And the point of it all is that when I went into that second business and sold that when
I was 43, I was determined not to repeat the mistakes that I had made the first time.
I said, I don't want to ever have to go back to work because I was stupid enough to lose
what I made.
How do people who are thinking about preserving wealth go about it?
What's the process?
And I noticed that there were two very different ways to do it.
One, you could try and get advice from people who wanted to sell you that advice.
But they always had an amazing coincidence between the products they were selling and
the advice they were giving.
And these are people who, while they might be legitimate, are literally selling rather
than serving.
It's very hard to give unbiased advice.
You can try, but it's really hard.
The minute I'm paying somebody to give me advice, it changes the dynamic.
Or you can learn from fellow peers who have no ax to grind, who have no product to sell
you, but are there simply to share with you their experience and learn from you your experience.
So in order for this process to work, everyone at the table-- 12 to 15 members around a table
once a month, every month, sometimes 5, 10, 15 years-- has to be able to teach and learn.
If you don't have something unique that allows you to teach something, I don't want you at
my table because I want to learn something from you.
And in return, I want to share with you whatever my unique knowledge is.
And then I want to make one and one make three or, in this case, 12 make 20 because of 12
different points of view.
So the simple insight that TIGER 21 has grown on is that people going through a transition
primarily after having a very significant liquidity event can best learn the process
of preserving wealth from peers in a totally confidential setting.
But I didn't create what I'm about to say.
But it's totally applicable.
Investors sign up, but people show up.
What that means is that what we found as we evolved was that the primary challenge for
our members-- while they were wealth preservers for the first time, having created great wealth
to begin with, there are a number of issues that when you're quite wealthy allow you or
force you to work through a different crucible.
Issues of children, legacy, philanthropy-- all of these things take on a very different
tone when you're in the press, or your kids know how much you're worth, or they realize
that they will be worth a lot more than their friends.
And knowing how to deal with it-- really the number-one issue in TIGER 21 is members' concerns
about not screwing up their kids.
How do they give them as many benefits as every parent would like to give their children
without giving them too much that it totally screws the kids up?
That's an almost impossible balance to find.
How did you go about starting your organization, though?
Because to your point exactly, when you've had a liquidity event like that, the sharks
are circling immediately.
And people know.
And they try and glom on and find a way to get in there.
How do you go about approaching people and saying that this is different?
This is what I'm trying to do.
Because you have to build it out.
You started with one guy.
You got to find one more guy to sit at your table.
So there's two answers.
One answer is, I had been a member of another peer-to-peer learning organization.
There are two great organizations for CEOs.
One is YPO, Young Presidents' Organization.
And the other is today called Vistage.
Then it was called TEC, The Executive Committee.
But TEC morphed into Vistage about 10 or 15 years ago.
And both of those organizations have CEOs come together in small groups and in large
conferences.
They each have around 24,000 or 25,000 members.
So you have a pool of about 50,000 CEOs around the globe.
And the very small number of them who achieve the greatest level of success financially
and to graduate from being CEOs is the candidate pool for our 700 members in TIGER.
It's like if you were in England, you would say that there are Cambridge and Oxford.
And we're the great graduate school.
Or MIT and Harvard, and we're the great graduate school.
That's the place where the largest number of our members come from.
Because if they like the peer-to-peer learning process that both of those organizations own,
they'll be comfortable shifting gears into a much more confidential, much more exclusive
organization.
And I only use "exclusive" because our focus is on people who have created wealth between
$10 million and a billion dollars.
Our average net worth is about $100 million.
And that obviously speaks to people who have created businesses that are worth hundreds
of millions of dollars or billions of dollars.
And then they've sold those businesses.
And what they're left with is the proceeds that qualify them to be a TIGER 21 member.
So you talked there about how you protect your kids, which is something I've thought
about a lot and spoken to various people about a lot.
And it is a huge challenge.
How have the TIGER 21 members gone about doing it?
I know that you include the next generation in the conference, which is a great chance
for them to see.
What initiatives have you put in place to help them do that?
I'd say there's two camps.
And each family has to decide what's best for them.
Clearly, there's one camp where parents say, I'm a first-generation wealth creator.
Almost all TIGER members are first generation, very different than multi-generation.
First-generation wealth creators believe that the key to their success was the very humble
beginnings that they had that sharpened them up and toughened them up that allowed them
to be successful.
It turns out that isn't the only way to be successful.
But many first-generation wealth creators believe it was their humble beginnings, the
poverty, or the drug addiction, or the disease, whatever happened in their childhood, alcoholic
parents, single children.
There's endless stories within TIGER 21 about what hardened somebody, steeled them up to
prove to the world they could be successful.
And for those people, they're trying to recreate some of that challenge for their children.
And very often, they fall into a trap because they forget that they brought their children
up not in the same environment that they grew up in.
They brought their children up in an amazing environment.
And so it has the emotional impact of, you get to graduate college.
And then the parent pulls the rug out from underneath the kids and say, I'm making it
tough for you.
It's tough love.
I don't think that really works.
I think people who are now dealing with second and third generations can think about, how
do you teach your children to be responsible stewards of the wealth that they're going
to inherit?
But very often, if you're in your 40s and 50s and 60s and your kids are reaching their
20s, you're still young enough that you haven't really thought about this issue of wealth
transfer.
Today we're witnessing the largest amount of wealth transfer in human history over the
next generation.
The scale of wealth that will be transferred is in the trillions of dollars.
Now, there's some techniques.
I can share some of the techniques.
The first is that there's a simple rule.
Parents are always wondering what happens if they treat their kids equally versus disequally.
And it's pretty clear to me that it's to each according to their own needs while the parents
are alive.
But any parent who doesn't leave equally their assets to their children will create potentially
very deep emotional scars.
There's a few ways to get around it.
The one most important is, if you're not going to leave money equally to your kids or not
leave them at all, it better be consistent with a family value that is expressed over
and over and over again.
So as an example, some families believe in public service.
So they'll leave a trust to support any child or grandchild that goes into public service.
Well, if you go into banking, you're not going to be part of that.
But you understand that the public service trust that your sister or brother is getting
reflects deeply held family values, similarly for the clergy, family farm.
Some families believe in preserving family farms.
But in each of these cases, while you're treating the children unequally, you're doing it in
a way that's consistent with a family value.
So this issue of what's equitable and what's equal is at the heart of how parents have
done it.
And the findings from the research I did on the book is, the only way you can escape deep
emotional scars in your children if you don't treat them equally is to have something like
a family meeting or a way to express values that children are steeped in before you go
on.
But while you're here, it's each according to their needs.
If Sally is buying a house and Johnny is starting a company and Mary has a kid with special
needs, you have to deal with each one according to their needs.