes on unless they see a VERY good chance of winning.
So what would be a scenario that you could foresee being sued?
Does this prevent you from getting hit with personal liens as well?
And thanks for all the info... learned a lot.
If you could set this up with everything in the world, you would never need to own anything.
I'm late to this party, but Id like to put in my explanation of this quote as I have discussed this with RealOG a few times.
Suppose I had an Ipad but every time you wanted to use it, I would let you. Then you effectively control the Ipad's usage time without owning it. Why would you ever need to buy your own Ipad?
If you could set this up with everything in the world, you would never need to own anything.
This is the basic concept of not owning anything that you use. If something happens and someone trys to take your ipad, they cant because you dont have one.
Now assets are different, but if you controlled everything in the manner above you may not need assets or much money.
It's all about the layers.
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