Ai Solves Billion Dollar Family Office Problem

Holidays seem to be approaching even faster this year. Normally, we would be slowing down, but it seems like I have more on my plate than ever, with transactions and deals everywhere.

I don't know about you, but I often catch myself saying, "Oh, next month or next quarter will finally slow down a bit, and I can catch up with things." In reality, though, it doesn't seem to slow down at all. There have only been moments of crunch time when we reorganize or implement new systems that actually free up some time. Usually, this happens after a period of frustration, pain, or stressful realizations.

I want to introduce you to my friend, Litan Yahav. I interviewed him on the Passive Wealth Principles podcast, and he faced a similar problem with his passive investments. He was always scrambling to track things down, which was especially painful toward the end of the year. Since this TradeOff newsletter is founded on Passive Wealth systems, I thought his solution to this problem was very fitting.

Family Office

Before discussing his problem, I need to explain what a Family Office is. Eight years ago, when I started managing funds, I had no idea what a family office was, and I've found that most people don't know either.

A Family Office is a private wealth management service for ultra-high-net-worth individuals. Unlike a wealth advisor like Fidelity, which might focus solely on investments in stocks and similar assets, it has a broader focus, managing investments, property, charities, tax planning, estate planning, legal matters, and providing lifestyle services. It can be a SFO (Single Family Office), focusing on just one family, or a MFO (Multi-Family Office), where professional services are bundled for several families.

Usually, the cost of employing an accountant, investment team, due diligence, legal team, etc., is pretty high, typically in the 6-7 figure range annually. So, your family would need many millions to justify that cost.

Litan's Problem

Back to Litan, his back story is he created a high-resolution, certified diamond photography business to document the full, magnified detail of diamonds. I didn't know this, but diamond dealers used to physically send diamonds all over the world for inspection. You had diamonds in South Africa and had buyers in New York they had to shipped there for inspection. But what if a buyer in Mumbai wanted to see them. Well they had to wait. However, with his business he saw the opportunity a dealer could send the certified digital files all over the world at once and buyers knew exactly what they were getting. His business took off as more and more dealers started using their service. Consequently, a large engagement/jewelry company decided to buy out his company.

This turned out to be a nice payday for Litan, but not the "never need to work again" kind. While enjoying time with his family, he earnestly started investing in deals as a limited partner. These deals required his money, not his time.

Now he was sitting on a nice amount of money but he needed to start investing it. Initially, he tracked his investments on a spreadsheet, which was manageable. But as he made more investments, he quickly became overrun with trying to remember the specifics of each deal. Common questions like, "What was my expected return? When was the deal supposed to close? How much were the monthly distributions?" became challenging. These are typical problems for a family office, but he lacked the capital to justify the overhead of such a staff.

Litan's Solution

Litan had a unwieldy spreadsheet that needed to connect to multiple banks, accounts, and mortgage companies, turning into a full-time job just to update it monthly. He often found to his frustration large sums of money in his accounts, just sitting there not earning returns, because a deal paid off early and he wasn't expecting it. (First world problems I know but if that money is meant to be making a return it sitting in a non-interest account it annoying)

He embarked on a journey to find software that could solve this for him, wondering what billionaire family offices used. Long story short it turned out there was no real easy solution. Even billionaires relied on a team of people for this task. Being the clever chap that he is, Litan having a background in tech he decided to create his own solution, naming it Vyzer (short for 'advisor'). It effectively creates a wealth management dashboard with all the functions you'd expect if you had a team managing your wealth, but it's easier than using a spreadsheet and much cheaper than hiring professionals. So now you don't necessarily need to have multimillions in play to afford these services.

I believe there might even be a free version of the program, at least there was when I interviewed him (Check Out Vyzer).

In short He and his harnessed AI and software to automate many repetitive tasks and synchronize accounts that billionaires struggled to do.

I'd do a disservice trying to explain how easy and ingenious it is to have a dashboard that auto-updates every month. Plus, the fact that you can just upload documents into what they call the MAGIC BOX, like monthly statements, and it uses AI to scan them, place them in the correct investment location, and reconcile them to your bank accounts. It’s one of those things that is amazing to see

In Closing

I've found that what Litan, through Vyzer, and other similar programs like ChatGPT have created, tend to be massive time-saving programs. Once you start using them, you wonder how you ever managed your life without them. Going into 2024, I was challenged to find areas of my life where I can get exponentially more output with the same amount of time. I believe that, just as we've moved from having to send diamonds around the world for inspection to using digital files that can be sent to everyone at once, and from managing investments manually to doing so with software and advanced AI, 2024 will explode with more options to get massive, outsized returns on your efforts.

Until Next Week,

Jake