GlobalWealth
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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.
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.
But isn't ownership the big rule of entrepreneurship? If you don't have equity, you don't technically have a business, ya know?
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.