Kennon-Green & Co. Global Asset Management, Wealth Management, and Investment Advisory

How to Manage Your Cash

How to Manage Your Cash Using The Central Collection & Disbursement Account Method

When I was first starting out, I found the world was full of general philosophy articles, essays, and commentary about finance, investing, saving money, and starting a business.  Very few people offered nuts-and-bolts here-is-how-we-are-structured explanations, though, which is what I valued more than anything else.  As I began to approve my monthly banking transactions this afternoon, I thought it might be useful for some of you to see how I setup our cash management system in the early days.  The basic structure stays with us, even though it is necessarily more complex.

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How a Family Holding Company Can Be Used to Transfer Wealth and Bind a Family's Economic Future Together - Header

How a Family Holding Company Can Be Used to Transfer Wealth and Bind a Family’s Economic Future Together

We’ve talked about how a holding company works in the past, provided a beginner’s explanation of holding companies, and even looked at two high profile private holding companies owned by America’s richest families, Walton Enterprises, LLC and Cascade Investment, LLC.  I even gave a very basic explanation over at About.com as to how family members can invest together through a limited liability company. Tonight, I thought I’d go over a very basic, very simplified explanation of a much more advanced concept that isn’t appropriate for most people but will show how a family holding company can be used to gift millions of dollars tax-free to heirs and others, while retaining control of assets and binding a group together economically.  This is a high-level, conceptual explanation.  Do not act on any of this without consulting with your own tax attorney, tax accountant, and other qualified advisers.  None of this is investment advice.  None of this is tax advice.  None of this is legal advice.

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A Mental Exercise What I’d Do If I Lost Everything

A Mental Exercise: What I’d Do If I Lost Everything

I started thinking about people who lose everything, or what Charlie Munger calls returning “to Go”, as in the Monopoly board. Once you are rich, your primary motivation shouldn’t be to get richer, it should be to avoid wipeout risk, or returning to go.  But as a training exercise, I decided to contemplate what I would do if I woke up tomorrow and the last ten years had been a dream.  What would my first course of action be to rebuild until I got my financial affairs in order?

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Chinese Proverb Melon Seeds

Do Not Throw Away the Melon for the Seeds

There is a traditional Chinese proverb that goes something along the lines of, “Do not take the seeds and throw away the melon”. Though there are many ways you can approach this, and multiple lessons that can be extracted from reflecting on it, it can be particularly sage when it comes to running a business and allocating the cash flow from that business. One of my favorite examples comes from The Coca-Cola Company.

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Kennon-Green & Co. Global Asset Management, Wealth Management, and Investment Advisory