Cash-Flow Traps

Hi, Tom here.

This week we take another deep dive into Jimmy Buffett’s estate and how his investment strategy led his widow and long-time business advisor to court.

This edition is relevant and relatable as you work to invest better and retire sooner.

Let’s dive in.

Watch this week’s Wealth Workshop:

Each week, we break down what’s happening in the world, how it affects your money, and what to do next.

This week, we break down Jimmy Buffett’s estate to show how concentrating wealth in illiquid, cash‑draining assets can strangle cash flow, and we share a simple playbook to prevent it in your own plan.

Have a question that you want answered? Submit them here

Missed last week’s show? Check it out here

The goal of investing is simple:

To own assets that generate meaningful income and steadily grow in value.

It’s always been that way, and it always will be. The mix between “growth” assets and “income” assets changes over time, but together, you want a portfolio that produces income and grows.

Or, if you hit the holy grail—both.

That portfolio ultimately becomes the engine of your entire financial life. One day, you can wake up and say, “I don’t have to work. I choose to work.” Once you reach that point, your mindset shifts to, “I don’t want to go back to the grind,” and losing money or paying unnecessary taxes becomes your financial enemy.

But life has its ways, and hard times come for all of us. Financially speaking, they can take many forms: unexpected healthcare costs, a market crash, layoffs, etc.

We’ve all been through them.

While each hardship is unique, they almost always do the same thing:
Stress cash flow.

Jimmy Buffett built a $275M empire doing what he loved.

For decades, he and Jane enjoyed a life most of us would call a dream : family, music, travel, and a brand that will outlive him.

But even in a life of tremendous success, financial structure matters.

As you know from last week, the Buffett family is deep into a large fight over control of his assets.

Recent court filings revealed the trust’s assets were generating far less income than you’d expect. That discovery has sparked a complicated legal dispute between Jane and the trustee.

To understand why, let’s look at a snapshot of the trust: its allocation, income, and growth.

Here’s the composition of the $275M estate:

• $34.5M in real property

• $15M in equity in Strange Bird Inc.

• $2M in music equipment

• $5M in vehicles

• $12M in “other investments”

• $85M in Margaritaville LLC

If you did some mental math, you’ll note those assets total just $153.5M, far short of the $275M being reported in the news.

Why?

The Margaritaville holding is likely falling in value.

At the time of his death, Jimmy Buffett—through the trust—owned a 28% stake in the company valued at $180M. According to 2025 court filings, the disputed trust now owns a 20% stake worth $85M.

A massive decrease in just two years.

And what do these trust assets produce in income for Jane? According to court records, independent trustee Rick Mozenter says the trust nets about $2M per year.

For context, that’s a yield of roughly 1.3%.

Jane, understandably, is working to have the trustee replaced in hopes of improving the trust’s performance.

A low net yield like this usually means:

1. The assets are highly valued but not very productive.

2. The assets cost a lot to maintain.

3. Taxes and fees are eating into returns.

In Buffett’s case, it appears all three are at work, not erasing the family’s success, but making it harder to keep cash flowing smoothly.

The crown jewel on the balance sheet is clearly the stake in Margaritaville, worth $85M. Two things worth noting about this:

1. The Buffett family holds a minority position in their own franchise.

2. Its value has fluctuated dramatically over the past two years.

From a planning perspective, this means:

1. They lack control over their best asset.

2. That makes it hard to plan.

Reports say Margaritaville has earned the trust over $14M in distributions, but without control over the operations of a $2B+ enterprise, they can’t influence strategy or cash flow.

Now what about the $56m in property?

The income over time from Margaritaville would have been used to acquire these assets.

Strange Bird Inc. holds their Dassault Falcon 900EX jet, they have a bunch of cars, boats, and probably a few homes.

Yes, these are assets, but they cost money to own rather than produce it.

Maintaining $56M in hard assets like these could easily cost $6M a year.

The $12m in “other investments” is probably where the liquid assets live: municipal bonds, stocks, etc. There’s just $12m in liquid covering over a $140m in illiquid assets.

This is a perfect example of the saying:
It’s not what you make—it’s what you keep.

Liquidity is always the key, for many financial doors.

I have spoken at great length about the importance of liquidity. All financial problems, at every wealth level, are ultimately liquidity problems.

Driving to work the other day, I saw a man riding a bike without a seat. My first thought was, “Why doesn’t he have a seat?” Then I remembered that sometimes people do not have the money to buy one.

Jane Buffett is on the other end of the wealth spectrum, traveling not on a bike, but on a 21-person private plane, yet facing what appears to be a liquidity challenge.

The Buffett family achieved extraordinary success, and their story is a reminder that success brings both opportunities and trade-offs.

Here’s what I want to remind you of today.

You are building a portfolio of assets and have immense choice over where to invest.

1. Seek to deeply understand how your assets will work together in good times, bad times, and the worst times, because those times will come.

2. Limit the amount of assets that consume cash versus those that produce cash.

Nearly every recent conversation I have had with people in your position has included some version of the “Jane Buffett question”:

“I don’t feel like this is right. I don’t know what to do or if I am invested right.”

What is hard about personal finance, and where the internet and mainstream media fall short, is how unique each person’s situation really is.

We all own similar asset types: a home, a car or two, maybe some Apple stock. We keep them in brokerage accounts, IRAs, and 401(k)s. But beyond that, financial lives are extremely nuanced.

The goal is to preserve the kind of financial freedom you have worked hard to build, not just in good years, but in every year.

You do that by having a portfolio that produces enough returns and income, regardless of what is happening in your life or the world.

Thanks for your time this week.

Tom

PS. Summer is closing out and now is the time to line up a strong year-end. If hiring a new advisor is on your list, I’d love to share why families choose our team and how our unique process can add tangible value to your life.

Let’s have a conversation.