Wealth Actually

Covering the issues that affect business, entrepreneurship, wealth, trusteeship and culture.

Wealth Actually is a business podcast hosted by Frazer Rice, with 211 episodes on record and a Required Pod Score of 80. PitchCentric scores this show on Booking Probability, Listen Score, and live audience signals refreshed every 24 hours.

Frazer Rice hosts Wealth Actually, a business show with 211 episodes published.

Our AI reads these to draft pitches. Use them as grounding for a pitch that cites a real guest and a specific topic.

• 

  Wealth Actually

  250 Years of American Compounding with Meb Faber

  Aug 18, 202632 min

  Fire the Whole Investment Team: Meb Faber on 250 Years of American Compounding and Why CalPERS Can’t Beat a 60/40 allocation https://youtu.be/9lBYkG4J2sY A dollar invested in the U.S. stock market in 1800 is worth roughly $200 million today, and Meb Faber says the giant pension funds paid to beat that kind of compounding usually can’t. In this episode of Wealth Actually , Frazer Rice talks with Meb Faber , co-founder and CIO of Cambria Investment Management and host of The Meb Faber Show , about his new coffee-table book Investing in America: The Rise of a 250-Year Bull Market , the shareholder yield thesis behind Cambria’s ETF lineup, and his long-running public campaign arguing that CalPERS and other giant institutional pools routinely fail to beat a simple, low-cost buy-and-hold portfolio. https://open.spotify.com/episode/4WmnPm3GN8jwQtJuCVV9XG?si=nLLcz8y8RSuydORA5_ZHGQ Key Takeaways America is, in Faber’s words, the greatest compounding machine in history. He puts a dollar invested in U.S. stocks in 1800 at roughly $200 million today — a number he uses to reframe how clients should think about staying invested through wars, depressions, and pandemics. The book’s origin story starts with meme stocks. Faber says COVID pulled a new generation of retail investors into the market through gamified trading apps, and he wanted to hand them a historically grounded alternative to day-trading and zero-day options. Diversification is older than the country itself. Faber traces the concept back to 15th- and 16th-century joint-stock voyages — the Mayflower and the Virginia Company among them — where spreading capital across many risky expeditions let “merchant adventurers” survive when any single ship was lost. Shareholder yield, not dividend yield, is Cambria’s core factor. Since the S&P 500’s dividend yield now sits near an all-time low of 1.04%, Faber argues the real signal is cash dividends plus net buybacks — net of the dilution from stock-based compensation that quietly erodes shareholders’ ownership every year. Faber’s CalPERS critique boils down to one line: “the returns are not bad, they’re just not good.” He’s built an entire body of work, including Cambria’s ENDW endowment-style ETF, arguing that giant pools with virtually unlimited access to managers still can’t consistently beat a disciplined global 60/40. Complexity is often the enemy, not the edge. Faber contrasts investing with almost every other field of expertise: hiring the best doctor or coach nearly always helps, but hiring the most sophisticated (and expensive) money manager frequently doesn’t. Illiquidity has a way of showing up at the worst possible time. Faber points to endowments getting caught upside down in 2008–2009 and to more recent leveraged blowups as the same lesson repeating: over-lever a portfolio and you’re out of chips at the poker table. The real accountability gap is career incentives, not investment theory. Faber contrasts Yale, which gets a pass for strong long-term results, with Harvard’s endowment, which he says has underperformed for two decades without anyone losing their job over it — a dynamic he says maps directly onto UHNW family governance. Timestamps [00:00] Cold open — CalPERS CIOs vs. UK prime ministers [00:29] Show open and disclaimer [00:54] Welcome: Meb Faber, Cambria, and the new book [02:07] The $76 price tag and the 1776 joke [03:13] Genesis of Investing in America : COVID, meme stocks, and joint-stock voyages [06:33] The most surprising find: Ben Franklin’s “Mind Your Business” motto [09:09] Argentina vs. the U.S. — what actually drove American exceptionalism [12:47] Cambria today: the shareholder yield thesis [17:46] Why politicians target buybacks instead of stock-based comp [20:54] The CalPERS critique begins [21:34] The Ivy Portfolio , the ENDW endowment ETF, and year-one results [25:45] The Nevada pension comparison and the liquidity-complexity pushback [26:56] Institutional blowups, Harvard’s endowment dysfunction, and misaligned incentives [29:36] The “anti-Switzerland of asset management” bit [31:16] Close: where to find Meb, Cambria, and the book Pull Quotes “No, no, no, no, Frazer — it is $76, in honor of 1776.” — Meb Faber “A dollar would be worth roughly $200 million today… despite wars and depressions and pandemics and everything else terrible that’s happened in the history of the world, this relentless compounding is such a fun story.” — Meb Faber “There are dividend funds in the U.S. today… whose actual dividend yield is lower than their management fee. A negative net dividend yield — an astonishing statistic in 2026.” — Meb Faber “Who’s had more turnover in the past 10 years — CalPERS CIOs or UK prime ministers? Both totally dysfunctional. I think CalPERS has a slight edge, but it’s close.” — Meb Faber “I’m the anti-Switzerland of asset management.” — Meb Faber About the Guest Meb Faber is co-founder, CEO, and Chief Investment Officer of Cambria Investment Management , an independent, privately owned advisory firm built around quantitative asset management and alternative investment strategies ( BusinessWire ). He hosts The Meb Faber Show , one of the most widely followed investing podcasts, and is the author of eight books, including The Ivy Portfolio , Global Asset Allocation , Global Value , Shareholder Yield , and now Investing in America: The Rise of a 250-Year Bull Market — his first coffee-table book, released to coincide with the U.S. semiquincentennial ( Curzio Research ). Proceeds from the book go to charities that fund investment accounts for Americans born in the country. A ninth book, The Awesome Portfolio , is slated for release on September 8, 2026 ( Meb Faber on X ). Contact Meb Faber & Cambria Cambria Investment Management: cambriainvestments.com Cambria Funds: cambriafunds.com Meb’s blog, podcast & research: mebfaber.com The Meb Faber Show: themebfabershow.com Twitter/X: @MebFaber Book — Investing in America : available on Amazon, Barnes & Noble, and signed via Pages bookstore in Manhattan Beach, CA ( Acquirer’s Multiple ) Cambria Funds Mentioned Shareholder Yield suite (SYLD, FYLD, EYLD, plus small-cap and large-cap variants) — cash dividends plus net buybacks plus net debt reduction, divided by market cap ( MarketWatch ) GVAL — Global Value ETF screening the cheapest quartile of roughly 45 country markets by long-term valuation ( Cambria — GVAL ) TAIL / FAIL — U.S. and global ex-U.S. tail-risk ETFs pairing short-term Treasuries with a rolling ladder of out-of-the-money S&P 500 puts ( Cambria — TAIL ) Trinity Portfolio (TRTY) — roughly half buy-and-hold, half trend-following across a basket of other Cambria funds ( Cambria — Trinity Portfolio ) ENDW — Cambria’s endowment-style ETF, discussed on the show as roughly $150–180 million at launch and referenced later in conversation as having grown toward roughly $5 billion in assets with more than 100,000 investors ( MebFaber.com ) The CalPERS Critique — Further Reading 9 Institutions Can’t Beat a Basic Buy-and-Hold Allocation — MebFaber.com How California’s $450B Pension Fund Misses the Basics of Investing — YouTube Should a Robot Be Managing CalPERS’ Portfolio? — MebFaber.com, 2015 Index Funds vs. Ivy League — MarketWatch/Barron’s Streetwise CalPERS: America’s Misled and Misleading Pension Leader — Retired Public Employees Association CalPERS Section II Performance Tables (2026) — CalPERS.ca.gov Reducing the Noise of AI Investing – FrazerRice.com Frequently Asked Questions How much would a dollar invested in the U.S. stock market in 1800 be worth today? Meb Faber says roughly $200 million, using the figure to illustrate how relentless compounding has powered through wars, depressions, and pandemics over the country’s history. It’s an illustrative, back-of-envelope estimate rather than a precise index calculation, since standardized stock indexes didn’t exist in 1800. Why is Meb Faber’s new book priced at $76? It’s a nod to 1776 and the country’s founding, timed to the U.S. semiquincentennial. All proceeds go to charities that fund investment accounts for Americans born in the country. What is shareholder yield, and how is it different from dividend yield? Shareholder yield is cash dividends plus net stock buybacks (net of new share issuance, particularly from stock-based compensation), divided by market cap. Faber argues it captures real capital return to shareholders better than dividend yield alone, especially now that the S&P 500’s dividend yield sits near an all-time low of about 1.04% and share buybacks have outpaced dividends every year since the late 1990s. What is Meb Faber’s argument against CalPERS and other large pension funds? Faber’s recurring claim is “the returns are not bad, they’re just not good” — that giant institutional pools with access to virtually any manager on the planet still fail to consistently beat a simple, low-cost, diversified buy-and-hold portfolio, once fees and complexity are accounted for. Cambria launched an endowment-style ETF (ENDW) partly to make this a live, ongoing comparison rather than a hypothetical one. What is Cambria’s endowment-style ETF and how does it compare to institutions like CalPERS? ENDW replicates a Yale/Swensen-style endowment allocation — global stocks, global bonds, and real assets like gold, TIPS, and REITs — in a low-cost ETF with an all-in expense under 25 basis points. Faber uses it as a running, real-time benchmark against actual endowment and pension performance reported each fiscal year. Why does Meb Faber say complexity is often the enemy in investing? Unlike most fields, where more resources and the best available experts reliably produce better outcomes, Faber argues that in investing, more complexity and more access to exotic managers frequently doesn’t translate into better returns net of fees — and often just adds cost and illiquidity risk. What lesson does Meb Faber draw from institutional blowups and the 2008–2009 crisis? Endowments that mark their portfolios only once a year got caught badly offsides in 2008–2009, with illiquid positions falling even further than public markets. Faber sees the same pattern recur whenever a fund over-levers and gets forced out of the game — a basic failure of position sizing and situational awareness that keeps repeating at the highest levels of finance. Full Transcript [00:00] Cold Open (produced VO): I said, who’s had more turnover in the past 10 years — CalPERS CIOs or UK Prime Ministers? Both totally dysfunctional. And I think CalPERS has a slight edge, but it’s close. Meb Faber suggested that CalPERS should fire its entire investment team, and that complexity has become a major headwind to their ability to generate returns. Find out more on this episode of Wealth Actually. We’re also going to talk about Meb’s new book, which argues that America is one of the greatest compounding machines in the history of capitalism. [00:29] Show Open (produced VO): Welcome back to the Wealth Actually podcast — the show that features experts, entrepreneurs, and commentators who give you the right knowledge, planning, and guidance so you can preserve your assets and enjoy your wealth. Learn more and subscribe today at WealthActually.com. This podcast is for educational and entertainment purposes. It is not investment, legal, or tax advice. It does not represent the opinions of the employers of the host or guest. [00:54] Frazer Rice: Welcome back. Meb Faber is on the show. He founded Cambria Investment Management, which is a $4 billion ETF group. He also has The Meb Faber Show and does a lot of different writing. He’s famous for being on Twitter and taking on CalPERS. But most importantly, he has a new book out talking about America as a great compounding machine. It’s a lot of fun to have him on. Welcome aboard, Meb. [01:16] Meb Faber: My man, great to be here. Frazer Rice: Oh, thank you for being on. I thank you beforehand for including a piece of my writing in one of your old compendiums on best investment writing. I’ve never forgotten that, so thank you again. Meb Faber: Well, good job making the cut. Frazer Rice: Yeah, right, exactly. I passed the audition. Seen you a few times on The Idea Farm here and there over the years. Meb Faber: Yep. As I tell people with my girlfriend, I met expectations in my recent review, so we’re onto the next year. Look, key to life, Frazer — investors, we’re in a bull market, everyone expects 15% returns forever. Key to investing in life: just low expectations. That’s it. Set your expectations low, and you’ll be pleasantly surprised every day. Don’t lose principal over time — that’ll get you pretty far in life. [02:07] Frazer Rice: So anyway, you’ve got a new book out too, which I thought was pretty cool. I love the fact that you priced it at $17.76 and really focused on the— Meb Faber: No, no, no, no, Frazer — it is $76, in honor of 1776. Now to be clear, we don’t make any money on this book. We’re donating all the proceeds to the Invest America charities that fund accounts for Americans born in this country — a wonderful charity, big supporters of it. Frazer Rice: But yes, in honor of the country’s founding. This is why we have you all to make sure I get that stuff right. But the concept of America as the best compounding machine ever — I think that’s really interesting. First of all, what prompted you to get involved with putting this book together? You’ve written before — seems like you’ve been busy with other stuff, of course — but then you came back and decided this was a good topic to take on. What was the genesis of the book? [03:13] Meb Faber: Yeah, so this is my eighth book, and the first coffee-table book we’ve ever done. People were saying, “What the hell, $76? Are you guys crazy?” Look — this is a beautiful 200-page book. There’s probably 70 pictures, charts, tables. And the concept is in the subtitle: Investing in America: The Rise of a 250-Year Bull Market. And the origin story goes back to COVID. Nobody had anything to do — sports stopped, you couldn’t go to the beach. So people were sitting around, and Americans — look, they’re gamblers, they’re risk-takers, we know that. And I said, we can’t do anything about that. So this entire generation of young people turned their attention to the stock market, and we got meme stocks. Today that’s evolved into prediction markets and zero-day options and all sorts of other nonsense. We wanted to grab those young people and say, “No, you don’t understand — the real story is better than any of this. You don’t have to day-trade. You don’t have to bet against the casino and lose.” So we said, let’s do this history since the founding of our republic — what it would have looked like if you could invest from 1800. And the compounding math is so fantastical it seems wrong. A dollar invested in 1800 — and yes, I know there were no indexes back then, chill out, people — but just to be instructive, a dollar would be worth roughly $200 million today. The point is you get on this train despite wars and depressions and pandemics and everything else terrible that’s happened in the history of the world — despite all that, this relentless compounding is such a fun story. On top of that — the founding of our country, and a lot of people don’t know this: when you learn the history of America in elementary school, you learn about the immigration, particularly from Europe, people escaping religious persecution, seeking a better life through freedom — the Mayflower, all that. All true. But what they leave out is that most of these explorations and voyages were funded by companies. Back then they called them joint-stock companies; today we call them companies, LPs, C-corporations — corps, right, partnerships. Because the reality, going back to the 15th century, is that if you’re sending a ship to the New World to find gold, that ship could sink, or there were pirates — you’d lose all your money. So this brilliant invention we call diversification today has been around for hundreds and hundreds of years. These companies said, it’s risky to invest in one voyage, but you can own part of a company that invests in 10 or 20 or 30 of these, and maybe one of them will hit. That sounds like venture capital. They used to call these people “adventurers” or merchant adventurers. Hudson’s Bay, the Mayflower voyage, the Virginia Company — many of them failed, many didn’t make money, but some made spectacular profits. It’s a fun origin story that hasn’t really been told about these early entrepreneurs and risk-takers, who honestly still permeate our culture to this day. [06:33] Frazer Rice: In putting the book together, what was the most surprising chart you found that you ended up including? [06:41] Meb Faber: There’s a lot of fun historical statistics in the book. One of my favorite parts of writing it was buying — I don’t know, 50 or 100 financial history books I’d never heard of, books on financial crises globally from various markets. We just had an author on the podcast talking about the global financial crisis of 1873, and on and on — you learn so much. One I love telling people, especially young people — my son or his friends — is: look at a dollar bill or a quarter, and I ask, what’s the motto on there? Well, that used to not be the motto. Ben Franklin, back in the day, the motto on the Fugio cent used to say “Mind Your Business” — which I thought was amazing. And it’s not “mind your business, kid” in the nosy sense — it’s more like, mind your (own) business. It had a sundial on it, too: time is short, mind your business. I thought, let’s go back to that — such a great motto. A bunch of little fun stories, but to me one of the big takeaways of the book is: as a public stock investor, the news is always negative. You turn on CNBC, Bloomberg, pull up your phone, social media — negative, negative, negative, negative. It’s hard to sustain conviction. Look, we haven’t been through a big bear market in 17 years, but when you’re down 30%, 40%, 50%, and you’re reading “Lehman’s going under” and all these crazy headlines — the book lets you zoom out. Each chapter zooms into a decade and then zooms back out and says, okay, 1930s, Great Depression, you lost 80% in stocks — but guess what, here’s your return over the next 50 years. Even over a 20-year period, large-cap stocks become less volatile than bonds, which is an amazing takeaway. Being able to zoom out and say, “I’m a long-term investor, why am I even concerning myself with day-to-day negativity” — that shift in mindset is really important, because when you zoom out, you can barely even see 1987 on a long-term chart of the stock market. I think it’s a useful thing to send to clients, particularly at year-end if you’re a financial advisor. We’ve got big discounts if you buy 50 books online — send it to clients and say, hey, stop going crazy, this too shall pass. [09:09] Frazer Rice: One thing I always have in my mind — I don’t remember if this is exactly true, but Argentina and the US were on roughly equal economic footing back around 1900. When you were putting this together, did you see anything in the US’s political climate or structure — the things that gave it

  ListenShow Notes
• 

  Wealth Actually

  Founder Succession Roadblocks

  Aug 4, 202630 min

  When the Title Changes but the Authority Doesn’t: Family Business Succession with Paul Edelman Most family business succession plans fail not because the legal structure is wrong, but because authority never actually moves.  In this episode of  Wealth Actually , Frazer Rice talks with  Paul Edelman, PhD  of  Edelman & Associates  about how to tell the difference between a real handoff and a cosmetic one. Edelman unbundles succession into six separate questions, explains the three behavioral tells that reveal who is really in charge, draws a hard line between a legitimate safeguard and an open-ended veto, and makes the case that agreement from a family is not the same thing as ownership of a decision. https://youtu.be/p2KCsftvM74 Key Takeaways Succession is not one decision — it is at least six.  Who gets the economic benefit of ownership, who votes the shares, who appoints and removes directors, who runs operations, who receives what information, and who retains informal influence after formal authority ends. Watch behavior, not titles.  Compensation changes and org charts are easy to read and easy to fake. How decisions actually get made — and whether they get reversed — is the real signal. Three tells that authority hasn’t moved:  the next management layer still routes real decisions to the founder; the successor has never had a disputed call stand; and in a genuine crisis, the founder is the one who walks into the room. Speed is not the test.  A five-year transition can be disciplined development; a six-month transition can be denial with a deadline. The test is whether milestones and readiness criteria are observable and stable, or whether the goalposts keep moving. “Not ready” is not a concern — it is a placeholder.  If a founder cannot restate it in specific, testable terms, the obstacle is emotional rather than substantive, and it needs a different path. Advisor impatience often masquerades as clarity.  When you catch yourself thinking “why can’t they just do this,” ask whose timeline is actually being served — the family’s, or your need to close the file. A safeguard is bounded; a veto is not.  Reserve specific extraordinary decisions with defined scope, thresholds, triggers, evidence, and duration. “The successor is in charge unless the founder feels uncomfortable” is an undefined operational veto. Agreement is not ownership.  A family can be outvoted and formally agree while owning nothing. Ownership comes from having weighed the trade-offs and the implications of each option in the room. Timestamps [00:00]  Cold open — why “he’s just not ready” is untestable [01:05]  Welcome: founders at the sell-or-transfer crossroads [01:48]  Unbundling succession into six separate questions [02:23]  Running a diagnostic on where the founder actually is [03:00]  Watch behavior, not titles — and what the CFO tells you [04:00]  Decision reversals and the second-guessing test [05:00]  The crisis test: who owns the emergency [05:36]  Fast handoff vs. staged succession and prolonged ambiguity [06:10]  Milestones that show it’s working — and goalposts that keep moving [08:00]  Inside vs. outside successors and family dynamics [08:54]  Competing heirs and the outside CEO as bridge or avoidance [09:47]  Reading resistance: making “not ready” addressable [11:10]  The advisory ecosystem’s frustration with stalled progress [12:16]  Whose timeline is being served? [13:31]  Push, pause, or reframe — the art and science of advising [15:00]  When to change the forum, the decision rights, or bring in a facilitator [15:36]  Safeguards vs. vetoes and the trap doors founders build [17:37]  Board composition: independence vs. familiarity [20:00]  Restructuring boards to create seats for new expertise [20:54]  Income-dependent family members vs. growth-minded owners [21:34]  Agreement is not ownership: dividends vs. reinvestment [23:31]  Matching complexity to the outcomes you need [25:00]  Communicating decisions to people who weren’t in the room [25:26]  How to reach Paul Edelman [25:46]  The Edelman–Shenkman trilogy for estate planning attorneys [29:19]  Close Pull Quotes “If the CFO briefs the new successor CEO and then confirms things with Dad, then the org chart is not telling the real story.” — Paul Edelman “To have authority when things are going well is fine. But the person who owns the crisis is the one who’s really owning the leadership.” — Paul Edelman “A safeguard should be limited, explicit, and connected to some extraordinary risk. A veto is an ongoing ability to stop or reverse any old ordinary decision.” — Paul Edelman “Just because there’s an agreement in name doesn’t mean there’s ownership of the decision.” — Paul Edelman About the Guest Paul Edelman, PhD  is a coach, facilitator, and mentor at  Edelman & Associates , where he works with family enterprise and family office leaders on decisions that cannot be delegated. He holds a PhD in developmental psychology from Harvard University and a BS in physics from MIT, and serves as faculty at  The UHNW Institute  and the Bertarelli Institute for Family Entrepreneurship at Babson College. Contact Paul Edelman Email:  paul@edelmancoaching.com Website:  edelmancoaching.com  (contact form on site) LinkedIn:  linkedin.com/in/pauledelman The Edelman & Shenkman Trilogy Paul and  Martin M. “Marty” Shenkman , CPA, MBA, JD, PFS, AEP (Distinguished), of  Shenkman Tietz , have written a three-part series aimed at estate planning attorneys: Simplicity and its trade-offs  —  When Clients Ask for a Simple Estate Plan ,  WealthManagement.com / Trusts & Estates , July 8, 2026. The language of estate planning conversations  — published in  Steve Leimberg’s LISI Estate Planning Newsletter  (subscriber archive). Beneficiary education  — forthcoming October 2026, expected in  Estate Planning . Paul’s running author archive:  wealthmanagement.com/author/paul-edelman More from Paul Edelman Approval Is Not Ownership: Helping Family Office Investment Decisions Hold Under Pressure  —  Family Wealth Report , July 1, 2026 How Families Can Override Emotions to Make Better Judgments  —  Family Business Magazine , April 9, 2026 Lessons For Families And Their Advisors From A Hit TV Series  —  Family Wealth Report , February 24, 2026 Stronger Family Bonds and Better Strategic Decisions  —  FFI Practitioner , January 20, 2026 Frequently Asked Questions What are the six questions a family business succession decision should be broken into? Who receives the economic benefit of ownership; who votes the shares; who appoints and removes directors; who runs the company operationally; who receives what information; and who continues to hold influence after formal authority ends. Bundling these into a single “handoff” decision is what creates ambiguity. How can you tell whether authority has really transferred to a successor? Watch three behaviors. First, where the next management layer goes for real decisions — employees are excellent at reading where power actually lives. Second, whether the successor has ever made a call the founder disagreed with and had it stand. Third, the crisis test: when a covenant breaks or a key employee leaves, who walks into the room and who gets briefed afterward. Is a fast succession better than a gradual one? Speed itself is not the test. A five-year transition can represent disciplined development, and a six-month transition can be avoidance followed by an arbitrary deadline. What matters is whether responsibility moves against observable milestones, whether the successor learns from outcomes instead of being rescued, and whether readiness criteria stay fixed rather than shifting each time the successor advances. What is the difference between a safeguard and a veto? A safeguard is limited, explicit, and tied to extraordinary risk — selling the company, debt above a threshold, issuing new equity, changing core strategy, or related-party transactions — with defined scope, thresholds, process, duration, trigger, evidence, and who decides. A veto is an ongoing ability to stop or reverse ordinary decisions. If the founder can intervene whenever they feel uncomfortable, that is an undefined operational veto. How should advisors handle their own frustration with a stalled family? Notice that impatience often feels like clarity. When you think “I see exactly what they need to do, why can’t they just do it,” that is often the moment to slow down and ask whose timeline is being served — whether the ambiguity is genuinely damaging the company, or whether the recommendation mainly closes the case and relieves the advisor’s discomfort with uncertainty. What makes an independent director genuinely independent in a family company? The ability to exercise business judgment and fiduciary duty free from undue family influence or loyalty to a particular branch. A director who is the founder’s golfing buddy or tied to one family faction will struggle to deliver the value independence is supposed to provide. Why isn’t agreement good enough? Because agreement in name is not ownership. A family branch can be outvoted, formally accept the outcome, and still feel no responsibility for it. Ownership comes from working through the trade-offs — what each option makes better and worse — so participants can say they helped weigh the considerations even if the result was not their first choice. Full Transcript [00:00] Paul Edelman:  The resistance often takes the form of some sort of concern that is stated like, for example, the most general concern that people will say is, well, he or she, the likely successor, is just not ready. But that phrase “not ready” is at a very high level of generality. It’s not specific enough to be testable or to be capable of being satisfied. So the challenge is to work with the founder to help them express their concern in terms that are actually addressable. [00:36] Announcer:  Welcome back to the Wealth Actually podcast, the show that features experts, entrepreneurs, and commentators that will give you the right knowledge, planning, and guidance so you can preserve your assets and enjoy your wealth. Learn more and subscribe today at wealthactually.com. This podcast is for educational and entertainment purposes. It is neither investment, legal, nor tax advice and does not represent the opinions of the employers of the host or guests. [01:05] Frazer Rice:  Welcome aboard, Paul. [01:07] Paul Edelman:  Thanks, Frazer. Looking forward to our conversation. [01:09] Frazer Rice:  Well, it’s important because I deal with a bunch of founders and a bunch of other business owners, families, et cetera, that are trying to make sense out of the concept of passing along the business either to the next generation or deciding to sell it, and all sorts of parts of that tough crossroads that everybody has to go through at some point. And that’s really the crux of your practice — to help people with those conversations. [01:34] Paul Edelman:  Yes. [01:35] Frazer Rice:  So when we’re thinking about that and kind of unbundling the decision to pass the business along, when a family wants to talk about that, what are the separate parts of that decision that need to be contemplated? [01:48] Paul Edelman:  Well, I see at least six different questions that need to be separated. One is who receives the economic benefit of ownership in the company. Another is who gets to vote the shares. And a third is who appoints and removes the directors. Then there’s who runs the company from an operational standpoint, and who receives what information. And then, who continues to have influence even though they may no longer have formal authority. [02:23] Frazer Rice:  So once you get into the… it always seems to me to be tough to sort of say, okay, here are six things that have to happen, and that’s a lot for somebody to digest in the course of one or two meetings and get the buy-in from all the different constituencies that are interested in what the business is up to. How do you run a diagnostic to understand where a founder is — or generation one — in their own head space, and understanding what control being passed on looks like in summary form on those six different aspects that you brought up? [03:00] Paul Edelman:  I think the key thing is to watch behavior more than titles. People often pay a lot of attention to when the titles have shifted or compensation shifts, things like that. But they pay less attention to how decisions are being made and whether those decisions get reversed. So when the title has moved but the authority hasn’t moved, you tend to see three different things. First of all, you can see something going on at the next level down in management — not with the founder and successor per se, but with the other executives. You can ask yourself, who do they go to for the real decisions? If the CFO briefs the new successor CEO and then confirms things with Dad, then the org chart is not telling the real story. [04:00] Paul Edelman:  Employees are excellent at reading where the actual power lives, because they can’t afford to be wrong about that sort of thing. So that’s one clue. Another is to look at decision reversals, or what is more commonly called second-guessing. You want to look for whether the successor has made a call that the founder disagreed with. And if so, did it stand, or did it get reversed? If the company is two years into succession and that’s never happened, it’s possible that the successor is pre-clearing everything with the former CEO and only making decisions that they know will be approved. So in that case, it’s not real authority. And a third situation is what you could call a crisis test. [05:00] Paul Edelman:  So when something genuinely bad happens — there’s a breach of a covenant, or a key employee departs, or a lawsuit — the question is, who do people go to? Who walks into the boardroom and into the decision-making situation, and who ends up getting briefed afterwards? To have authority when things are going well is fine, but the person who owns the crisis is the one who’s really owning the leadership, in a sense. [05:36] Frazer Rice:  So one of the avenues that I think is interesting, that I read in your materials ahead of time, was the idea that a quick succession oftentimes — and maybe not often, but can be — a better avenue in terms of moving the succession forward, as opposed to having a staged succession where a long period of ruminating and decision-making often perpetuates ambiguity, or even confusion, amongst different constituencies both managerially and ownership-wise. [06:10] Paul Edelman:  Speed itself is not the test. You could have a five-year transition that represents disciplined development of the successor, and you could also have a six-month transition that essentially is a denial of what needs to happen, followed by some kind of a deadline. But you certainly don’t want to allow things to drift. If the transition is proceeding gradually, you can tell it’s working if responsibility and authority are moving according to observable milestones. So the successor is making increasingly consequential decisions. They’re learning from the outcomes rather than being rescued by the founder or the prior leader from their mistakes. [07:01] Paul Edelman:  They’re developing important relationships and they’re becoming someone that others rely on. The criteria for readiness also should become clearer over time, and the founder’s involvement should change in ways that are recognizable. So that’s the ideal. But sometimes a gradual transition represents avoidance, and in those cases you see criteria — sometimes people refer to them as the goalposts — that keep moving. And decisions are repeatedly returned to the founder. Also, each step that the successor takes toward greater authority may be followed by a new reason why the founder feels that they’re not ready. So the question that can be asked is: what are the capabilities that the successor is developing, and what specific evidence would demonstrate that? [08:00] Frazer Rice:  When you’re diagnosing what those capabilities are, as part of that diagnosis, if the successor is inside the family versus outside the family, how do you diagnose whether that is a positive or a negative, in addition to maybe the harder skill sets that are being dealt with? [08:29] Paul Edelman:  If the successor is from inside or outside the family, I would say that many of the capabilities needed for leadership are the same. [08:40] Frazer Rice:  Yeah, I was going to say — if you run into situations where a family member is capable skill-wise, but there are dynamics issues that have prevented their succession to the throne, essentially. [08:54] Paul Edelman:  Sometimes there may be a situation in which you have more than one potential successor and they’re in competition with one another, and the family is reluctant to declare a winner. And so one move that can be made in that situation is to essentially bypass the decision by going to the outside to bring in someone. It could be a kind of conflict avoidance mechanism. On the other hand, if no successor is really ready, then sometimes going to the outside can be an interim move. So some companies will hire an external candidate for CEO with the expectation that part of the responsibility will be to develop one of the family members who ultimately may take over. [09:47] Frazer Rice:  And so part of your methodology is to read resistance in the room and understand where those pain points are. How does a founder, or generation one, or the successive generations understand what the resistance is? And how do you help them overcome that? [10:02] Paul Edelman:  The resistance often takes the form of some sort of concern that is stated like — for example, the most general concern that people say is, well, he or she, the likely successor, is just not ready. But that phrase “not ready” is at a very high level of generality. It’s not specific enough to be testable or to be capable of being satisfied. So the challenge is to work with the founder to help them express their concern in terms that are actually addressable. If you try to do that and you’re unable to, that’s an indication that the concern is less about something specific and addressable, and more about some unpleasant feelings that the founder is experiencing — and that implies a different path for how to address those, or what needs to be done. [11:10] Frazer Rice:  For those of us in, let’s call it the advisory ecosystem — that can be the wealth manager, or the lawyer, or the accountant, the people who help guide the technical succession issues, whether it’s tax planning or trusts and estates or even just the corporate handoff — oftentimes we’re presented with situations that just get muddled, and we look at lack of progress with frustration. How does an advisor deal with that, when the instinct and in a sense the business model is to try to push, to get resolution and to get progress on these types of issues? [12:16] Paul Edelman:  The signal that I watch for is what that impatience feels like to the advisor. Sometimes it feels like clarity. The advisor says to himself, oh, I see exactly what they need to do — why can’t they just do this? And in my experience, that’s often the moment when it’s helpful for the advisor to slow down. Not because the family should be allowed to delay indefinitely, but because the advisor’s own need for resolution may begin to shape what they say and do, a

  ListenShow Notes
• 

  Wealth Actually

  Choosing a Trustee: Why Naming Your Kid May Be a Mistake — Marguerite Lorenz

  Jul 28, 202628 min

  Choosing a Trustee: Why Naming Your Kid May Be a Mistake — Marguerite Lorenz Short answer:  Naming your child as trustee, executor, or agent under your power of attorney is the default choice for most American families — and it is frequently the wrong one. In this episode of  Wealth Actually , host Frazer Rice talks with California Licensed Professional Fiduciary and Master Certified Independent Trustee  Marguerite Lorenz  about why roughly two-thirds of American adults still have no estate plan, why the job of a trustee is far more intimate and technical than families expect, and how to decide between a family trustee, a bank or trust company, and an independent professional trustee. https://youtu.be/56bzuORe8YI Episode Overview: Who Will Actually Run Your Plan? Most estate planning conversations stop at the documents. Marguerite Lorenz argues the documents are the easy part. The hard part is  staffing  — deciding who steps in when you can no longer make new decisions, and whether that person can absorb the technical, financial, and emotional weight of the job. Lorenz has served as trustee, executor, agent under power of attorney for finance, and agent for health care for hundreds of families since 2003. She is the author of three books —  Luck or Control? The Life-Improving Power of Estate Planning ,  How to Be a Successful 90-Year-Old , and the newly updated  Ethics for Trustees 2.0  — and she is Vice-Chair of the Independent Trustee Alliance. Her framing line, and the one that should stick with every listener: “If you don’t get your estate plan done, you’re suing your family. You’re making them go to court. And who would want to make anyone else go to court?” — Marguerite Lorenz This is the second time Marguerite has joined the show. Her first appearance covered the mechanics of individual trusteeship: EP.75 — Individual Trusteeship with Marguerite Lorenz. Key Takeaways • Only about a third of American adults have any written estate plan  — and Lorenz argues half of those plans would not actually function when needed. • Professionals are barely better than the public.  When Lorenz polls rooms of attorneys, CPAs, and financial advisors, roughly one-third raise their hands for a complete, up-to-date, ready-to-go plan. • The trustee role is intimate, not administrative.  A trustee sees your paperwork, your bills, your medications, and your bedroom. “Who is going to be the first person in your bedroom when you are no longer able to make new decisions?” • Incapacity, not death, is the long tail.  Many people live for five or six years unable to make new decisions. The trustee’s job often runs during your lifetime, not just after it. • A professional trustee can be temporary.  Lorenz recounts stepping in for a client during cancer treatment, providing a full accounting, and stepping back down when he recovered — then serving again after his death. Would your child step back down? • Estate planning is about preferences, not predictions.  “Our power in estate planning is not prediction, it’s setting our preferences” — and preferences can only be set while you are competent. • Quality of life belongs in the plan.  Not just tax, legal, and financial terms — but how you want to live, where you want to live, and what small things matter (for Lorenz, an international selection of dark chocolate). • Digital assets are now a core trustee problem.  Phones, social accounts, and daily transactions all require someone with access and authority. • A will does nothing while you are alive.  “The will doesn’t operate at all if you go to the hospital and you haven’t granted authority to anyone.” • Cost is usually overestimated.  Both an estate plan and an independent professional trustee typically cost far less than probate court. • Revisit every five years.  Calendar a five-year check-in with your attorney to review law changes, marriages, divorces, births, and deaths. Chapters and Timestamps • [00:00]  Cold open: “If you don’t get your estate plan done, you’re suing your family.” • [00:32]  Welcome back — introducing Marguerite Lorenz, California trustee and author • [01:14]   Luck or Control?  — why fear keeps families from finishing an estate plan • [02:22]  What a full-time trustee actually sees: trustee, executor, agent for finance, agent for health care • [03:49]  Why families default to naming a child — and where that breaks down • [05:00]  The skill set nobody screens for: negotiation, calm, empathy, and grief • [05:40]  Case study: serving as temporary trustee through a client’s cancer treatment — and stepping back down • [07:51]  Why even attorneys need their own attorney: nobody is objective about their own circumstances • [09:09]  The five-year estate plan check-in as a life milestone • [09:39]   How to Be a Successful 90-Year-Old  — living well to the very end • [10:20]  The “black box” problem: privacy, dignity, and care in your own home • [11:54]  Preferences over predictions — planning for your future vulnerable self • [13:40]  Rewriting an advance health care directive after hundreds of hospital bedsides • [16:13]  The statistics: only a third of adults — and only a third of professionals — are actually ready • [17:47]  Frazer’s challenge to advisors: you can’t advise well if you aren’t practicing what you preach • [18:22]  The first question in  Luck or Control? : “Hey professional, do you have your estate plan done?” • [19:21]   Ethics for Trustees 2.0  — what’s new in the updated audio and PDF edition • [20:27]  Family trustee vs. bank trustee vs. independent professional trustee • [21:52]  The looming crisis: the great wealth transfer, incapacity, and digital assets • [24:54]  Documenting the “why” behind hard trustee decisions • [25:23]  Probate courts overrun, bioethics committees, and next-of-kin defaults • [26:54]  Where to find the books, the podcast, and the Independent Trustee Alliance directory About the Guest: Marguerite Lorenz, MCIT, CLPF Marguerite Lorenz is a California Licensed Professional Fiduciary (CLPF #319) and a Master Certified Independent Trustee (MCIT) . She has served as Trustee, Executor, Agent for Finance, and Agent for Health Care for more than 200 families since 2003 as managing partner of Lorenz Private Trustees. Marguerite is Vice-Chair of the Board of the Independent Trustee Alliance, past Chair of the California Professional Fiduciaries Bureau Advisory Committee, and host of the Plan For This podcast. She is the author of Luck or Control? The Life-Improving Power of Estate Planning , How to Be a Successful 90-Year-Old , and Ethics for Trustees 2.0 . About the Host: Frazer Rice Frazer Rice is the author of  Wealth, Actually: Intelligent Decision-Making for the 1%  and host of the  Wealth Actually  podcast, where he interviews experts, entrepreneurs, and commentators on preserving assets and enjoying wealth. Resources and Links Mentioned •PlanForThis.com — Marguerite’s books, the  Plan For This  podcast, and a free First Steps toolkit.  Ethics for Trustees 2.0  is now exclusive to this site (audio + PDF bundled with purchase). •TrusteeAlliance.com — the Independent Trustee Alliance directory for locating certified independent trustees by state. •Marguerite Lorenz on LinkedIn •California Professional Fiduciaries Bureau — state licensing for professional fiduciaries •Related episode: EP.75 — Individual Trusteeship with Marguerite Lorenz •Related episode: What If You Are Named in a Will or Trust? Frequently Asked Questions Should I name my child as trustee? Not automatically. A child understands the family but may lack the technical skill to handle tax, legal, financial, and medical decisions — and may be grieving or in conflict with siblings at the exact moment judgment is required. Marguerite Lorenz notes that a trustee must be a good negotiator, stay calm under pressure, set aside personal feelings, and enforce rules the grantor set. She also raises a test most families never consider: if you recover, would your child voluntarily step back down and hand you a full accounting? What is the difference between a family trustee, a corporate trustee, and an independent trustee? A family trustee is a relative or friend serving in a personal capacity, usually unpaid and untrained. A corporate trustee is a bank or trust company with institutional infrastructure, minimum account sizes, and staff turnover. An independent professional trustee is a licensed or certified individual — like a California Licensed Professional Fiduciary — who serves full-time, carries a succession plan, and can often be engaged at a lower cost than families expect. The Independent Trustee Alliance maintains a national directory of independent trustees. What does a trustee actually do while I am still alive? A trustee acting during incapacity manages assets, accounts for every dollar, handles taxation, pays bills, coordinates care, and increasingly manages digital assets such as phone-based transactions and social media accounts. Lorenz emphasizes that many people live for five or six years unable to make new decisions, so the trustee’s lifetime role is often longer and more demanding than the post-death administration. How often should I update my estate plan? Roughly every five years, or sooner after a major life event such as marriage, divorce, birth, death, a liquidity event, or a change in tax law. Lorenz recommends putting a five-year reminder in your phone to call your attorney and ask what has changed in the law and in your life. What happens if I go to the hospital without an estate plan? The hospital and its bioethics committee will do the best they can and will look for next of kin to make decisions for you — potentially people with whom you have never discussed your personal wishes. A will does not help here, because a will only operates after death. Financial and health care powers of attorney are what grant someone authority while you are alive. Is an estate plan expensive? Usually less than people assume, and materially less than probate court. Lorenz makes the same point about professional trustees: “Independent individual professional trustees cost a lot less than you think also. And you need to ask, because this is your life we’re talking about.” Do financial professionals have their own estate plans? Often not. When Lorenz polls audiences of attorneys, CPAs, and financial advisors, only about a third report having a complete, up-to-date, ready-to-go plan — barely better than the general public. Her challenge to the profession is that clients will increasingly ask advisors directly: “Do you have your estate plan completed?” Pull Quotes “Our power in estate planning is not prediction, it’s really about setting our preferences.” “Who’s going to be the first person in your bedroom when you are no longer able to make new decisions?” “I’m not in charge. I’m a servant-manager.” “Once I get my estate plan done and updated, I don’t think about it anymore. My head space is so clear because everything I was worried about has been thought about, considered, allowed, and put down in writing.” Full Transcript Transcript lightly edited for clarity. Timestamps are approximate. [00:00] Marguerite Lorenz:  You know, if you don’t get your estate plan done, you’re suing your family. You’re making them go to court, right? And who would want to make anyone else go to court? [00:08] Announcer:  Welcome back to the Wealth Actually podcast, the show that features experts, entrepreneurs, and commentators that will give you the right knowledge, planning, and guidance so you can preserve your assets and enjoy your wealth. Learn more and subscribe today at wealthactually.com. This podcast is for educational and entertainment purposes. It is not investment, legal, nor tax advice and does not represent the opinion of the employers of the host or guests. [00:32] Frazer Rice:  Welcome back. Friend of the podcast Marguerite Lorenz is on the podcast this week. She’s a California trustee and has a new book called  Luck or Control?  out. We’re going to talk a little bit about fiduciary matters and what it takes to have good staffing within your estate plan. Welcome back, Marguerite. [00:54] Marguerite Lorenz:  Thank you, Frazer. [00:55] Frazer Rice:  Since the last time you were on, you have a couple of books out and we’ve gotten to see each other a couple of times with the Independent Trustee Alliance. Let’s talk a little bit about the new book that you just published and what you’re trying to do with it. [01:14] Marguerite Lorenz:  So that book is  Luck or Control? The Life-Improving Power of Estate Planning . And I wrote it because I’ve seen hundreds and hundreds of families really struggle with how this is going to get done, and many people don’t get their estate plan done at all because they’re so afraid. They don’t know what to expect, they don’t want to talk about their mortality, they don’t want to have serious conversations with their loved ones. And if we don’t have those conversations, we really lose all control when we need it the most — when that medical crisis happens or when life changes in a big way. [01:52] Frazer Rice:  No question about it. And I went through the book and it’s an important read, because for those people who really have to get their affairs in order and feel stuck for some reason, I think you do a good job of laying out why you need to get unstuck and then how to take a couple of steps to initiate those conversations and get the important things down so that you can then have the deeper conversations that help out later on as you’re structuring things. What part of your experience being a full-time trustee helped to inform all of this? [02:22] Marguerite Lorenz: Well, as a trustee professionally, I’ve met with lots of different families in lots of different circumstances. And for many of them they’ve named me, and so I’m serving in that role. It’s not just trustee; it’s trustee, executor, agent on the power of attorney for finance, and even as agent for health care. And so that’s a very intimate job. It’s a job where you end up seeing someone’s entire life, or as much as you can of another person — their paperwork, how they do things, how they pay their bills, how they live, what medications they take. It’s really very intimate. And I think a lot of us assume that our children know us and they’ll do what we want them to do. But the thing is that it’s very likely you haven’t lived with your children in the same household for decades. And now you’re asking them to come back, drop their life, and come in and be that person for you. Be the person who’s going to protect your privacy, be that person who’s going to protect the way you want to live. And they may disagree with the way you want to live. They may actually have issues with some of the choices that you’ve made or how you’ve proceeded. So now, in addition to having a medical challenge where you’re not able to make new decisions — maybe temporarily, maybe permanently — now you have someone who wants to run the show or actually be in charge. In my job as a professional trustee, I’m not in charge. I’m a servant-manager. I’m really taking the trustor’s wishes and how they’ve structured things and really looking at that to be sure that I can continue it as best I can with all the changes that have occurred. [03:49] Frazer Rice:  One of the things we were talking about before we got on board, and something we’ve discussed generally through the Independent Trustee Alliance, is that people who are asked to serve in those roles usually are family members. And for people who are uninitiated in the field, that seems like an obvious choice, because they’re really trying to put somebody in there who understands the family. But as you and I know, they may not be necessarily qualified to deal with the technicalities of the different roles that we just discussed. But also, the idea of taking on the emotional toll of these new conditions can be something different and unapproachable for many people. [04:30] Marguerite Lorenz:  Well, I think it helps to kind of look at some of those issues. So you might have more than one child. Even if you have an only child, these issues apply. And now you’ve been in the hospital and you’re expecting this person to deal with your tax, legal, financial, and medical decisions. This person has to be a good negotiator. This person has to be calm when there’s issues that arise, and they may have feelings — they may be grieving that things have changed for themselves and in their relationship with you. So I think to be really empathetic and to be really kind and compassionate, we have to get our own stuff in order so that we can really have a good experience for our last days. And again, some of these roles that I’ve served in have been temporary. Let me give you an example. I worked with a gentleman whose wife had passed away because of cancer. She had been gone about two years and he himself was diagnosed with cancer. So he already knew what that might be like, right? She had already had chemotherapy; he was right there with her through all of that experience. Well, now faced with it himself, he said, “In order for me to do this, I don’t have a partner. I need somebody who’s going to deal with the business of my life so that I can focus on my health.” He named me as his trustee. I became active. I reported to him because he was still able to receive those reports. He was certainly mentally able, but physically it was really hard. He was exhausted most of the time. And he was going to grief support for the loss of his wife and going to chemotherapy treatments. So you can imagine just how full his day was. So we’re into this two years. He met a woman at grief support. He was feeling better because the treatment worked, and he decided he wanted to travel the world before he died. And he married this woman, and they were very happy together. And he asked if he could be trustee again. So — I’m a professional trustee. It’s part of my duty to step back and step down when the trustor who wants to be trustee again wants that job back. So I gave him a full report, he had an accounting, he knew exactly what had happened during my term. He went on with his life, and then he passed away and I became trustee again. So I just wanted people to know that it could be temporary. It’s not necessarily a permanent job. Would your child step back down? [07:14] Frazer Rice:  No question. Once in the role, sometimes it’s difficult to get out of it. But you did the right thing in terms of getting an accounting, making sure that your duties stopped when you were told to get off, and then when you were ready to come back on, that those sightlines are very clear. And that’s what comes with talking to a professional like you. You understand those parts so that you’re not having things bleed from one role into another and having liability issues or misunders

  ListenShow Notes
• 

  Wealth Actually

  REDUCING THE NOISE OF AI INVESTING

  Jul 7, 202629 min

  “Reducing the Noise of AI Investing”: In this Wealth Actually episode, Frazer Rice speaks with KEVIN SHEA , Senior Equity Analyst at BNY Wealth, about AI Investing and how investors should think about artificial intelligence as an investment theme rather than just a headline-driven trend. They discuss the difference between hype and durable fundamentals, how to segment AI opportunities across infrastructure, software, and end-user adoption, and why free cash flow still matters when evaluating companies tied to AI. https://open.spotify.com/episode/1NGM8j2KqdiUFWSLguBMEH?si=YmB4s0OVSqyy6U3Mpg7OaA https://youtu.be/Wnlub-HoiUo The conversation also explores circular financing risk, the role of management vision in fast-moving markets, which industries may be disrupted or strengthened by AI, and how large institutions are using AI internally to improve productivity, analysis, and client service. Chapters 00:00 – Intro and episode setup Frazer Rice introduces the episode, frames AI as a dominant investment theme, and welcomes Kevin Shea to help unpack AI Investing for the audience. 01:00 – Hype versus disciplined investing Kevin explains that disciplined investing is what allows investors to separate hype from durable opportunity, and argues that AI adoption, spending, and earnings revisions point to real underlying fundamentals. 03:00 – How to bucket AI investment themes The discussion turns to how investors can organize AI exposure, including beneficiaries versus disrupted companies, technology bottlenecks such as GPUs and networking, and industry adoption themes across sectors. 05:30 – Valuation, momentum, and free cash flow Kevin discusses why free cash flow per share growth remains one of the most important drivers of stock performance and why parts of the semiconductor ecosystem may deserve a valuation re-rating. 08:15 – Circular financing and risk in the AI ecosystem Fraser asks about the growing concern that AI companies are financing one another, and Kevin outlines both the bullish “escape velocity” case and the downside risk if business models do not become independently profitable fast enough. 11:45 – Infrastructure buildout and competitive uncertainty Using analogies like railroads and golf courses, the conversation highlights the risk that early builders may not be the ultimate winners, especially in a market with heavy spending and rapid leapfrogging among competitors. 13:00 – AI Investing: Public versus private market exposure They examine whether owning public companies such as Alphabet offers meaningful AI exposure, versus gaining more direct but harder-to-access exposure through private investment vehicles. 15:45 – What strong AI management teams look like Kevin emphasizes that in an environment with no clear historical playbook, vision, execution, and the ability to identify durable differentiation are critical traits in management teams. 19:15 – Adaptability and strategic pivots Fraser adds that thoughtful adaptation matters, and Kevin notes that sometimes acquisition activity can signal whether a company is innovating ahead of the curve or scrambling to catch up. 20:45 – Which industries are most exposed to disruption The conversation shifts to sectors under pressure, especially parts of software and IT services, while stressing that disruption does not necessarily mean extinction. 24:45 – Why law and accounting may evolve, not disappear Fraser offers a contrarian view that AI may make strong legal and accounting professionals more valuable, and Kevin compares that to earlier fears that Excel would eliminate accountants. 26:15 – How Kevin uses AI in practice Kevin describes how AI has made his team materially more productive, especially in data aggregation, scenario analysis, industry research, and portfolio risk work, while also helping BNY operationally across onboarding, security, and client communication. 29:10 – Where to find Kevin and closing remarks The episode closes with Kevin sharing where listeners can connect with him and Fraser noting how quickly the AI landscape continues to change. Links KEVIN SHEA on Linkedin RICK FERRI on BRING SIMPLICITY BACK TO INVESTING Transcript of AI INVESTING Frazer (00:01) Welcome aboard, Kevin. Kevin Shea (00:03) Yeah, thanks for having me. Appreciate it, Frazer. Frazer (00:06) We’re going to tackle two words that have basically taken over the investment world for the last six months: artificial intelligence. Before we do that, whether it’s AI or crypto or tulips or anything with a lot of hype or buzz around it, how do you think about delineating between investing based on hype and doing it within the confines of a disciplined approach? Kevin Shea (00:32) They really do go hand in hand. You need a disciplined approach in order to recognize whether it’s hype or not. The reality is that it’s pretty impressive, the adoption we’re seeing with AI: the amount of spend, the companies that are participating in and benefiting from AI. There was some concern with the stock movements that many of these companies have seen about whether the market was getting ahead of itself. Yet we have seen significant estimate increases throughout the year. If you take a look at some of the networking companies, their earnings expectations for 2027 are up almost 50% versus where they were just six months ago. The same is true with memory, GPUs, and CPUs. Fundamentally, we’re seeing a lot of these companies have expansion in revenue growth and earnings growth, which is quite supportive of a durable trend. What’s also very important is that adoption of AI is increasing. You can look at enterprise adoption: nearly two‑thirds of enterprises pay for an AI service. You can look at token usage — that’s how much companies are using AI — and that has been parabolic as well. Look at the revenue generation of these AI models. Right now, they are some of the largest, fastest‑growing companies that have ever existed. So we don’t really see this as a tulip scenario, or even comparable to the internet bubble. We find it very different. We think there are fundamental drivers to this trade, and we’re seeing that through earnings growth. Frazer (02:37) Cool. AI to me is a term that encompasses a lot of different things, and in some ways it’s become like real estate or water — it’s starting to touch a lot of different industries. It’s not just a thing unto itself, but something that’s becoming integrated into a lot of other types of things. How do you define and bucket the investment themes so that it’s digestible for the investor, and it’s not just, “I’m investing in Anthropic or Google,” but people can parse out where it fits within a portfolio? Kevin Shea (03:14) It’s a great question and probably one of the most important ones. Part of our overarching thesis is that for AI to fulfill its promise, it has to be in every geography, in every industry, at every company, and at almost every employee layer. We’re seeing that when you look at the business units that are adopting AI: customer service, product development, marketing — basically divisions that almost every single company in every geography has. You phrased it as water, how it touches everything, and we’re seeing that. So how do you segment it? There are a number of different ways: First, you can break it into: who are the AI beneficiaries, and who are those that will be disrupted by AI? Second, you can break it down into different bottlenecks. That’s a way I frequently use within the technology landscape: GPUs, CPUs, memory, networking, storage, data centers. Then you look at that framework and see which companies are most exposed to those bottlenecks. Third, you can ask: which industries will benefit from adoption? Is that biotech, transportation, warehousing? Which companies could be more negatively influenced — maybe that’s software? That’s how we try to create an AI Investing framework for where we should focus our investment efforts and determine the allocation that our clients can benefit from. Frazer (05:17) As we dive a little bit into how you’ve bucketed these themes across different areas, there’s the concept of benefiting from momentum or valuation versus maybe the cash flow and fundamentals of these different investments. I could imagine that, with the hype and mania around the space, there’s a lot of interest. How do you temper that valuation play versus analyzing what the cash flows look like? Kevin Shea (05:49) One of the most highly correlated metrics to stock outperformance is free cash flow per share growth. That’s often the most important metric, and we watch that heavily. What’s incredible — and we talked about this earlier with estimate revisions — is that many within the AI ecosystem are generating extremely healthy free cash flow growth and margins. A lot of that is in AI infrastructure. They’re being paid to supply all the equipment and semiconductors. There’s also this concept that valuation multiples shift to where there’s value creation. I’ll give an example: The SOX, the semiconductor index, used to trade at parity with the S&P. But there’s been a paradigm shift. A lot of the intelligence that’s being created through these models is powered by semiconductors, networking, packaging, and hardware. You’ve seen semiconductors go from trading at parity to trading at almost a 50% premium. At the same time, the market is intelligent; it’s shifted its view of software. Software used to trade at a 70% premium, and we think the intelligence layer has moved just one layer above where software applications normally sit. As a result, you’ve seen valuation compression for the IGV, the software index, from that 70% premium down to about 20%. Some people might look at the semiconductor index and say it’s more expensive than where it historically trades — maybe that’s hype. But we actually view it as a shift in where the value creation is occurring. So we think it’s a healthy, understandable move within the market. Frazer (08:16) One of the questions that pops up is that there’s a lot of news around the circular flow of cash, where a lot of these companies are all investing in each other. You hear “five hundred billion is going from Google into Anthropic,” or different flavors of that, where it seems like the money is rotating. And there’s a question as to whether it’s rotating and expanding, given sales and so on. How do you think about that and make sure that we aren’t wandering into more of the sort of things that are happening off balance sheet that we don’t see, while still recognizing the investment that’s taking place? Kevin Shea (08:57) At minimum, it raises the risk profile. There are many circumstances and scenarios where this has occurred in the past — the internet being the most commonly referenced — and that obviously did not work out. There are multiple scenarios that could happen, but for simplicity we’ll break it down into two. The first scenario is that this is such a capital‑intensive expansion that companies are doing an “all‑hands‑on‑deck” effort. The faster you can get capital from well‑capitalized firms, the faster you can build your infrastructure and reach scale so that these large language models are profitable. If you can expand and take capital from everywhere, then you can provide enough compute for all enterprises and consumers to utilize your product and your model. You reach “escape velocity” in the sense that your scale allows you to lower costs and become more profitable faster. That’s the glass‑half‑full environment. Glass‑half‑empty is that they do not reach escape velocity. The business models needed more time to bring the cost of delivering AI down enough to be profitable on their own; they didn’t need this extra capital to reach an enormous amount of scale, and they’re moving too fast. If that scenario plays out, and these companies are not able to be profitable on their own, and the financial markets become tighter, that creates more downside risk for everybody in the ecosystem. We don’t see that right now because, at the moment compute is available, it’s being taken right away. We still feel comfortable with the financing occurring right now, but it is one of the top risks that we monitor. It’s not that it’s systemic, but it provides less clarity and disclosure, and it creates a riskier profile as we go through this expansion. Frazer (11:43) In the back of your mind, you’re probably saying, “We want to make sure, if there are winners and losers in AI Investing, that we avoid the railroad scenario,” where you build this whole infrastructure and companies have to go bankrupt twice before they actually reach profitability. Or the bromide that golf courses only become profitable, if they ever do, because the person who built it — a passion project — didn’t make it work, then it goes bankrupt, then the bank is stuck with it and doesn’t know how to run it, then they get rid of it, and then the third person has learned the lessons from the first two and is able to push forward. Kevin Shea (12:23) That’s a good point. When we look at all these different models being created, right now you have an environment where everyone is spending and keeps leapfrogging each other at different times. It’s still a very unknown outcome for all of these players. There’s a lot of competitive intensity in the large language model space and the broader AI ecosystem. It’s certainly a very dynamic environment right now. Frazer (12:59) As investors are trying to access this, there are the public companies. You can go on your Fidelity account or talk to your advisor at BNY Mellon or anybody else and say, “I’ve heard about Anthropic or Google or all of these things.” As far as a good proxy for exposure, how do you think about that? For example, if I looked at Google and understand that they have underlying investments in their portfolio — in addition to their regular businesses — into these different scenarios, is that a way to get shorthand exposure? As opposed to trying to access a venture fund where the entry points are difficult, the hurdles are high, you need to write big checks, and access is gated? Kevin Shea (13:53) It’s a very astute point when you mention circular financing. That doesn’t just happen with public companies; a lot of these vendors and companies in this ecosystem are investing in private companies as well. When those private companies go public, you find out that Company XYZ is a top owner, and one of their suppliers. There has been a growing awareness that, with certain public companies, you have exposure to a handful of private companies. For BNY, our Fujio funds do a lot of our private investments. That’s usually the best way to gain direct exposure. Frazer (15:37) Sure. Not to be flippant, but you’re getting paid to own it at that point via their dividend, as opposed to you paying — at the SPV or LP level — to gain access to it. But yes, it’s definitely not a pure play. I wouldn’t buy Google just to be in a venture fund. And just to reiterate for listeners, this is not investment advice. We’re trying to learn and talk through different types of scenarios. As you’re thinking about this and looking at these different companies, what does a good management team look like? You’d think: a bunch of PhDs, great at coding, lots of experience in the venture community, maybe hung out in Silicon Valley. But everything is so new and dynamic. When you’re evaluating these businesses, what does a good management team look like as they’re trying to scale at warp speed, while profitability may or may not be a thing? Frazer (17:49) I’d add that I think there’s an interesting component to AI Investing: a track record of what I would call thoughtful adaptation. When your business plan gets punched in the face and you’re able to pivot — meaningfully pivot — I’m not talking about a dog food company suddenly putting “.ai” at the end of its name, but someone who can shift and take advantage of opportunities as they come up, as you say, without being so rigid in their vision that they end up getting lapped. I think that’s an interesting facet to focus on. Frazer (20:50) When I try to get my arms around this, I bucket things in terms of: Disruption: blowing up something traditional Optimization: taking something that’s already good and turning it into great World‑building: taking a vision, starting from zero, and building something that didn’t exist before On that first point, what industries do you think are under attack, and how do you invest around that so you’re not left holding the bag — you’re not a buggy‑whip company as Tesla releases their next issue? Frazer (24:48) As an example, I run into all sorts of law firms and accounting firms, and I hear the comment that law firms are going away. I have a contrarian view. First, I think law has a wonderful ability to metastasize, to find issues, and I think AI is going to be great at finding those and keeping lawyers busy. Second, for lawyers who are good, I think the ability for AI to make them more efficient and help them graduate to even more detailed and “higher‑value” discussions will only increase. So when people say, “Law is going to be dead,” I don’t really agree. I think that ties into your point that AI will help some companies that can adapt and use it well to drive further value, probably even charge more. For others, they’ll be left behind or become cottage industries. Frazer (26:11) And there will be more and more issues to solve. I don’t underestimate that. I think AI is going to start poking holes in different things we didn’t think about. Then it will take good brainpower, made more efficient by AI, to deal with these new issues as they pop up. In your day‑to‑day job, what are you using AI for? Maybe through Bank of New York, and maybe informally, when you’re doing other research — to be smart not only about the company areas, but what you’re doing personally to be more efficient, take advantage of AI, and learn about cool stuff. Frazer (29:11) Cool stuff. How do people find Kevin Shea, and any final thoughts? Kevin (29:20) KEVIN SHEA on AI Investing Frazer (29:29) Terrific. Thanks for being on, and we’ll be sure to stay in touch, as I’m sure everything will be completely different in not just six months — probably six weeks. https://www.amazon.com/Wealth-Actually-Intelligent-Decision-Making-1-ebook/dp/B07FPQJJQT/ Keywords: AI Investing

  ListenShow Notes
• 

  Wealth Actually

  College Success: Essential Tips from Laurie Dhue

  Jun 30, 202637 min

  For many, college success seems pre-ordained and the rightful outcome of a thoughtful next generation development plan, But, we all know this isn’t always the case. One of the great fears for many families is a child stumbling with their first taste of independence and outside accountability. LAURIE DHUE shares insights on preparing young adults for college, focusing on the four S’s: sex, substances, self-esteem, and scholastics. This episode offers practical advice for parents and students to navigate independence responsibly and confidently and set those students up for college success. In recovery for 19 years and with a career in broadcast journalism at the highest levels, Laurie is one of the foremost experts in the field and armed with real world, personal experience. https://youtu.be/8JN2iM8gxWA Key Topics The four S’s framework: Sex, Substances, Self-esteem, Scholastics Importance of consent and online safety Managing peer pressure and peer influence Building self-esteem in the age of social media Practical safety tips for college students The role of family communication and support Long-term decision making and goal setting in college Recognizing signs of substance abuse and mental health issues Guest Name: Laurie Dhue Titles The 4 S’s of College Success: Sex, Substances, Self-Esteem, and Scholastics How to Prepare Your Kid for College: Essential Tips from Laurie Dhue College Success Sound Bites “Consent is the most important thing to discuss.” “Social media creates so much pressure on young people.” “One bad decision can lead to a tough time.” Chapters 00:00 Introduction to Recovery and Wellness 03:06 The Four S’s: Preparing for College Life 06:05 Navigating Consent and Relationships 08:50 Substance Awareness and Safety 11:58 Building Self-Esteem in College 15:42 Academic Success and Responsibility 28:49 Financial Literacy and Practical Majors 33:47 Final Thoughts and Key Takeaways Resources Family Wellness First Program – https://familyofficegrowth.com Laurie Dhue on LinkedIn – https://www.linkedin.com/in/lauriedhue/ Laurie Dhue on Instagram – https://www.instagram.com/lauriedhue/ Family Office Growth Partners – https://familyofficegrowth.com College Success Guest Links LinkedIn – https://www.linkedin.com/in/lauriedhue/ Instagram – https://www.instagram.com/lauriedhue/ The Citizen Heir Concept Transcript Preparing Kids for College: The Four S’s Framework Featuring Laurie Dhue | Hosted by Frazer Frazer: Welcome aboard, Laurie. Laurie Dhue: Great to see you. Thank you so much for having me on, Frazer. Frazer: It’s a pleasure to have you. Today we’re diving into an important topic: preparing kids for the transition to college and setting them up for success. You’ve had a remarkable career in broadcast journalism, and you’ve also been open about your personal journey with sobriety. Can you share a bit about your background? Laurie’s Background and Mission Laurie Dhue: I’m always grateful to talk about recovery and how sobriety can positively impact individuals, families, and communities. I’ve been sober since March 2007—so 19 years now. Sobriety has given me everything back, plus entirely new purpose and additional careers beyond television news. For the past year, I’ve been focused on building health and wellness resources for individuals and families—covering physical, mental, emotional, and spiritual health. Through my work with Family Office Growth Partners, we created a program called Family Wellness First , which provides high-level resources to help families maintain purpose, preserve legacy, and operate at their best. The College Transition Challenge Frazer: We talked beforehand about how this work applies to many areas, but one that deserves more attention is preparing kids for college. You’ve framed this around the “Four S’s.” Walk us through that. The Four S’s Overview Laurie Dhue: The Four S’s are: Sex Substances Self-esteem Scholastics College brings freedom, independence, and opportunity—but also risk. For many students, it’s the first time making decisions without parental oversight while navigating relationships, substances, schedules, and academics. 1. Sex: Consent and Boundaries Laurie Dhue: Consent is the most important concept. It must be clear, ongoing, and voluntary. It can be withdrawn at any time. Young men need to understand responsibility for ensuring mutual comfort. Young women need to understand that attention or kindness does not create obligation. Alcohol complicates this significantly by lowering inhibitions and increasing risk. It’s also important to understand that sex is not a reliable source of validation or self-worth. Practical guidance includes: Use protection Communicate plans with friends Stay aware of surroundings Know campus resources (health center, security, emergency services) 2. Substances: Risk Management and Awareness Laurie Dhue: Substances can derail judgment, safety, relationships, and academic performance—especially early in the first semester. Key guidance: No pills, no powders (due to fentanyl risk) Be cautious with alcohol; it impairs decision-making Never accept drinks you didn’t see prepared Warning signs of a problem include: Obsessing over the next opportunity to drink or use Repeated negative consequences with no behavior change Missing classes or experiencing memory gaps Friends expressing concern Students should have prepared ways to say no and understand that not everyone is engaging in heavy substance use. 3. Self-Esteem: Identity and External Pressure Laurie Dhue: Social media has intensified comparison and pressure around appearance, lifestyle, and status. Ways to build self-esteem: Attend class consistently Tell the truth Leave uncomfortable situations Treat others with respect Make decisions you can live with the next day Support systems are critical: Friends Extended family (aunts, uncles, mentors) Counselors and campus resources Asking for help is a sign of strength, not weakness. 4. Scholastics: Discipline and Structure Laurie Dhue: Freedom in college requires discipline. No one is managing your schedule, so students must build structure early—especially in the first semester. Key habits: Prioritize sleep, nutrition, and exercise Review notes regularly Start assignments early Use planners or digital calendars Seek tutoring when needed Discipline is a form of self-respect. Financial and Academic Practicality Frazer: Students should balance curiosity with practicality—developing skills that translate into career opportunities. Avoid unnecessary debt and understand basic financial concepts like compounding. Even small financial decisions can have long-term consequences. Laurie Dhue: Agreed. Use debit cards where possible, avoid unnecessary credit, and think carefully about major purchases. Practical majors today include: Nursing Accounting Engineering Computer science Finance Supply chain and operations Information systems Students don’t need to decide immediately, but they should move toward a viable path. Final Takeaways Laurie Dhue: One poor decision can have lasting consequences Small decisions compound over time Asking for help is a sign of maturity College is about learning to manage freedom—not proving independence through risk-taking Trust your instincts—if something feels off, it likely is Where to Find Laurie Laurie Dhue: LinkedIn: Laurie Dhue (Family Office Growth Partners) Instagram: @LaurieDhue Facebook: Laurie Dhue I’m always happy to connect and help families navigate mental health and substance use challenges. Frazer: Terrific. Thanks for being on. Laurie Dhue: Thanks, Frazer. Keywords college prep, young adults, self-esteem, substances, consent, college safety, mental health, family wellness https://www.amazon.com/Wealth-Actually-Intelligent-Decision-Making-1-ebook/dp/B07FPQJJQT/

  ListenShow Notes

Recent guests on Wealth Actually. Study who booked and why before you pitch.

Based on semantic analysis of episode topics and host coverage, this show is a strong guest fit for executives in:

Industry fit is computed by PitchCentric using vector embeddings of the show's episode catalog.