Mutterings.

What trusts show.

Putting money in trusts is a very popular thing to do these days, now the first onvious reason for this is to avoid the taxation that comes with giving someone a gift or inheritance, heck they might even be set up because the person passing along the wealth doesn't really trust the wits of the receiver. There is however something very fundemental about what trusts display, and that is how hard it is to make a lot of money in a hurry.

At some point in time the people passing along the wealth happened onto a great deal, maybe it was a real estate or equity deal or maybe it was the opportunity to invest in a small business, in any rate they had the chance to blow up some capital, really inflate the amount of wealth they had. Now what the people who did this realize, and what the existence of trusts displays is how hard it is to do that. Even with outrageous taxes you are still better off replicating what increased all that wealth in the first place, only doing that is a rare event.

So this should put into perspective how difficult it is to start and run a successful business, or get a great deal on an investment, because even very wealthy families do this. They don't take the capital they managed to make and start a business with it, they freeze it into a trust. O.k. now sure the trust itself invests, so they haven't just given up on the earning potential of the capital, but they have given up on blowing that capital up, trusts are all about safety.