Navigating the Family Office Landscape with Carol Pepper.

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Hello, Welcome everybody to
another episode of Arthur's

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Roundtable.
Super happy to have my friend,

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longtime friend Carol Pepper
here with us.

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Carol's an icon in the family
office space.

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We're really glad to hear about
her journey and what's going on

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in the family office world from
her perspective.

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So Carol, really appreciate you
doing this.

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It's been quite some time since
we've seen each other in person,

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but I'm so glad we're doing this
here today.

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Thank you, Arthur.
It's so wonderful to see you as

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well.
And I value our long term

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friendship for sure.
And your podcast has been doing

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great things.
So look forward to this

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conversation that we're going to
have today.

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Great.
Thanks for saying that.

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Yeah, it's, it's, it's a nascent
podcast podcast.

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We've had some really
interesting folks, including

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you, and so we'll see what
happens as it grows.

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So let's start at the beginning.
Carol, tell us about your

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journey, how this all started
and how you got weeped and so

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nicely into the family office
world.

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Sure.
Well, I started my company

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Pepper International actually 25
years ago, February 1st in 2001.

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So this is my big 25, which is
very exciting.

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And prior to that I had a long
career in private wealth.

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I worked started as after
studying philosophy and Russian

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language at Bryn Mawr College.
So true liberal arts girl.

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I went to Salomon Brothers as
the only girl in the MA

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department in 1984 to 1986,
which was quite a shock after

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Bryn Mawr to get, you know,
which has a very feminist all

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female school to the den of
iniquity, the lion's den on Wall

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Street at Solomon.
But that was an amazing

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experience.
And after two years there, I was

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hired by JP Morgan and they put
me through Columbia Business

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School.
And then I had a long career in

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private wealth at JP Morgan
Credit and Citibank.

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And then I was hired by the
Rockefeller family where I

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managed over a billion dollars
for them and then started my own

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company, Pepper International,
as I mentioned 25 years ago when

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the Internet came into
existence, because that was

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really the catalyst to allow the
beginning of all the virtual

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work that we see today.
That's really when it began.

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And, and I, I forgive me for
just going off a little bit

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here.
First of all, I lived in

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Villanova and and I had dear
friends that went to Bryn Mawr

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and Haverford, which they were
sister campuses, right?

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And so I've spent a lot of time
I brought up my kids in

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Villanova for it was a great
place to bring up kids, great

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lifestyle was wonderful before I
moved to New York City.

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And then the other question I
have for you, that wasn't a

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question is, I want to know if
you played Liar's Poker when you

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were at Salomon Brothers with
all the boys.

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I didn't, but there were
strippers on the floor every

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single day.
There were some woman when I'd

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come into work, taking off her
clothes.

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Cocaine was being snorted in the
bathrooms.

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The traders would, you know,
trade all day and get on a plane

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to Atlantic City and gamble all
night and come back again.

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I was somewhat insulated because
I was in the M and A department

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and but because we were doing
work with public companies, we

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were on a different floor than
the trading guys.

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But I was the person they
actually would send down to the

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trading floor when we had to get
information on public companies.

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And I remember very clearly
sitting on the trader's desk and

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not moving until he gave me what
I needed.

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Meanwhile, you know, phones are
being thrown like projectiles

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and a lot of screaming and
yelling is going on.

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It was, it's absolutely crazy,
but you had to learn to be cool

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under fire to do well at Salomon
Brothers, and they were

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incredibly smart people there at
that time.

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I mean, it really was an
incredible group of people and a

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completely shocking environment
after how I had grown up.

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So it's really interesting.
It's kind of the, some would say

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the good old days, but all that
stuff not happening anymore and

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you go to jail, forget about the
illicit drugs, it's all the

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hookers and all that kind of
stuff doesn't.

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That stuff was real.
Like I was there and, you know,

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we didn't have cell phones back
in this.

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They they didn't exist.
Yeah, we did.

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For example, we did our
spreadsheets with an HP12C

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calculator on massive sheets of
paper that would be then turned

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into a typing center, and the
women would type it into these

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huge sheets.
We'd correct it multiple times,

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and then we had to cut and paste
those sheets down into a size to

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fit into a book so it could be
presented to companies.

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And one of the skills we had to
learn all night was actually

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repairing copying machines in
the middle of the night.

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And we'd sleep on a couch, get
up, get the next version out of

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word processing, Jack
everything.

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Once it was clean cut and paste
and put it into a deck.

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And that was going on all night
with about 20 of us from the MA

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group.
And they replaced us with 100

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analysts, 2 boys.
Actually, I was the only girl.

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Two boys actually had a nervous
breakdown and had to leave in

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the middle of that two year
program.

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But I figured if you could
survive that, you could survive

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anything.
It really was like GI Jane and

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those.
That is old school New York,

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right?
I mean, you would do, you would

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trade a institutional bond,
you'd make an institutional bond

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trade and make more than enough
money to lose 400,000 in

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Atlantic City and come back and
do it all over again, right?

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Yeah, I was definitely in the
wrong side of the house.

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If I had become a trader in
those days, I think it would be

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a much wealthier woman today.
Yeah.

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Super fun talk about that.
I wasn't there during that, but

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I've had a lot of friends that
were so and played a lot of

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Liars Poker with them.
So tell us what is really Pepper

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International and why you
started that and how it all

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evolved and the the Rockefellers
were essentially the first

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family office that anybody ever
knew about, right?

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And that publicly.
So was it a outgrowth of your

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experience there?
Well, yes, exactly.

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It was working at the time.
You know, I was reproached by

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Egon Zender and which was a big
head hunting firm and they said

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the Rockefellers were looking
for someone who was both a

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technical person who could do
analysis of investments,

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etcetera, but could also talk to
clients.

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Because the back then the
stereotype was, OK, if you're a

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portfolio manager, you hate
people, you just want to sit in

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the room and manage investments.
And if you talk to clients,

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you're kind of dumb.
You can't really do portfolio

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management.
So they were looking for a

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person that could do both.
So I said to them, well, you

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know, I'd love to try.
And for whatever reason, they

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hired me.
It was absolutely fantastic.

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I had known of them many years
ago when I first had my first

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job back in the late 80s, early
90s at JP Morgan.

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Of course I had known of them,
but I had a beautiful office at

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30 Rockefeller Center when they
were there.

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And back in those days a family
office was a very physical

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operation.
So you had 200, around 200

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family members at that point.
You had 200 employees, but 99%

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of them were back office.
They were accountants.

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They were in the back doing all
the bookkeeping that was

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required and investment
reporting.

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That was all very manual back in
those days.

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And then we would literally,
again, you know, manually be

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assembling these books.
So if you were the beneficiary,

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5 trusts, we'd be putting all
the various documents together

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for your five different trusts.
Each trust had different

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beneficiaries.
Now you do all that stuff with

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the push of a button, but in the
old days that was all very much

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manual labor, so.
Were you there when they started

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Rock and Co?
When they really started?

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Yeah, they were.
Just they just started Rock and

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Co.
So they had the family office

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and then they had a few friends,
very large, very prominent

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families that were also clients.
But it wasn't widely marketed.

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It's just kind of getting
started.

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Larry Grant was was the head of
the organization at the time

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that I was there and and it was
fantastic.

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I mean, I learned so much from
that family.

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I referenced them often in my
work today because they are the

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epitome of a good family office
and a family that has made it

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through 9 and 10 generations
still having all their wealth.

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Everybody is doing fairly well.
They are extremely well

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respected.
You know, they are the perfect

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example of what you can create
if you decide to actually go

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down this path of creating multi
generational wealth.

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And much of what I learned, I
learned from the Rockefellers.

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So I'm forever grateful.
I still know many people in the

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family and at the office and I'm
forever grateful for the time I

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spent with them.
So do you have any idea what the

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number is, how many
beneficiaries there are now?

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No, but I believe it's quite a
bit higher than 200.

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So the family has grown, they've
always had lots of children,

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which is wonderful.
And you know, they're they're

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still committed.
They made very smart decisions.

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This was public.
Anything I mentioned about them

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is public information.
So for example, Justin

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Rockefeller was one of the
founders of Adapart.

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Adapart has now become one of
the most wonderful systems that

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that I implement into many of
the single family offices that I

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helped create today.
So even though back in those

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days it was a very manual family
office, they're in the forefront

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now of how to deliver technology
to make it easier to run your

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family office.
And hands down, they have the

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best customer service of any of
the technology providers because

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this is their DNA.
They did it for their own family

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and now they do it for the other
customers.

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He also was the person who
decided to sell oil for the

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Brothers Fund.
This again is public

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information, which was one of
their large foundations.

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And he sold at the peak of oil.
So I'm sure, you know, at

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$150.00 a barrel, that's when
they sold out of oil and went to

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it into alternative fuel.
So they've always been extremely

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forward thinking.
You know, they founded Eastern

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Airlines, they saved the main
woods, they saved the island of

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Saint John and made it a, a
State Park.

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So they've, they've always been
very ahead of the times, very

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smart, very ahead of the times
and always thinking, I think not

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only about themselves, but about
the culture and society in which

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they live.
So they're, they're just an

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incredible family.
And yet when I knew Justin

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originally, he was a little guy,
you know, and yet the DNA of

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that family was absolutely
imprinted in him.

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And you see it in the decisions
that he's made us he's become an

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adult.
So it absolutely works.

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There are processes and
procedures that you need to go

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through if you would like your
family to be like the

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Rockefellers, if you would like
to have highly respect,

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respected family members, multi
generational wealth, be able to

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do lots of charity.
By the way, a lot of it's still

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done anonymously.
They're, they're very modest

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relative to the impact that they
have the medical research that

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they fund, you know, the, the
they, they help one of the

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family members help build the
Native American Museum in

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Washington, DC.
So I mean, there's just so many

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in there, you know, that
actually burn Mar College had a

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Rockefeller dorm that was funded
by them and they also paid and

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helped start Spelman College
education for female African

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Americans and back when no one
was educating them.

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So if you want to be one of
these highly respected families

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that is highly successful after
9 to 10 generations and more,

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there are things you do to make
that happen.

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It doesn't just happen by magic.
It's absolutely based on

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thoughtful processes and
procedures that start when

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children are very little and
then continue on through their

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lives so they grow into the kind
of adults who are literally

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global leaders.
It's really inspiring, isn't it?

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It really is.
I can tell you a brief story

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that I think you'll appreciate.
This is in the I wrote a book

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called The Seven Pearls of
Financial Wisdom, A Woman's

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Guide to Enjoying Wealth and
Power.

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And in that book I talked about
how to raise children, wealthy

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children, to be wealthy or to
handle wealth when they grow up.

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And I referenced a document that
was again, from the Rockefeller

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family.
It was published in the

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Smithsonian Magazine.
So this is public information,

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but at the time, John D the
Third, John D Ralph Rockefeller

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the second was the wealthiest
man in the United States and he

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had a 15 year old son, John D
the 3rd and he made an allowance

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contract with John D the third.
Now this is the wealthiest guy

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in America.
He gave his son $1.50 a week of

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an allowance, which was a normal
allowance of a kid, a normal kid

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if you will in those days, not a
massive allowance.

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He had to put 20% to charity.
He had to put 20% to savings.

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He could spend 60%, but he had
to write down all of his

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spending and his father would
personally review his spending

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every week.
So his father was taking the

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time to make sure his son
actually recorded what he was

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spending.
That's how it was for him to

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make sure that his son developed
this habit.

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If the son voluntarily gave more
money to charity or savings, he

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would match fund that amount.
If the son did the accounting

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correctly, he got a raise of
$0.10 a week, and if he didn't,

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it was Ding $0.10 a week.
Now that's something anybody can

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do.
Anybody can start their children

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with an allowance that's a
reasonable amount, force them to

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have some in savings and charity
and monitor their spending and

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give them more money if they if
they follow certain rules.

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And that practice which was
started by John D, the second I

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think you see in, you know,
Justin's generation and the

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younger generations coming after
that, so.

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It's really interesting.
One of the things that we can

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count on is incentives work,
right?

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Yes.
And they seem to have worked in

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this case, but just the
construct makes sense, right?

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Yeah, well, first.
You always have people go off

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the rails, but whatever, right?
Right.

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Well, if you're tough from when
you're really young that your

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money goes some to spending,
some to charity and some to

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savings.
Your brain is developed that

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way.
So I tell people from the first

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time you're giving them 1/4 for
the tooth fairy, when they lose

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that first tooth, you give them
three piggy banks and you divide

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up that quarter maybe a dime, a
nickel and a nickel.

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And you start this practice from
the very first amount of money

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and you make it fun.
So help them count it, help them

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see how it grows.
Have them and their siblings

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work together to decide how
they're going to give their

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money away.
That's for charity.

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You know, there's a lot and help
them invest.

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I have, in fact, I have on on
YouTube, I have something called

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family office boot Camp.
And there I made all these

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videos of eight and nine year
old kids talking about money.

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I made skits of them and we
talked about how how it was

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better, for example, to buy
GoPro stock than to buy a GoPro

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00:14:29,360 --> 00:14:32,960
camera or buy Apple stock than
to buy, you know, another Apple

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one.
Yeah.

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And so the and my daughter and a
couple of her friends were in

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those videos.
So little kids today at 8-9 and

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ten can understand the concept
of investing.

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And so if you stardom young
enough, by the time they're

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grown, they're saving money,
they're helping others and

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they're managing a budget.
And that's a wonderful gift to

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give any child.
Because most people don't learn

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that.
I mean just they don't teach

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that in school.
They don't.

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It's got to come.
And also if they see you doing

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the same things, they know you
keep a budget and you help

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others and you save money, then
it's becomes part of their DNA.

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It is the best gift that costs
zero money that you can give

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your kid to have them be
financially organized and not

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chaotic.
It really is.

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I think that when I was first
had children, somebody very wise

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gave me some advice and it
worked.

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And I'll tell you what it is,
but it largely has to do with

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people.
The kids watch what you do.

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They don't listen to what you
say, right?

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And So what his recommendation
was is when you're trying to get

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your kid not to do something or
to do something, but they say,

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well, I'm going to do this, you
don't.

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You go in and defuse the
situation by first saying you're

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not going to listen to me, which
is their position in general.

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00:15:49,920 --> 00:15:52,960
So now they're listening to you.
You're right, I'm not going to

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00:15:52,960 --> 00:15:54,200
listen to you.
What do you have to say?

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00:15:54,280 --> 00:15:56,960
Right?
And so you defuse that so you

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get them to listen.
So you're not going to believe

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00:16:00,080 --> 00:16:04,920
me, but it's very likely if you
do the chosen path that you want

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00:16:04,920 --> 00:16:07,240
to do, it could end up like
this.

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00:16:07,280 --> 00:16:10,640
And so that whole words matter,
right?

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00:16:10,920 --> 00:16:14,520
And so my kids to this day catch
me doing that and they go, Dad,

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00:16:14,520 --> 00:16:18,120
you're doing it again, right?
Yeah, I mean, it's really true.

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00:16:18,120 --> 00:16:20,080
I think.
I think as much as kids roll

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00:16:20,080 --> 00:16:24,880
their eyes at us, they do watch
what we do like a hot and that's

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00:16:24,880 --> 00:16:27,680
the most the biggest gift you
can give to them is what you

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00:16:27,680 --> 00:16:31,080
communicate not with your words
but with your actions for sure.

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00:16:31,080 --> 00:16:35,440
So is this some of the stuff
that you tend to focus on in

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00:16:35,520 --> 00:16:38,680
Pepper International?
Yes, I mean, so when I formed

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00:16:38,680 --> 00:16:43,440
Pepper International in 2001, I
did it because the Internet had

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00:16:43,440 --> 00:16:46,360
just come alive really in 2000.
That's when we really started to

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00:16:46,360 --> 00:16:49,760
get the Internet and I realized
the way that we had done it at

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00:16:49,760 --> 00:16:53,440
Rockefeller, although amazing,
was going to change because now

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00:16:53,440 --> 00:16:56,760
it could be even more amazing.
For example, at Rockefeller we

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00:16:56,760 --> 00:16:59,720
had, you know, in house lawyers
who were just supervising

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00:16:59,800 --> 00:17:01,680
external lawyers.
That's all they were doing.

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00:17:01,760 --> 00:17:05,160
And now instead we would be able
to just hire the best and

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00:17:05,160 --> 00:17:09,119
brightest for whatever need a
family had, use them for that

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00:17:09,119 --> 00:17:11,920
task, and then not have them be
full time.

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You know, necessarily because we
only used it for one particular.

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00:17:14,599 --> 00:17:15,240
Yeah.
Totally.

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00:17:15,240 --> 00:17:17,960
That was a brand new concept
back in 2001.

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00:17:18,000 --> 00:17:21,119
And just like Al Gore invented
the Internet, it was actually,

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00:17:21,240 --> 00:17:23,800
as far as I'm aware, the first
person to start talking about a

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00:17:23,800 --> 00:17:26,640
virtual family office because I
could see where it was going to

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00:17:26,640 --> 00:17:28,920
go.
So I was very excited by that

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00:17:28,920 --> 00:17:31,640
because I knew at that point I
had been working for a long time

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already and I knew a lot of
wonderful experts, whether they

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were tax people, estate
planners, great investment

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00:17:37,560 --> 00:17:41,160
bankers, it, you know, people
for a rehab if your child's in

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00:17:41,160 --> 00:17:45,360
trouble, all kinds of experts.
And I could see that now we were

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going to be able to run all
this.

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Virtually everything was going
to be as it is today.

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00:17:49,840 --> 00:17:51,920
I mean, 20 years ago it was a
dream.

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00:17:52,040 --> 00:17:55,600
Even consolidated reporting in
some ways, which we started

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00:17:55,600 --> 00:17:59,440
working on around the year 2000
is only coming into it.

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So I'm now, especially with AI
allowing you to do much quicker

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00:18:02,520 --> 00:18:04,800
analysis.
My God, it's not like the old

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00:18:04,800 --> 00:18:08,520
days, you know, we had our HP12C
calculators and we had to do

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00:18:08,520 --> 00:18:11,040
everything by hand.
Now you throw your spreadsheet

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00:18:11,040 --> 00:18:13,640
into ChatGPT and they do the
analysis for you.

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00:18:13,800 --> 00:18:16,280
So you know a lot of the.
Grunt work.

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00:18:16,480 --> 00:18:20,440
Was was going to be taken away
by having the Internet and now

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00:18:20,440 --> 00:18:22,960
we're going to come into the
next level of taking away the

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00:18:22,960 --> 00:18:26,440
grunt work that does not
substitute for human ingenuity

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00:18:26,640 --> 00:18:29,360
or making your own decisions.
I think that's very important

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00:18:29,360 --> 00:18:33,120
that people use these things as
tools and not look at them as

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00:18:33,120 --> 00:18:35,280
gods that are going to tell them
what to do with their lives.

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00:18:35,280 --> 00:18:36,480
That's where you get into
trouble.

362
00:18:36,760 --> 00:18:38,200
I totally agree.
Yeah.

363
00:18:38,800 --> 00:18:45,280
Did Atapar become an outgrowth
of Roc and Co?

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00:18:45,640 --> 00:18:47,560
Yes, it did.
Yeah, it did.

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00:18:47,560 --> 00:18:51,120
In fact, Bill Wyman started
Atapar with another family

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00:18:51,120 --> 00:18:53,280
office.
He and I had worked together at

367
00:18:53,280 --> 00:18:55,960
Rockefeller and Bill's an
amazing guy and.

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00:18:55,960 --> 00:18:56,840
We.
I know, Bill.

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00:18:57,760 --> 00:18:58,120
Yeah.
Yes.

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00:18:58,600 --> 00:19:00,640
And out of part is a fantastic
example.

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00:19:00,800 --> 00:19:03,920
But back in 2001 we were
dreaming these things up.

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It was brand new in those days.
And so I dreamt up this concept

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of doing two things.
One was to help people set up or

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00:19:11,360 --> 00:19:14,960
improve the operations of their
family office as because I had

375
00:19:14,960 --> 00:19:17,400
seen so many of them at that
point and that.

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00:19:17,400 --> 00:19:21,320
And then secondly, to act as an
external CIO, but at a high

377
00:19:21,320 --> 00:19:25,560
level, really overseeing the big
asset allocation, helping the

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00:19:25,560 --> 00:19:29,200
clients interface with all of
their banks, because most

379
00:19:29,200 --> 00:19:33,240
clients have 5 or 10 banks, they
have all these statements.

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00:19:33,240 --> 00:19:35,800
They don't have consolidated
reporting back in the day.

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00:19:35,800 --> 00:19:41,000
So actually having a satisfying
relationship without giving

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00:19:41,000 --> 00:19:44,440
control to the banks to do all
your asset allocation was very

383
00:19:44,440 --> 00:19:48,080
challenging and it still is
today, mind you, which is why I

384
00:19:48,080 --> 00:19:51,440
have very strong opinions about
how family offices should manage

385
00:19:51,440 --> 00:19:53,840
their wealth.
Meaning they should have an

386
00:19:53,840 --> 00:19:57,280
independent chief investment
officer who's only paid by them

387
00:19:57,680 --> 00:20:00,760
and does not take kickback from
the products to manage their

388
00:20:00,760 --> 00:20:02,640
funds.
And then they're paid and you

389
00:20:02,640 --> 00:20:05,440
know, with base and bonus or
assets under management, lots of

390
00:20:05,440 --> 00:20:07,040
different ways you might get
paid for that.

391
00:20:07,360 --> 00:20:10,840
But most importantly, you don't
work for the money managers,

392
00:20:10,920 --> 00:20:14,760
right?
And the reporting system also

393
00:20:14,760 --> 00:20:17,600
should not be at Fidelity, even
though they get everybody to use

394
00:20:17,600 --> 00:20:21,080
a free system or JP Morgan.
That should be an out of part or

395
00:20:21,080 --> 00:20:23,600
another independent system,
because again, if you suddenly

396
00:20:23,600 --> 00:20:25,920
don't want to have your.
Your money at Fidelity, they

397
00:20:25,920 --> 00:20:27,840
have all your data.
That's dangerous.

398
00:20:27,840 --> 00:20:31,800
So having your data independent,
having your CIO independent,

399
00:20:31,800 --> 00:20:34,400
then you go out and use the
banks, Oregon, the money

400
00:20:34,400 --> 00:20:38,000
managers as supermarkets and you
shop on their shelves and you

401
00:20:38,000 --> 00:20:41,240
put together the right
portfolio, finding the best

402
00:20:41,240 --> 00:20:44,800
providers from each of the banks
and use what they're best at

403
00:20:44,800 --> 00:20:47,560
doing.
So that way you at the family

404
00:20:47,560 --> 00:20:50,880
level stay in control of your
destiny and you can have an

405
00:20:51,000 --> 00:20:54,080
investment committee with
experts to advise you.

406
00:20:54,680 --> 00:20:56,800
Again, all these people should
only advise you.

407
00:20:56,800 --> 00:20:59,320
You should always stay in
control and make your own

408
00:20:59,320 --> 00:21:01,960
decisions.
And my experience over doing

409
00:21:01,960 --> 00:21:05,120
this now for 25 years, when you
set up your family office

410
00:21:05,120 --> 00:21:09,760
investment that way you stay in
control and it meets your

411
00:21:09,760 --> 00:21:11,960
requirements.
Because there was a lot of

412
00:21:11,960 --> 00:21:16,240
people during the crash of 2008
and 2009 who were getting very

413
00:21:16,240 --> 00:21:19,280
antsy before the crash.
And they would call JP Morgan or

414
00:21:19,280 --> 00:21:21,880
they would call Goldman just to
pick on a couple of them and say

415
00:21:21,880 --> 00:21:23,360
I should I get out of the
market.

416
00:21:23,360 --> 00:21:25,880
And of course, all those guys,
but no, don't worry about it,

417
00:21:25,880 --> 00:21:28,720
stay in the market and people
lost massive amounts of money

418
00:21:28,720 --> 00:21:32,240
because by the time the big
houses told people to exit, they

419
00:21:32,240 --> 00:21:35,960
had already lost a lot of money.
Then on the other side, they

420
00:21:35,960 --> 00:21:38,960
also waited a long time to tell
people to get back in.

421
00:21:39,160 --> 00:21:42,240
So people lost money twice.
They exited late and they came

422
00:21:42,240 --> 00:21:44,520
back in late.
Whereas the people that followed

423
00:21:44,520 --> 00:21:46,960
their own instincts, which was
to go to much more cash.

424
00:21:46,960 --> 00:21:50,040
One of my major clients at the
time, we went to 75% cash

425
00:21:50,320 --> 00:21:52,840
because he he did not have
taxable portfolios.

426
00:21:52,840 --> 00:21:57,680
He was able to do that is not
AUS person and and then we

427
00:21:57,680 --> 00:22:00,880
waited and then we could go back
in earlier than everybody else

428
00:22:00,880 --> 00:22:04,320
was prepared to go back in
because we were following our

429
00:22:04,320 --> 00:22:07,200
instincts and what felt right,
not the herd of Wall Street.

430
00:22:07,200 --> 00:22:10,840
So it's very important to use
the street in the way that that

431
00:22:10,840 --> 00:22:13,840
it works for you versus the way
that it works for them.

432
00:22:13,840 --> 00:22:19,320
You know, it's the assets under
management business is a really

433
00:22:19,320 --> 00:22:23,720
good business because it's
recurring revenue and it's a

434
00:22:23,720 --> 00:22:27,880
pain in the ass to move right.
It's not easy.

435
00:22:28,160 --> 00:22:31,040
You know, there you could do it,
but it's it's unpleasant.

436
00:22:31,600 --> 00:22:35,480
And so when people from the
outside looking in this, I've

437
00:22:35,480 --> 00:22:39,040
seen a lot of it recently where
a lot of private equity is, is

438
00:22:39,880 --> 00:22:43,320
jumping into buying investment
advisors because they see the

439
00:22:43,320 --> 00:22:45,280
recurring revenue and it's
sticky.

440
00:22:45,280 --> 00:22:47,080
I mean, there's all kinds of
reasons why it's going to

441
00:22:47,080 --> 00:22:51,080
compress and so on and so forth.
But I'm wondering, one of the

442
00:22:51,080 --> 00:22:54,640
things that I found, for
example, to switch back to the

443
00:22:54,640 --> 00:22:58,320
outer part discussion is that
almost everything that I've seen

444
00:22:58,920 --> 00:23:03,640
recently, a lot of companies and
investors that have put money

445
00:23:03,640 --> 00:23:07,640
into companies that want to do
the data aggregation and

446
00:23:07,640 --> 00:23:11,200
reporting for family offices.
I mean, there's a ton of

447
00:23:11,200 --> 00:23:12,720
investment that's been made in
that.

448
00:23:12,920 --> 00:23:15,840
And almost in every case,
they're all using at a par.

449
00:23:16,000 --> 00:23:19,240
And so part of their gig is to
say, we're going to help you

450
00:23:19,320 --> 00:23:22,640
integrate at a par, but at a par
is almost at every equation.

451
00:23:22,680 --> 00:23:25,320
And so I'm just wondering, and
I'm wondering what you're

452
00:23:25,320 --> 00:23:27,920
thinking is that what do they
bring to the table?

453
00:23:29,000 --> 00:23:30,880
I don't know.
I mean I think you go directly

454
00:23:30,880 --> 00:23:32,480
to out of part.
I don't know that you need

455
00:23:32,480 --> 00:23:35,520
anybody else out of part is
going ahead and making decisions

456
00:23:35,520 --> 00:23:37,480
about who they want to integrate
with.

457
00:23:37,480 --> 00:23:40,960
So for example, another system
that are very much like is

458
00:23:40,960 --> 00:23:43,560
Sumitas.
It says Sumitas is a system.

459
00:23:43,880 --> 00:23:45,800
That's Bill, right?
Yeah, that's Bill.

460
00:23:45,800 --> 00:23:48,680
So you can take Sumitas, that's
where you can keep all your

461
00:23:48,680 --> 00:23:52,480
documents, you DocuSign inside
of a vault that's very safe and

462
00:23:52,480 --> 00:23:56,880
protected etcetera.
So I love the fact that Sumitas

463
00:23:56,880 --> 00:23:58,520
and out of part are now
connected.

464
00:23:58,720 --> 00:24:02,440
So so I can go on Sumitas and
now all my monthly statements

465
00:24:02,440 --> 00:24:04,640
that are being generated by
Atapar have been loaded up into

466
00:24:04,640 --> 00:24:08,320
my personal vault.
So when I go on Sumitas and I'm,

467
00:24:08,400 --> 00:24:12,160
you know, beneficiary Carol,
beneficiary Carol on her page

468
00:24:12,160 --> 00:24:14,960
sees her documents, sees
whatever I'm supposed to see

469
00:24:14,960 --> 00:24:17,800
about the family companies.
Maybe I see the social events

470
00:24:17,800 --> 00:24:19,840
coming up.
Everything is there in one place

471
00:24:19,960 --> 00:24:24,120
and I'm sending emails or I'm
docusigning inside a secure and

472
00:24:24,120 --> 00:24:27,320
safe vault.
So they're all do all the,

473
00:24:27,640 --> 00:24:31,000
honestly, in my opinion, the
best systems are finding each

474
00:24:31,000 --> 00:24:34,280
other and integrating.
So either you can go to Sumitas

475
00:24:34,280 --> 00:24:37,280
or you can go to auto parts,
Some of these very good long

476
00:24:37,280 --> 00:24:41,440
term systems and that
particularly in my opinion that

477
00:24:41,440 --> 00:24:44,600
have come out of the family
office space, those are the ones

478
00:24:44,600 --> 00:24:46,320
that work best for family
offices.

479
00:24:46,320 --> 00:24:49,360
There are others, I don't want
to disparage anybody on your, on

480
00:24:49,360 --> 00:24:52,280
your podcast, but there are
others that say came out of the

481
00:24:52,280 --> 00:24:55,640
institutional money management
side, etcetera, or the trading

482
00:24:55,640 --> 00:24:57,120
floors.
They, they're terrible.

483
00:24:57,120 --> 00:24:58,920
They, they have 0 customer
service.

484
00:24:59,200 --> 00:25:01,920
They're extremely frustrating.
And I have a lot of private

485
00:25:01,920 --> 00:25:04,560
conversations with people trying
to, you know, who got them

486
00:25:04,560 --> 00:25:07,600
because they maybe were a hedge
fund, another family office.

487
00:25:07,760 --> 00:25:10,280
And like this system just
doesn't work for a family.

488
00:25:10,280 --> 00:25:12,840
It it worked when we were
trading the hedge fund for the

489
00:25:12,840 --> 00:25:15,480
institutional people, but it
doesn't work for the family

490
00:25:15,480 --> 00:25:18,320
members.
So we don't need to linger on

491
00:25:18,320 --> 00:25:20,800
this, but I just want to get
your opinion, if it's OK with

492
00:25:20,800 --> 00:25:24,480
you.
For years now, the challenge has

493
00:25:24,480 --> 00:25:28,160
been I've got all these
spreadsheets and I've got a team

494
00:25:28,160 --> 00:25:30,680
of people working on the
spreadsheets and we know how

495
00:25:30,680 --> 00:25:33,320
they work.
But somebody's come in to me and

496
00:25:33,320 --> 00:25:37,560
said I need to automate this
because there's too many people

497
00:25:37,560 --> 00:25:40,600
and too much money and too many
chances of errors.

498
00:25:40,640 --> 00:25:43,200
And so somebody comes in and
says we're going to automate it

499
00:25:43,360 --> 00:25:48,400
and it the, the ROI on the
automation is almost impossible

500
00:25:48,400 --> 00:25:51,400
to calculate.
And then it goes from a million

501
00:25:51,400 --> 00:25:55,800
two to get it done over 2 years
to 3,000,000 / 5 years.

502
00:25:55,800 --> 00:25:57,920
And then when it's finally done,
it doesn't work.

503
00:25:58,040 --> 00:26:00,200
And then you have to try to
unravel and go back to

504
00:26:00,200 --> 00:26:03,840
spreadsheets.
I haven't had that experience.

505
00:26:03,880 --> 00:26:07,400
I mean, all I can say is the
implementations I've done going

506
00:26:07,400 --> 00:26:10,480
from spreadsheets for example,
of consolidating on spreadsheets

507
00:26:10,480 --> 00:26:13,120
to consolidating on out of part.
It hasn't been a problem because

508
00:26:13,120 --> 00:26:17,520
out of part just goes in and
grabs the feeds right off of the

509
00:26:18,120 --> 00:26:20,880
from the nowadays.
I mean earlier it was different,

510
00:26:20,880 --> 00:26:25,360
but now literally everything is
coming directly that ports into

511
00:26:25,360 --> 00:26:28,320
all these banks and what happens
suddenly you have visibility

512
00:26:28,320 --> 00:26:30,880
into fees you never knew about
because those fees were showing

513
00:26:30,880 --> 00:26:32,920
up on the statement, so you
never saw them.

514
00:26:33,240 --> 00:26:37,600
You start seeing hidden fees you
get basically what these systems

515
00:26:37,600 --> 00:26:41,000
do is they put all the
securities getting them all

516
00:26:41,000 --> 00:26:44,240
priced on the same system.
So if your Goldman account or

517
00:26:44,240 --> 00:26:46,920
your credit, you know, cred
Swiss back in the day or your

518
00:26:46,920 --> 00:26:49,920
UBS account or your Merrill
Lynch account, suddenly all the

519
00:26:49,920 --> 00:26:53,520
securities are priced off of 1
system and all the returns are

520
00:26:53,520 --> 00:26:56,920
priced similarly.
So they, the, the look throughs

521
00:26:57,040 --> 00:26:59,800
through the portfolios to see
what your true position

522
00:26:59,800 --> 00:27:03,280
concentrations are, are
available to you with, with, you

523
00:27:03,280 --> 00:27:06,800
know, simple clicks of a button.
So at least I, I don't, I can't

524
00:27:06,800 --> 00:27:09,360
comment in general because I
haven't had that experience.

525
00:27:09,640 --> 00:27:11,560
I think it depends on the system
that you pick.

526
00:27:11,960 --> 00:27:14,680
And ideally, if you've never
done it, you know, have a

527
00:27:14,680 --> 00:27:17,160
consultant help you with that
integration.

528
00:27:17,400 --> 00:27:21,360
Even though you have hired out
of PAR, I still help out of PAR

529
00:27:21,360 --> 00:27:24,080
design a report that I know
those family members will

530
00:27:24,080 --> 00:27:26,880
understand because they don't
know what they will or will not

531
00:27:26,880 --> 00:27:29,000
understand.
And if some of the family

532
00:27:29,000 --> 00:27:32,000
members are not financial
people, but they're important

533
00:27:32,000 --> 00:27:35,720
people, you need to create
reports that they can understand

534
00:27:35,720 --> 00:27:38,720
as well as the technical report,
let's say for the CIO.

535
00:27:38,920 --> 00:27:42,720
What I hate to see at a family
board meeting are all these

536
00:27:42,720 --> 00:27:44,520
board people looking at their
phones going.

537
00:27:44,520 --> 00:27:46,040
When is this?
It's going to be over, Please

538
00:27:46,040 --> 00:27:48,760
God.
And some consultant or CIO up

539
00:27:48,760 --> 00:27:52,400
there showing them spaghetti
charts and charts that they

540
00:27:52,400 --> 00:27:56,320
can't understand, talking about
vexity and talking about

541
00:27:56,480 --> 00:27:58,920
standard deviation, all these
things that mean absolutely

542
00:27:58,920 --> 00:28:01,680
nothing to a human being, normal
person.

543
00:28:01,920 --> 00:28:05,360
You have to be able to speak in
plain English.

544
00:28:05,360 --> 00:28:07,360
As you know, we learned to Bryn
Mawr, if you will.

545
00:28:07,360 --> 00:28:09,440
You know, we have to go back to
the basics.

546
00:28:09,440 --> 00:28:13,240
If we can't translate, we, the
professionals can't translate

547
00:28:13,360 --> 00:28:17,240
this fine financial jargon into
something that's common sense.

548
00:28:17,240 --> 00:28:20,840
We are not doing our jobs.
It's on us to translate for

549
00:28:20,840 --> 00:28:23,200
these families.
So then they make the decisions

550
00:28:23,200 --> 00:28:25,560
about their money.
Totally.

551
00:28:25,560 --> 00:28:31,160
You've seen nothing but
gobbledygook and no one knows

552
00:28:31,160 --> 00:28:33,280
what to do, and so they do
nothing right?

553
00:28:33,760 --> 00:28:36,240
Yeah, I mean, I can't tell you
how many times I've sat in a

554
00:28:36,240 --> 00:28:41,120
room, literally with some very
stern patron from Latin America

555
00:28:41,120 --> 00:28:43,560
sitting there next to me.
And on the other side of the

556
00:28:43,560 --> 00:28:46,560
table are 25 guys from Goldman
Sachs with books this thick.

557
00:28:46,960 --> 00:28:49,320
And they flip, and they flip and
they flip and they talk and they

558
00:28:49,320 --> 00:28:51,000
talk.
And he sits there, stone face

559
00:28:51,520 --> 00:28:54,360
and he gets, they get up and
say, thank you very much, Sir.

560
00:28:54,360 --> 00:28:56,880
And out they go.
And the guy turns to me and

561
00:28:56,880 --> 00:29:00,880
says, what did they say?
I mean, no family member will

562
00:29:00,880 --> 00:29:04,880
ever say generally to the
bankers or advisors.

563
00:29:05,000 --> 00:29:06,760
I don't understand what you just
told me.

564
00:29:06,760 --> 00:29:10,800
It means nothing to me because
they don't want to look stupid

565
00:29:10,800 --> 00:29:14,280
and they're afraid that they'll
get even more taken advantage of

566
00:29:14,280 --> 00:29:17,560
if they admit that they don't
understand what this person is

567
00:29:17,560 --> 00:29:20,720
saying to them, though, that's
the role to me of the family

568
00:29:20,720 --> 00:29:24,200
office advisors or the CIO has
to be the person.

569
00:29:24,200 --> 00:29:26,520
That's what I try to do.
The translator between Wall

570
00:29:26,520 --> 00:29:28,560
Street speak.
Having spent my time the.

571
00:29:29,200 --> 00:29:32,280
Buffer the interpreter right?
And the interpreter, because

572
00:29:32,480 --> 00:29:34,400
it's their money, it's not my
money.

573
00:29:34,560 --> 00:29:37,320
But they need to know what
tricks are being played on them.

574
00:29:37,320 --> 00:29:39,920
They need to know what
assumptions went into that model

575
00:29:40,160 --> 00:29:41,680
to show them something they
need.

576
00:29:41,680 --> 00:29:46,200
I mean, I remember very clearly
when I was at Rockefeller and,

577
00:29:46,520 --> 00:29:50,120
you know, Madoff came in to
pitch, right, because we were

578
00:29:50,120 --> 00:29:52,600
putting together the very first
hedge fund for the family.

579
00:29:52,600 --> 00:29:55,120
Part of history, Carol, Part of
history.

580
00:29:55,320 --> 00:29:57,280
It's really true.
I sat in the room when Madoff

581
00:29:57,280 --> 00:30:00,200
was pitching and we were making
a fund of funds of hedge funds.

582
00:30:00,200 --> 00:30:02,360
So we were interviewing all
these very various people.

583
00:30:02,360 --> 00:30:06,680
But we knew back then the
ethics, the morality and the

584
00:30:06,680 --> 00:30:09,680
style of the family, which was
their extremely well, they're

585
00:30:09,680 --> 00:30:12,520
low key and they're not stupid,
OK.

586
00:30:12,920 --> 00:30:15,920
And when Madoff came in being
very arrogant when you asked him

587
00:30:15,920 --> 00:30:20,040
questions and just name
dropping, that did nothing for

588
00:30:20,040 --> 00:30:21,960
people from the Rockefeller
family office.

589
00:30:21,960 --> 00:30:24,640
They did not invest with him.
They didn't make a big deal of

590
00:30:24,640 --> 00:30:27,000
it was just like, Nope, you're
not our style.

591
00:30:27,000 --> 00:30:31,280
I mean, that kind of bravado and
that kind of name dropping and

592
00:30:31,280 --> 00:30:36,760
that kind of stuff doesn't fly
with successful secure families,

593
00:30:36,760 --> 00:30:40,400
right?
So it's about actually getting

594
00:30:40,400 --> 00:30:41,800
to the bottom of what you're
selling me.

595
00:30:41,800 --> 00:30:43,600
What are you actually selling me
and what are you actually

596
00:30:43,600 --> 00:30:45,720
charging for it?
I'll give you another example.

597
00:30:45,720 --> 00:30:47,880
The Swiss, when I worked for
Credit Suisse were great at

598
00:30:47,880 --> 00:30:50,640
this.
They would sell you an American

599
00:30:50,640 --> 00:30:53,240
secure technology security
portfolio, and they're charging

600
00:30:53,240 --> 00:30:57,440
these poor people, you know, for
the tech stocks back in the day,

601
00:30:57,440 --> 00:31:00,640
they're charging them three and
four and 5% fees for their

602
00:31:00,640 --> 00:31:04,080
structured product.
Meanwhile, an ETF could do the

603
00:31:04,080 --> 00:31:06,880
exact same thing for, you know,
a few basis points.

604
00:31:07,240 --> 00:31:10,800
So they they try to song and
dance you and make you think

605
00:31:10,800 --> 00:31:14,640
that somehow their structuring
is making it worth you paying 3

606
00:31:14,640 --> 00:31:17,800
and 4 to 5% when in fact there's
no difference.

607
00:31:17,800 --> 00:31:21,200
If you say, well, please run me
an analysis of your portfolio's

608
00:31:21,200 --> 00:31:23,680
performance versus the ETF.
They don't like that.

609
00:31:23,920 --> 00:31:26,760
So you have to know, you have to
have somebody that knows how to

610
00:31:26,760 --> 00:31:29,800
ask the questions that get to
what you really want to know.

611
00:31:30,080 --> 00:31:30,840
Totally.
I haven't.

612
00:31:31,040 --> 00:31:33,360
Important.
I have dozens of Madoff stories,

613
00:31:33,360 --> 00:31:38,000
but my favorite is I was asked
to sit with somebody in New York

614
00:31:38,000 --> 00:31:42,960
City, in Brooklyn who had sold
his lifelong company of knishes

615
00:31:44,040 --> 00:31:47,960
like he he made a real business.
He had $10 million cash sold the

616
00:31:47,960 --> 00:31:51,640
company.
And he was asking, somebody

617
00:31:51,640 --> 00:31:55,600
asked me to sit down with him
and suggest what he do with the

618
00:31:55,600 --> 00:31:59,000
$10 million of cash.
And it was at the time when

619
00:31:59,000 --> 00:32:02,200
Madoff was still there.
And he said, hey, you know what

620
00:32:02,200 --> 00:32:04,800
I'm going to do?
I'm going to, my sister has a

621
00:32:04,800 --> 00:32:08,600
slot and I have access to Madoff
and I'm not sure how long it's

622
00:32:08,600 --> 00:32:10,720
going to last.
And so I'm going to put it all

623
00:32:10,720 --> 00:32:13,520
in that.
And so it wasn't my place.

624
00:32:13,680 --> 00:32:15,960
My place was just to say what I
would do.

625
00:32:15,960 --> 00:32:18,600
And I said, well, I wouldn't do
that if I were you because you

626
00:32:18,600 --> 00:32:21,080
know, you've got $10 million.
That's your lifes work.

627
00:32:21,080 --> 00:32:22,440
You don't want to put it all in
one place.

628
00:32:22,560 --> 00:32:24,760
First of all, forget about the
Madoff thing, right?

629
00:32:24,760 --> 00:32:27,200
Yeah.
And he did.

630
00:32:27,280 --> 00:32:29,920
And he basically, I mean, he
recovered because a lot of

631
00:32:29,920 --> 00:32:33,160
people that put money into
Madoff got their money back on

632
00:32:33,160 --> 00:32:36,880
some level.
But I mean, he, he, he felt

633
00:32:36,880 --> 00:32:39,600
because he was an
unsophisticated investor, not an

634
00:32:39,600 --> 00:32:42,760
unsophisticated person, but an
unsophisticated investor.

635
00:32:42,960 --> 00:32:46,480
And he just felt like it was
FOMO.

636
00:32:46,960 --> 00:32:49,880
His sister had a slot and so he
had to take advantage of it.

637
00:32:50,360 --> 00:32:54,320
And so he went all in and had to
live through that nightmare.

638
00:32:54,440 --> 00:32:56,480
Well, we're seeing that again
today, right?

639
00:32:56,480 --> 00:32:59,600
We're going back into kind of,
it feels very frighteningly

640
00:32:59,600 --> 00:33:01,640
like, lady, these early 90s
right now.

641
00:33:02,440 --> 00:33:04,800
I mean, there seems to be less
focus on risk.

642
00:33:04,800 --> 00:33:08,920
There seems to be more focus on,
you know, oh, give money into

643
00:33:08,920 --> 00:33:09,920
SpaceX.
You have no idea.

644
00:33:09,920 --> 00:33:13,240
There's no financials, but you
can get a slot in space.

645
00:33:13,240 --> 00:33:16,840
XI just got called about that.
You know, when, when, when

646
00:33:16,840 --> 00:33:22,080
you're selling pre PO, pre IPO
shares from you know, employee

647
00:33:22,080 --> 00:33:28,000
number 30 and you know, there's
no real disclosure on how much

648
00:33:28,000 --> 00:33:29,960
money because it's the bid and
ask, right?

649
00:33:30,120 --> 00:33:32,560
Yeah, that's probably not a good
idea.

650
00:33:32,600 --> 00:33:35,560
Yeah.
So, you know, we, it's very the

651
00:33:35,760 --> 00:33:38,520
AI craze right now.
For example, where should you

652
00:33:38,520 --> 00:33:41,280
invest in AI?
What part of AI makes sense?

653
00:33:41,280 --> 00:33:43,880
How do you figure that out?
How do you actually get down to

654
00:33:43,920 --> 00:33:46,600
figuring out earnings?
These things are, you know,

655
00:33:46,880 --> 00:33:50,080
these are real questions.
And some families handle that by

656
00:33:50,080 --> 00:33:52,600
saying I'm not doing anything
like this is just too hard.

657
00:33:52,800 --> 00:33:55,200
Yeah, others are saying, OK, I'm
going to have an overall

658
00:33:55,200 --> 00:33:57,920
allocation to technology and
some percentage of it or the,

659
00:33:58,040 --> 00:34:00,760
you know, the beautiful 7 or
whatever number it is today and

660
00:34:00,760 --> 00:34:02,840
I'm going to give them some
money and you know, let's let it

661
00:34:02,840 --> 00:34:04,200
ride.
There's nothing wrong with

662
00:34:04,200 --> 00:34:06,960
momentum and letting it ride.
But as you say, let's not put

663
00:34:06,960 --> 00:34:11,880
100% in once one AI stock or
worse 1, you know, private AI

664
00:34:11,880 --> 00:34:15,880
thing that's going to go public
maybe, maybe, right?

665
00:34:15,880 --> 00:34:20,520
So I think again, common sense
at the end of the day is your

666
00:34:20,520 --> 00:34:23,800
friend, what your grandmother
did, what your grandfather did

667
00:34:23,880 --> 00:34:26,400
still applies today.
It doesn't matter that we have

668
00:34:26,400 --> 00:34:30,320
AI, nothing has changed.
What is AI anyway but a large

669
00:34:30,320 --> 00:34:33,400
learning language model of
everything humans did in the

670
00:34:33,400 --> 00:34:34,920
past.
Think about that.

671
00:34:35,120 --> 00:34:39,080
It's the pipeline, but you just
want to make the same mistakes

672
00:34:39,080 --> 00:34:44,800
as everybody made in the past.
It's it's it's really, really

673
00:34:44,800 --> 00:34:46,920
fast.
Auto complete, Yeah.

674
00:34:47,800 --> 00:34:49,600
Exactly I.
Mean that's really what it.

675
00:34:49,880 --> 00:34:53,280
Is the best thing I ever studied
in my entire life was philosophy

676
00:34:53,280 --> 00:34:56,480
at Bryn Mawr and Haverford
colleges, because that was a

677
00:34:56,480 --> 00:34:59,640
course where you have the
Socratic method and you had to

678
00:34:59,640 --> 00:35:02,800
learn how to critically think.
And that is very much missing

679
00:35:02,800 --> 00:35:04,520
today in a lot of people's
education.

680
00:35:04,920 --> 00:35:07,000
And there's a lot more about
razzle dazzle.

681
00:35:07,000 --> 00:35:09,280
And oh, he's the expert.
I should believe him.

682
00:35:09,280 --> 00:35:11,520
Oh, Elon, so rich, I should give
him money.

683
00:35:11,640 --> 00:35:14,160
Forget all of that.
God gave you a brain.

684
00:35:14,160 --> 00:35:16,800
Use it, you know, Learn what
critical thinking means.

685
00:35:16,800 --> 00:35:19,240
Learn how to think.
That's what philosophy teaches

686
00:35:19,240 --> 00:35:20,320
you.
And that's why.

687
00:35:21,040 --> 00:35:24,080
I totally agree with you.
I don't know if you know this,

688
00:35:24,080 --> 00:35:27,840
but I'm Greek.
My parents were born here, but I

689
00:35:27,840 --> 00:35:31,840
have a real affinity for my
culture and the Socratic method

690
00:35:32,080 --> 00:35:34,800
and the critical thinking is how
I approach everything.

691
00:35:35,160 --> 00:35:37,720
And it's not because I'm Greek.
It's just that that's how I

692
00:35:37,720 --> 00:35:40,480
learn.
And I think it's woefully absent

693
00:35:40,840 --> 00:35:43,200
in a lot of the current
generation.

694
00:35:43,440 --> 00:35:48,560
And the last two perhaps even
it's really easy for somebody to

695
00:35:48,640 --> 00:35:52,920
attach themselves to an idea or
an ideology that validates how

696
00:35:52,920 --> 00:35:55,920
they think they feel and not do
the work to figure out whether

697
00:35:55,920 --> 00:35:57,280
it makes any sense.
Right?

698
00:35:57,800 --> 00:35:59,600
I'm just talking about ideology
for a minute.

699
00:35:59,600 --> 00:36:02,440
But it's anything like, wait a
minute, you just told me it

700
00:36:02,520 --> 00:36:05,000
sounds like a great idea.
Let's unpack that.

701
00:36:05,120 --> 00:36:06,600
And they just don't bother,
right?

702
00:36:06,760 --> 00:36:09,520
And part of it's people are
busy, part of it, they don't

703
00:36:09,520 --> 00:36:10,800
care.
Part of it's there's a whole

704
00:36:10,800 --> 00:36:14,120
bunch of reasons why, but
critical thinking serves people

705
00:36:14,120 --> 00:36:19,000
well. 100% And if you think of
what a lot of guys are going

706
00:36:19,000 --> 00:36:21,520
through right now, men in our
generation, they're in their

707
00:36:21,520 --> 00:36:24,920
50s, sixties and 70s, they've
got these kids coming up.

708
00:36:24,960 --> 00:36:27,560
Maybe they've made 100 million,
maybe they've made a billion in

709
00:36:27,560 --> 00:36:29,200
their real estate or their
companies.

710
00:36:29,320 --> 00:36:33,360
And the number one conversation
I have with them is should I

711
00:36:33,360 --> 00:36:35,600
give this business to the kids
or should I sell it?

712
00:36:36,000 --> 00:36:38,800
Are the kids going to be able to
take it over or aren't they?

713
00:36:38,880 --> 00:36:42,280
You know, and so walking through
the steps critically and

714
00:36:42,280 --> 00:36:44,920
logically of how to make that
one of the most important

715
00:36:44,920 --> 00:36:48,040
decisions of your life, what to
do with this business that you

716
00:36:48,040 --> 00:36:50,200
built.
You know, like your fellow who

717
00:36:50,200 --> 00:36:53,520
sold the money, sold his
business and had the cash, that

718
00:36:53,520 --> 00:36:56,400
that's what many, many families
are facing today.

719
00:36:56,760 --> 00:36:58,440
And critical thinking is your
friend.

720
00:36:58,440 --> 00:37:01,600
Because the first question you
have to ask yourself is do I

721
00:37:01,600 --> 00:37:06,040
keep do does the, does anyone
want to run it or, and then if

722
00:37:06,040 --> 00:37:08,000
yes, is anyone competent to run
it?

723
00:37:08,000 --> 00:37:11,400
And depending on how those two
answered out, you decide is it

724
00:37:11,400 --> 00:37:14,160
better to sell it or to keep it?
I'll give you an example.

725
00:37:14,160 --> 00:37:17,240
One family I work with from
Latin America, the businesses

726
00:37:17,240 --> 00:37:19,560
were extremely successful,
successful in Latin America, but

727
00:37:19,560 --> 00:37:22,200
the patriarch moved the whole
family and the kids all grew up

728
00:37:22,200 --> 00:37:26,400
in the US and they've never
worked in the Latin America.

729
00:37:26,400 --> 00:37:28,600
In fact, in their country, you
have to go around with guns and

730
00:37:28,600 --> 00:37:30,760
armored cars.
They have no interest in running

731
00:37:30,760 --> 00:37:33,400
the business.
There's nobody except for him

732
00:37:33,400 --> 00:37:35,560
who can sell it.
He has to do that now.

733
00:37:35,560 --> 00:37:38,400
He may drag his feet or worry
about what's going to happen

734
00:37:38,400 --> 00:37:41,760
when I suddenly have two or $3
billion liquid, you know, and

735
00:37:41,760 --> 00:37:45,400
these kids go to blow it.
But the truth is if he leaves it

736
00:37:45,400 --> 00:37:48,240
in the companies and thinks
someone else is going to handle

737
00:37:48,240 --> 00:37:52,040
it in the future, a huge mess
and family, the family will

738
00:37:52,040 --> 00:37:54,680
never realize the value that he
could realize if he sold it.

739
00:37:54,960 --> 00:37:58,120
And that's true in some of the
US I've talked to real estate

740
00:37:58,120 --> 00:38:01,240
families, especially in New York
where you and I, let's spend a

741
00:38:01,240 --> 00:38:04,240
lot of time, they're like, we've
never sold a building.

742
00:38:04,440 --> 00:38:06,760
If we sell our buildings, it's
going to kill us.

743
00:38:06,760 --> 00:38:10,000
It's going to kill us with taxes
because our bases is so low.

744
00:38:10,160 --> 00:38:14,200
But none of our kids wants to
anything to do with this real

745
00:38:14,200 --> 00:38:15,480
estate.
They've never set foot in the

746
00:38:15,480 --> 00:38:17,200
office.
They don't want to work hard.

747
00:38:17,200 --> 00:38:18,720
In fact, they think we work too
hard.

748
00:38:18,720 --> 00:38:21,520
They hate our lifestyle.
In fact, they have a really nice

749
00:38:21,520 --> 00:38:23,240
lifestyle now that we created
for them.

750
00:38:23,240 --> 00:38:25,800
But what are we going to do so
these things we can.

751
00:38:26,800 --> 00:38:28,320
I know.
That.

752
00:38:29,120 --> 00:38:33,480
I have one of those kids.
You just can't.

753
00:38:33,480 --> 00:38:34,760
You just can't put that decision
off.

754
00:38:34,760 --> 00:38:37,160
You have to really take a hard
look at it and say, OK, what are

755
00:38:37,160 --> 00:38:40,360
my choices?
OK, I could be the one who sold

756
00:38:40,360 --> 00:38:42,560
everything.
I could do a lot of tax

757
00:38:42,560 --> 00:38:44,240
planning.
There's all kinds of creative

758
00:38:44,240 --> 00:38:45,880
things you might be able to do
on that.

759
00:38:46,120 --> 00:38:48,520
I could create it.
I could throw this on a dynasty

760
00:38:48,520 --> 00:38:50,680
trust and put a bunch of
professionals in to read it

761
00:38:50,680 --> 00:38:52,640
forever and ever.
That's what some families do.

762
00:38:52,880 --> 00:38:57,320
I could liquefy it and create a
long term dynasty trust and none

763
00:38:57,320 --> 00:39:00,240
of these my lovely but
incompetent children are going

764
00:39:00,240 --> 00:39:01,920
to run it.
I'm going to get professionals

765
00:39:01,920 --> 00:39:04,960
to rent it and a board of people
I trust to rent it and they will

766
00:39:04,960 --> 00:39:06,880
get income because that's really
what.

767
00:39:07,000 --> 00:39:09,680
And hopefully, God willing, one
of my grandkids will be

768
00:39:09,680 --> 00:39:12,640
entrepreneurial like me and will
come to the family and take some

769
00:39:12,640 --> 00:39:14,440
of this money and start again,
right.

770
00:39:14,520 --> 00:39:17,240
So there, there's different
things you can do, but one thing

771
00:39:17,240 --> 00:39:19,160
you can't really do well, you
can.

772
00:39:19,160 --> 00:39:22,760
But the, the worst thing you can
possibly do is not use the brain

773
00:39:22,760 --> 00:39:26,160
God gave you to make your
business to, to really think

774
00:39:26,160 --> 00:39:29,800
seriously, back the question and
then explore if you've never had

775
00:39:29,800 --> 00:39:32,800
a family office, what would this
look like if I did sell it?

776
00:39:33,240 --> 00:39:35,120
Now I got all this cash.
Now what do I do?

777
00:39:35,480 --> 00:39:38,720
And I call that rich person 101.
There are so many times I deal

778
00:39:38,720 --> 00:39:42,040
with folks who, you know, they
may exit and get 100 million or

779
00:39:42,040 --> 00:39:44,040
more.
They've never been wealthy like

780
00:39:44,040 --> 00:39:45,520
that.
They've been upper middle class.

781
00:39:45,520 --> 00:39:47,400
They always, you know, had
enough money to pull out of the

782
00:39:47,400 --> 00:39:50,440
business to have a nice
lifestyle, but they were not

783
00:39:50,440 --> 00:39:53,280
wealthy.
They didn't have $100 million

784
00:39:53,920 --> 00:39:55,360
that they had to suddenly deal
with.

785
00:39:55,440 --> 00:39:58,080
And there's no shame in that.
There's nothing you inherently

786
00:39:58,080 --> 00:40:01,960
know about managing that money.
If you've never had it, how

787
00:40:01,960 --> 00:40:05,400
could you know that, right?
It's a art in of itself.

788
00:40:05,520 --> 00:40:08,960
So I urge people, if you sell
the business or you're scared to

789
00:40:08,960 --> 00:40:11,000
sell it because you're not going
to know what to do in the next

790
00:40:11,000 --> 00:40:13,040
step.
There are good people out there,

791
00:40:13,120 --> 00:40:14,680
you know, you know them, I know
them.

792
00:40:14,680 --> 00:40:18,000
Good reputable people that will
help you organize it in a way

793
00:40:18,000 --> 00:40:20,520
that it will not all go down the
drain into one bait off

794
00:40:20,520 --> 00:40:21,600
investment for.
Example.

795
00:40:21,600 --> 00:40:24,040
It's true.
There are very, very good, good

796
00:40:24,040 --> 00:40:27,320
people and I think we should say
that out loud.

797
00:40:27,320 --> 00:40:29,760
There are very good people that
have your best interests at

798
00:40:29,760 --> 00:40:35,960
heart, get paid to do it well,
and will will represent you well

799
00:40:35,960 --> 00:40:38,640
and give you good context.
Yeah, and and the best.

800
00:40:38,640 --> 00:40:41,280
Decision making.
Yeah, and you know, look at

801
00:40:41,280 --> 00:40:44,800
people that have won awards,
look at people that are writing

802
00:40:44,800 --> 00:40:46,720
about things.
Read what they write and see if

803
00:40:46,720 --> 00:40:49,920
you agree with their philosophy.
You might agree with one person,

804
00:40:49,920 --> 00:40:53,440
you might disagree with another,
but you can find good hearted

805
00:40:53,440 --> 00:40:56,360
people, people that really are
not there to RIP you off, people

806
00:40:56,360 --> 00:40:58,360
that are really there to take
you on this journey.

807
00:40:58,360 --> 00:41:01,520
That's a new journey for you and
certainly for your children, You

808
00:41:01,520 --> 00:41:03,680
know, and then if you're a
person, I mean, I deal with a

809
00:41:03,680 --> 00:41:06,080
lot of young couples right now,
which which is wonderful.

810
00:41:06,080 --> 00:41:09,360
And they say to them, OK, guys,
right now you have $50 million.

811
00:41:09,360 --> 00:41:12,200
That's amazing.
But when your little babies who

812
00:41:12,200 --> 00:41:16,560
are two and four years old are
your age, you and you keep going

813
00:41:16,560 --> 00:41:18,640
like this, you're going to have
100 million.

814
00:41:18,640 --> 00:41:22,000
You're going to have 300 million
or maybe more because money

815
00:41:22,000 --> 00:41:24,880
grows much faster today than it
did in the 80s and 90s.

816
00:41:25,040 --> 00:41:27,400
Money can just explode so
quickly nowadays.

817
00:41:27,520 --> 00:41:30,440
Are those children going to be
able to handle what you're

818
00:41:30,440 --> 00:41:33,240
creating?
And if not, there's lots of

819
00:41:33,400 --> 00:41:37,120
people out there who know how to
prepare your kids so by the time

820
00:41:37,120 --> 00:41:41,760
they are adults, they can have a
relationship with this money.

821
00:41:41,760 --> 00:41:44,040
And that sounds like a funny
thing to say, but you see some

822
00:41:44,040 --> 00:41:48,360
kids who just, you know, flip
out, kill themselves or become

823
00:41:48,360 --> 00:41:52,080
anorexic or become drug addicts
because frankly, they don't know

824
00:41:52,080 --> 00:41:55,640
how to have a relationship with
their own place in society as a

825
00:41:55,640 --> 00:41:58,560
wealthy kid in a grounded way.
And that's something parents are

826
00:41:58,560 --> 00:42:01,080
very worried about.
But it can be trained.

827
00:42:01,080 --> 00:42:03,760
You can teach kids to be able to
handle it.

828
00:42:04,760 --> 00:42:07,040
You know, that's why I made my
videos on family office boot

829
00:42:07,040 --> 00:42:10,200
camp to kind of, you know, we
talk about what happens when

830
00:42:10,200 --> 00:42:12,480
people are hitting you up for
money and you're a kid in high

831
00:42:12,480 --> 00:42:14,480
school to invest in their
company.

832
00:42:14,640 --> 00:42:17,280
What happens when you want a
date and you're trying to find a

833
00:42:17,280 --> 00:42:21,360
spouse, a husband or a wife?
You know, how do you make sure

834
00:42:21,360 --> 00:42:23,280
they're after you and they're
not a gold digger?

835
00:42:23,280 --> 00:42:26,440
You know, I, we could go on for
hours about that problem that

836
00:42:26,440 --> 00:42:28,960
families have.
So preparing your kids and then

837
00:42:28,960 --> 00:42:32,120
helping them to manage
friendships and then helping

838
00:42:32,120 --> 00:42:34,840
them to get married and then
helping them to either come into

839
00:42:34,840 --> 00:42:38,280
the business or have a great
life doing something completely

840
00:42:38,280 --> 00:42:41,720
different, but not go off the
rails, frankly, from the money

841
00:42:42,080 --> 00:42:45,240
and from what they're exposed to
with the money to other families

842
00:42:45,240 --> 00:42:47,400
that are letting them do
whatever they want and get into

843
00:42:47,400 --> 00:42:49,600
terrible trouble.
Frankly, you know, I don't

844
00:42:49,600 --> 00:42:52,400
believe in this business.
You know, high school kids at

845
00:42:52,400 --> 00:42:55,760
home in the mansion and
Greenwich unsupervised, having

846
00:42:55,760 --> 00:42:58,960
parties with only the poor nanny
there to supervise, that's a

847
00:42:59,080 --> 00:43:03,320
recipe for disaster.
You have to be an involved

848
00:43:03,320 --> 00:43:06,200
parent.
John D the Third, it was OK

849
00:43:06,200 --> 00:43:08,680
because Johnny the second
actually was involved with his

850
00:43:08,680 --> 00:43:10,800
son.
Even he you know, the equivalent

851
00:43:10,800 --> 00:43:13,520
of Elon Musk in the day, you
know, the wealthiest man in his

852
00:43:13,520 --> 00:43:16,760
cut in the United States.
He was involved every week with

853
00:43:16,760 --> 00:43:18,240
his son.
He didn't just I'm.

854
00:43:18,680 --> 00:43:22,720
Not, I'm not, I'm not blaming
Elon, but I mean, look what

855
00:43:22,880 --> 00:43:25,560
happened to one of Elon's son.
He went off the rails and he's

856
00:43:25,560 --> 00:43:28,960
basically doesn't exist because
he went down the trans thing,

857
00:43:28,960 --> 00:43:31,840
whatever that was going on.
And I don't know if that had

858
00:43:31,840 --> 00:43:34,320
anything to do with him not
being a good parent or whatever

859
00:43:34,320 --> 00:43:36,600
it is.
But one, one thing I do know,

860
00:43:36,600 --> 00:43:39,640
Carol, and I think you'll agree
with this is rich people have

861
00:43:39,640 --> 00:43:41,880
the same problems as poor
people.

862
00:43:41,880 --> 00:43:43,640
They just are exacerbated,
right?

863
00:43:43,880 --> 00:43:47,480
And so we all have potential of
the kids going off the rails

864
00:43:47,680 --> 00:43:51,080
doing stupid stuff because kids
do stupid stuff no matter what.

865
00:43:51,560 --> 00:43:57,600
And it it just, it, it you have
to pay attention because if

866
00:43:57,600 --> 00:44:01,760
you're not paying attention,
they will do what kids do. 100%,

867
00:44:01,760 --> 00:44:03,600
And they'll do what their
friends do because they're

868
00:44:03,600 --> 00:44:05,000
looking for that.
Yeah.

869
00:44:05,000 --> 00:44:08,480
I mean, I always say love is in
the core of every family, right?

870
00:44:08,480 --> 00:44:11,320
I mean, it sounds like an
obvious thing to say, but with

871
00:44:11,320 --> 00:44:14,360
some of these wealthy families,
if the parents are just jetting

872
00:44:14,360 --> 00:44:17,240
around the world and the dad is
always working and the mom is

873
00:44:17,440 --> 00:44:20,120
attending all the social events
and the kids are being raised by

874
00:44:20,120 --> 00:44:22,440
the nanny, where's the love for
the children?

875
00:44:22,520 --> 00:44:25,560
And so that when your heart is
empty of love, you go looking

876
00:44:25,560 --> 00:44:28,160
for it and generally you find it
in the wrong place.

877
00:44:28,960 --> 00:44:32,040
Yeah, from people that are your
same age, that have the same

878
00:44:32,040 --> 00:44:34,600
issues that you are and are not
developed right.

879
00:44:35,200 --> 00:44:37,400
I've done.
I've done made lots of

880
00:44:37,400 --> 00:44:41,080
interventions of kids, you know,
who are on drugs, girls who are

881
00:44:41,080 --> 00:44:45,120
dying from anorexia, boys who
are on drugs and, you know,

882
00:44:45,120 --> 00:44:47,720
taking so many drugs.
The parents think he's mentally

883
00:44:47,720 --> 00:44:49,640
ill, but in fact he's just
having flashbacks and

884
00:44:49,640 --> 00:44:51,800
hallucinations.
I mean, this is these are

885
00:44:51,800 --> 00:44:54,400
billionaires children's.
We're not talking about kids

886
00:44:54,400 --> 00:44:57,960
without resources.
So, you know, you're absolutely

887
00:44:57,960 --> 00:45:00,240
right.
But having said all of that, if

888
00:45:00,240 --> 00:45:03,640
you, if you make some effort and
you go find, you know, sensible

889
00:45:03,640 --> 00:45:05,800
people that help you, it doesn't
have to be like that.

890
00:45:05,880 --> 00:45:10,080
It's money is not the issue.
It's, it's how the human beings

891
00:45:10,080 --> 00:45:11,800
are, how the human beings
behave.

892
00:45:11,960 --> 00:45:14,160
Is it, as you say, exacerbated
by the money?

893
00:45:14,280 --> 00:45:17,760
Do you what, what's your opinion
on this Michael Dell

894
00:45:19,560 --> 00:45:22,720
contribution to kids putting
money into kids accounts?

895
00:45:22,720 --> 00:45:26,880
So when they're of age, they'll
have some some money to back

896
00:45:26,880 --> 00:45:29,000
them up.
So sort of a safety nut, you

897
00:45:29,000 --> 00:45:30,560
know what I'm talking about?
No, I'm not.

898
00:45:30,640 --> 00:45:33,080
I'm not familiar with.
It no, Michael Dell just

899
00:45:33,080 --> 00:45:36,200
committed a billion and a half
dollars or more.

900
00:45:36,320 --> 00:45:38,720
Maybe it's a lot more than that.
I can't remember what it was.

901
00:45:39,240 --> 00:45:43,080
But yeah, he did a big pomp and
circumstance with Trump and

902
00:45:43,160 --> 00:45:46,880
basically said, my wife and I
are going to put money that

903
00:45:46,880 --> 00:45:48,320
we're going to give to the
government.

904
00:45:48,560 --> 00:45:50,000
And the government's going to
give it to kids.

905
00:45:50,000 --> 00:45:52,320
And they're going to put it into
account that they can't trust.

906
00:45:52,800 --> 00:45:55,360
They're going to give up the
$3000 or $1000.

907
00:45:55,360 --> 00:45:58,120
Can't remember what it is.
Sorry to be unclear about it,

908
00:45:58,120 --> 00:46:02,080
but it's some number.
And the idea is that Michael

909
00:46:02,080 --> 00:46:06,440
Dell is sharing his wealth and
saying we're going to give kids

910
00:46:06,480 --> 00:46:09,560
$1000, that by the time they're
21, it's going to grow to

911
00:46:09,560 --> 00:46:12,160
whatever it grows.
And they have a launching pad to

912
00:46:12,160 --> 00:46:14,600
do whatever they want.
Oh, that's a lovely thing to do.

913
00:46:14,600 --> 00:46:17,360
Good for him.
I mean, this is a country where

914
00:46:17,360 --> 00:46:20,480
their education is not free.
This is a country where

915
00:46:20,480 --> 00:46:23,200
Healthcare is not free.
This is a country where there's

916
00:46:23,200 --> 00:46:25,320
very little support for you if
you're poor.

917
00:46:25,680 --> 00:46:29,120
So anything that puts some
support in place for people,

918
00:46:29,120 --> 00:46:31,680
especially that don't have
means, I think it's a wonderful

919
00:46:31,680 --> 00:46:34,240
gesture and good for him.
I mean, you know, if it can

920
00:46:34,240 --> 00:46:37,120
support more kids getting it.
I'm a big believer in education.

921
00:46:37,200 --> 00:46:38,960
You know, who knows what
education will look like in the

922
00:46:38,960 --> 00:46:41,280
future.
But you know, I am personally

923
00:46:41,280 --> 00:46:44,680
the product of philanthropy.
I got to go to Bryn Mawr because

924
00:46:45,080 --> 00:46:48,720
women at Bryn Mawr had a
scholarship for me, nice high

925
00:46:48,720 --> 00:46:51,920
academic grades in high school,
and that paid for half of my

926
00:46:51,920 --> 00:46:54,480
education.
A foundation in my hometown paid

927
00:46:54,480 --> 00:46:58,040
for another quarter because that
was a childless couple That's

928
00:46:58,120 --> 00:47:01,000
that gave money for to support
the education people from my

929
00:47:01,000 --> 00:47:04,640
town in Massachusetts.
And then the rest I borrowed and

930
00:47:04,640 --> 00:47:07,280
I worked 40 hours a week while I
was at Bryn Mawr's.

931
00:47:07,320 --> 00:47:10,080
You know, I was thrown in the
fire early in life, but I

932
00:47:10,080 --> 00:47:12,880
wouldn't be where I am today
without philanthropy from people

933
00:47:12,880 --> 00:47:15,080
like Michael Dell.
So I think that's a beautiful

934
00:47:15,080 --> 00:47:15,960
thing to do.
Yeah.

935
00:47:15,960 --> 00:47:18,760
So we have all this interesting
Nexus here where in

936
00:47:18,760 --> 00:47:22,880
Massachusetts?
Sudbury, which is 20 miles West

937
00:47:22,880 --> 00:47:25,200
of Boston.
I went to high school.

938
00:47:25,360 --> 00:47:28,400
I was born in New Hampshire and
I went to high school in Western

939
00:47:28,400 --> 00:47:30,520
Mass outside of Springfield.
Longmeadow.

940
00:47:30,920 --> 00:47:33,200
Oh wow.
You know, Bay Path, the whole

941
00:47:33,200 --> 00:47:36,040
thing, you know, Bay Path
Anyway, so that's, we have an

942
00:47:36,040 --> 00:47:39,320
interesting connection between
Bryn Mawr and there, yeah.

943
00:47:39,480 --> 00:47:42,240
My my dad was a was an engineer
at Raytheon.

944
00:47:42,240 --> 00:47:44,600
In fact he came back after World
War Two.

945
00:47:44,880 --> 00:47:47,720
He survived 5 beach landings in
the Pacific which is

946
00:47:47,720 --> 00:47:50,240
unbelievable.
He actually worked with General

947
00:47:50,240 --> 00:47:54,280
MacArthur in his tent as an
attache because he got malaria

948
00:47:54,280 --> 00:47:56,160
and he couldn't be out on the
frontline anymore.

949
00:47:56,680 --> 00:47:59,440
And, and then he came back and
went to Raytheon.

950
00:47:59,440 --> 00:48:02,920
And he actually helped Spencer
Percy build the first microwave

951
00:48:02,920 --> 00:48:05,120
ovens for what you and I used
today.

952
00:48:05,120 --> 00:48:08,400
My dad helped create those.
And he worked in Raytheon his

953
00:48:08,400 --> 00:48:11,760
entire career in Waltham, Mass.
But, you know, we did.

954
00:48:12,080 --> 00:48:14,080
He had a good job, but not a lot
of money.

955
00:48:14,080 --> 00:48:16,400
And so I was the beneficiary of
philanthropy.

956
00:48:16,560 --> 00:48:18,720
I had an uncle that worked in
Raytheon.

957
00:48:18,720 --> 00:48:21,520
He lived in Tyngsboro, outside
of Lowell.

958
00:48:21,880 --> 00:48:25,160
I have relatives in Lowell.
I have all that sort of New

959
00:48:25,160 --> 00:48:26,600
England connection.
Yeah, wow.

960
00:48:27,240 --> 00:48:30,880
Very, very hard people to fool.
New Englanders are very down to

961
00:48:30,880 --> 00:48:32,640
earth, totally.
They're not impressed by

962
00:48:32,680 --> 00:48:34,680
anything.
And they're the salt.

963
00:48:34,840 --> 00:48:37,320
The salt of the earth really
describes people from New

964
00:48:37,320 --> 00:48:38,680
England for sure.
Totally.

965
00:48:38,920 --> 00:48:48,960
So what if somebody had to say,
crystallize for them in their

966
00:48:48,960 --> 00:48:50,800
mind of how you could be
helpful?

967
00:48:51,000 --> 00:48:53,040
What What?
What's a good profile of

968
00:48:53,040 --> 00:48:55,480
somebody that you think you can
be helpful to?

969
00:48:55,520 --> 00:48:57,960
Well, there's probably three
kinds of people they could be

970
00:48:57,960 --> 00:49:01,640
helpful to. 1 would be a family
that doesn't have a family

971
00:49:01,640 --> 00:49:03,000
office.
Maybe they have a family

972
00:49:03,000 --> 00:49:05,440
business.
And as I said, they're facing

973
00:49:05,440 --> 00:49:08,200
these tough choices and they
need to do something and they

974
00:49:08,200 --> 00:49:09,880
don't even know how to think
about the problem.

975
00:49:10,120 --> 00:49:12,080
I'm your girl.
I can help you look at what you

976
00:49:12,080 --> 00:49:14,560
have.
I can help you in the corporate

977
00:49:14,560 --> 00:49:17,080
finance side to figure out what
to do with the business or who

978
00:49:17,080 --> 00:49:19,840
to help you with the business
and then what to do with the

979
00:49:19,840 --> 00:49:22,080
proceeds.
If you decide to choose to sell

980
00:49:22,080 --> 00:49:25,520
it or you want to get your kids
ready, even if it's earlier and

981
00:49:25,520 --> 00:49:27,480
they're younger and you want to
get your kids ready to take it

982
00:49:27,480 --> 00:49:31,120
over in the future and create a
multi generational wealth for

983
00:49:31,120 --> 00:49:32,920
your family.
I'm your girl for that.

984
00:49:33,040 --> 00:49:36,360
If you already have a family
office, but it's frustrating you

985
00:49:36,360 --> 00:49:39,000
and you feel it's too expensive
and it's not doing what you

986
00:49:39,000 --> 00:49:41,800
wanted it to do, I can help you
diagnose.

987
00:49:41,800 --> 00:49:45,520
I do sort of a 360�� assessment
and help you diagnose.

988
00:49:45,520 --> 00:49:48,920
Why isn't it working and what do
we need to make it work for the

989
00:49:48,920 --> 00:49:52,120
family rather than be an expense
that the family sees as

990
00:49:52,200 --> 00:49:55,040
unnecessary?
And then finally, if you have

991
00:49:55,040 --> 00:49:59,200
assets to manage and you were
not a money manager yourself and

992
00:49:59,200 --> 00:50:02,200
you need a CIO who's
independent, who can come in and

993
00:50:02,200 --> 00:50:06,200
help do that translation job and
help you oversee and put

994
00:50:06,200 --> 00:50:10,840
together a structure and a
process to grow your wealth from

995
00:50:10,840 --> 00:50:13,840
multiple generations, I can help
you with that as well.

996
00:50:13,840 --> 00:50:17,880
So whether it's setting up,
improving or managing the

997
00:50:17,880 --> 00:50:20,200
wealth, those are the three main
areas.

998
00:50:20,200 --> 00:50:23,240
Or if you haven't done family
governance, you have a family

999
00:50:23,240 --> 00:50:25,520
office, but you never did a
family constitution.

1000
00:50:25,520 --> 00:50:28,440
You never figured out, you know,
how do we make important

1001
00:50:28,440 --> 00:50:30,280
decisions as a group in our
family?

1002
00:50:30,280 --> 00:50:32,720
I can also walk you through that
process.

1003
00:50:32,920 --> 00:50:35,280
If you've never done family
values, you know, if you've

1004
00:50:35,280 --> 00:50:37,480
never actually gone out there
and figured out what do we

1005
00:50:37,480 --> 00:50:39,840
really stand for?
If we want to be like the

1006
00:50:39,840 --> 00:50:42,760
Rockefellers, if we want to have
a family Crest, if we want to,

1007
00:50:43,240 --> 00:50:46,240
you know, be able to teach our
children and our grands and our

1008
00:50:46,240 --> 00:50:49,480
great grands who we are, help us
articulate that.

1009
00:50:49,680 --> 00:50:53,560
That's another very, very
meaningful and, and I feel very

1010
00:50:53,560 --> 00:50:55,560
honored when I work with
families for that because that

1011
00:50:55,800 --> 00:50:57,560
that's work that lasts for
generations.

1012
00:50:57,840 --> 00:51:00,320
And your great, great grands.
Well, thank you for doing that

1013
00:51:00,320 --> 00:51:02,160
work.
So that's super helpful.

1014
00:51:02,160 --> 00:51:08,440
Thanks for saying that.
I was asked recently, I'd love

1015
00:51:08,440 --> 00:51:13,200
to see your perspective on this
by our friends at Bessemer to

1016
00:51:13,200 --> 00:51:17,920
talk to somebody that was an in
house CEIO at a very large

1017
00:51:18,040 --> 00:51:20,880
family office in New York,
single family office.

1018
00:51:22,680 --> 00:51:28,400
And the conversation was around
negotiating compensation and

1019
00:51:28,440 --> 00:51:32,320
career path.
And I have strong feelings about

1020
00:51:32,320 --> 00:51:34,920
the career path in family
offices, especially a single

1021
00:51:34,920 --> 00:51:38,440
family office.
I'm wondering how you feel about

1022
00:51:38,440 --> 00:51:41,280
the career path.
And I know that there's many

1023
00:51:41,280 --> 00:51:43,800
different single family offices
and I get that.

1024
00:51:44,000 --> 00:51:49,400
But there there seems to be a
sentiment among people that

1025
00:51:49,520 --> 00:51:54,320
there's a similar career path in
single family offices that might

1026
00:51:54,320 --> 00:51:58,400
be in an in, in a commercial
family office that gets paid

1027
00:51:58,400 --> 00:52:01,160
based on AUM.
How do you feel about that

1028
00:52:01,160 --> 00:52:04,400
career path in contrast?
You know, it's interesting.

1029
00:52:04,400 --> 00:52:08,120
That's a really great question.
I really think the family has to

1030
00:52:08,120 --> 00:52:11,800
think long and hard about what
type of person they want to have

1031
00:52:11,800 --> 00:52:14,880
as the CEO or the CIO of their
family office.

1032
00:52:15,400 --> 00:52:16,720
And let me tell you what I mean
by that.

1033
00:52:16,800 --> 00:52:19,520
If some families, and let's talk
about the billion dollar plus

1034
00:52:19,520 --> 00:52:21,640
family for a moment, because
these are big families, they

1035
00:52:21,640 --> 00:52:24,520
could have any kind.
Of this isn't far in excess of

1036
00:52:24,520 --> 00:52:28,240
that, Yeah, in this case.
So generally those folks are

1037
00:52:28,240 --> 00:52:32,920
advised nowadays by big head
hunters, let's say, to go out

1038
00:52:32,920 --> 00:52:36,640
and get often institutional
money managers, guys that have

1039
00:52:36,640 --> 00:52:39,280
worked generally guys, but
sometimes women, but mostly guys

1040
00:52:39,600 --> 00:52:42,520
that have run a hedge fund or
that have worked at, you know,

1041
00:52:42,520 --> 00:52:46,640
in the institutional money side.
The the, the thought as well, we

1042
00:52:46,640 --> 00:52:48,560
have the same amount of money as
the institution.

1043
00:52:48,560 --> 00:52:51,640
We need institutional practices
and therefore we need an

1044
00:52:51,640 --> 00:52:53,760
institutional guy to run this
OK.

1045
00:52:53,920 --> 00:52:56,600
Now the institutional guy for
this kind of money is going to

1046
00:52:56,600 --> 00:52:59,360
want multiple millions of
dollars of compensation.

1047
00:52:59,560 --> 00:53:02,520
He's going to want Carrie and
all the deals and most likely

1048
00:53:02,520 --> 00:53:05,680
within three to five years he's
going to be pushing you to let

1049
00:53:05,680 --> 00:53:08,960
him launch a fund, right Yet
other families to come into that

1050
00:53:08,960 --> 00:53:10,200
fund and.
He's very.

1051
00:53:10,240 --> 00:53:13,320
Good on that saying.
Oh, but we'll all make, you'll

1052
00:53:13,320 --> 00:53:15,320
make money.
You won't cost you anything now

1053
00:53:15,400 --> 00:53:18,800
to have your money managed
because I'll go export what I do

1054
00:53:18,800 --> 00:53:21,560
for you to other people and
you'll make money on that.

1055
00:53:21,560 --> 00:53:25,640
Is a person who should not in my
humble opinion, be at a single

1056
00:53:25,640 --> 00:53:28,880
family office to grow multi
generational wealth.

1057
00:53:29,040 --> 00:53:32,240
OK.
That, as you say, is, is a

1058
00:53:32,240 --> 00:53:35,080
person who's used to a
commercial environment, wants to

1059
00:53:35,080 --> 00:53:38,840
maximize his earnings every
chance he can get and indeed

1060
00:53:39,040 --> 00:53:42,040
wants to probably launch out on
his back out out on his own to a

1061
00:53:42,040 --> 00:53:45,200
hedge fund after he establishes
a track record with your money,

1062
00:53:45,440 --> 00:53:48,240
by the way, so he can then
become Ron Baron, you know, or

1063
00:53:48,240 --> 00:53:51,240
whoever.
So that type of personality, if

1064
00:53:51,240 --> 00:53:52,920
you get that kind of
personality, you have to

1065
00:53:52,920 --> 00:53:55,400
understand what you're getting.
You're getting him for three to

1066
00:53:55,400 --> 00:53:57,440
five years.
He's going to demand a lot of

1067
00:53:57,440 --> 00:53:58,680
money.
He's going to force you to

1068
00:53:58,680 --> 00:54:02,240
launch a private fund for him to
run most likely, right?

1069
00:54:02,440 --> 00:54:04,760
Do you want that for your multi
generation money?

1070
00:54:04,760 --> 00:54:08,840
Is that really what you want?
Or do you want a person whose

1071
00:54:08,920 --> 00:54:11,480
personality is I want to stay
with the family.

1072
00:54:12,120 --> 00:54:15,040
I know I don't know everything,
but I can build a team of

1073
00:54:15,040 --> 00:54:18,200
experts to support me and I'm
going to understand what the

1074
00:54:18,200 --> 00:54:20,360
family needs.
And I'm going to start and I'm

1075
00:54:20,360 --> 00:54:22,680
going to the best tax people
around because I'm not

1076
00:54:22,680 --> 00:54:24,840
institutional.
I'm after tax.

1077
00:54:24,840 --> 00:54:26,880
These are individuals who pay
taxes.

1078
00:54:27,080 --> 00:54:30,920
And I'm going to help you figure
out the right jurisdictions and

1079
00:54:30,920 --> 00:54:35,600
tax strategies to maximize your
your after tax risk adjusted

1080
00:54:35,600 --> 00:54:37,640
return over multiple
generations.

1081
00:54:37,640 --> 00:54:42,000
That's a very different mandate
than I'm an institutional guy

1082
00:54:42,120 --> 00:54:45,000
who's used to maximizing
billions in a tax free

1083
00:54:45,000 --> 00:54:48,400
environment, right?
So I always say to people, if

1084
00:54:48,400 --> 00:54:51,600
you do the family business, the
business plan and your values

1085
00:54:51,600 --> 00:54:54,880
first, quite frankly, and you
know what you want him to do,

1086
00:54:55,000 --> 00:54:56,640
then you can hire the right
person.

1087
00:54:56,880 --> 00:55:00,760
Because if you just get that
super ambitious guy who just

1088
00:55:00,760 --> 00:55:04,240
wants to leverage your money
into his next hedge fund, yes,

1089
00:55:04,240 --> 00:55:06,480
he ran $10 billion and you only
have two.

1090
00:55:06,480 --> 00:55:09,040
So you think you're you're doing
even better because he knows

1091
00:55:09,040 --> 00:55:10,520
that aren't even more money than
you have.

1092
00:55:10,800 --> 00:55:13,240
And he might even hint at you
that he's going to turn your 2

1093
00:55:13,240 --> 00:55:16,880
billion into 10.
Let him allocate some money to

1094
00:55:16,880 --> 00:55:20,280
him in a fund, you know, even
see them in a fund if you love

1095
00:55:20,280 --> 00:55:23,080
him that much.
But know the nature of the the

1096
00:55:23,080 --> 00:55:25,640
person that you're dealing.
With So, what's the right person

1097
00:55:25,640 --> 00:55:27,400
for that job?
The which job?

1098
00:55:27,400 --> 00:55:30,520
The the.
So being the consiglieri for the

1099
00:55:30,520 --> 00:55:32,160
family.
How do you find that person?

1100
00:55:32,200 --> 00:55:35,520
What does he look like or she?
Well, they, they tend to come

1101
00:55:35,520 --> 00:55:37,880
out of three areas, right?
They're either from the money

1102
00:55:37,880 --> 00:55:40,680
management side, they're a
lawyer and a state planning or a

1103
00:55:40,680 --> 00:55:42,520
lawyer site type, or they're an
accountant type.

1104
00:55:42,800 --> 00:55:45,760
Generally they come out of those
three areas, the Consiglia areas

1105
00:55:45,760 --> 00:55:49,200
often was the CFO of the family.
He's about to retire.

1106
00:55:49,200 --> 00:55:51,480
He knows all the secrets, he
knows where the bones are buried

1107
00:55:51,480 --> 00:55:53,040
and they give him that job,
right?

1108
00:55:53,040 --> 00:55:56,520
Which could be fun because he
has trust, but he may have 0

1109
00:55:56,520 --> 00:56:00,640
technical expertise on your
money as a multi generational

1110
00:56:00,640 --> 00:56:02,560
family.
He had a lot of technical

1111
00:56:02,560 --> 00:56:04,640
expertise on your business,
right?

1112
00:56:04,880 --> 00:56:06,840
So he may or may not be the
right person.

1113
00:56:06,840 --> 00:56:10,480
Maybe you pair him with somebody
who's had the family office

1114
00:56:10,480 --> 00:56:13,280
experience and background and
you, you get someone to drill

1115
00:56:13,280 --> 00:56:16,880
into that person to figure out,
you know, how good were they?

1116
00:56:16,880 --> 00:56:19,800
And, and by the way, I will tell
you a secret a lot of people

1117
00:56:19,800 --> 00:56:22,400
don't know.
There seems to be an honor code

1118
00:56:22,400 --> 00:56:25,120
among families because I've done
a lot of placing people into

1119
00:56:25,120 --> 00:56:29,160
family office jobs.
And if I call the principles of

1120
00:56:29,160 --> 00:56:32,080
this big family and I'm calling
on behalf of another big family,

1121
00:56:32,360 --> 00:56:34,880
they get on the phone and tell
me exactly what that guy was

1122
00:56:34,880 --> 00:56:38,040
like or that girl was like, that
person was like, and why they

1123
00:56:38,040 --> 00:56:40,960
have them and why they left.
And they're very blunt about it

1124
00:56:40,960 --> 00:56:44,360
because we all have kind of an
honor system, if you will.

1125
00:56:44,600 --> 00:56:46,720
Not only that, they're not right
person.

1126
00:56:46,760 --> 00:56:48,480
Placed in the right job.
Yeah.

1127
00:56:48,480 --> 00:56:51,640
And they're not subject to all
the nonsense that a big

1128
00:56:51,640 --> 00:56:56,440
corporation would be hedging to
tell the truth, right?

1129
00:56:56,600 --> 00:56:58,120
Correct.
I mean, you know, the headhunter

1130
00:56:58,120 --> 00:57:01,080
can't tell you anything about
the age of the person, their

1131
00:57:01,080 --> 00:57:04,440
personal relationships, if they
had problems, you know, But the

1132
00:57:04,440 --> 00:57:06,920
person that they work for can
tell you because he's not, he's

1133
00:57:06,920 --> 00:57:10,040
not constrained in the same way
that a professional headhunter

1134
00:57:10,040 --> 00:57:10,480
is.
So.

1135
00:57:10,800 --> 00:57:13,320
Yeah.
In that and flip it a little bit

1136
00:57:13,480 --> 00:57:17,800
in the description of the person
that you said might be, for

1137
00:57:17,800 --> 00:57:20,920
example, let's say the CPA, is
that a career path?

1138
00:57:21,160 --> 00:57:23,000
To be.
The head of the family office,

1139
00:57:23,320 --> 00:57:24,080
yeah.
Yeah.

1140
00:57:24,120 --> 00:57:27,440
I mean, they're single family
office for 2530 years.

1141
00:57:27,640 --> 00:57:29,640
Most likely they've done
something else.

1142
00:57:29,640 --> 00:57:33,680
Generally they get into that job
at least 20 years into their

1143
00:57:33,680 --> 00:57:34,960
career.
So they've already done

1144
00:57:34,960 --> 00:57:36,800
something else.
They're ready to have this

1145
00:57:36,800 --> 00:57:41,760
steady assignment that's got
lots of different facets to it

1146
00:57:41,760 --> 00:57:43,520
and they're going to stay there
until they retire.

1147
00:57:43,520 --> 00:57:45,320
There are a lot of people like
that now.

1148
00:57:45,320 --> 00:57:47,960
What's happening right now is a
lot of those people are

1149
00:57:47,960 --> 00:57:50,480
retiring, right?
There's a lot of single family

1150
00:57:50,480 --> 00:57:54,240
offices right now where their
beloved counselor, their person

1151
00:57:54,240 --> 00:57:57,480
that guided them and guided the
knew their kids when they grew

1152
00:57:57,480 --> 00:57:59,080
up and now their kids are about
to take over.

1153
00:57:59,080 --> 00:58:02,840
That guy is going to retire
because he's 75, he's 80, some

1154
00:58:02,840 --> 00:58:05,200
of them are 85 and still doing
that role because if can't

1155
00:58:05,200 --> 00:58:07,640
family can't bear to let them
go, you know.

1156
00:58:07,640 --> 00:58:10,800
So the harder part for families
is replacing that first guy

1157
00:58:10,960 --> 00:58:13,160
often.
How do they, what kind of person

1158
00:58:13,160 --> 00:58:16,680
should take that job on?
And ideally, if the person loves

1159
00:58:16,680 --> 00:58:18,800
the family, which they all do,
the ones that have been long

1160
00:58:18,800 --> 00:58:22,120
term like that, he is well
advised to get that person in

1161
00:58:22,320 --> 00:58:24,560
five to 10 years before he's
going to have time.

1162
00:58:25,520 --> 00:58:28,480
Yeah, get that person in.
And pay 2 salaries it's.

1163
00:58:28,520 --> 00:58:30,000
Nothing.
It's a drop of the bucket

1164
00:58:30,000 --> 00:58:33,880
compared to your wealth, so that
by the time your beloved person

1165
00:58:33,880 --> 00:58:36,880
retires, your new person is now
beloved as well.

1166
00:58:37,400 --> 00:58:39,800
And you've had enough time to
know that it's the worst.

1167
00:58:39,840 --> 00:58:43,120
Like you've been with Bill
forever and Bill retires and now

1168
00:58:43,120 --> 00:58:46,560
you got Jane and Jane just came
in out of nowhere.

1169
00:58:46,680 --> 00:58:49,560
She doesn't know where the bones
Berry Bill Bill's not retired in

1170
00:58:49,680 --> 00:58:52,760
Palm Beach or whatever.
And Port Jane is like kind of

1171
00:58:52,760 --> 00:58:55,360
hated because she she's not
Bill, right.

1172
00:58:55,880 --> 00:58:58,960
So you really have to unless
you've got the next generation

1173
00:58:58,960 --> 00:58:59,880
issue, right?
Yeah.

1174
00:58:59,880 --> 00:59:01,760
And you've got a.
Next generation issue too.

1175
00:59:02,840 --> 00:59:04,760
And they a lot of times don't
know what they don't know.

1176
00:59:05,080 --> 00:59:07,520
God bless them, we love them,
but they need a lot more

1177
00:59:07,520 --> 00:59:10,360
motherly or fatherly help than
they may think they do.

1178
00:59:10,360 --> 00:59:12,920
Even when they say okay, boomer
and they don't like to hear from

1179
00:59:12,920 --> 00:59:14,960
us boomers.
Actually boomers have a lot to

1180
00:59:14,960 --> 00:59:17,720
teach you believe boomers to
their phones.

1181
00:59:18,200 --> 00:59:19,760
I can't even.
Believe I'm a boomer.

1182
00:59:20,680 --> 00:59:22,080
We're.
Thinking about that, right?

1183
00:59:22,600 --> 00:59:26,320
Yeah, Carol, this has been.
Amazing and we.

1184
00:59:26,320 --> 00:59:28,240
Truly, truly appreciate you
doing this.

1185
00:59:28,440 --> 00:59:29,800
How does everybody get a hold of
you?

1186
00:59:30,160 --> 00:59:33,640
Well, you can give me an e-mail.
Carol at

1187
00:59:33,640 --> 00:59:36,960
pepperinternational.com.
You can look at me on LinkedIn.

1188
00:59:37,040 --> 00:59:39,760
I'm on Bloomberg once a month
talking about the markets.

1189
00:59:40,040 --> 00:59:43,040
You can read my book, The Seven
Pearls of Financial Wisdom.

1190
00:59:43,040 --> 00:59:48,320
You can get that on Amazon or
you can you can also look at

1191
00:59:48,320 --> 00:59:51,840
Family Office Boot Camp where I
have about 40 videos, free

1192
00:59:51,840 --> 00:59:55,680
videos on how to create a family
office, how to find love and how

1193
00:59:55,680 --> 00:59:57,520
to raise your kids.
So it's all there.

1194
00:59:57,600 --> 01:00:00,360
And I'd love to speak with
anybody who has questions in

1195
01:00:00,360 --> 01:00:01,800
this area.
And thank you, Arthur.

1196
01:00:01,800 --> 01:00:03,600
This has been a delightful
conversation.

1197
01:00:03,600 --> 01:00:06,600
It's been my pleasure.
Really, really glad it's been.

1198
01:00:06,960 --> 01:00:08,960
I don't know.
I think the last time I saw you

1199
01:00:08,960 --> 01:00:11,240
in person had to be 5 years ago,
something like that.

1200
01:00:11,240 --> 01:00:14,000
Right before COVID, right?
Yeah, I think we're at lunch in

1201
01:00:14,000 --> 01:00:17,040
New York exactly at.
Somewhere at some nice

1202
01:00:17,040 --> 01:00:18,560
restaurant to.
Remember that but.

1203
01:00:19,120 --> 01:00:22,720
Great to see you and keep doing
what you're doing because this

1204
01:00:22,720 --> 01:00:26,240
is very helpful to people to
have a chance to listen and gain

1205
01:00:26,240 --> 01:00:28,640
experience and learn from other
people that have done it for a

1206
01:00:28,640 --> 01:00:30,680
long time.
Yeah, it's super appreciated,

1207
01:00:30,680 --> 01:00:31,960
Carol.
Great, great.

1208
01:00:31,960 --> 01:00:35,120
Wisdom, really appreciate it and
thank you everybody for joining

1209
01:00:35,120 --> 01:00:38,520
us today.
So please feel free to to share

1210
01:00:38,520 --> 01:00:42,480
this and dial in and listen in
when it makes sense.

1211
01:00:42,600 --> 01:00:44,280
Thank you, Carol, really
appreciate it.

1212
01:00:44,480 --> 01:00:46,560
Thank you, Arthur.
Take care.