According to the Wall St Journal after the stock market lost 20% of its value in October 1987, Sam Walton, then one of America's richest men, was unfazed. In less than a week, the value of his Wal-Mart Stores stock had dropped almost $3 billion, reducing his wealth to a mere $4.8 billion. "It's paper anyway," he told the Associated Press. "It was paper when we started and it's paper afterward."
We should all be so glib. Or lucky. However, even without a few extra billion dollars in the bank, there are useful lessons to be gleaned from the way the Waltons and other ultrarich families cope with investments and market volatility.
• The very wealthy have a plan. Sam Walton's plan started in the early 1950s, when, on the advice of his father-in-law, he set up a family partnership, made up of him, his wife, Helen, and their four children, to own his two variety stores. By doing that, he began planning his estate and building family wealth years before he opened the first Wal-Mart in 1962. Small investors, too, should have a comfortable investment process that works in good times and bad.
• The very wealthy live below their means. Walton, who died in 1992, was famously frugal, driving an old pickup truck and flying coach. Many very wealthy people spend much more extravagantly, but even so, "most of our ultrawealthy clients have a lifestyle that is well below their means," says Craig Rawlins, president of Harris myCFO Investment Advisory Services, which serves wealthy families…
Find out the rest at http://online.wsj.com/article/SB10001424053111904823804576500813872123254.html?mod=WSJ_hp_MIDDLENexttoWhatsNewsThird
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