Entrepreneurial Empire
Learn the fundamentals of where you are in business and how to scale with your host Jacqueline. Your business will go through many stages, and every stage will have it's own set of requirements. Let's unravel the journey ahead together and find strategic solutions that will help you conquer it all.
Entrepreneurial Empire
Fortified Fortunes: Generational Wealth Building
Unlock the secrets of building and maintaining generational wealth in our riveting conversation with Mitzi Perdue, Dame Sheila B Driscoll, and a managing partner at Greenstein Rogoff Olson and Company. Imagine being part of a legacy that thrives through centuries, wouldn't that be remarkable? This episode focuses on providing valuable insights on ways to build and secure your family's financial future and legacy, drawing from the rich experiences of our esteemed guests. We explore the power of a family charter, and the role of legal structures, education, and mentorship in perpetuating prosperity. The conversation also reveals the hidden tax implications of wealth creation and preservation, shedding light on this often overlooked aspect of long-term wealth management.
Get ready to take notes as our guests share their experiences on the creation of family trusts and endowments - all aimed at bolstering your family's financial standing for generations to come. They delve into the cruciality of investing in ventures that resonate with your family's culture and the surprising impact of incorporating this culture into your everyday life through newsletters and family gatherings. They emphasize the importance of developing a culture of stewardship within a family, thereby instilling the values necessary to preserve wealth for generations. This intriguing conversation will undoubtedly leave you inspired to cultivate a legacy that stands the test of time.
Welcome to the Entrepreneurial Empire Podcast. This is the place where you can find business and career strategies, techniques and real life success journeys of individuals who have built businesses to the million dollar revenue mark and beyond. I'm Jaclyn Hernandez, life Coach and Business Development Consultant. I have worked with startups, fortune 100 companies, network marketing, direct sales organizations, churches, nonprofits and government agencies all to become the authority experts in their industry, lead with people and scale their revenue. Let's get started. Welcome back, entrepreneurs.
Speaker 1:Today's episode is a three part series recently recorded at our impact conference with American Dreams. We have three panel speakers on the topic of generational wealth and building a lasting legacy. Our first speaker is Mitzi Perdue, who is the daughter of the well-known business Titan, who co-founded the Sheraton Hotel chain, and she is also the widow of another business, titan Perdue Farms. Between the two families, she comes from generational wealth that goes back 286 years Now. Due to her unique upbringing and long lasting marriage, she has had the best mentors and guidance when it came to growing businesses, growing and preserving wealth, along with keeping the family together for multiple generations, and, as a graduate from Harvard University, she naturally became that business woman in her own right. She would go on to start the family wine grape business, which is now one of the largest suppliers of wine grapes in California. She also served as one of the US delegates to the United Nations Conference on Women in Nairobi and is a former commissioner for the US National Commission of Libraries and Information Science. Now, today, she writes and speaks on combating human trafficking and also on land mine clearance. She's been to Ukraine three times and has published more than 50 articles on interviews and bomb shelters during air raids that she gathered.
Speaker 1:Now our second panelist, dame Sheila B Driscoll, who leads Dame Venturist, the global platform where interdisciplinary business creators join forces together to make higher purpose innovation happen. Dame Sheila is the great granddaughter of Jeremiah Driscoll, the patriarch of Driscoll berries, who began producing fresh berries out of California in 1907. Growing up into her adult years, her family never wavered their ability to see business and charity as one entity. This has fueled Sheila's creative engine. Now her mind is behind an extraordinary blend of IP assets and capital undertakings across the world of film, product development, food security, educational policy reform for President George H W Bush and the co-founding of the Billionaire Foundation. In November 2021, she was honored by her peers in Dubai and was awarded the UAE 2021 Lifetime Achievement Award for her work in business and philanthropy.
Speaker 1:And last but certainly not least, our third guest is none other than the legend, the managing partner at Greenstein Rogoff Olson and Company, also known as GroCo, a premier tax and family advisory firm located in the Silicon Valley, who services the Ultra Fluent. Now, as a respected leader with over 30 years in tax advisory experience, he serves some of the most influential and successful entrepreneurs and venture capitalists in the entire world, clients that have helped fund and make successful companies such as Google, spacex, tesla, sun Microsystems, oracle and many others. He has been featured on K-Pix, k-ron, consumer Reports, cnn and Fox Business, bloomberg and many other leading publications. Now he is also the host of American Dreams, which is a radio and podcast show where he interviews top CEOs, venture capitalists, entrepreneurs, tech and thought leaders who share their path in life and what it took for them to build their success. Now I can't think of anybody better to talk about and lead the discussion in generational wealth and leaving lasting legacies than these three individuals.
Speaker 1:Please welcome to our show. Entrepreneurial Empire. Take a seat. Fasten your seatbelt, don't fall off. The information that you're going to hear here today cannot be googled and you can only hear it in these publications. Thank you so much. Here we go. Ready set, let's go.
Speaker 2:All right. So today, to kick off, I'm just dead thin. I'm going to ask you guys to give your opening statement when it comes to generational wealth and growing it, and what are your pillars that be? Stand on, go ahead, sheila.
Speaker 3:I'll let you go ahead and kick that off, so I would start by saying in the industrial revolution, we're needed to change the world by opening a factory. Today, currently, in the Internet Revolution, all you need to do is open a laptop. And in agriculture, you really need to have creative solutions using AI technology. But an overlay of philanthropy and giving back. And I have been blessed that I have a 150-year legacy with my family that generationally they educated us, mentored us and really gave us the principles to stand on. And I think just shortly, in light of the afternoon and what we're going to be discussing, one of the great principles I was taught by my family was this If service is beneath you, then leadership is beyond you, and that is something that I adhere to today. Those are the overlying principles, one at least of what I have in my business and in my philanthropic giving. So I will let my esteemed colleague Mitzi take the stage.
Speaker 4:I love what I just heard. My approach and what I want to share with everybody this morning or this afternoon, depending on where you are is having grown up in a family that's been in business since 1840 and married into one that began in 1920. I've gotten to observe what makes families last. I've also spent a fair amount of time reading books and interviewing people on it. In fact I even wrote a book on it and I am eager to share with you some of the techniques, the systems, the approaches that, thank you, that help make your family business last.
Speaker 4:And I have an underlying motive for all of this. First of all, I'm a capitalist and I think the free market system brings more happiness than anything else, than any other system. So kind of the backbone of that is the family business. The other part's a little bit philosophical, but I figure that my purpose in life is to increase happiness and decrease misery. That's what I want to do with my life, and it seems to me that a family, when it's high, functioning, is an engine for happiness. On the other hand, if you get it wrong, it's an engine for misery. So in our time today, I want to share some of the things that I think help push happiness along in high functioning families.
Speaker 1:Thank you so much, Mitzi. Oh my gosh, that was gold nuggets right there already. Alan, can you please share with us?
Speaker 5:I think that, as Sheila and Mitzi both brought out, that service and money and money is not equal to happiness. They're all intertwined together and it's finding a purpose in life. I view money as really a stewardship. So, as an individual is able to solve a problem and most time they're not setting out to make a lot of money, but oftentimes they're more transforming, the solution that they put out to the benefit of society is usually they're amply rewarded and with such, they have a lot and abundance of wealth to do something with.
Speaker 5:I've talked to individuals who have been successful in making exits, businesses, and then they didn't know what their purpose was and they immediately came back and said Alan, money is not happiness. I need to find a purpose, a purpose to be able to solve and continue to benefit the whole of society. So you know, today when I meet with individuals, we talk about purpose, we talk about foundation, and a lot of people, when they talk about transitioning to the next generation, you know they often are challenged of how do I give wealth to my kids and do it successfully? And I said well, if you're giving wealth to the kids, that's not the answer. You need to transform them into the purpose that you're standing for and what the family is trying to accomplish.
Speaker 1:Wow, okay, audience participants, please give a round of applause for those opening statements, everything that they just talked about right there. I mean, if you didn't get goosebumps right there, oh my gosh, we need to pinch you and wake you up. Thank you so much for that, okay, so now my first question here today is going to be more on the section of building and preserving the generational wealth. So, in regards to preserving wealth across generations, how have you managed to sustain wealth within your family for multiple generations? And we can go in the same order if that is comfortable for you guys.
Speaker 3:Sure, okay. So I'll begin. I think one of the most important things that I have seen and I have with the multiple families that I have met over the years, one of the key factors you need to have as a family governance you really really need to have a family charter. The family charter walks in the values, the vision and the mission of the family. It's almost like setting foot aboard a ship and sailing on the sea. If you don't have the sex tent in your hand, a clear indication of where you're going, you're going to get out into the middle of the water and drown. It just will happen. So one of the things that I have found in my family is they had a very clear set of family protocol and rules and in that I think you know I can highlight probably the steps of what you really need to have in family governance to really make it palatable, but also to ensure that the torch and the wealth is passed to next generations. So again, establish a very clear vision, admission of what your family wants to do with their wealth and their business. Often that's not discussed and this is where family generations, fland, are saying I don't know what you know my grandfather did or what my great grandfather did. I think the next again, as I had said, very clear protocol with policies and family. I would say connecting with people, with other families and being out there in the world, regular family meetings. This is huge. You need to be able to discuss where you're going, what you've done, the mistakes you've made, how to course correct.
Speaker 3:Next piece would be education and capacity building. Mentorship is huge. Education was a linchpin in my family. Generationally, we all aspire to get a higher level of education. Formation of family councils this is huge. Not one person should have the decision making power. You really need to make it equitable. We have a round table we all sit in, really borrowing from King Arthur's round table. There was a reason why he did that. No one was at the head, no one was at the back of the front. They all had an equal voice. I think that's so, so important. I think the two other pieces really have a good legal structure to your family and to your family governance, but also study the masters. Don't be afraid to step outside and ask for external advisors. One of the key principles that my family had we were farmers. We were not highly educated. It was this always hire people that are smarter than you.
Speaker 1:That's it, the question was how have you managed to sustain wealth within your family for multiple generations?
Speaker 3:For me, oh for me, you want me to answer that question.
Speaker 4:Yes, all right, I figured that. She said exactly what I would have said first. She covered it. I kind of structure.
Speaker 4:I'm going to go into culture and my theory on it. Every family that exists is you all have a culture. Thing is, and, by the way, let me define culture. Culture is the way we do things, so every family has a culture, but the ones that are designed, not left to accident, I think, are the ones that last.
Speaker 4:And there's a man who studies family businesses, dennis Jaffe. He's a hero of mine and read his books everybody. They're the best. Dennis Jaffe has studied hundreds and hundreds and hundreds of families. He spent 40 years at it, studying families to the fullest, and one of the things that he says my two families in body is the families that last more than a couple of generations have discovered the importance of stewardship. And the two families that I'm part of, one is hotels, one is or actually we invest together. We're no longer in hotels, and the other is in agriculture, both grain and animal agriculture. We have a very strongly embedded culture that we're stewards. We're not there to go spend it all, we're there to hand it on in better condition to the next generation, that what we have right now is borrowed from the next generation, and some of the things that flow from that attitude is in both my families.
Speaker 4:I've never seen anybody be extravagant. They're going to spend money to look at it, but they're going to spend it on things like philanthropy, or do I dare say that it's making the world a better place? Frank Perdue, who was used among the fortune no the 4400, he was a wealthy man. Even into his he would go economy class. I'm going to bet that there are few New Yorkers who know the subway system better than he can go by subway. And, for that matter, since he likes subways and didn't feel the need to go around in a Rolls-Royce, he also knew the subway systems of London, paris, moscow. He was a frugal person, and so we put a lot of effort into having the children and the grandchildren and family members absorb the notion which I'm eager to share with everybody else get your identity through service, not through spending.
Speaker 3:Amen.
Speaker 1:Wow, I love that, everybody in the audience. If you guys can write a comment about what she said there, can you say that one more time, mitzi, please?
Speaker 4:Look, I'll make it a little broader. Every family has a culture. Make sure that your culture instills in kids from the youngest age that your identity, your best identity, is going to come from service, not through spending.
Speaker 1:Wow, if anybody can pop into the chat really quick here, please, what do you feel about that? I mean, that is just that says it all right. Yes, thank you. Look at those chats Awesome. Ok, alan, if you can do. You want me to repeat the question?
Speaker 5:Go ahead, yeah, repeat it, yeah, I remember it, but good, Good, OK.
Speaker 1:how have you managed to sustain wealth within your family for generations?
Speaker 5:You know, when I look at this and I'm going to be more broad because I work with a lot of family offices what I see happen is the ones that have a foundation and a mantra in the instill that to the next generation are more powerful.
Speaker 5:Sometimes the parents or grandparents may just set up a foundation and say this is what I want you to do.
Speaker 5:And I'll tell you a story of one of the heirs to one of the large beer companies called me up one day and he says my grandpa set up this foundation for me to donate to mothers against drunk drivers and it was tens of millions of dollars into this.
Speaker 5:And he said do I have to do this? Grandpa had already passed away and I said no one's going to force you to do anything if you don't want to, but it's, the case in point, about understanding the culture and also, when the person resigns or passes on and gives it to the next generation, making sure that whoever is a steward to that carrying on the foundation's purpose understands and accepts responsibility. There. Money brings with it a stewardship and that is to solve the problems of the world and help make the world a better place. And I think it's never too early to start communicating within the families, of meeting often with family councils of the things that the parents would like to do and also to have the input back from the kids of. Are you willing to accept this responsibility so that when mom and dad pass on, they know that the legacy will continue?
Speaker 1:I love what you said right there and if you guys caught that in the audience. Wealth is a responsibility is what I heard right there. Wealth is a responsibility and I love that. Okay, so now as your core values. How important is it is? How important is intention in building and preserving the family wealth? I know, mitzi, you talk a lot about it in your book. This is not on accident. This is not by default. Your family legacy and your family togetherness, that's on purpose. So maybe, mitzi, if you could lead that one, that question.
Speaker 4:I'd adore to. We put a lot of effort into embedding the culture and I want to give a couple of points that might be useful to other people. And it's this. People ask me what's kept the Henderson's together since 1840? I mean, that's a long time and I would say that the well. There are two pillars of it.
Speaker 4:One is philanthropy, but almost the bigger one is the Henderson's state company, which is the children of the initial wealth generator, decided they liked each other. They would fund in perpetuity an endowed dinner, the Henderson's state dinner, and that meant for probably 100 years we would get family members would get together for dinner once a year. It's now grown into a weekend and we just celebrated our 132nd family weekend and the huge advantage of that is it gives people identity and we make it very nice. There's money to, there's entertainment and it's a great experience.
Speaker 4:I have family members tell me that it's one of the highlights of their lives to get together to think about what the family values are, and at these endowed vacations of the produce now are doing the same thing. We do things that embed the culture, such as there's a service to the family award and all your loved people are competing for it. You get nominated and the previous winners vote who wins and there's a great big, elaborate ceremony that the person gets to feel really good. So we don't leave it to accident that the values that we stand for are embedded in how we do things, and one way is these family endowed vacations. Another is we have newsletters, and the newsletters are just for the adults. We have newsletters deliberately aimed at children, telling family stories of where they came from and what we value in this family.
Speaker 1:I love that. Thank you so much for sharing. Sheila, would you like to go next?
Speaker 3:Sure and piggybacking on what Mitzi said so eloquently. She's 100% correct, because if we really define the word intention, intention really ultimately translates into the goal what is the goal? And you really need to have a clear, crystal clear vision of just not accruing wealth but also sustaining a legacy and Mitzi just spoke about a family legacy and really a legacy that echoes your core values and principles, and this is what my family has also done. But I think what you need to do in order to anchor that is really look at what are you investing in and what are the ventures that you're looking at. Are they in clear alignment with your core values and what your family believes and the culture of your family? I think that's critical and one thing that I would invite anyone new to this field of family offices or creating wealth Again, go back and study in the master's. I'll give you three people that have created funds intentionally that anchor their intention but also create their wealth. One is the Omidyar network. This was created by Pierre Omidyar. He was the founder of eBay, the Emerson Collective, lorraine Powell Jobs this is her foundation and also the Reyes Foundation. Clearly, look at those three examples of how families really are putting their money where their mouth is and have created a fund to do this Because, remember, in our families Mitzi's and in mine it's really serving the higher good, as what I would like to define it.
Speaker 3:It's just not spending money to spend money. Gone are the days of the Rockefellers or the Fords and Essent. We're really we're taking a look at very laser-focused giving and doing good, and I would say initially, that's the difference with philanthropy. If we define philanthropy, it's doing good and feeling good while we're doing it. I think that's probably about the most simple explanation of it. That is the core investment, and I love what Mitzi just said about how, every year, her family gets together and has this dinner. If you're looking at building wealth, think about investing in real estate that you have a property that anchors that Just where the family goes. They have their dinners, they have their meetings, whether it be biannual or annual. They celebrate the family, they celebrate the legacy, but also on a financial return, it compounds growth, it appreciates in wealth. So this is something that I'm throwing out, that my family has done. But also for those that say, gee, what are a few things that I could do? Just a few examples.
Speaker 1:I love that. Thank you so much for sharing Sheila. Alan, how about you Intention on building and preserving wealth? How important is it, and give us some examples.
Speaker 5:It's very important from the standpoint of how you put this trust or the estate in place to continue on after you're gone. I've seen situations that parents for running through and saying I want to set up the trust so that after I die this is how it's going to work. And then they come back to me and ask if I would give oversight to that as a trustee and I said absolutely not, I will not touch that unless you get everybody together in the same room and you have a discussion. And in this case the mother called the family together and invited me and I stepped into World War III and it was a good experience because it helped the mom's eyes to be opened of how the kids really felt about what would happen after she passed. So the mother, with that information, went back and expressed her desires in a way to say you don't have to do it my way, but if you don't do it on Plan A, I'm going to give you Plan B, which is a corporate trustee, and they're going to have oversight. Plan A will be that you can do a co-trustee with Alan. Plan B will be the corporate trustee, will completely control. And, uh, I just finished 23 years together with the kids and it was a wonderful experience of after mom passed. Everything was done according to the way that she wanted it to be done, the grandchildren were educated and we got through everything in the generational well.
Speaker 5:I also like Sheila's suggestion of having a family I call them the dynasty trust where there's a property that families can come together with an annual retreat, they meet, they discuss, they talk about family goals, missions, philanthropy, and I think it's important for the kids to stay in contact.
Speaker 5:On my father's side of the family in his it was his grandparents had nine children and, and, and so we we met every week or every year. We would go to an annual family reunion and we'd have to run out hotels, and some of the the individuals in the room became very, very successful in respective industries. They had some that were running game preserves over in Africa, others that were running large agricultural operations in Idaho. But what we found is that the more we passed down the generational wealth, the more difficult it was to stay connected. Going beyond the fourth generation is next to impossible. I think there's a few case studies out there the Mars family is one of them how they've been able to successfully pass from generational wealth and and it's very defined and articulated inside of the mission and the statements and I I feel constant communication and getting an understanding and a buy-in from all the kids and the family members is so important.
Speaker 1:Thank you so much for sharing that in the comments we have. Hugh says great approach. Alan, I learned that one the hard way. Daniel says so wise, important to provide that clarity. Thank you guys for sharing in the chat. Keep it coming.
Speaker 1:So I love what you guys talked about. You you really emphasize on the fact of getting along and that getting along starts from a very young age and really cultivating that culture like you are speaking on, mitzi, and creating that dynamic culture from a very young age and creating those experiences that really bond you and lock you in and anchor you in together as family members. In your book you talked about a very wealthy friend of yours that had that was celebrating Thanksgiving alone and you know, when you really piled back those layers there was a lot of family tension that was going on and it was all circled around finances. So you guys are talking about building that family. I love what Alan says. He talks about getting everybody together, as Sheila says, and stapled that talking about the round table. There's nobody at the head, nobody at the foot. Everybody has a valued opinion when it comes to this. But it all starts from cultivating that culture from the very beginning, right?
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