This is the question facing those of wealth.

Answering the question is made more difficult if being dubious as to the overall outlook for developed economies. Of course, less developed economies are likely to be adversely impacted by the problems of the larger economies, where the assets of the wealthy have traditionally been invested.

If securities are not currently deemed attractive, are storable commodities, precious metals, gems, objects of art or other assets, which are believed will be ultimately able to be sold for currency the answer?

It will be immediately noted and questioned why real estate was not suggested as being the logical alternative to securities or included in the prior list of assets.

Real property, income producing or not, is highly visible. Land and buildings can be secretly proxy owned but not hidden. Governments are going to be under increasing financial pressures as populations age and social demands increase. Taxation of property is likely to increase, and the tax will probably be based on appraised current value and not cost.

The traditional value of real property has been the assumed property right that the owner could base the charge for the use of the property on market demand. However, property rights are under attack in many jurisdictions.

Therefore, increase taxation and greater profit restriction cloud the projected value of real property.

Due to the vast amount of money possibly seeking non-publicly traded securities, investment in the ownership of private companies is becoming increasingly attractive. This is especially the case if the companies can be competently managed by employees of remote owners. The role of private equity firms must include a management ability, and not just the successful identification and acquisition of attractively priced assets.

Finally, it is probable that those having lots of money to employ will continue to use professional advisors, who will continue to use securities markets. If the longer terms concerns of the wealthy are valid then their wealth will decline absolutely, and if they are wrong and the markets increase, without their participation, their wealth will relatively decline.

 

Arthur Lipper, Chairman                          arthurlipper@gmail.com
British Far East Holdings Ltd.

 

P.S.
Perhaps a Problems of Rich (POR) 501c3 educational organization might be formed and result in public support of a Benefit of Rich (BOR) tax free entity which cared for the Former of Rich (FOR) or Scions of Rich (SOR).