Most of the families I work with come to me before they sell. By the time the transaction happens, we've been working together for a long time already. That matters, because the day a business owner sells the company, the financial picture changes completely.
When you live out of a business, you have tax advantages built in. Insurance and some other expenses are deductible. There's flexibility in how money moves. When you live out of a portfolio, all of that goes away. You make the money, you pay the tax, and then you pay separately for the things the business used to cover. The portfolio has to do work it didn't have to do before.
That's the lens I bring to portfolio construction.
Two businesses, one picture
I run Long Family Office, where we give financial advice and manage money. I also run Build Prove Sell with my daughter Ellen, our exit planning and business consulting practice. Legally they're two different businesses. In my mind it's one big picture. I think on a macro level on behalf of business owners and their families, to help them view their lives as a whole instead of in silos.
I'm a lawyer by trade. I did estate planning and business transaction work for 25 or 30 years but even before that I was starting my wealth management firm in 1987. Got into the Wall Street side in 83 or 84. I'm a certified financial planner too. Ellen, my daughter, has been with me about 12 years and has an MBA and a CFP.
Who we work with
I don't have a great desire to work with people who are super wealthy. I like working with people who built their own businesses, not so much inherited money. Not that there's anything wrong with inheriting money. I just have a particular respect for the people who sign the checks every month, take the risk, and put their lives on the line to grow something.
Typically the businesses are between $10 million in value and a couple hundred million, with most fitting in the $20 to $80 million range. We hold ten to twenty exit planning clients at a time. The work runs about three to four years on average, with hour-long meetings every two weeks and more when something has to get handled.
Some families have stayed eight, twelve, fourteen years. A couple have left thinking they had it handled and come back later: "Okay, we did all that stuff. Now we're over our heads again. Can you work with us again?" That kind of overwhelm is one of the most common things we deal with, and it usually starts in the mind.
Because the work runs long, the first filter is whether I like the person.
Why 60/40 doesn't work anymore
The standard 60/40 portfolio the industry sells is built on assumptions that no longer hold.
From 1982 forward, interest rates fell from the high teens all the way down to essentially zero. Bonds appreciated the whole way down and paid a coupon while they did it. That was a forty-year tailwind for the bond side of the portfolio. It's over. Rates can't fall from zero.
The other half of the assumption was that stocks and bonds move in opposite directions, so the bonds hedge the equity side. That stopped being true a long time ago. In recent corrections, they've fallen together. The hedge didn't hedge.
There's also the math nobody wants to say out loud. Since around 2009, the deficit has grown by roughly 8% a year on average, which is essentially the rate the dollar is being debased. On top of that, inflation has averaged about 3%. If you're investing too conservatively, you need around 11% just to hold your purchasing power steady. VanEck has written about this. A few others are starting to. We've been positioned this way for three or four years already.
A lot of the industry hasn't adjusted. The business has drifted into asset gathering and relationship management. Bring the client in, keep them happy, and let a 60/40 index do the portfolio work in the background. That's distribution dressed up as advice. What you learn about portfolio management when you go through the CFP program is virtually zero. The credential is pointed at relationships, and the actual management gets offloaded to the index.
What we actually hold
We build portfolios to minimize the risk of the bond side going the wrong direction at the wrong time. On the equity side, I lean toward "invest in the best and ignore the rest." We get some broad exposure where it makes sense, but we don't buy the S&P 500 and call it diversification.
We hold gold and silver. We've had small increments of Bitcoin and Ethereum for about four years now. Where any given client sits depends on where they are in life, how aggressive or conservative they want to be, and what the family money actually has to do. We're global investors and macro investors, looking for opportunities wherever they are.
Build for the Day After
The key takeaway is this: when the business sells, your portfolio becomes the engine. It has to do the work the business used to do. And if you decide to keep the business, we want to build real net worth outside the value of the business.
A 60/40 won't get you there. The tailwind that made that model work for forty years is over. The math doesn't work anymore.
If you're three to five years out from a transition, the work starts now. Build the business so it's sale-ready. Build the portfolio so it's life-ready. Plan for what your money has to do the day after, not just the day of.
If you want the bigger picture of how we approach this work, including why exit planning is about a lot more than the transaction itself, I laid it out in my book, Bulletproof Your Exit or connect with me to start the conversation.