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 misunderstandings with the next generation.

[07:51] Marguerite Lorenz: Right. And let’s talk about working with professionals from the beginning. We don’t know what we don’t know. And even attorneys need to go to an attorney to get their estate plan done. There may be attorneys who disagree with that, but none of us can be truly objective about our own circumstance. And we need someone who’s going to ask us some tough questions and really help us figure out: what is our intention? How do we feel about this? What’s important to us?

So, getting my own estate plan done — I was a single mom in a new profession. I had just become a fiduciary and I had just learned about estate planning. I was learning so much at that time and realized, every time I drive on the freeway, I’m risking my children’s future. I’m their only parent. What can I do about that? So estate planning isn’t just about money, and it isn’t just about death. It’s also about taking an inventory. What do I have? What have I accomplished? Who do I love? What do I really care about? And once we get to have those kinds of conversations, our whole perspective on life improves. And I’ve used my own estate plan, every time I’ve gone to update it, as sort of a milestone check — where am I now?

[09:09] Frazer Rice: Maybe the standard procedure is every five years to check in and make sure that life has not advanced as far as divorce, deaths, new kids, marriages, things like that, to make sure that the plan is in place. And it’s a great milestone to reflect on things. And then, as we move up the ladder wealth-wise, if there are changes in tax laws and things like that, it’s important to make sure that the plan understands that change and is able to accommodate what’s going on on that front. Let’s take that as a segue. You have another book that you came out with, How to Be a 90-Year-Old — or a well-functioning 90-year-old.

[09:36] Marguerite Lorenz: How to Be a Successful 90-Year-Old.

[09:39] Frazer Rice: More than well-functioning — actually successful. How to Be a Successful 90-Year-Old. I have not read that yet, so tell us a little bit about what’s going on there.

[09:47] Marguerite Lorenz: Well, I want everyone to have that blue ribbon feeling at the end of their lives. And I picked 90 because I have had clients that have reached a grand old age of over 100. My last client passed at 105. So it is possible to live well until the very end. And I’ve been working with people for over 20 years that are much older than me, who have lots of wisdom and experience to share. Their stories are important. So for people that are serving as trustee — whether you’re a family member trustee or you’re a professional — this book might be helpful, because I actually talk about the relationships with those clients. And I also talk about some things we could do now so that life is simpler, better, and more comfortable when we might need some help.

And that’s another barrier that a lot of us have. We have this barrier to having someone come into our home and help us. Our home is our sanctuary, it’s our private space. But I want everyone who’s listening right now to just think about it: who’s going to be the first person in your bedroom when you are no longer able to make new decisions? And do you want that person to see everything that might be in your bedroom? Many, many adults have what I call a black box. We have something that’s private that really, really we keep to ourselves. But everything gets exposed once you are not able to care for yourself.

So then what? Well, many people want to stay in their home no matter what, as long as possible. So imagine, if you will — some of my clients have lived in the same home for 30, 40, 50 years. And now they have to get care. Can we arrange to have that care in their home? So this exploration is really about living well to the very end. There are some really great tips, things I’ve learned from my 90-plus-year-old clients that I’ve employed and deployed for myself.

[11:23] Frazer Rice: Just as an example there — I’m a ripe old age of 53 shortly. The idea of getting things in place while you’re at the peak of your powers, and you don’t have the difficult decision of having the car keys taken from you, or being in a home that isn’t appropriate for you anymore, meaning you don’t have the necessary safeguards for showers and stairs and things like that. Do you get into that, as far as trying to look five years ahead to make sure that the things that you can do now in a more comfortable environment take place before maybe the emergency happens and then all of a sudden we say, “Oh my gosh, we’ve got to do a complete overhaul here”?

[11:54] Marguerite Lorenz: Well, as you know, Frazer, our power in estate planning is not prediction, it’s really about setting our preferences. And if we don’t do that while we feel good, while we’re competent, while we’re thinking clearly, we don’t get a chance to express that or do that once we’ve lost our competence. So this is really important — that I’m thinking about my future vulnerable self.

I’ll give you a small example for me personally: dark chocolate is part of my life. I like having an international selection of dark chocolate and I don’t want the same kind every day. I feel the nuances and the taste and the flavors; it’s important to me. For some people that might be wine, for other people it might be fine literature. It really depends on what you’re into. Well, our estate plan can be just about tax, legal, and financial stuff, but it really should be more. It should be about our quality of life. And that’s really what I’m instructing and what I’m talking about in a very warm, personal way in How to Be a Successful 90-Year-Old.

And even in Luck or Control?, I want people to understand the function of the documents. So we talk about the documents and what they’re supposed to do to assist your person. But you have to have a person. And you might choose to have a trust company or a bank serve as your trustee, you might have a family member, you might have an individual like me — an independent trustee. You can find more independent trustees at the Independent Trustee Alliance.

But the point is: how do I want to live? Who do I want to have help me? What does that help look like? Well, you might not know all the answers right now, but if you begin now, your eyes open to different possibilities. I’ll give you an example: I have visited lots of hospitals. I’ve been to people’s bedsides many, many times. I’ve learned that there are certain procedures I’m just not willing to go through. So in my mind I had to update my advance health care directive to basically say: this shell that I’m in, the case I walk around in, the machine that I live in, needs to be kept alive long enough so that my boys can say goodbye. And that’s not for me, that’s for them. But I don’t want it to go on interminably.

[15:00] Marguerite Lorenz: So I’m pretty specific in my documents about what I want. So I’m hoping to help people have a little perspective — use that energy you have, use the power that you have right now to make decisions for yourself, and allow yourself the opportunity to update your estate planning documents from time to time, so that what you learn goes into your documents, and what you decide and what your intention is, is clear.

[15:23] Frazer Rice: One of those points that you bring up that I think is important is that you can be a really good user of professional services with some forethought. To muse a little bit about what the end of life looks like is somewhat an unpleasant thought, if you feel like you’ve got less than your full faculties and that ends up being your future. But thinking about that and putting some planning around it, and real ideas about what you want others to take away from your end of life, in many ways I think is a great way to really get the documents put in place and reduce tension and questioning later, and any ambiguity that there might have been ahead of time.

[16:13] Marguerite Lorenz: Well, that’s the thing too that we don’t necessarily consider when we avoid estate planning. And I’m talking to all the professionals who listen to you, Frazer. The percentage of professionals who have their estate plans completed might be just a little bit more than the average person, but only a third of American adults have any kind of written plan — and I would argue that half of them are not really going to work. And when I speak to professional groups — attorneys, CPAs, financial advisors and so on — I get that same raise of hands: only about a third of them have a complete, up-to-date, ready-to-go estate plan.

Why do I need it ready to go? Because I don’t know what’s going to happen or when. So yes, it is hard to contemplate the end of our lives; it’s not something we want to think about. But how do you stop thinking about it? How do you stop worrying about it? You do everything you can about it right now, and then you set it aside. And our cell phones are so powerful that I can put in my calendar five years from now to call my attorney and ask if anything’s changed in the law, and to consider then if I need to think about anything that might have changed in my life that I want to update. So once I get my estate plan done and updated, I don’t think about it anymore. I’m so relieved. My head space is so clear, because everything I was worried about has been thought about, considered, allowed, and put down in writing. And now I don’t worry anymore.

[17:47] Frazer Rice: I scolded a group of financial professionals I was giving a talk to. I asked probably a similar question, which was: how many of you have your estate plan documents up to date? And they all shot up, out of shame. I said, “How many of you have looked at them within the last two years?” And then that shot down to about a third, maybe less. I just said, “Shame on you.” People are looking to you for help on these things and you’re not leading by example. And so — point taken, and not just the trusts and estates lawyers, but for everybody else around the ecosystem. To not go through that exercise yourself — you can’t possibly advise correctly if you’re not practicing what you’re preaching.

[18:22] Marguerite Lorenz: Well, here’s my challenge, and here’s my challenge to every professional in our mutual space: bank trust officers, administrators, paralegals, everybody. In Luck or Control? and on planforthis.com, which is where you can find my books and get a free First Steps toolkit, the first question is, “Hey professional, do you have your estate plan done?” It’s the first question. Why? Because I want to be sure I’m dealing with somebody who has some empathy for the emotional decisions I’m going to have to make. I want someone on my team that understands what this feels like — not just the wise, tax-smart decisions that they made. It’s a whole package. And so I’m putting it out there and I’m saying: I’m challenging everyone in our mutual space. Make sure you have your estate plan done, because more and more clients are going to be asking you, “Do you have your estate plan completed?”

[19:21] Frazer Rice: So then let’s talk about your third book, which is sort of an update — and we talked about it in the previous podcast that we did a while ago, and I’ll have that in there — which is Ethics for Trustees. What’s in the update? I know it’s now in an audio version, which I haven’t sampled yet but I’m sure it’s really good. What’s new now versus when it first came out?

[19:54] Marguerite Lorenz: So I’ve simplified it a bit, because I recognize that each of us can look up the probate code for the state that we live in, and it was really much more of a California-specific book. Look, I’m a California Licensed Professional Fiduciary and I’m also a Master Certified Independent Trustee. So having the audiobook, and also having it in PDF form, I think is very helpful for people so they can make notes, take a certain page with them. And the book now is exclusively available at planforthis.com. And when you purchase it, you’re getting both the audio and the PDF version.

[20:27] Frazer Rice: Cool. Well, we’ll make sure that’s in the show notes. Let’s take the last little bit of time we have here and talk about the decision to have an individual trustee — and by individual, I mean family trustee — versus a more professional trustee, whether it’s an individual or a bank trustee. You and I sort of nod our heads in agreement every time we talk on this topic, and I’ve done podcasts with others where I feel this looming crisis is coming, where people put all these documents together in trusts and then they staff them with people who may be initially qualified, barely, but then six months after the ink is dried, their interest wanes, their technical capability wanes, life intervenes, something different happens — and the problems just multiply at that point.

I guess my big question is — and from the Independent Trustee Alliance, where there is a group of people who can operate as a trustee without having to go to a bank — how bad do you think this problem could get? We have this great wealth transfer and we have a lot of assets shifting, not just from the ultra-high-net-worth but regular people shifting to the next generation, with people at the wheel of these structures that I don’t think really understand what’s going on. How bad could this get?

[21:52] Marguerite Lorenz: In my view, we’re not just dealing with a transfer of wealth — because that’s where a lot of people focus. Where’s the money going, right? It’s going from one generation who died and then the money’s going to the next generation. But in that interim — and by the way, many people live for years unable to make new decisions for themselves. So it’s during their lifetime that they might need their trustee to step in, not just after they die. And that’s really important to consider: that you might need someone for five or six years when you need someone to make decisions.

What kind of decisions? You have digital assets, you have your social media accounts, you might be doing transactions on your phone all day every day — but someone else will need to get into your phone to actually do those things, maybe. Is that somebody you want from your family to do that for you? Maybe you still say yes. But that family member has to have the ability to enforce the rules that you’ve set in your trust. They need to communicate really well with other people. And they have to set aside their own feelings. They have to put you first. And that’s a big challenge.

So when you think about the word fiduciary — and I know that the financial industry has used the word a lot — the technical aspect of that is that I’m putting my needs aside and putting that trustor, that person who created the trust, their needs first. Then I also have to consider their beneficiaries and the future of those beneficiaries. So I’m dealing with transactions and having to account for every single penny of where the funds are now and where they’re going, what the assets are, what the character of those assets are. I have to deal with all the taxation that goes with that. I have to manage those assets. So that’s one set of skills, right? But then there’s the softer skills about communicating with other people and understanding their doubts and their concerns, and not taking that personally, and putting things in writing.

So this is a big job. It’s not the simple job that it might have been at one point, where someone just wrote a will on their cocktail napkin and said, “Okay, I’m leaving you all my money.” The will doesn’t operate at all if you go to the hospital and you haven’t granted authority to anyone to be that person for you, to go to your house, get you some clean underwear and socks and bring it to the hospital for you. So I think we have to look at our lives as more complex. It’s not just driving a car; it’s deciding where that car goes, and if the car is maintained, and is the car clean, and can we have other people in the car with you? There are just so many decisions that I’ve had to make for other people that I don’t take any of this lightly — and nor should anyone who’s writing their estate plan. You need that attorney to ask you those questions and walk you through your day-to-day, so you can keep your day-to-day as long as possible.

[24:54] Frazer Rice: Well, the other part too is the people who assume those roles — and I’ve been in it too — when you are asked to make tough choices, sometimes you have to make tough choices that favor one person over another, and you may be called to account for that. And the idea of keeping diligent records and writing — in a sense putting down the reasoning behind what you’re doing and making sure that everyone, to the extent it’s possible, understands the why of what’s happening — I think that is going to help people really save themselves some issues going forward when those tough choices have to be made.

[25:23] Marguerite Lorenz: You know, if you don’t get your estate plan done, you’re suing your family.

[25:27] Frazer Rice: Ah — good way to put it.

[25:29] Marguerite Lorenz: You’re making them go to court, right? And who would want to make anyone else go to court? I mean, it’s just such a sad thing. And by the way, our courts are overrun with people that did no planning. And none of it happens quickly. So if you end up hospitalized and you haven’t selected a person, then the hospital and their bioethics committee is going to do the best they can. They’re going to ask for next of kin to make decisions for you — people that you may never have discussed your personal life with now have to be making decisions for you.

So I’m asking people to be a little more proactive. I know you’re busy. I know it costs money to get an estate plan — probably less than you think, and certainly less than probate court would cost. A lot less than probate court would cost. 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.

I’m good. I have my plan, I keep up to date with my successors. I have a succession plan that’s worked beautifully. I’ve tested it. I know. And that’s why I can be so calm and so confident everywhere I go in my life. I’m feeling so good and so happy. Well, I want that for everyone. I want everyone to have that calm, true confidence that comes with knowing you’ve done everything you possibly can for yourself and the people you love.

[26:54] Frazer Rice: Terrific. Marguerite, how do people get the books? How do people find you and your podcast, the Independent Trustee Alliance, and any other points of contact?

[27:04] Marguerite Lorenz: Great, thank you. So planforthis.com is where you can find the books, where you can find me. We do have a podcast that has some wonderful discussions, case studies, and other topics to help people better understand the choices that they have. The Independent Trustee Alliance has a wonderful directory to find all kinds of professionals, but especially independent trustees, and you can find that at trusteealliance.com. And I’m going to be out there — I’m on LinkedIn. Come find me, connect with me. And Frazer, once again, thank you so much for the opportunity to visit with you.

[27:40] Frazer Rice: Oh, it’s always great to get your expertise. And you bring a great sense of empathy to what can be a very technical and dollar-driven process. And I think the empathy, when it gets avoided or missed, there’s something really lost. So I really value your perspective on it. Thank you so much.

[28:00] Announcer: This podcast is for educational and entertainment purposes. It is not investment, legal, nor tax advice and does not represent the opinions of the employers of the host or guest.

Subscribe to Wealth Actually on Apple Podcasts, Spotify, Youtube or wherever you listen — and if this episode was useful, share it with the person you have named in your documents.

https://www.amazon.com/Wealth-Actually-Intelligent-Decision-Making-1-ebook/dp/B07FPQJJQT/

“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

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/

Citizen Heir: How Engaged Citizenship Helps Solve The Three Generation Rule Destroying Most Wealthy Families

https://youtu.be/yyt4d271lSU

Citizen Heir

Successful families right now are struggling mightily to raise their kids to be productive, moral people in an Instagram me‑first world. The question I keep hearing from parents who are serious about it is, where do you turn when achievement gets measured in dollars and likes?

The stories of ruined generations are as old as time itself. There’s even a phrase for it: “shirt sleeves to shirt sleeves in three generations.” Every culture has a version of that saying, and they all mean the same thing. The question I keep coming back to is, why do some families break that pattern when so many others don’t? The ones who do almost always took seriously something harder than drafting a good estate plan. They took seriously the job of raising a good heir.

And today, I want to share a concept that comes back constantly in those conversations I have with clients. I call it the “citizen heir.” Citizenship has been on my mind a lot lately with America’s 250th birthday coming up.

We live in divided times, and the discourse around civic responsibility has suffered for it. Many people feel the core ideas and institutions are no longer worthy of their trust. We’ve become loose from our moorings. That might sound like a political observation, but it’s actually a family one.

Because when you strip away the noise, what families with significant wealth are really doing is trying to transmit values alongside resources. And that’s exactly where most of them run into trouble. They get very close to the money, and sometimes in the process, they forget the values part.

Here’s the connection I keep making. A good citizen and a good heir are operating under the same moral logic. A good citizen doesn’t treat rights as pure entitlement. They understand they’ve received something they didn’t fully build. It could be a society, a tradition, a set of institutions, yet they’re responsible for what they do with it.

A good heir works exactly the same way. Wealth isn’t a possession, it’s actually a trust. In Jewish, Christian, and Islamic traditions, this idea is ancient. Wealth is treated as something given for service, not self‑indulgence. A faithful person uses what they receive with humility, with charity, and with accountability. The good heir honors the giver by using the inheritance wisely. Both are tests of whether a person can handle a gift without becoming enslaved by it.

Politically, a good citizen sustains the republic, not just by obeying laws, but by defending institutions and resisting the pull toward passive entitlement. A good heir does something analogous within a family. They preserve capital and avoid waste. They use resources in ways that strengthen something larger than themselves over time. In both cases, the person is a custodian of an order that predates them and should outlast them.

Citizenship without duty is just a passport. Inherited wealth without responsibility is just a balance. Both require something from the person holding them, or they stop meaning anything at all. Neither the citizen nor the heir chose the structure they were born into, but both are answerable for what they do with it.

The good citizen and the good heir each prove something to themselves by converting privilege into obligation, and obligation into something durable. A family’s educational efforts have to acknowledge that reality. Preparing an heir isn’t a side project. It deserves as much attention as any other part of the plan.

https://www.amazon.com/Wealth-Actually-Intelligent-Decision-Making-1-ebook/dp/B07FPQJJQT/

https://frazerrice.com/10-family-office-myths-exposed/

https://www.jamesehughes.com

The New CEO Social Media Playbook: Communications Strategies in the Digital Age for the Modern CEO. In this episode, TED MERZ from Principals Media discusses the seismic shifts in corporate communications, exploring how CEOs can build authentic visibility in a rapidly evolving digital landscape, and the future of traditional media.

https://open.spotify.com/episode/6MLjRILrkeCPhlG6ItXaMC?si=uQP9CdYORpmr89iL4dfMvg https://youtu.be/clHzhrOZAps

Key Topics

• The decline of traditional PR channels like CNBC and The Wall Street Journal and the rise of direct content creation for thought leadership.
• The importance of authenticity and transparency in CEO messaging, with real-world examples such as McDonald’s CEO controversy and insights into crisis management.
• Strategies for leveraging social media platforms—LinkedIn, X (Twitter), YouTube, and emerging tools—for building personal and corporate reputation.
• The evolving role of AI in shaping search results and online identities, emphasizing the need for content influence.
• The significance of visibility across multiple channels and the concept of the “public record” for professional branding.
• Balancing platform choice with audience targeting and the importance of integrated content strategies.
• The future of content formats: long-form videos, short clips, point-of-view storytelling, and the normalization of CEO participation in digital media.
• Traditional media’s ongoing role in establishing credibility within a pyramid of influence, from legacy outlets to influencer-generated and user content.

Timestamps:

00:00 – Introduction to CEO communications in the digital era
02:00 – The decline of traditional media outlets for corporate messaging
05:00 – Case study: McDonald’s Big Arches video controversy and lessons learned
07:30 – Why engagement in digital platforms is no longer optional for CEOs
09:00 – Platform strategies for business communication and audience targeting
11:00 – The future role of CEOs on YouTube and social video content
13:00 – Authenticity and AI’s impact on content credibility
15:00 – Cross-platform content distribution and emerging channels like Substack
16:00 – Measuring success: from vanity metrics to real business impact
17:00 – The complexity of linking social media efforts to sales and hiring outcomes
19:00 – Building visibility to enhance reputation and company valuation
20:30 – The importance of a balanced media approach—traditional and digital
22:00 – Influencer dynamics, user-generated content, and organic reach
24:00 – The societal shift towards individual visibility and personal brand
26:00 – The relevance and future of traditional media in a digital-first world
28:00 – Strategies for influencing AI-driven search and online biography management
29:30 – How organizations can foster authentic employee advocacy
30:50 – Resources to connect with Ted Merz and his ongoing projects

Resources & Links:

• Principals Media
• Pricing Culture — The Bloomberg for Collectible Data
• LinkedIn
• X (Twitter)
• YouTube
• Substack

Connect with Ted Merz:

• LinkedIn
• Twitter

Insights:

• CEOs should view digital visibility as a fundamental communication muscle.
• The importance of integrating long-form content, short clips, and authentic storytelling.
• The shifting landscape where legacy media remains valuable for credibility, but influence is increasingly driven by digital presence and influencer narratives.
• BRAM WEINSTEIN ON “BREAKING THROUGH DIGITALLY”

https://youtube.com/shorts/Ia_X8A_WhG4?feature=share

Transcript

Why CEO Communication Is Changing

Frazer Rice:
Welcome back to the Wealth Actually Podcast. Apologies in advance for the head cold. I’m joined today by Ted Merz of Principals Media. We’re discussing how CEOs are navigating communications, the role of social media, and whether traditional media is still relevant.

Frazer Rice:
Ted, welcome.

Ted Merz:
Great to be here. Thanks for having me.

Frazer Rice:
We met at a dinner in New York, and I was struck by your perspective on the shift happening in PR. You advise CEOs on communications—what are you seeing?

Ted Merz:
We’re in the middle of a major structural shift. Traditionally, companies relied on PR firms to secure placements in outlets like CNBC or The Wall Street Journal. That’s becoming less effective—those platforms are more competitive, often paywalled, and in some cases shrinking.

Ted Merz:
At the same time, more people want access to that exposure. So companies are going direct—creating their own content through social media, podcasts, video, and written thought leadership. It allows them to bypass traditional gatekeepers and control their narrative.

Risks, Authenticity, and the Learning Curve

Frazer Rice:
It also gives you more room to develop your ideas. But we’ve seen cases—Sam Altman, for example—where messaging goes sideways. Is that inexperience or the format?

Ted Merz:
It’s not the format. There’s always risk in speaking publicly—people can react negatively. Sometimes it’s inexperience, but more broadly, this shift is inevitable.

Ted Merz:
If you want to reach younger audiences—late millennials and Gen Z—they’re not watching CNBC or reading newspapers. They’re on YouTube and Instagram. So participation in digital media isn’t optional.

Ted Merz:
That said, there’s a learning curve. Executives aren’t always comfortable, and mistakes will happen.

Frazer Rice:
Just look at the reaction to a poorly thought-out tweet—it can spiral quickly.

Ted Merz:
Exactly. But opting out is the bigger risk. If you’re not visible, you’re not part of the conversation.

Choosing Platforms: LinkedIn, X, YouTube, Substack

Frazer Rice:
I’ve leaned into that with this podcast and more activity on LinkedIn and Twitter. But there’s a tension—should you focus on one platform or meet clients wherever they are?

Ted Merz:
It’s not about the platform—it’s about communication. You’re either writing or creating video.

Ted Merz:
For most businesses, LinkedIn is the best starting point. It’s professional, relatively forgiving, and widely accepted. But platforms are evolving quickly.

Ted Merz:
For example, X (Twitter) is now supporting long-form content—5,000+ word essays—and has become a hub for thought leadership in finance and tech. It’s more intense and less forgiving than LinkedIn, but that may be where your audience is.

Frazer Rice:
That’s part of why I moved my podcast to YouTube. If you’re not on YouTube, you’re invisible to Google. But not everyone is comfortable on video—how do you handle that?

Why Video and YouTube Matter for CEOs

Ted Merz:
I tell them to get comfortable.

Ted Merz:
YouTube is the new television. It’s where attention is going, and it rewards creators financially. Companies need to develop video capability.

Ted Merz:
Written content conveys ideas well, but video builds trust and familiarity. That’s critical today.

Ted Merz:
Historically, CEOs didn’t communicate this way. But now you see leaders like Mark Zuckerberg, Jamie Dimon, and Jon Gray using video regularly. That legitimizes it. Within a few years, this will be standard.

Frazer Rice:
There’s also a push for authenticity. Overproduced or AI-generated content feels hollow, especially with growing fatigue around corporate messaging.

Ted Merz:
That’s right. But authenticity doesn’t mean abandoning standards. You can still communicate clearly and thoughtfully.

Ted Merz:
Also, content is increasingly distributed across platforms—LinkedIn, X, YouTube, Substack. Substack, in particular, is emerging as a strong platform for serious thought leadership.

Ted Merz:
Importantly, in business, the goal isn’t to go viral. It’s to create a credible public record—so when someone looks you up, they see someone thoughtful and worth engaging.

Measuring Impact: Beyond Vanity Metrics

Frazer Rice:
That raises the question of metrics. How do you connect social media activity to actual business results?

Ted Merz:
It’s difficult. Social media behaves more like brand advertising than direct response marketing.

Ted Merz:
Vanity metrics—likes, shares—can be misleading or manipulated. The connection to revenue is often indirect.

Ted Merz:
But you can see impact anecdotally. One client told me they couldn’t tie posts directly to sales, but they were attracting better job candidates who already understood and trusted the firm. That’s real value.

Frazer Rice:
And what about search? It used to be about controlling Google results. Now with AI-driven search, that’s changing.

Ted Merz:
Exactly. Large language models now shape how people are perceived online. You can’t fully control that, but you can influence it by consistently publishing clear, factual content.

Ted Merz:
If you don’t, the narrative will be created without you.

Personal Brand, Corporate Brand, and Goodwill

Frazer Rice:
I think of this as building personal and corporate goodwill—like managing the name on the back of the jersey as well as the front.

Ted Merz:
That’s a great way to put it.

Ted Merz:
We’ve also seen a cultural shift. In the past, companies emphasized the collective—“there’s no I in team.” Today, we’re in an attention economy where people connect with individuals more than institutions.

Ted Merz:
That’s why CEOs are becoming more visible. It helps the brand, and it reflects how audiences engage.

Ted Merz:
Companies are also trying to involve employees, but that’s tricky—you can’t fully control messaging and still have authenticity.

Frazer Rice:
Which brings us back to the core tension: authenticity versus control.

Ted Merz:
Exactly.

Is Traditional Media Dead?

Frazer Rice:
So is traditional media dead?

Ted Merz:
No—but its role has changed.

Ted Merz:
Think of it as a pyramid. At the top is legacy media, which provides credibility and validation. Below that are influencers and independent creators. At the base is owned content—what you publish yourself.

Ted Merz:
Traditional media still matters, but it’s harder to access. Increasingly, strong content created independently gets picked up and amplified by legacy outlets.

Ted Merz:
So the strategy is layered: create your own content, engage across platforms, and let that visibility lead to broader coverage.

How to Work With Ted Merz

Frazer Rice:
That makes sense. Ted, we’ll have to continue this conversation—there’s more to cover. In the meantime, where can people find you?

Ted Merz:
LinkedIn is the best place—I’m very active there. You can also find me on X, YouTube, and TikTok.

Ted Merz:
My primary business focuses on content creation and ghostwriting for CEOs. I’m also building a platform called Pricing Culture, which tracks collectible assets—think of it as a Bloomberg for collectibles—targeted at family offices.

Frazer Rice:
Terrific. We’ll definitely dive into that next time. Thanks for joining.

Ted Merz:
Thanks for having me.

https://www.amazon.com/Wealth-Actually-Intelligent-Decision-Making-1-ebook/dp/B07FPQJJQT/

Keywords:

The New CEO Social Media Playbook, CEO Marketing, CEO Social Media, Quest for Authenticity, CEO Branding, Corporate-Speak fatigue, Problems with LinkedIn

ALEXANDRIA SEYDEL from Ripples Edge Advisors shares expert strategies on “getting the business ready to sell.” We focus on exit planning and getting the most value out of the transaction. Discover how early planning, owner mindset, and strategic positioning can lead to successful exits and satisfied owners.

https://youtu.be/8OwhCRCBZl4 https://open.spotify.com/episode/2qawd64OYzljBvU9xqS8df?si=1Xvv2OUFSbeBtUDeJGTMXg

KEY TOPICS

Early exit planning and owner mindset,
Getting the business ready for sale and transfer.
Risk assessment and deal readiness.
Owner satisfaction and post-sale happiness.
Capital raising and growth strategies.

SOUND BITES for “GETTING THE BUSINESS READY TO SELL”

“Getting clear on owner success is crucial.”
“Start exit planning 2-5 years in advance.”
“Family dynamics can be deal breakers.”

Chapters

00:00 Navigating Business Exits: An Introduction.
02:57 Understanding Owner Satisfaction Post-Sale.
.05:55 Preparing for Sale: The Importance of Readiness.
09:00 Building a Succession Plan for Business Continuity.
11:49 Assessing Business Value: The Exit Readiness Assessment.
15:08 Evaluating Growth Opportunities and Capital Needs.
17:58 Cash vs. Equity: Making Informed Decisions.
21:03 Finding the Right Buyers: The Role of Advisors.
24:08 Addressing Family Dynamics in Business Sales.
26:59 Checklist for Business Owners Considering Sale.

RESOURCES

Ripples Edge Advisors – https://ripplesedgeadvisors.com/

GUEST LINKS

LinkedIn – https://www.linkedin.com/in/alexandriaseydel/

QSBS For Founders – https://frazerrice.com/qsbs-for-founders/

TRANSCRIPT

Frazer Rice
Welcome aboard, Alex.

Alexandria Seydel
Hi Frazer, so nice to be here. Thank you for having me.

Frazer Rice
Thank you for being on. We’re at a time now with the economy where it feels like it’s roaring. Valuations on things are going up, up, up. And people who have founded businesses are exploring their options. That’s kind of where you step in with your firm Ripple’s Edge Advisors.

Talk to us about what you do to help founders get ready. Not only in understanding what they have in their own business. How to go through the daunting process of exploring their options. Getting their business bulletproof for when people start looking under the hood.

Alexandria Seydel
Absolutely. My background is as an M&A attorney, so I came from the deal side. My co-founder is an operator — she actually knows how to run the businesses. It’s a very good duo. I think like a buyer, first and foremost. That’s how I was trained. So how we help business owners now is we jump in two to five years before exit. We’re trying to solve a problem still being missed by most of the industry.

Brokers and bankers know how to get deals done, create auctions, create demand, and sell for high prices. That’s all great. But the gap I was seeing was the need to jump in with the owner before that process. Getting clear on what’s a win for them. There are some startling stats about owner dissatisfaction post-sale. Some surveys show 70 to 80% of owners are dissatisfied after selling. I’d argue that’s not because they sold — it’s because they sold to the wrong person in the wrong way. So it’s the who and the how.

Jumping in with them earlier. Before we go to market, Before we start talking multiples and financials. Getting with the owner and doing the work on what a win looks like for them. What do they care about in the process? When they think about their life through this deal and post-deal, what do they want to feel and see? How do they want to operate on an average Tuesday. Yes, after all the cool vacations with all the freedom and the new chapter. After that, what do you want to be doing?

And when you look back at that beautiful business you built and then sold, what do you want to see in it? Is it that client service remains the same? Is it that the ethos of the company remains the same? Or is it simply: “Alex, I’m satisfied with the biggest wire at closing we can get, and I’ll be a happy camper moving on to the next phase of life.” Really getting with that owner earlier to get clear on that — what’s a win for them and what’s a win for their business — that’s where we start. Then we begin implementing and helping them build those exit strategies from there.

We believe that foundational vision and values work is really going to help bring down that dissatisfaction number. So now we’re building an exit that feels right for the owner, right for the business, and helps them feel good about that transaction.

Frazer Rice
From the estate planning and tax planning side of things, I totally agree that the earlier you start, the more tools you have at your disposal and the better it turns out. I did a piece on pre-exit planning — really engineering what your calendar is going to look like a year after the sale. And I see a lot of dissatisfaction with people who sell and then lose purpose, or aren’t quite equipped to deal with their lower participation in the thing they built, the baby they helped give birth to.

They end up unmoored, and that’s part of the depression they sometimes feel if they haven’t really gamed it out and thought through how to replace the structure and the drive it took to build something. It sounds like we’re saying the same thing from slightly different angles.

Alexandria Seydel
Totally, absolutely. On your side, you’re such a critical part of the team when we start this process. One of the first two questions we ask every client is: who’s your wealth advisor, and who is your tax strategist? Hopefully they’re already in communication, but if they aren’t — you’re looking at the personal side, focused on what the family structure looks like financially, the tax strategies and planning that we know has to happen.

And because you’re doing this work — which not all advisors do — you’re getting really clear on the personal side. I’m coming at it from the business balance sheet and business trajectory; you’re coming from the personal side. They work well together. I like to jump in early with the other advisors working with these owners to get really clear, because not only do we know there are structural and strategic things we need to put in place years in advance, but we also need to get clear on what’s a win for them personally and business-wise.

Frazer Rice
One of the things you mentioned is the idea of getting the business ready to be sold. I’m fast-forwarding to the concept of getting it Sarbanes-Oxley ready in case a public company wants to buy it — so it can slot neatly into a balance sheet. But that’s really shorthand for saying things are professionally managed: bookkeeping, process, accounts receivable, accounts payable — all formally documented. So that when a buyer starts looking under the hood, they don’t start applying discounts for things they’ll have to fix later. Is that part of what you do?

Alexandria Seydel
Exactly. Being trained as a lawyer on the buy side, my goal — usually at the 11th hour — was to advise my client, the buyer, on risk. And to assess whether the purchase price offered in the letter of intent actually held up once we looked under the hood.

The best part of my job now — and way more fun — is that instead of just identifying risk and applying discounts (because almost every deal goes through some form of repricing), I’m jumping in with the sellers and owners hopefully a year or two in advance. We find things a buyer is going to see as a risk, things that would prompt a reprice, and we now have the opportunity to make those things shinier. So that when the buyer looks under the hood, the high end of the multiple range is validated.

It’s not just the financials the purchase price is based on — it’s all the other things buyers care about: the people, the processes. Is this a truly transferable asset they can step into, run, and grow?

Another big thing we work on is owner dependence. Most owners think the business doesn’t depend on them, but there are often significant opportunities to continue reducing that dependence — so that a buyer sees this as a true transferable asset they can step into and grow.

Frazer Rice
I imagine there are a couple of come-to-Jesus discussions where you have to tell the owner their revenue is too dependent on them personally. On one end of the spectrum, think of a law firm where business comes in because people think you’re a great lawyer — that doesn’t transfer cleanly. You want the recurring revenue to come from somewhere else.

That’s one issue I’m sure you have to sit someone down and address. The five-year runway is helpful there — it gives you time to build in a succession plan, not just for the sale, but operationally, so that value still sits in the business whether you’re there or not.

The second thing I find interesting is where you sit somebody down and say: this would look a lot better if you took less money out of the business. If we can put that back into EBITDA, then when a buyer starts applying multiples, they’re multiplying against something bigger rather than against a number deflated by, say, buying a boat. Do you get into that conversation?

Alexandria Seydel
Yes, we do, and we take a cursory look at that fairly quickly. Then we bring in support if needed — whether that’s on the accounting side, how money flows through the business to affect the bottom line and create the story. Every buyer wants at least three years of financials; we want that growth story to look strong, and we want to start building it now. If we need to bring in a fractional controller or a fractional CFO depending on the size and sophistication of the business, that’s something we pull in right away.

On your first point — we actually have an architect client right now at exactly that phase. He has a right-hand woman architect who’s been with him for over ten years, and he wants her to have the opportunity to step into the business. He also has a son who’s an architect and wants the same opportunity for him. So we’re building a succession plan. And one of the first problems we addressed was that he’s still driving almost all of the top-line revenue — nearly all the business development runs through him.

So we’re asking: when does this right-hand woman get involved in the sales process? What percentage of meetings is she in? What is she bringing in herself? His timeline is five to seven years, so we have time to build this out — continuing to train her, continuing to elevate her and others in the business who can drive relationships and sustain that revenue flow, the recurring revenue that comes from major referral partners and developers giving him large contracts.

And on the equity side: what’s the incentive plan? How do we get her aligned with the goals of the business so she genuinely wants to take ownership, both literally and figuratively? We’re building an equity incentive plan with her. On the process and sales side, we’re setting goals — she’s in a certain percentage of meetings by year-end, driving a certain percentage of revenue. We’re helping him set those goals and build a plan to execute on them.

Frazer Rice
And all of that also sets up a longer-term exit — maybe selling the practice to a larger architectural firm or a private equity-backed platform down the line.

Alexandria Seydel
Exactly. And on a slightly longer timeline, all of that work makes the business more efficient operationally and more attractive as a potential sale — whether that’s to those two individuals in a succession plan or to an outside buyer.

Frazer Rice
What happens when a business comes to you and maybe the brand is well respected and things look good from the outside, but there’s decay underneath? They come to you and say they’re ready to sell, but when you look at it, the dollar signs in their eyes are based on something that existed a long time ago and has since been left to deteriorate. What do you do in that situation?

Alexandria Seydel
We start with what we call an Exit Readiness Assessment — it’s a 90-minute virtual session that pulls you out of your inbox, out of the fires you’re fighting every day, and lets you step back and look at every dimension of your business through the lens of what a buyer is going to assess.

It produces a readiness score and tranches everything into three buckets: value adds (greater multiple), value detractors (reduction in sale price), and deal killers — things like accounting or legal issues so significant that a buyer doesn’t just reprice, they walk away entirely. That assessment becomes the foundation for a roadmap: what are the most important things to fix, and in what order?

We all have limited time, energy, and capital. The triage framework helps you apply those resources to the things that actually move the needle. And yes, there is often a come-to-Jesus moment. Sometimes an owner comes in burned out — they just want to hand over the keys. We want to avoid that situation, but if you get there proactively rather than reactively, if you’ve already done the work with advisors like Frazer and like us to put systems, people, and processes in place, your readiness score is in much better shape.

If you haven’t done that work, it requires a harder conversation — what do you want out of this? What are your goals? And what can we realistically accomplish in what period of time?

Frazer Rice
What about founders who want to grow and are looking for outside capital, but want to stay involved? How do you think about sourcing that capital and making sure the partners are the right fit?

Alexandria Seydel
We have several clients right now raising seed rounds, and one working through whether to raise a Series A. I think that discussion has to be framed, at least in part, through the exit lens.

There’s a lot of pressure right now — especially in AI or capital-hungry industries — to raise the big splashy Series A, make the oversubscribed round LinkedIn post. Great, I’m all for it if you actually need that capital. But there’s a lot to consider first: are these the right partners? What limitations does this put on your exit pathway?

I have one client who has a really nice business growing at a solid clip — I think it could exit in the $20 million range in the next year or two, and he’s still the primary owner. He’s feeling pressure from his industry where raising a big Series A is the norm. I asked him what he wants to be doing in two years. His answer was surfing in Portugal.

If you raise a Series A right now, you are not surfing in Portugal in two years. So with that in mind, is this the business you want to keep growing? Are you ready to bring in people who have real influence over how you sell, who you sell to, and for how much? Your timeline gets extended and your decision-making authority gets diluted. Maybe the Series A is right because you need the capital to grow — but even then, does it have to be a $50 or $100 million round? Could it be $10 million? Even the size of the round affects the cap table, the governance, and ultimately the exit.

Frazer Rice
Have you had the difficult situation where someone is presented with an offer that mixes cash and stock in the acquiring company — and you’re looking at it thinking maybe they should push for all cash, or maybe they should walk away entirely?

Alexandria Seydel
Yes, and I’m very comfortable in that conversation. My advice almost always starts the same way: get as much cash at close as possible. Reduce the earnout tranche.

A lot of deals come in structured across three buckets — cash at close, earnout, and rollover equity in the buyer. I’ve seen deals close where five years later that rollover equity is worth zero. So I walk every owner through this exercise: if the earnout and the rollover equity both go to zero, are you completely comfortable walking away with just the cash at close? If that feels okay, then we can dial those other numbers however we need. If it doesn’t feel okay, then we need to ask harder questions — do we need to grow more first? Do we need to negotiate different terms? Do we have multiple LOIs with different structures we can compare?

The institutional buyers will always tell you the rollover equity is going to 10x. Always. And as the lawyer, I used to be delivering that reality check at the 11th hour when it was almost too late. Now that I get to work with owners before that process, I can prime them early: rollover equity, in our minds, is always worth zero unless proven otherwise. If it 10x’s, that’s the cherry on top — incredible. But don’t build your retirement plan around it.

Frazer Rice
Are you part of the process of generating buyer interest? I imagine it’s often industry-specific — there are people who understand the space and know the players. But how do you get a few LOIs on the table so it doesn’t become a fire sale?

Alexandria Seydel
We consciously made the decision not to become brokers or registered broker-dealers, for two reasons.

One, I want to stay fully aligned with the owner’s actual goals. This has happened: we started working with a woman, began building up her people and processes, and 18 months later she said, “Wait — I actually have more freedom now. I’m operating at a higher level because the business is starting to run without me.” The work we were doing to prepare for a sale also just made the business more enjoyable to run. She decided to grow for another year or two instead. Because our compensation isn’t tied to a success fee at closing, we can fully support that decision.

Two, deal brokers and investment bankers are often highly industry-specific. A banker who knows your manufacturing sector deeply is going to be more effective in market than we would be. So we refer our clients to multiple specialists in their industry, help them assess fit, and — because I’m trained in reviewing those contracts — help them understand what they’re actually agreeing to in the engagement letter. Then once that team goes to market, we stay on the owner’s shoulder throughout the process. My consistent message: fit matters. Trust your gut. If this buyer doesn’t feel right, honor that, and let’s figure it out before we’re at the closing table.

Frazer Rice
How do you tell a founder or family-owned business that the family dynamics are a value detractor? If there’s conflict — someone looking for income while others want to grow, every decision a fight — I imagine buyers pick up on that quickly.

Alexandria Seydel
It starts with being human first. Understanding the people behind the business, understanding the family dynamics. A lot of M&A professionals have no interest in going there. My co-founder Kim Wozny and I both actually like that part. We like knowing the people, understanding the dynamics, understanding when someone has a mental block around part of their business because of a fear mindset, or when pressure from a family member is pulling them in a direction they don’t want to go.

Being willing to dig into that — as a third-party neutral advisor working for the founders first — is part of what we do. And on the process side, if you have four siblings who own a second-generation business and three want to grow while one wants to sell, how do you show that fourth person that now isn’t the right time? You give them more information, more context, more understanding. And where necessary, you wrap enough process and procedure around that situation so that a buyer can see that this one person being out of alignment doesn’t constitute a major risk to the business.

Frazer Rice
Don’t give the buyer a reason to say no or pay less. If you can batten that down ahead of time, it’s worth it. As we wind down — what’s a short checklist for founders who are thinking about selling? What are the first steps to assess their readiness?

Alexandria Seydel
First and foremost: it’s never too early to start thinking about it. Even just getting clarity on your personal vision — what you want out of this — helps direct major business decisions as you grow. We have two clients right now considering joint ventures. One is actually moving forward with a new 50/50 partner; the other decided against it. They’re on very different exit timelines, and those exit pathways are a large part of why a joint venture may or may not be the right choice for each of them.

I’m always happy to just talk to founders about how they’re thinking about this, even without any formal engagement. I want more owners thinking about exit earlier — it only does them a massive service.

And one practical exercise I love: the Europe Test. Imagine you’re going to Europe for three weeks, somewhere with no cell reception. Who calls you first? What processes break? What sits in your inbox undone? It’s a more fun version of the “hit by a bus” question — and it’s a really useful early diagnostic for where the business still depends too heavily on you. Start uncovering those things now, so you have the time and runway to fix them.

Frazer Rice
Terrific stuff. Alex, how do people find you and your firm?

Alexandria Seydel
I’m Alexandria Seydel — last name spelled S-E-Y-D-E-L. You can find me on LinkedIn, where I’m active all the time, or look up Ripple’s Edge Advisors. Reach out via email or LinkedIn message. Even if you’re just starting to think about it, I love having that conversation.

Frazer Rice
Perfect — that will all be in the show notes. Thank you for being on.

Alexandria Seydel
Thank you, Frazer.

https://www.amazon.com/Wealth-Actually-Intelligent-Decision-Making-1-ebook/dp/B07FPQJJQT/

ALTERNATE TITLES

The 5-Year Exit Strategy Blueprint: Preparing Your Business for Sale

Getting The Business Ready to Sell

How to Maximize Business Value Before Selling

KEYWORDS (GETTING THE BUSINESS READY TO SELL)

business exit planning, M&A, business valuation, succession planning, sale readiness, owner dissatisfaction, deal structuring, growth strategies, capital raising, exit readiness assessment, getting the business ready to sell,

In a world of noise and distraction, there is a trend in “Bringing Simplicity Back To Investing.” RICK FERRI and I talk about why it’s important for investments and why it’s important for individuals. You’re going to leave here understanding a new framework for looking at your investment portfolio and hopefully bring some peace of mind as you go forward.

https://youtu.be/8EFnt_UTjEA

Rick Ferri has been a good friend to the podcast. He shares his insights on simple investing, emphasizing the importance of clarity, discipline, and understanding the core principles of investing. He discusses the pitfalls of complexity, the value of index funds, and how to maintain a disciplined approach amidst market noise.

https://open.spotify.com/episode/743dxOLLgZjUzKszZo4Owy?si=57mqK1ZmQ0a7LPdcwVoQ-g

Keywords

investing, index funds, simplicity, portfolio management, financial planning, discipline, asset allocation, tax efficiency, global growth, investment philosophy

Key topics

The philosophy of simple investing
The stages of investor learning: darkness, enlightenment, and simplicity
The importance of cash flow and intrinsic value in investments
Asset allocation based on liabilities and time horizon
Tax-efficient investing strategies for taxable and retirement accounts
Risks of alternative investments and private equity in retirement plans
Discipline and automation in maintaining investment strategies

Chapters of “Bringing Simplicity Back to Investing”

00:00 The Philosophy of Simple Investing
07:03 Stages of Investment Understanding
11:19 Financial Planning and Purpose
17:57 Implementing a Simple Portfolio
23:01 Discipline in Investing
30:46 Navigating Complexity in Wealth Management

Resources

Rick Ferri’s Website – https://rickferri.com
Bogleheads.org – https://bogleheads.org
Index Fund Book by Rick Ferri – https://www.amazon.com/s?k=Rick+Ferri&ref=nb_sb_noss_2

Website – https://rickferri.com
Twitter – https://twitter.com/RickFerri

Skeptic’s Guide to Investing

Outline: “Bringing Simplicity Back To Investing”

Introduction: Three parts to simple investing: Philosophy, Strategy, Discipline

Part 1: Philosophy: Overview: Embrace Simplicity – the Education of an Index Investor – 4 stages

1: Born in Darkness (who you ask, chasing returns, naive research)

2: Finding Enlightenment (measure, compare, enlightened)

3: Complexity Traps (slice’n dice, factors, the fallacy of perfection)

4: Embrace Simplicity (global equity, specific fixed-income as needed)

Part 2: Portfolio Strategy Overview: Making the Philosophy Work for You

5: Setting Goals (family – culture, career – taxes, risk tolerance)

6: Managing Risk (three ways to allocate assets: required return, risk avoidance, cash-flow)

7: Tax Management (three account types, asset class tax, tax avoidance)

8: Investment Selection (ETF vs fund, balanced funds & TDFs)

Part 3: Discipline: Overview: Implement, automate, stay the course

9: Implement fully (consolidate, tax issues, lump sum vs DCA)

10: Maintain regulatory (automate new, rollovers, TLH)

11: Adjust as goals change (accumulation vs distribution, tax situations, legacy)

12: Stay the Course (recommit occasionally, continue ed., conferences)

Transcript of “Bringing Simplicity Back to Investing”

Frazer Rice (00:00.962)
Welcome aboard, Rick.

Rick Ferri (00:02.3)
Well, thank you for having me.

Frazer Rice (00:04.258)
Well, thank you. First of all, want to thank you for a kindness you showed me way back in time and having me on the Boggleheads podcast. It was probably worth at least 25 % of my book sales and it was a lot of fun to do and never forgot it. So it took a while, but here we are back on my podcast. And what I want to do is go through a little bit about really the three parts to simple investing, which I think is something, especially now with the proliferation of alternatives, a lot of noise with crypto.

That sometimes we kind of lose sort of the forest for the trees as far as what’s the right things to be thinking about in terms of an overall investing philosophy sort of embrace. And so maybe let’s start with that. How do you think about the parts to a good investing thesis and what is your overall worldview on that?

Rick Ferri (00:55.804)
So I’ve been in the investment advisory industry now for 40 years. And what I have learned is that the simpler you can make investing and the simpler you can make the portfolio, the better for you, the better for your family, the better for those who will inherit your portfolio. Don’t make it complicated.

Complexity is just job security for those people who are selling you things and trying to manage your money. And in the end, you don’t benefit from that. They do in the form of fees. And if you just had a simple portfolio of a few good index funds and maybe some individual securities, you’ll be much better off and your family will be better off in the long term. And that’s the philosophy of simple investing.

Frazer Rice (01:50.947)
Mm-hmm.

Rick Ferri (01:53.208)
The second part is a strategy. How do you go about doing this, particularly if you’ve had a complex portfolio? And the third thing is discipline, which is how do you stick with simplicity as an investment philosophy?

Frazer Rice (02:06.318)
Sure. and without the second two, it’s great to have high-minded thoughts and so on, but if you can’t do it, it’s all for naught, and then if you can’t stick with it, then the best laid plans just kind of go asunder here. So let’s go back to the philosophy for a second here, and as you think about, it’s almost like the life cycle of discovery and learning about how these things work. How do you think about that from an ARC perspective?

Rick Ferri (02:12.561)
Ha ha.

Rick Ferri (02:36.05)
So generally when you’re new to investing, you’re going to ask other people for advice. I where you get that from, might be a friend or family member, maybe a professional advisor, might be coworkers, maybe you’ll just get on the internet and start searching. I don’t know, but 99.9 % of the time you’re gonna run into advice that is not very good. And the advice will be, you should put your money here, you should put your money there.

Use these 10 different funds. It’s just a lot of confusion, quite frankly. I call this stage darkness because you don’t, you you’re just investing in the dark. You don’t know. And a lot of the advice is going to be very short based upon short-term performance. So recency biased people are going to be recommending, but you know, growth stocks because the Magnificent Seven has done well in the past.

Or buy crypto because crypto went up a lot in the past and so therefore you should buy it now. And so most of the advice you’ll get in darkness is going to be recent based upon recent performance and rather than looking at it over say how should you be investing over 10, 20, 30 years and that will end up being quite different. So darkness is where we all begin.

And most people stay in darkness. They never get out of darkness because they don’t put the brain cells to work to look at how am I doing? I mean, how has that done for me? What seems to be happening in my portfolio? Really? Do I really know what’s going on? And then the ones who are very fortunate start asking questions about, what if I just

Frazer Rice (04:06.125)
You

Rick Ferri (04:31.334)
bought the market and bought an index fund and just got the return of say the US stock market or the international stock market and that’s all I ever did. Would I be better off? And the answer to that 98 % of the time is yes, you would be better off if that’s all that you did. And if you come to this realization, I call it the second stage, which is enlightenment, where you now realize that, okay, all the stuff I’ve been doing may have been okay.

I’ve been moving in and out of things, but now I need to start looking at just buying the market and holding it for the longterm. And that’s enlightenment. But for some people, it doesn’t stop there. And they start to dig into this idea of indexing. When you start doing that, it’s good that you’re learning, but you’ll start running into a whole lot of noise.

That is alternative indexes, enhanced indexes uh… explore strategies all of these things that you’re going to take this nice simple concept called indexing and make it complicated again.

So you start adding all these things to your portfolio because it has the word index in it or maybe the word passive in it and uh… advisors are notorious for doing this it’s called complexity for job security

Frazer Rice (05:39.148)
Right.

Rick Ferri (05:54.066)
Basically, are, you know, you take the idea of indexing and you just add a lot of things all around the edges of it and you make a simple portfolio complicated. So the third stage of this process of simplicity is complexity. In other words, you’ve made something simple complex. Okay, so the last stage is

Frazer Rice (05:54.221)
You

Rick Ferri (06:18.544)
Simplicity. That is that you realize this is going on. You realize that all the stuff that you’re adding to your portfolio is just making it all complicated again. And that the people who are benefiting from this are not you, but the people that are selling you all this stuff. And you say, that’s it, I’m done. I’m going back to my second epiphany, if you will, which is simplicity. I’m just going to go back to a simple portfolio of a few broad index funds, US stock market index fund.

An international stock market index fund that covers the whole market and a couple of bond funds, municipal bond fund and maybe corporate bond funds or treasury bond funds. And you could use index funds for those as well. And it’s a really low cost, very tax efficient and very simple.

Frazer Rice (07:05.953)
A couple of quick asides here. The first one is for people who are coming into this in and they’re in the darkness, but they are informed maybe from the TikTok world or Robin Hood or Kal-She or these or these betting orientations and distinguishing between betting and investing.

How do you think about that and kick people over to the positive side of the force so that their emergence from the darkness into the enlightenment and simplicity doesn’t take them in a place where they really touch the stove in a bad way and have a bad experience that’s simple but bad.

Rick Ferri (07:32.988)
Right, okay.

Rick Ferri (07:51.484)
So there’s a concept called intrinsic value. You may have heard Warren Buffett speak about this. Well, you want to buy things that have cashflow. Bonds, for example, have cashflow. They pay interest. Stocks have cashflow. You have companies that are going concerns. They earn earnings and pay dividends. They buy back stock and they reinvest money. So you can value these things based upon these cashflows.

Real estate has cash flow, it pays rent, or maybe you own timberland that you can cut the wood or you own a farm where you can harvest or lease it out. mean, these are cash flows. So the first thing that I have for cut in investing is cash flow. How do my investments generate cash or will generate cash later on down the road?

That’s different than say buying gold or Bitcoin or currencies or commodities. Those things don’t have a way of generating a cashflow. One bar of gold put in a safe is one bar of gold a thousand years from now. It doesn’t become two bars of gold. doesn’t get little bars of gold. It doesn’t pay interest and so forth. mean, so unless you’re good at

Frazer Rice (09:12.994)
Right.

Rick Ferri (09:16.966)
Buying low and selling high, you can’t really expect to make anything other than maybe the inflation rate. And with commodities, you actually earn less than the inflation rate. Gold has earned a little bit more than the inflation rate. Where Bitcoin is going to end up, I have no idea. But the speculative assets are the ones that usually don’t have any intrinsic value. People are just betting on price because that’s all you have. I

f price is going up, let’s buy it. Because the price went up. I don’t know where it’s going, but the price went up, so let’s buy it. And maybe someone dumber than us will buy it at a higher price from us, and then we can make money. But I mean, you have to trade these things. And what information do you have? None, really. It’s very difficult to come up with information that the market doesn’t already have. And you’re not a professional trader. So you might get lucky. I mean, people do get lucky. You you can flip a coin.

And pick heads 10 times and if it comes up head 10 times it doesn’t mean you’re a good coin flipper you’re just lucky and so you can get lucky and you can make money doing this but it’s not a long-term investment strategy to do that it’s best to buy things that have cash flows or will have cash flows in the future.

Frazer Rice (10:30.175)
As I like to tell people, you not only have to be right, you have to be right twice, and then you have to be systematically right twice in order to make a living out of it. even professional traders struggle at that. And to think that you’re going to be better equipped than a lot of those folks is folly. And so I try to talk people out of that whenever I can, because I think…

Rick Ferri (10:35.42)
Correct.

Frazer Rice (10:58.101)
It’s just very difficult to play in that space and have that turn out to be a success. Okay, so we kind of have some ideas here around the philosophy and sort of the idea of, you know, sort of garnering luck versus skill and those types of components in that portfolio strategy, that second phase, maybe take us through that a little bit and how you take a good philosophy of simplicity and make it work for you.

Rick Ferri (11:22.18)
Right. So this gets into a little financial planning at the beginning of it because you can’t invest without a purpose. I you have to have a reason why you’re investing. It might be to pay future liabilities such as college for your children or retirement, or maybe you want to leave a legacy or maybe just trying to build wealth for the family, whatever it is. I mean, you have to have a purpose. And so what is the purpose? What are you trying to do?

And you have to look at your life and you have to say, are my liabilities? What are my short-term liabilities? Do I want to buy a house? Or do I want to send my kids to Ivy League school? Do I want to retire early? And what are my liabilities? And sometimes it involves other family members. Maybe you have parents who need your help or siblings who need your help.

So that’s a liability. The first thing you have to do is look at what are my liabilities? And included in that is how much you want to leave to your children. I often ask people, okay, you’ve got $10 million. How much do you want to leave to each of your three children? And they don’t have any idea. I said, do you want to leave more than 10 million or you want to leave less than 10 million? And a lot of people would say, well, they’ll get what’s left. Well, that changes the whole concept of investing if they’ll get what’s left.

Frazer Rice (12:43.318)
Sure.

Rick Ferri (12:43.634)
Versus, yes, I want to leave each of my child five million dollars when I die and I’m starting with ten. Okay, well that changes how you invest your money. So these are the liabilities. So that’s where you start with. And then you start looking at well, what are the short-term liabilities and what are the long-term liabilities? And long-term liabilities can be funded with equity. Meaning things that are ten years or longer out. I usually I tell people anything you’re to be spending your money on between say,

Now and 10 years from now probably shouldn’t be in equity. You’ll be getting dividends and interest from your portfolio, which is fine. You could just spend that money. But in addition to that, I big chunks of money that you might be spending to buy a vacation home or whatever it is really should probably not be in equity. But the money that’s going to be not used for 10 years or longer, 20 years or maybe ever in your life, that can be in equity. don’t differentiate that first.

A lot of times asset allocation, that’s what we’re talking about, starts with, well, what do you want between stocks and bonds? What do you want your portfolio to look like? What percentage in stocks and what percentage in bonds? I don’t think you really get to that number until you know when you’re going to be needing the money. If you’re going to be needing the money 10 years out, fine, that money can be in stock. So that would allocate a portion of that long-term money to stock and that might be a percentage. Okay, so that’s what we start with.

A real basic look at who you are and what do you need and when are you going to need it and what are you trying to do for your heirs. And then that leads to an asset allocation between stocks and fixed income. The stocks again, I’m not investing in any stock money in liabilities that I have in the next say 10 years. So it’s long term. Okay.

Now we have to look at the stock side. That’s the easy stocks. Stock investing is easy. I quite quite frankly, I’m working on a book right now about this, but stock investing is very simple. It’s much easier than fixed income and bond investing. Stock investing is simply we buy the global equity market. We’re just trying to buy the growth of global economic growth, global GDP growth. We’re trying to capture that, which has been going on.

Rick Ferri (15:08.594)
Fairly steady for about the last 250 years and continues to be that way as more and more countries shift more towards capitalism and away from fascism and communism and so forth and realizing that capitalism is the way if you want to take care of your people and you want to increase standards of living all around the world, it’s done through capitalism. much a fact of life. Capitalism works. Well, I’m well.

Frazer Rice (15:31.185)
I think many can agree with that, although it might not be popular here in New York.

Rick Ferri (15:37.425)
The reason New York existed was because it was a port for capitalism at first. So I mean, is the financial capital of the US still is New York. So you could disagree with it because you live in New York, but you’d be in a minority and you’d be outside of reality and history as well. But the idea is that it’s all I’m trying to capture this global growth of…

Frazer Rice (15:41.686)
That’s right.

Frazer Rice (15:55.648)
Exactly.

Rick Ferri (16:03.026)
Global economic growth, which is about 2 % per year in real terms. So if I get from equity, if I get the inflation rate and I get 2 % real growth and then I get about a 3 % dividend yield and that comes from both cash dividends and then buybacks, we’re looking at about a 7.5 % expected return from global equity. And that’s good enough. I mean, that’s all I need on my equity side. I’ll be outperforming inflation by about 5%.

I’ll have to pay some taxes, but I’ll still have an actual real after-tax return of about 3%, which is good. Okay. The rest of it then goes into fixed income. And what type of fixed income? Well, that depends on what type of account that you have and what your taxes are. So if it’s in a taxable account, it could be municipal bond income, because it’s probably your best bet if you’re in anything other than a 22 % tax bracket.

Or if it’s in your retirement account, could be corporate bonds. And depending what state you live in, it could be treasury bonds. But you don’t expect the treasuries or the corporate bonds or the municipal bonds really to give you much of a return over taxes and inflation. If you could pick up 1 % over taxes and inflation over 20 years or so by being in fixed income, I mean, you’re actually doing well.

So that is more of a stabilizer, meaning you don’t want to be all in stock because you can’t handle the volatility of the stock market. It goes up and down too much, even though the asset allocation would say, well, you should have an awful lot of your money in stock because you have a lot of money that you’re not going to be needing in the next 10 years. But a lot of people can’t handle having a lot of money in stock. So you have fixed income that at least keeps up with taxes and inflation over the long term. And that becomes part of your asset allocation as well. So it’s kind of how you

This is what you do first before you go out and pick any index funds. You have to go through this process.

Frazer Rice (18:00.116)
And then as part of that, I spend a lot of time basically all day, every day thinking about the tax management side of things and helping people understand their appetite for volatility and how that impacts their long-term goals and things like that. The creation of these buckets to understand where you are in your tax situation and where you’re going to be, that can have a pretty significant impact on how things do.

And from your perspective, I that’s really just, that’s a function of projecting out the purposes that you described before with your current situation and then the vehicles with which to invest in.

Rick Ferri (18:38.226)
Right. And you’re not trying to hit the ball over the fence here. I mean, you’re just trying to get your fair share of the returns that are available to everybody. And through index funds, and this is where index funds come in, you can get exactly that. I mean, you could buy a global equity index fund, a global equity, covers the entire globe for a few basis points, 0.05 % per year fee. It’s very tax efficient. And that wasn’t the case.

30 years ago, 40 years ago, but it is now. that’s the way you should do this. You don’t want to leave out all these ideas that you’re going to go out and hire people who are going to outperform that because they don’t. A vast majority of them don’t.

Frazer Rice (19:21.963)
And so the machinery to implement these portfolios, ETFs are sort of standard tax-efficient ways to do things. Mutual funds distribute gains at the end, which is sometimes a nasty surprise for people who are learning about this. Maybe take us through your analysis on how to implement this index investing in a way that stays simple and tax-efficient and at the same time helps you take advantage of what’s out there.

Rick Ferri (19:52.883)
So we have to divide up the world between your taxable money. Again, you already have a portfolio. So you have all these legacy assets in a portfolio, in your taxable portfolio. Then you have your retirement portfolio, 401k, 403b, 457 IRA, rollover, Roth IRAs, tax-free portfolio. So you have to look at taxes first.

To implement a…simple portfolio say in a 401k if you have access to a target date index retirement fund like a Vanguard or an iShare or a State Street very low cost Fidelity has one too but very low cost index target date retirement fund this does it all for you you don’t have to do anything you just have to buy one fund based upon what the asset allocation is underneath the hood of that particular fund.

How much in stock, how much in bond. That’s all you need to do in a 401k. You could roll your own in a 401k by buying individual index funds like a US stock market index fund, an international index fund, and say a bond index fund. So you could do your own allocation if you wish. But a target date fund works really well there.

In a Roth account, you probably just want to have equity because there’s no tax in a Roth account. So you want to get maximum growth out of that account. So I would you look at the Roth account and I’d say, well, I’ll just buy the global equity index fund and my Roth account. And that’s it. All I have. So you’ve got your retirement accounts, which are target date fund. Very simple. You’ve got your Roth accounts, which are just a global equity index fund. And the only thing you need to worry about is your taxable account.

Taxable accounts always have issues because people will come in and they will have this list of stuff that they already own and guess what there’s a lot of embedded long-term capital gains in there and if you just sell it and go to a index portfolio you may not be doing the clients a good service because they’ll pay a tremendous amount of taxes and if they’re over 65 they’ll have to pay more for medicare ermor they’re going to lose their over 65 deduct i mean lots of bad things happen when you just sell out of a taxable account

Rick Ferri (22:04.722)
So there you’re going to be a little bit more tactical. know, you’re going to wait. The market will give us some opportunities to trade out of some stocks or some investments that may have losses. So you can then take those losses. You could sell other things to that have some gains to offset the losses. And I mean, you may never get out of everything that you’ve got in a taxable account. But the idea is to have this portfolio out there of say, a US total stock market index fund and a municipal bond fund.

That you want to move towards. So as you’re selling these things off, you’re just putting the money in a US total stock market fund. And the reason I say US total stock market in a taxable account is because they’re so tax efficient. The dividend yield is down about 1.2%. They don’t distribute capital gains in an ETF. And that’s a great fund for a taxable portfolio. But you just can’t sell everything and buy it. You’ve got to crawl your way out of what you currently have.

Frazer Rice (23:05.715)
No, you have to do it thoughtfully or else you create hits that are unnecessary. So as we segue to the discipline portion here, one thing that’s popping up is the, I think the discipline to stay simple. The world out there, the US in particular, is making retirement accounts safe for alternative investments like private credit and private equity.

Rick Ferri (23:10.256)
Right.

Frazer Rice (23:31.211)
I just bristle and shudder because I think there’s a level of complexity and illiquidity that is misunderstood and it is going to be difficult, nay impossible, to properly educate people on where those things sit in the asset spectrum to the point where they justify their fees or anything like that. Maybe take us through what you think on that as we get to the discipline portion of how you sort of stay the course with this mindset.

Rick Ferri (24:00.924)
Well 401ks are allowing these private equity investments and private debt investments in, but I personally have not seen any of my clients and I have a lot of clients and I charge an hourly fee. So I’m not trying to sell anything or manage anybody’s money, but nobody’s asking for these things. where, where are they getting the idea that they should own them? Well, they’re getting from the people that were selling them, right?

The people who are making fees from them. I haven’t seen any useful data that says that these things actually enhance your return. Alpha goes to the manager. I say that over and over again. If these things actually produced a higher rate of return than say just a corporate bond index fund, you’re not going to get it.

It’s going to go to the advisor, it’s going to go to the manager, and all you’re going to do is take the risk. You’re going to take the risk and they’re going to get the excess return in the long term through fees. They don’t make any sense. You don’t do it. It’s just the rehash of active management and mutual funds, which has already been dismissed as not producing anything for you, the investor. It only generates fees for the people in the investment industry.

This is just another iteration of that and we’ve already seen some cracks. Isn’t that what Jamie Dimon said? What are they cockroaches? I think is the word that he used in the private equity market. And yeah, I mean, this is not new. This is just a repackaging of ideas just that now they’ve been allowed to go into the 401k market. But you have to ask yourself why haven’t they been allowed to go into the 401k market for the last 40 years if they’ve been so great? It’s because the SEC

Frazer Rice (25:31.978)
Right.

Rick Ferri (25:58.703)
The Department of Labor said, no, we’re not going to allow these things in there. you give people enough rope to hang themselves. They’re not going to hang themselves, by the way. Somebody else is going to put the noose around their neck. And that’s the advisors who are doing that.

Frazer Rice (25:59.499)
Department of Labor and right.

Frazer Rice (26:19.066)
And I mean, a different podcast probably, but it’s something where the liability really is going to shift to the planned sponsors. I don’t care what happens and you know, they’re going to present these things and something’s going to blow up. And it’s like, know, you may you gave me the option and they’ve already those lawsuits already already proliferate. OK, so back to discipline a little bit here. What should people be doing in order to make sure they can carry carry out the.

Rick Ferri (26:39.367)
Yeah.

Frazer Rice (26:47.147)
What they’re doing in a systematic way and keep themselves safe from being distracted by all this noise.

Rick Ferri (26:52.86)
So again, that’s why we start out with the philosophy. You have to believe in the philosophy of simplicity and simple indexing. You can’t just jump to it because some TikTok video said buy index funds, okay? If you’re just jumping to it that way, then you’re not gonna have the discipline to stick with it because it’s just another phase or fad or whatever in your mind. You don’t really truly understand.

Frazer Rice (27:14.346)
Mm-hmm.

Rick Ferri (27:22.32)
Why you’re doing it this way. So it gets back to the philosophy. Really got to understand the philosophy and why this works better than 98 % of everything else out there over your lifetime. And then you create the strategy for yourself and now you’re working towards completing that. Again, in the retirement account it’s done quickly, but in your taxable account it could take a while.

The discipline is while you’re getting your portfolio in line, the first thing you need to do from a discipline standpoint is actually do it. Actually go to your 401k and change what you’re investing in. Because so many people will do the strategy, but it never gets actually implemented. Or maybe it gets 50 % implemented. It never gets old.

It doesn’t, I don’t want to say never, because I have a lot of clients who do fully implement it, but I also have clients that I’ve given them the plan and three years later or five years later they come back and they haven’t done anything. Okay. And so I say, you need to implement the plan. Nothing has changed. So you got to, the plan first off has to be implemented fully. And then once it gets implemented fully, it’s a lot easier to maintain it.

But if it never gets implemented fully, then of course you can’t maintain it. So implementation of the plan fully is the first discipline, the first part of discipline. And then once that’s done, maintaining it. In other words, not being drawn off course. Yeah, it’s fine to say, the price of oil is gonna shoot through the roof because what’s going on in the Middle East, so I’m gonna buy an energy index fund. That sounds like something I should do.

No, it’s something you could think about. Something might be interesting, but it’s not something you should do. So discipline transcends the urge to do things. In other words, like John Bogle said, don’t just do something, stand there. And that takes more going back and remembering why you have this philosophy, going back and looking at the data.

Rick Ferri (29:46.151)
going to the right place to find information. And I’ll mention the bogeyheads.org website to go back and remind yourself why you’re doing this. If you’re gonna stick with it and these things help you stick with it. The more you automate things too, the better it is. Like we’re in a 401k just automatically invest in the target date fund and don’t do anything else. So automation helps you as well.

Frazer Rice (30:05.736)
Hey, hey.

Frazer Rice (30:14.109)
No question, if you can take these things out of your own hands in many ways and delegate it out and it happens automatically, just a chance of success on that front. And then if life intervenes and things need to be adjusted, you deal with it at that point and not have CNBC or the world news whipsaw your viewpoint on these different things.

So as we wind down here, just talk a little bit about the service that you provide, sort of these larger family office clients, because I think in a lot of times they gravitate toward complexity, they gravitate toward FOMO investing and how you help to center that back to this worldview so that they get where they’re going at scale at sort of that ultra high net worth world and remind them of you how they got there and how to not be how to not leave by by getting cast aside into these different whirlpools that are out there

Rick Ferri (31:13.778)
That’s a great question. So you got to pick your advisors well. So some of my clients have a net worth over a billion dollars. I have several clients that have several hundreds of millions of dollars and believe me,

They have simple portfolios, total stock market, total international municipal bonds. It’s all they have. And it may seem strange, but they don’t have these limited partnerships that you can’t get out of or syndicated deals that may sound good. I say to them, you don’t have enough money to own those, meaning that if you’ve only got $100 million, you’re just chump change to the Goldman Sachs of the world or the Morgan Stanley’s.

When it comes to who’s going to get the good deal on a the next private equity deal or venture capital fund. You’re the person they sell the leftovers to. I know it’s hard to people to accept this. They think they have a lot of money if they have a hundred million. But the fact is they don’t. I mean, if you’re not sitting on five, ten billion dollars, you’re not going to get preferential treatment. You’re going to get you might get lucky.

Just like everything else, the coin flip idea, but most of the time you’re not going to end up coming out ahead. That’s not the way they make you feel when they sell you these things. They make you, even if you had a million dollars and your Wells Fargo broker is trying to sell you some limited partnership, they’re going to make it feel like you’re very special and that this is a very special deal that is just for you.

Frazer Rice (32:46.505)
You

Rick Ferri (32:50.322)
And that’s how it’s going to be sold to you. But in the end, when you look at your performance and you say, I want to get out of this thing and you can’t, you realize at that point that maybe you shouldn’t have done it to begin with. And I’ve had experience going back 30 years working with some of the very largest families in the country, some magnificent seven IPO families, and they all want to get back to simplicity.

They want to get rid of all of the stuff that they had gotten. And it’s true. And it’s better for estate planning as well because you need to transfer these things eventually to somebody else’s name.

Frazer Rice (33:35.785)
you’ve triggered me. I’m dealing with this on multiple levels, on multiple different things, and I’ve had to be trustee on some of the complexity and sort of sit Indian style and try to own your way through it. It’s brutal. So.

Rick Ferri (33:53.81)
Wouldn’t it be so much nicer just to have, let’s say, a single total stock market ETF to have to deal with rather than all that other stuff?

Frazer Rice (34:01.807)
No question. OK, so as we wind down here, how do listeners and watchers find you?

Rick Ferri (34:09.478)
Well, they can find me at Rickferri.com. I’m not currently and I won’t be taking on any new clients. I’m sorry for that, but I have a set clientele and that’s all that I am working with and I won’t be expanding my clientele. But there are other people that do this that believe in what I do. And you can go to Rickferry.com and you could find their names there. But me personally, you can find me on Rickferry.com. I’ve written several books about this. I’m writing another one.

And but I apologize that I’m not off the market as far as hiring me personally.

Frazer Rice (34:45.645)
I love it. But at the same time, your books and your other ways that get out there, they are on RickFerri.com. So we’ll have that in the show notes. In the meantime, Rick, thanks for being on.

Rick Ferri (34:52.07)
Yes, exactly. Thank you.

https://www.amazon.com/Wealth-Actually-Intelligent-Decision-Making-1-ebook/dp/B07FPQJJQT/

This interview explores the critical importance of managing digital assets in estate planning, highlighting the challenges of digital inheritance, account access, and cybersecurity risks. TATYANA THURSTON and NATALIA PARKER share insights on creating effective digital estate plans, tools, and best practices.

https://youtu.be/2N56L51cD6Q https://open.spotify.com/episode/01ScInrdux6UOQ0G1kPzNF?si=uiCizZbOTEisa9PJ_D_S5g

KEYWORDS:

Digital assets, estate planning, digital inheritance, cybersecurity, online accounts, digital executor, wills, estate law, digital legacy, digital estate management

KEY TOPICS

• Digital assets definition and scope
• Challenges in digital inheritance and estate planning
• Tools and strategies for digital asset management
• Legal and cybersecurity risks in digital estate planning

Guest Name

Tatiana Thurston and Natalia Parker

Sound Bites

• “Biometric security doesn’t work after death.”
• “Planning ahead saves hundreds of hours and pain.”
• “Domain name issues can take months to resolve.”

Chapters

00:00 Introduction to Digital Assets

01:28 Understanding Digital Assets and Their Importance

04:14 Challenges in Estate Planning for Digital Assets

09:17 Navigating Access and Security Risks

13:22 Creating an Inventory of Digital Assets

18:21 Preparing Executors for Digital Asset Management

24:40 Resources and Tools for Digital Asset Planning

GUEST RESOURCES

DEXITPLAN

TRANSCRIPT

Frazer Rice (00:01.146)
Tatiana and Natalia, welcome aboard.

Natalia Parker (00:04.206)
Thank you.

Tatyana Thurston I Dexit (00:04.211)
Hi, thank you for having me.

Frazer Rice (00:05.966)
We are, this is a new frontier for wealth actually. You are the first two person interview I’ve done so far. So it looks like the technical issues seem to have gone away. That’s great. But we’re gonna talk about something that I think is the driver for your new company and something that’s important to me because when I’m advising people around a lot of different topics, either estate planning wise or wealth management wise, the digital asset question comes up and.

You’ve formed this new company. Tell us a little bit about that and more importantly tell us the problem that you’re trying to solve around digital assets

Tatyana Thurston I Dexit (00:40.83)
Okay, so I’ll first start with what is a digital asset because there’s a lot of different definitions out there and a lot of people have different concepts of what it might mean. of all, because crypto is in the news quite a bit, it is not just about crypto. Everybody has digital assets because basically if you are logging into an account and it is storing data, you have an account that has assets online and it could be monetized.

It could be social media, which means that the information that’s there is very personal to you. It could be that you have reward points you’ve accumulated. There’s all sorts of types of assets that are out there and there is a pain point problem. Let’s die down.

Natalia Parker (01:28.462)
Yes, and we started actually, it was interesting, Tatiana just went through the process of writing a will and she will tell about it. I went through a divorce where we had online business and it was really, really hard to trace all those online accounts because I had no understanding how many we had and what to do with them and how even to find them. And Tatiana wrote a will.

Frazer Rice (01:54.67)
Yeah, no. so just to put a finer point on that, it’s not only the monetary assets and the social media accounts and everything that basically requires a password to get into it probably in this day and age.

Natalia Parker (02:10.252)
Yes, and I can tell you more than I lost pictures of my family from my daughter’s birth to age seven because I didn’t think that the iCloud password and iCloud identity gone through a divorce. Yes.

Tatyana Thurston I Dexit (02:10.336)
That’s all.

Tatyana Thurston I Dexit (02:26.88)
So she can resell for it. Yeah.

Frazer Rice (02:26.992)
Yeah, and a very painful thing to go through. so, Tatiana, as we sort of look at that example and make the definition a little bit even more in depth, how else do you sort of think about that in terms of the roles that are played from a Will’s perspective?

Tatyana Thurston I Dexit (02:49.366)
So from a will perspective, you have two kinds of entities. You have things where business owners have created online accounts where their business is running off of certain platforms. And you also have a personal side aspect. And it may be an influencer, it may just be your personal account. The thing is that we’re dealing with a problem of immortality.

And this means that these accounts remain open, active and online, ready for hackers and ready for now, today, AI to continue the trajectory of that account because they’re making money off of the data that we’ve put online. So we actually have two things to look at. One is from the business perspective and how do you transfer a business over? Because maybe you’ve built a platform for 10 years on Facebook, right?

You have a following which is important to your base. Maybe you’re just a mom and you’ve put all your baby pictures on there, like Natalia, and then what is the loss? What is the impact of that loss? And both are really difficult on families. So estate planning means that we actually need to be looking at these accounts, we actually need to be planning for these accounts, because down the line, it’s gonna be a heavy impact, whether it’s sociological, emotional, or monetary.

Frazer Rice (04:14.552)
So as we think about this little bit further, the concept that these accounts are going to live on beyond the life of someone who created them. Maybe dive into that a little bit, because I imagine you not only have points of risk, certainly during the lifetime, and someone hacking in and pillaging your bank account or otherwise maybe blocking access or something like that, but what happens when someone passes away? How do those risks translate to the people who are inheriting these properties?

Natalia Parker (04:45.258)
Okay, let’s talk about it. We have those certain pain points. The first one, when somebody dies, the executor or administrator, they don’t know what is existence. They don’t know what kind of accounts the person had, what they wanted to do with those accounts. That’s a first problem because they don’t know even what banking, where the life insurance, did they have Venmo because they don’t have access to phone.

The second one, didn’t know what the person wanted to do with that account. Did they want to close, transfer, memorize it? They have no clue. The other one is authority as an executor doesn’t mean that you will get automatic access to the account. Many people think that yes, it is. No, for Google it doesn’t matter. Unless you were appointed as inactive account manager. The same for Apple.

Frazer Rice (05:48.68)
I was going to say those annoying terms of services agreements that no one reads and you click so that you get, you move on with life and get into your accounts, that’s where some of these details are buried. And the intersection between that and maybe what we call estate law and how an executor works, that’s where the friction takes place.

Natalia Parker (06:09.43)
Yes, I agree and many people don’t even know that that feature exists like legacy contact for Meta and Apple or inactive account manager. Otherwise, when you look at the hierarchy online tool, we call it Castonian tool, outweighs everything what you have in wheel. If the online tool wasn’t enabled, then it goes what kind of language you had in wheel.

if you appointed some digital executor and if that executor was authorized to have access to all your accounts. The third one, it always default to terms of service. Terms of service for basically 99 % of each company says do not give access.

Frazer Rice (06:56.09)
So if you were stuck and you didn’t do anything and you relied on the terms of service, you could be in a really deep set of troubles. They might delete your account, they may not allow access, or they may make it otherwise very difficult in order to access and do it. You think that the person who died with it wanted to have done.

Tatyana Thurston I Dexit (07:16.246)
That’s right.

Natalia Parker (07:16.598)
Absolutely.

Tatyana Thurston I Dexit (07:17.504)
That’s why some of these really large companies have a custodial tool. You do have to go to certain settings within the device or within the account. And you can enable these tools so that you can either add what could be a legacy contact. It may not have the term beneficiary on it, but it’s important to be able to enact that so that these settings will allow certain access down the line.

A lot of the companies are very particular about that the larger ones have it and then a lot of them don’t so Knowing which company has the most value to you and those terms of service is really important

Frazer Rice (08:01.84).
For someone who has an account that lives beyond them, there are identity and financial risks to having that. I can imagine, you know, when you put a credit card on file and, it’s auto-debated or you have information lurking out there that that’s a problem. Maybe talk a little bit about how bad that can get.

Tatyana Thurston I Dexit (08:21.517).
So I think there’s a few issues on that. We all know that there are scammers and hackers. The really important stories that have come out in the past is where AI is enabling recopying your name, image, and likeness posing as you live on a video stream or live on a phone call asking for money or data or information. And this is becoming really prevalent.

This is where families, if they want to save and secure their reputational legacy. But also perhaps crypto, perhaps their banking accounts, it’s really important that they understand that they are all subject to this hacking because probably the likelihood that they have a social media account is there and that means it has public access.

Frazer Rice (09:17.636).
So let’s dive into the tech problem. I can envision, and I’ve heard before, the concept of someone passes away and people can’t access the computer, the hard drive, the phone, all sorts of mechanisms that hold a lot of this data. I think you could probably extrapolate that to the cloud accounts and things like that where other information is held. How do you help people think about that?

Natalia Parker (09:28.162).
Mm-hmm.

Natalia Parker (09:44.398).
Two-factor authentication. It is your phone, your email, it is gateway to your estate, basically, administration. If you don’t have access to the deceased phone or email, you don’t know anything about their accounts, first of all, second of all, where all those codes are coming to, to that devices.

Frazer Rice (10:08.72).
Right. And how do you fix that problem?

Natalia Parker (10:12.91).
There are some settings on iPhone because we kind of everybody has iPhone some have androids but mostly it’s iPhones. Yes, you have to establish the legacy contact. You have to make sure that specific features are turned off or on like stolen device protection. If it is on, it’s basically impossible to override it.

Frazer Rice (10:20.793).
Right. Beware the green text.

Tatyana Thurston I Dexit (10:24.212).
Bye.

Natalia Parker (10:40.302).
because if 48 hours, is it 48 or 72, Tatiana?

Tatyana Thurston I Dexit (10:44.981).
Well, so what she’s referring to is that the latest update in Apple has this feature for stolen theft mode, it’s called. So this happened to us on an actual case. Someone had given us a phone and they said, can you help us? The problem was the person had passed away over 100 miles away. because Apple tracks our location everywhere we go, it’s a habitual, you know, we’re creatures of habit, right?

Same coffee shop, we go to the same store. So they know what our patterns of behavior are. As soon as it leaves that circle of trust, call it, that map of trust, theft mode can become enabled if the setting is on, which means that Apple has cut off any access to the phone. So for people who are dealing with families, let’s say, who live across state borders, this is a really difficult task for them. Because their phone is completely inaccessible because of theft mode not even because of the legacy contact.

Natalia Parker (11:51.278)
8.

Frazer Rice (11:51.345)
And then, you know, I’ve seen in movies and I’ve actually heard anecdotally, you know, the concept that the biometrics at play, they in a sense turn off too. It used to be you could take the phone and put it up to somebody’s face or you could take their finger and maybe get into the laptop by putting it onto the biometric reader. That world doesn’t exist anymore, correct?

Natalia Parker (11:58.594)
Mm-hmm.

Natalia Parker (12:12.162).
Correct. When you’re dead, the Face ID doesn’t work really well.

Frazer Rice (12:17.59)
Well, and that tells you something that they can tell whether you’re dead or not. And I would not have made that comment maybe six weeks ago before we started talking about this, saying, geez, these things are getting smarter. So as we start thinking about this, we’ve sort of analyzed a couple of pain points, areas where if you’re an executor and someone’s situation comes across their desk and they say, gosh, first of all, I have to try to know.

Natalia Parker (12:19.758)
Yes.

Frazer Rice (12:43.81)
What accounts are out there, what social media accounts, what subscriptions, what bank accounts, what crypto, what IP, that type of thing. So getting your arms around that’s important. Then the idea of hopefully someone has been organized enough to lay out where the accounts are and how to access them in one way, shape or form. And we can get into what a good practice is on that. But then if you’re the executor slash in conjunction with the estate planner slash the client,

Natalia Parker (12:48.545)
Yes.

Frazer Rice (13:13.402)
How do you plan for this so that you create a real organized state of affairs for the person who has to actually manage this stuff going forward?

Tatyana Thurston I Dexit (13:22.797)
So I think it’s important to understand priorities. So everyone’s different, everyone’s unique. There may be priorities that are social media based priorities where there’s a lot of crypto at stake or monetary funds, even perhaps reward points. That priority list is best done in an inventory.

Where we specialize is in the directives for this. So we’ve actually researched all these terms of services for hundreds of companies. We maintain this database so that someone can say, okay, if it’s company A, company A has three options for a directive. You can select that directive.

That means that the executor will then know exactly, this is what needs to be done with this account and this is what is of value either for the descendants, the beneficiaries, and so on. So first the inventory, but actually the directives is really important.

Frazer Rice (14:21.904)
By directives, mean something maybe an addendum to the will or something like that that says these the information or the value, whether it’s monetary or otherwise, is going to be transmitted to such and such a person and given full access to it. Is that really is that part of the advice is to say, you know, for the modern will drafter, let’s say that it’s a really good idea to have an inventory of what these digital assets are.

To set out who gets what in the will so that there’s a, let’s call it a backstop, so that if you have problems with the terms of service or something like that, you have something that goes through probate where somebody opines on that and you can actually get access to it after the fact.

Tatyana Thurston I Dexit (14:50.061)
Yep.

Tatyana Thurston I Dexit (15:08.565)
Yeah, so there’s two points there. There’s the access part and then there’s the directive part.

Natalia Parker (15:09.313)
Yes.

Frazer Rice (15:13.315)
Okay.

Natalia Parker (15:13.556)
Yes, there’s, yes, sorry, there is a language in the will where it’s actually specified that this is a digital executor who has the right to access all those accounts and perform all those duties.

Frazer Rice (15:32.068)
Got it. so in your experience, so Facebook or Google or Coinbase or things like that, for me anyway, in the last maybe three or four years ago, to get somebody on the phone to even have any understanding of what you’re talking about was gonna be just forget it, not happening. Are they getting better at understanding these situations?

Natalia Parker (15:56.074)
No, they’re not. They’re not. They don’t care. Facebook, it’s all AI. You don’t get a person on the phone in any case, Coinbase. You can, but it’s weeks of waiting for the response and they will ask you, we lost it. Can you resend it again?

All three companies you name, they do have policies.for transferring or for somebody who is dead. But it’s still very, very difficult to deal with them.

Tatyana Thurston I Dexit (16:32.069)
To add to that too and I’ll give you a case example is that we had social media requests to take the accounts down. Meta of course owns both Instagram and Facebook right and the images and memories that were left on these accounts were actually harming the kids.

The request was can we close these accounts out and of course you can but Facebook interestingly enough agreed of course to close the account and even though it’s owned by Meta, Instagram said, no, these photos do not violate our terms of service. So it doesn’t mean you can close out both just because it’s Metta. It’s really, really specific and it’s really in their hands.

Frazer Rice (17:19.003)
Lovely. That will warm people’s hearts that have to deal with this.

Tatyana Thurston I Dexit (17:22.143)
Natalia Parker (17:22.638)
Yes, it’s hard. And can you imagine we deal with this day after day, but people who have never been in this position, they don’t even know where to start.

Frazer Rice (17:34.747)
So walk us through what you think a good scenario would be for someone who wants to, let’s say they have, I don’t know, a bunch of accounts, both monetary and social media and maybe miles and maybe other things, stuff like that. And they walk into a trust and estate lawyer’s office and they say, okay, I’ve got my house, I’ve got my liquid assets, that stuff trust and estate lawyers know how to deal with.

but let’s say the lawyers aren’t as facile with the digital assets. A, help the person be a better client for that trust and states person so that it’s organized. And then, let’s start with that and then I have a follow-up question.

Tatyana Thurston I Dexit (18:21.055).

Okay, I would say the first thing is that, you know, there are modern problems and we need modern solutions. And that starts with the discovery and conversation that we do have these immortal accounts online. As much as we may not want to think about it, and we can get into other stories about this, but I won’t do that now, there are reasons to enact on these accounts.

That means deleting them, transferring, closing, out data, it might be biological data. There’s a lot of data and for me that means that data is money. It may not be money to us, but it’s money to companies. And what you want done with that is your choice still. So it’s important to make that decision.

I think that any estate planning attorney who starts this conversation with their clients is already helping move the needle because everyone has online accounts, the average user has at least probably around 200 accounts by now. And that’s without a work account.

Natalia Parker (19:28.492)
Yes, we developed a tool basically where we have inventory and 15-20 minutes with assigned directives and it’s prompt. Just choose the companies you have accounts with. They don’t have to remember. just, okay, I identified those companies and we already give them a choice of pre-selected, pre-vetted directives, assigned a directive. Then take these report and go to your state attorney.

Bring it, yes, bring it to them, include it into the wheel with specific language, appoint a digital executor, you’re set. Then you will just have to support it, kind of.

Frazer Rice (20:11.609)
No, so then the next question, so let’s say the paperwork from a will and a revocable trust, et cetera, is up to speed and covers the authority to access these. Then let’s say the executor is not the attorney and it’s a family member or a friend or something like that and you’re giving them the honor of helping to deal with all of this stuff. What do you deliver to them to help them be prepared for that time when you pass away?

Tatyana Thurston I Dexit (20:39.479)
We-

Natalia Parker (20:39.5)
We give step by step directions on how to deal with each company. We give what this company has, what kind of account is that, what kind of paperwork you need, what kind of documents in what time frame. For some companies it’s three years, for matter in their terms of service it’s 28 days, but hey, you have an account for years there.

Anyway, we give step by step directions. How to deal with this account to fulfill the directive. But if they can’t or they don’t want to, they can always hire and come to us.

Tatyana Thurston I Dexit (21:11.597)
Go.

Frazer Rice (21:17.361)
Sure. No, that’s the backstop too, is that you not only provide the tool, but also some support behind the tool and the experience of having dealt with some of those folks, maybe even the contacts to call it one or the other company to maybe get from A to Z a little bit faster.

Tatyana Thurston I Dexit (21:18.326)
Well…

Natalia Parker (21:20.717)
Yeah.

Tatyana Thurston I Dexit (21:21.26)
you

Tatyana Thurston I Dexit (21:35.245)
It can be very overwhelming, that is for sure, and I think tech is constantly changing and the terms of service is constantly changing. So we have lot of barriers to entry to enact professional executorship and do it as best we can and a lot of it is because of technical bottlenecks, if you like.

Natalia Parker (21:45.165)
Mm-hmm.

Frazer Rice (22:00.101)
So this is a bit of a catty question, which is how many times have you seen this properly set up? Because I can tell you right now, I feel like I’m pretty fashion forward as far as tech’s concerned. I see the issue. I know my estate plan. The poor person, in this case, my sister, who’s my executor, she’s gonna take one look at this and be like, thanks a lot, man.

Natalia Parker (22:08.651)
None.

Tatyana Thurston I Dexit (22:25.901)
What?

Frazer Rice (22:26.033)
And so I’m guilty as charge number one, but is anybody doing this with any sort of specificity yet?

Natalia Parker (22:26.478)
you

Tatyana Thurston I Dexit (22:34.785)
Well, can I just… sorry.

Natalia Parker (22:35.112)
No. I’ll start, Tatiana. Here’s the problem. We came across some people and they say that, I have spreadsheets where all my accounts and passwords are written down and my wife will deal with that at some point. First of all, there is no directives for those accounts. And second of all, it’s still illegal to log in under somebody else’s logins.

Frazer Rice (23:02.853)
Right.

Tatyana Thurston I Dexit (23:04.567)
And I was just gonna say the reason we started this company is exactly what you just described. My brother is my executor and I was like, man, there’s no way he’s gonna know how to start at all because I have my fingers in a lot of different businesses, my personal. And so, you know, that floor plan and sort of direction guide was sort of how we started this.

It became intense. I mean with Natalia. It became a really intense research project. We have a database that is constantly being updated. As executors become executors or as will writers are writing wills, we really want everybody to understand the importance of technology in this process. Because it’s moving really fast. Now that AI has come about we can even throw in the whole name image and likeness problem which a whole other sort of barrier of questions to ask.

Frazer Rice (24:11.501).
No, I’m going to bring you all back on to tackle that one separately. I think it’s worth its own half hour sort of figuring that out. But in the meantime, tell us a little bit about how people can find you. One of the things that I think you have on your website and some of your materials is a digest.

Really almost like a questionnaire or a brief that allows people to think through where they may have digital assets. It’s not just social media accounts and your bank accounts. They’re like fruit and flower miles, things like that. I hadn’t thought of that, but yes, that’s a big one. Where can people find you and what kind of resources do you have that people can get familiar with the topic as they embark on this fun assignment?

Tatyana Thurston I Dexit (24:45.399)
Thank you.

Tatyana Thurston I Dexit (24:59.809)
So the first place is our website and it’s actually, even though our company name is Dexit, which stands for digital exit, it’s Dexitplan.com because where we are proud is the actual plan of action that we’ve been able to customize for any individual. And then yes, we do have a sort of discovery questionnaire so that they can understand exactly what impacts them the most, where they may want to look at these accounts and have a plan for them.

And yeah, contact us anytime, email, phone. We’re here, we’re not chat bots. We want to be sure that you are talking to a human. We know how this AI slop is turning out and we don’t want to be any part of that.

Frazer Rice (25:46.501)
I was going to add on to that too. mean this is not just for the end clients, so for anybody who sort of understands that they have this issue, obviously check out your website and do all that. But I would argue that for the estate planners, the accountants, the wealth managers, etc. who are advising clients, it’s a good resource to kind of help you get your arms around it in terms of advising people who are looking for help on all these different things.

Tatyana Thurston I Dexit (25:55.041)
Yeah.

Natalia Parker (25:55.575)
Yes.

Tatyana Thurston I Dexit (26:04.68)
See you

Natalia Parker (26:11.136)
Yes, because you can have the most compliant language in the world. But the executor will still start with the zero on day one. They don’t know the inventory. They don’t have the directives. Finally, they don’t know how to deal with those accounts.

Frazer Rice (26:32.491).
So give us the website one more time. Then take us out here with a funny story. One you’ve dealt with in putting this company up to getting it up and running.

Tatyana Thurston I Dexit (26:42.381)
Okay, so that sounds great. So Dexit Plan. It’s D-E-X-I-T-P-L-A-N dot com. Dexit Plan dot com. And I guess I’ll leave you with a text story. We worked with a church here locally. They had their domain name purchased in 1997 and posted as in your own personal name. The person passed away over 20 years ago. Nothing was ever done with the titling of the church’s domain name.

But the church has been forever on this domain name. It’s been over 50 years so to remark it. Rebranding a dot org is not an easy task. Actually, no kidding it took us nine months to get the church back their domain name. That was finding people from 20 years ago reopening email accounts from a long time ago, getting signatures verified and processed.

It is actually doable, but it is definitely a task. So planning ahead of time would save hundreds of hours and a lot of pain. Absolutely.

Frazer Rice (27:52.241)
No, good object lesson for companies too. That it’s a good idea to see who owns what. Your domain name, any other digital IP, we’ll call it that. If you don’t have that in place. You may have a real forensic accounting job in the tech world to get everything back.

Tatyana Thurston I Dexit (28:02.274)
Yep.

Tatyana Thurston I Dexit (28:10.337)
That’s right.

Natalia Parker (28:10.72)
Yeah.

Frazer Rice (28:11.705)
Natalia, Tatiana, thank you so much for being on and we’ll look forward to talking again soon.

Tatyana Thurston I Dexit (28:16.811)
Thank you so much.

Natalia Parker (28:16.888)
Thank you.

TRUSTEE RESOURCES

TRUSTEES AND DIGITAL ASSETS

NORTH CAROLINA ESTATE RESOURCES

Titles

• Mastering Digital Estate Planning: Protecting Your Online Legacy
• The Future of Wealth: Managing Digital Assets After Death

https://www.amazon.com/Wealth-Actually-Intelligent-Decision-Making-1-ebook/dp/B07FPQJJQT/

BRADY WELLER discusses the intricacies of QSBS rollovers, including eligibility, timing, and strategic planning for founders and investors. The goal is to help the listener maximize tax benefits and navigate the legal complexities of this powerful tool.

https://youtu.be/gvQ0ZskvWVI

QSBS, tax exemption, startup founders, rollover, legal structuring, investment strategy, tax planning, startup exit, C corporation,

Key Topics

• QSBS eligibility and benefits
• Challenges in executing rollovers
• Legal and tax considerations for founders
• Timing and risk management in rollovers
• Strategic structuring for maximum benefit

“QSBS ROLLOVERS” Sound Bites

• “60 days is a very short window for founders.”
• “Rollover continues your holding period clock.”
• “Partial rollovers are common for founders.”

Chapters

00:00 Understanding QSBS and Its Benefits

03:07 Challenges for Founders in QSBS Compliance

05:54 Advising Founders on QSBS Rollovers

08:57 Structuring New Ventures for QSBS Eligibility

12:00 Navigating QSBS for Tech and Non-Tech Founders

14:54 Investor Considerations in QSBS Transactions

17:46 State-Specific QSBS Regulations and Planning

20:57 Future of QSBS and Strategic Planning

Resources

• Brady Weller on LinkedIn
• qsbsrollover.com
• qsbsreference.com
• Frazer Rice and Michael Arlein discuss the nuts and bolts of 1202 QSBS Features for Founders

Guest links

• LinkedIn

Transcript

Frazer Rice (00:01.314)
Welcome aboard, Brady.

Brady Weller (QSBS Rollover) (00:03.043)
Hey, Frazer, thanks for having me.

Frazer Rice (00:04.738)
Well, you are the nice compliment to a piece I just did with Michael Arlene on QSBS. We covered some of the nuts and bolts around 1202. You come at it from a little bit different angle. It’s usually where people, founders especially, have issues sort of complying with things like the three and five year rule. And otherwise really maximizing the capability of the rollover and the tax significance for it. Tell us a little bit about who benefits and what you do here.

Brady Weller (QSBS Rollover) (00:35.107)
Yeah, QSBS is.

by far the biggest tax exemption available to individual taxpayers in the U.S. So it’s been something that hasn’t been up. I should say there’s not a massive advisory network around it. So it’s not something that’s been taken advantage of, I think, to its full scope. Michael, who you had on recently, is a top trust and estate planner for founders of companies around QSBS.

The specific problem that QSBS rollover solve is for a shareholder of an early stage company. Most often founders or very early investors, say, maybe series A or earlier shareholders. It’s an incentive to basically hold your stock for a quote unquote long time. In this sense, that means, you know, now under some new rules, basically three to five plus years.

It’s a tax exemption available to folks who hold their stock for at least five years. Then they can exclude from federal income tax now up to $15 million of gains when they sell that stock. So you have to be a shareholder in an early stage C corporation, early stage company.

Frazer Rice (01:50.616).
Those founders before three to five years are trying to figure out how to use this tool. What are the challenges in making sure they don’t blow up the transaction by transferring something poorly. Or having their company grow too large or have too much cash or those types of things? Maybe list out a little bit some of the challenges that are out there that that a founder needs to be aware of.

Brady Weller (QSBS Rollover) (02:22.509).
Yeah. So we don’t have to constantly caveat. I’ll mainly talk as though we’re speaking about the pre July 5th, 2025 rules for QSPS. Anything, any stock issued after that date, middle of last year. is under a slightly different set of rules. They are more expanded rules, but I’ll speak to this sort of from those old rules. And so the old rules state that you have to hold your stock for at least five years. And if you do, you can exclude a large portion from federal income tax, usually $10 million for founders. But if you don’t hold the stock for five years, your only option is to take the cash from that sale. For example, say you sell stock at year three or year four,

and purchase new QSBS eligible stock with that cash within 60 days. So it’s sort of like the 1031 exchange. Folks maybe are more familiar with real estate property exchanges. Its sort of like a 1031 exchange for stock. So you take the cash and you purchase a like kind quote unquote asset with it. Now the challenge with that is 60 days is not a very long time. And when you’re a founder of a company who just went through liquidity. You just got your deal done and the whirlwind that that is.

Now you’re dealing maybe in a post liquidity world. You’re maybe running another team at the acquirer or you’re otherwise involved. 60 days is not a long time to be able to find and diligence a new opportunity. . It’s just not feasible. Especially for founders to use that cash to say buy stock in someone else’s company. It just doesn’t make sense. Like risk adjusted, I suppose.

Frazer Rice (04:05.579)
No, it’s a miracle that your company did great. Now you have to go and find another miracle and make it work within 60 days. It’s crazy.

Brady Weller (QSBS Rollover) (04:10.143).
That that’s the biggest that’s probably the biggest barrier to executing them. For the longest time there just weren’t a lot of people. They hadn’t come alongside founders to help advise them on structured ways that they could do these rollovers.

Yeah, the options are risky. It’s like take your money and invest it in Dave’s startup in San Francisco. He’s going to lose your money. So that may be what you want to do with that money. To keep your risk profile sort of moving. But that’s not tax planning in any way. Right.

To make that decision just to save on federal income tax might not be the best way to use your rollover. So we’ve seen it much more for angel investors, something that they might use. People who want to maybe have a lot of deal flow. A lot of investment opportunities in front of them. But they want to keep that risk profile moving. I’d say timing and risk are the two biggest challenges when you’re trying to execute a rollover.

Frazer Rice (05:13.805).
As a detail on that, you’ve got your company. You’ve got $10 million coming to you. Hopefully tax free, similar to a 1031. You don’t have to go into one company, you could go into a basket of companies.

Brady Weller (QSBS Rollover) (05:28.579).
Yeah, you could take the cash, say you make $10 million from a sale. You could pay taxes on $3 million of it, assuming you haven’t hit your five year requirement. Then, you could roll over the other seven in various other deals. You could put it all into one new company. What the rollover actually does is it continues your holding period clock from the last stock. So if you held for three years in your original company stock,

You sell. You’re able to reinvest those proceeds within 60 days. It continues your holding period. Once you’re beyond a combined five the next liquidity event in the second company. Now you have proper seasoning on your shares, for lack of a better word, and then you can sell them under the QSPS exemption.

Frazer Rice (06:17.143)
So, this gets to what you do on a day-to-day basis. So a founder comes to you and says, all right, I’ve got this situation I think that’s coming. And I need some advice. You’re sort of letting them know what’s happening here. How do you advise them, in a sense, whether it’s through your company or even as a general matter? Do you have a suite of other founders and companies that are out there? And then…

Maybe also similar to a 1031, is there sort of an intermediary function that needs to happen in order for the asset or the cash to go into sort of a, for lack of word, like an escrow account to then be deployed correctly into the eligible next company so that you keep that period going.

Brady Weller (QSBS Rollover) (06:50.713)
Boom.

Brady Weller (QSBS Rollover) (07:05.839)
That’s a good question. It’s not as formalized as the, you know, in terms of the 1031 world where there’s sort of a designated intermediary and that’s sort of required step in the process. This is very much the wire goes into your checking account for the sale of company A stock.

Frazer Rice (07:11.703)
Mm-hmm.

Brady Weller (QSBS Rollover) (07:22.281)
You send a wire back out to purchase stock in company B. When someone comes to us and is looking for guidance on how to do a rollover, sometimes they’ve talked to tax or trust in state attorneys already, or maybe they’re CPA. And there are maybe 50 folks in the US who have, I’d say,

Frazer Rice (07:37.463)
Sure.

Brady Weller (QSBS Rollover) (07:45.07)
I call it advanced QSPS planning knowledge, which is they have the trust planning strategies, rollover knowledge, all of these things that sort of at their disposal that they can speak to, but it’s a very small network. so our firm is actually the only non-CPA non-law firm in the country that deals directly with founders on these. And so we ended up kind of playing quarterback, connecting them with the right attorneys, maybe the right CPA, if they don’t have one to make sure that the team is sort of assembled.

You know, because the risk profile of taking your money and investing in someone else’s company typically doesn’t align with most founders’ interests at that time, the service that we provide is helping them to roll that money into a new startup of their own.

We think these founder-led rollovers where the founder or the shareholder who sold their original stock can now direct the proceeds into a new entity that they own and control. It’s a really great way to execute this. It gives the shareholder, the founder the optimal amount of flexibility and control over the proceeds over time. So they can handle their own risk profile.

Frazer Rice (08:57.921)
So for the founder who built their business originally, they sell it and you’re sort of with them along the way to roll it over into another founder led situation. Are there any mechanics that you help with to sort of ensure that that takes place correctly? There’s so many, it seems like so many tiger traps along the way that you can stick your foot in and you did every, your intent was there, but maybe you did something weird or incorrect.

Brady Weller (QSBS Rollover) (09:26.617)
Yeah.

Frazer Rice (09:26.721)
Maybe a better way to ask this question is what are the things in that receiving new QSBS rollover do you want to see or a founder should make sure they have in place before they go ahead and pull the trigger?

Brady Weller (QSBS Rollover) (09:41.904)
We want to make sure it’s a C corporation. First of all, a lot of times when founders start their first companies, they just, you know, incorporate an LLC somewhere and start doing business. A lot of times there’s not even, maybe there’s, you know, two or $3,000 transferred to a checking account, you know, from their personal to their checking. That’s how you start most businesses. But when you’re, when you’re starting a rollover business, we have to see a couple other things. One is we want to make sure it’s a C corp from day one.

Frazer Rice (09:58.989)
Right.

Brady Weller (QSBS Rollover) (10:09.123)
You know, it’s okay if it’s a single owner C Corp where the founders, the, you know, only board member, only director. It’s, you know, it’s your entity. That’s fine. but we also want to see a purchase agreement, some kind of stock purchase agreement. So you can’t just transfer money from your chase savings account where the wire landed to the new business account and, know, go on about, about the business. we want to see a stock purchase agreement. And so some of those agreements, and the optimal way to do those for sort of the, the, the long run.

Sometimes, we would obviously we have our template docs in ways that we might advise to do it. But very often we refer that out to legal counsel and coordinate there to make sure that just all the purchase agreements and governance docs and those types of things are in a good place. You know, it’s really making sure we have the purchase agreements and that the money gets moved to the corporate bank account, the new business bank account within 60 days. It’s really not a long period of time. And we run into a lot of situations where

If someone’s not kind of quarterbacking the process, deadlines get away quickly and then administrative issues with a bank might push you beyond the 60 day window. We’ve seen that a few times and it can obviously cost you a lot of money.

Frazer Rice (11:24.468)
The, when you get to a point where the next business that this is going into, often the qualifications of being a QSBS eligible business can be a little bit murky. I’m thinking healthcare for instance, where like a hospital or that type of thing would traditionally probably not be a QSBS situation, but a healthcare service provider or a biotech company or something like that is.

Brady Weller (QSBS Rollover) (11:46.937)
Yeah.

Frazer Rice (11:51.029)
Do you help founders think about that? in many ways, there’s sort of the which came first, the idea for the company or the company itself. How do you make sure people stay on all fours on that front?

Brady Weller (QSBS Rollover) (12:00.56)
Yeah.

Yeah, I if you build a startup before, know that the ideas in the early stage sometimes are extremely malleable. And when you start testing things in the market, the business very often changes. You know, we majority work with tech founders and that’s not because, you know, QSBS is well suited for tech. I think a lot of people think that to be QSBS, to be a technology company. That’s not true. It’s just that we most often see QSBS.

We run into people who are knowledgeable about QSBS in the venture space. So venture backed start up, like traditional startup businesses, has 80 % plus of those companies are tech businesses.

And then the other 20 % is manufacturing, biotech, life science, e-commerce, those types of things. But majority of people that we do these transaction with are in tech. And so by virtue of that, their rollover business ends up being, most of the time, ideas that they have are tech adjacent. So that’s a great place to be.

I’d say some things to avoid. What we hear often people coming to us wanting to roll over into real estate in some way or another. And there are ways that the business that you start as part of a QSPS roll over can hold real estate assets long term, depending on the business type. But you have to be really careful there not to, in the eyes of the IRS, look like a real estate holding company or have too much of your assets tied up in sort of like passive real estate holdings. And so I’d say that’s the murkiest stuff that we run into.

Brady Weller (QSBS Rollover) (13:37.822).
Most of the businesses that we are helping founders start and grow as part of a QSPS rollover are B2B or B2C tech. Either web applications or mobile applications, e-commerce stores. We have a few hardware sort of based companies or like very physical product based companies as well.

Frazer Rice (13:58.431)
For a lot of tech founders, the idea of taking some money off the table is important. And I would think that maybe partial QSPS situations come up. This isn’t an all or nothing thing. You can take some money off the table and then allocate other parts, maybe half off and then the other half you can roll into the next company.

Brady Weller (QSBS Rollover) (14:14.137)
Yeah.

Brady Weller (QSBS Rollover) (14:18.798)
I’d say an extremely common situation that we see is maybe a founder.

in New York who is raising maybe a Series B, call it a 50 or $60 million Series B. We saw a lot of these size rounds with the AI kind of boom happening and might be an opportunity to take, you know, four to $6 million off the table as secondary at that stage in the company’s growth. so you have this founder who just got $5 million wired to their bank account, maybe their first money. They’ve been renting in a condo or apartment in the city and they’re still very much like in high growth stage with

company so they don’t have a lot of bandwidth to run a new business. And so they’ll really try and de-risk themselves. That is, maybe pay taxes on a million, a million and a half, give themselves a cushion right away, maybe buy a condo or you know whatever, stabilize their life just a bit and roll over the other four, three and a half million, you know, and manage a project on the side that way. That’s a really common situation we see.

Frazer Rice (15:19.624)
For investors who are invested in a lot of different things and maybe you know, they’ve got six or seven companies that are QSBS eligible and they are sort of rolling the dice on that and sort of picking and choosing which one should go into which that type of thing What’s different about it from an investor standpoint than from an operator standpoint?

Brady Weller (QSBS Rollover) (15:43.758)
Yeah, I think the biggest thing investors have to pay attention to is if you receive a distribution that isn’t QSPS eligible because of holding period, you cannot just take that money and invest it back into a venture fund.

and call that a rollover. The money can go into a venture fund, but that capital also has to be called and deployed into, an investment from that fund. Meaning you can’t just invest in the, in the partnership at the partnership level in a venture fund and it’s sit there undeployed and be eligible for QSBS. It actually has to be fully deployed into target, target opportunities within 60 days. So that’s something that I think that we’ve run into a couple of times with, with investors is they think,

I’ll just, know, Fund2 is open at, you know, XYZ firm. I’ll just roll the money over there. But it does have to be deployed still within that 60 day window. So that’s something that we hear a lot of. You know, if you’re an investor, I would keep, you know, you don’t always have the perfect deal ready at the right time. But keeping good relationships with the founders that…

you’re partnering with, you know, you never know when someone might be able to open up a tranche on the side or sell some secondary to you. if you’re trying to still get access to that deal sort of outside of a normal round.

Frazer Rice (17:07.445)
So for the companies that are in your orbit, obviously you’re probably checking in saying, hey, you didn’t do anything to blow up your QSBS status. But for the companies that aren’t that way, and let’s say you’re a founder and you’ve got a nice situation where you’re able to take some money off the table and maybe put it into.

one of the things that your friends put together or something like that. How do you think about a checklist or what are the questions to ask to make sure that the recipient investor or recipient of the investment is QSBS eligible and will sort of stick to it?

Brady Weller (QSBS Rollover) (17:46.48)
Yeah, you want to ensure first that the company is small enough. so under the old rules that I mentioned, the company would have to have less than $50 million of gross assets. A really great proxy for that is just how much has that company raised? You know, if you’re trying to invest in a company and they’ve raised $120 million, it’s very likely that they have at some point blown the asset test and they’re not issuing QSPS anymore. It’s very, it’s not always, but it’s very possible. A lot of people confuse that test for valuation.

which is a mistake, you could have a billion dollar company in terms of market value, you know, with only 20 or 25 million dollars worth of assets on the balance sheet. It is possible, especially in some of these high multiple high growth tech businesses. And so, yeah, not confusing valuation with gross assets is one thing to pay attention to.

the other is ensuring just that the company is a C corp, especially for early stage investors. I’m talking like first money in, maybe before, you know, pre seed or pre seed, would say, ensuring that the right structuring is in place such that, know, you’re getting stock issued directly from a C corporation at that time you’re investing. So I would say that’s something to worry about more if you’re, you know, an angel.

who does a lot of sort of direct sourcing of deals and you’re not going through a fund. Most of the time, if someone’s raised capital directly from a venture fund, all the paperwork and things that you’re going to look for as far as QSPS are going to be in place, because most VCs are pretty well acquainted at this point with, hey, let’s make sure this is eligible before we get in here.

Frazer Rice (19:27.913)
Right. And just to distinguish, an LLC that elects to be taxed as a C Corp versus a C Corp, C Corp, is there any distinction there for our listeners?

Brady Weller (QSBS Rollover) (19:39.673)
Yes.

Generally, we would say as long as the LLC has made that C-Corp election before issuing more at that stage, guess, membership units of stock, as long as they’ve made that C-Corp election prior to issuing the stock, then we feel generally good about it. But yeah, an LLC, it’s an entity structure whose default taxation is as a pass-through, but an LLC can also be taxed as a C-Corp and can issue quote unquote QSBS eligible shares.

or units as well, so it is possible.

Frazer Rice (20:12.683)
I was gonna say, so for the listeners out there, C-Corp doesn’t just mean C-Corp, but the real operative language is that it’s taxed as a C-Corp component, and that should be part of your checklist as you go down the list of companies to potentially roll into. So for those people who aren’t exactly founders,

but maybe are investors or otherwise part of businesses that they’ve been included in, et cetera. Those non-venture-backed businesses, what are the opportunities there for QSBS and then the ability to roll it over into other things?

Brady Weller (QSBS Rollover) (20:48.708)
Yeah, I would say it’s very rare that we see a non-venture-backed business in between the coasts, I’ll say, right? Like not one of these like kind of like call them coastal elite tech businesses. I’m talking about your like legacy family business in, you know, North Carolina.

Frazer Rice (20:59.488)
I mean…

Brady Weller (QSBS Rollover) (21:11.856)
Most of the time we’re going to see those as pass-throughs or partnerships, maybe like an S-Corp. You would see that type of structure and those businesses, while they could be amazing businesses, the interest in them isn’t QSPS eligible because it has to be issued from a C-Corporation. Most of the time, the planning opportunity we see with those types of businesses is around the time of maybe a generational transition or other type of transition planning where

Maybe the children take over from the parents and they establish a plan. Hey, we’re going to take it over, but we want to plan to sell maybe the next five to seven years. I hear this a lot. And opportunity. If you are in an industry in a sector where stock sales are common in the industry for exiting the businesses, changing, electing to

be treated as a C Corp or restructuring to a C Corporation from one of those pass through structures is an opportunity because you could sort of reorganize, reissue stock, now start your QSBS five year time clock. And, you know, hopefully the business keeps doing well and you can have that exit opportunity down the line. And at that point, take advantage of QSBS.

Again, the thing you want to pay attention to is that you actually be able to do a stock sale at that time because QSBS requires a sale of stock, not an asset sale. And so that’s a really important distinction. So make sure either that you’re in an industry where that’s common or you’re working with counsel who understands what you’re trying to accomplish before you make those decisions about how you’re setting your entity up at that stage.

Frazer Rice (22:41.353)
Right.

Frazer Rice (22:56.758)
I just have a comment for me with the passage of the new law that we sort of alluded to where previously you really didn’t start thinking about this until fully five years. The new law, people can start thinking about it within three. You get 50 % of the benefit of the exclusion at three years.

Brady Weller (QSBS Rollover) (23:08.282)
Mm-hmm.

Frazer Rice (23:15.21)
And I’ve run into people where three years suddenly seems like a short amount of time, whereas five years, I think everyone was sort of like, we’ll get there eventually. you know, they’re they’re they’re fighting for their survival anyway. And if that happens to work terrific in this case, I think that the law moving the timeline up a little bit has had an interesting impact on those conversion discussions, because I think people are now starting to say, hey, you know what? I can get to three years. And, you know, with the speed at the

and the rate at which things change at this point, it’s much more realistic than I think it might have been going back in time.

Brady Weller (QSBS Rollover) (23:50.896)
And if you have a stable business where you feel comfortable making projections, say three years out, so to what that business could look like at that time, it’s really becoming more common now to do what you’re calling like choice of entity studies, right? So working with someone who can model out with the difference in taxation, both at the company level and at the point of.

Frazer Rice (24:05.482)
Mm-hmm.

Brady Weller (QSBS Rollover) (24:15.276)
selling stock, what the optimal structure may be depending on your time horizon tax it, your expectations for growth or lack thereof. So that’s something that some valuation firms, business advisories, some law firms or CPA tax advisories may be able to do. If you’re in that situation, you’re trying to figure out, hey, what’s the math look like based on my baseline assumptions of what this business will be and can help you sort of make those decisions about how to plan.

over the next three to seven years.

Frazer Rice (24:47.402)
As part of that reorganization too, I’ve talked to a few people who are in, let’s call it personality-based businesses, whether they’re podcasters or influencers or other types of things that are a little bit adjacent to maybe typical software companies. And I’ve brought up the notion that you may be disqualified now, but you may have a future growth opportunity within your business to make it fall more in line with a QSBS-defined business.

And so, you if you’ve got the time and the ability and it makes a business sense, it may make sense to start thinking about either sectioning that off or developing that business line for something a little bit later on.

Brady Weller (QSBS Rollover) (25:27.95)
Yeah, being strategic about where those adjacent businesses, how they’re structured and where they’re built. And I mean, where like in terms of a legal entity level sense, I’m thinking about, for instance, several golf YouTubers, make a lot of golf content online, but now they’re announcing partnerships to, you know, design clothing, you know, have their own clothing line, or maybe they’ve entered a, a joint venture with a golf club maker or maybe an emerging brand and they’re taking equity.

Frazer Rice (25:41.983)
Mm-hmm.

Brady Weller (QSBS Rollover) (25:57.826)
Those are really interesting options and I think that you still have the opportunity to leverage your personal brand to grow that business but separating them out so that you know your reliance on your personal brand doesn’t ruin QSBS. That’s actually getting to one of the rules around qualified small business stock which is that the companies can’t be based on the skill or reputation of a single person. And so that’s when we think about

Frazer Rice (26:24.938)
Mm-hmm.

Brady Weller (QSBS Rollover) (26:27.632)
Like entertainers, athletes, social media personalities. MrBeast, for instance, couldn’t sell MrBeast, the YouTube channel necessarily, as QSBS eligible interest because of that rule more than likely. And that’s obviously a broad brush, paying attention to where you hold your business interests is important for this if you’re in that space.

Frazer Rice (26:53.5)
Any state thoughts? I know California QSBS is uncoupled from the federal QSBS and New York threatened it and apparently that got knocked down. New Jersey just coupled with the federal government so that people weren’t scared away from doing that. How does that figure into your analysis?

Brady Weller (QSBS Rollover) (27:04.304)
you

Yeah.

Brady Weller (QSBS Rollover) (27:12.784)
It’s sort of a battle of the coast. It’s like which coast of the United States is going to be most investor and founder friendly with relation to these things. Yeah, because California hasn’t followed it for a long time. Oregon and Washington state are close behind there. And then we have the sort of somewhat the opposite happening on the East Coast. So as an East Coast guy, I hope it becomes a hub. But yeah, there is some sort of.

Frazer Rice (27:19.528)
Right.

Brady Weller (QSBS Rollover) (27:36.388)
you know, state and local tax planning, strategic planning that you might be able to do if you have the foresight and, you know, the right data to determine where you might become a resident or taxpayer prior to an exit. You might talk with a.

assault attorney or assault advisor state and local tax is usually tax advisors CPAs or or tax attorneys who can help you think through Hey, does it make a difference whether or not I move from California to Texas? What does that look like for my family? What does that look like for my post-tax exit situation?

because where the company is headquartered, as long as it’s in the United States, doesn’t matter for QSPS, just has to be a domestic USC corporation. And so remembering that QSPS is fundamentally an individual taxpayer incentive means that regardless of where the shareholders are located, you’re gonna be beholden to that specific state of where you live and their roles around QSPS.

Frazer Rice (28:36.906)
Terrific stuff. Brady, we’re winding down here. How do people find you and your company and any sort of parting thoughts?

Brady Weller (QSBS Rollover) (28:44.516)
Yeah, I’m personally very active on LinkedIn. So you can find me there, Brady Weller and our website, qsbsrollover.com. We also have a sort of an open source QSBS advisory referral site called qsbsreference.com. And so you can find us at either of those places. We’d be happy to help you out and point you in the right direction.

Frazer Rice (29:05.13)
Brady, thanks for being on.

Brady Weller (QSBS Rollover) (29:06.874)
Thanks, Frazier, appreciate it.

Keywords

QSBS, tax exemption, startup founders, rollover, legal structuring, investment strategy, tax planning, startup exit, C corporation, legal advice

Titles

• Mastering QSBS Rollovers: Strategies for Founders and Investors
• The Ultimate Guide to QSBS Tax Exemptions and Rollovers

https://www.amazon.com/Wealth-Actually-Intelligent-Decision-Making-1-ebook/dp/B07FPQJJQT/

https://youtu.be/FU5IvtBbtCY

JOHN SAMUELS from WELLWORTH ADVISORS discusses “HEALTH AS AN ASSET CLASS” and the nuances of personalized healthcare management for high-net-worth individuals. We contrast concierge medicine with comprehensive health advisory services. Learn about his book “WEALTHCARE” which lays out the frameworks of his practice. Finally, John goes into how expert navigation, team-based care, and strategic planning can significantly improve health outcomes and client relationships. Finally we hear a little bit about what his favorite medical shows are on TV!

Key Topics

Differences between concierge medicine and health advisory services
Team-based care and specialist involvement
Integrating healthcare with wealth management
Debunking myths about healthcare access and VIP treatment
Strategies for managing mental health and complex conditions

Key Frameworks of Health as an Asset Class

Team-based healthcare approach
Evidence-based treatment decision-making

Action Items

Review your healthcare risk factors and create a plan.
Organize your medical records and update legal documents.
Engage a healthcare advisor to understand your coverage and treatment options.

Chapters in “Health as an Asset Class”

00:00 Understanding Concierge Medicine vs. Health Advisory
02:11 The Importance of Team-Based Care
03:49 Collaborating with Client Advisors
06:23 Navigating Complex Healthcare Needs
08:07 Addressing Client Misinformation
09:40 Challenges in Mental Health Treatment
12:24 The Purpose Behind the Book
14:26 Debunking Myths in Healthcare
16:31 Preparing for Healthcare Interactions
20:56 Managing Healthcare Risks
23:05 Finding Resources and Support

Resources

Wellworth Advisors – https://wellworthadvisors.com
John Samuels’ Book on Healthcare Management – https://www.amazon.com/Healthcare-Management-Advisor-Guide/dp/B09XYZ1234

More From John on “Wealth Actually”: https://frazerrice.com/ep-126-john-samuels/

Guest links

Website – https://wellworthadvisors.com
Email – mailto:[email protected]

https://www.amazon.com/Wealth-Actually-Intelligent-Decision-Making-1-ebook/dp/B07FPQJJQT/

Keywords

healthcare, concierge medicine, health advisory, high-net-worth individuals, patient navigation, mental health, healthcare risk, medical research, healthcare myths, health insurance

Titles

Beyond Concierge: The Future of Personalized Healthcare for Wealthy Clients
How Expert Care Navigation Transforms High-Net-Worth Healthcare

Sound Bites

“We map out the cost of treatment for clients.”
“We focus on evidence-based treatment options.”
“VIP care often doesn’t mean better care.”

“Breaking the Glass Ceiling: Julia Carreon’s Fight Against Corporate Gaslighting”

In this episode, Frazer Rice sits down with Julia Carreon to explore her recent high-profile litigation against a major financial institution and her powerful insights on women in leadership, corporate culture, and overcoming systemic barriers.

YOUTUBE

https://youtu.be/e05k7SVQ2xI

We discuss:

• Julia’s experience with workplace gaslighting and her litigation journey with Wells Fargo
• The importance of transparency, accountability, and protecting yourself in corporate environments
• How societal and corporate cultures disadvantage women, especially around motherhood and leadership
• The themes and motivations behind Julia’s book, Walking on Broken Glass
• Practical strategies women can use to build political capital and safeguard their careers
• The significance of external networks and understanding your personal strengths
• The evolving landscape of equity, ownership, and governance in corporations
• How to proactively prepare for and respond to systemic workplace challenges

SPOTIFY

https://open.spotify.com/episode/5c546gs6Qctx4bGOvalgXj?si=1dDyJxnwSyu4tnhXxpzVxg

Timestamps:

• 00:00 – Introduction: Julia’s litigation and book overview
• 02:03 – Gaslighting in corporate culture and early experiences
• 04:14 – Dealing with systemic backstage politics and fighting for justice
• 05:10 – Motivations for writing Walking on Broken Glass
• 08:08 – Diagnosing workplace culture and gender dynamics
• 09:33 – The weaponized HR department and accountability
• 11:38 – Protecting yourself: cultural awareness and bias
• 13:12 – Demographics, gender disparities, and moving forward
• 15:12 – Institutional misogyny and societal shifts
• 16:05 – Motherhood, work-life balance, and corporate support
• 18:28 – Questions of corporate culture change post-COVID
• 22:21 – The fear factor and change in workplace loyalty
• 27:12 – Tactical career strategies and building political capital
• 28:15 – Always Be Executing (ABE) and tracking success
• 30:53 – The ownership mentality and equity’s role in career resilience
• 34:45 – Building internal and external networks for support
• 36:49 – Understanding personal aptitudes through testing and reflection
• 40:12 – Leveraging political capital and seizing opportunities
• 43:31 – How to follow Julia and stay updated on her journey

Transcript

Frazer Rice (00:01.004)
Welcome aboard, Julia.

Julia (00:03.32)
Thanks for having me.

Frazer Rice (00:04.652)
Well, as I said in the opening, the concept of gaslighting in the boardroom is something that certainly isn’t new, but it doesn’t make it any more comfortable for the people who deal with it on a day-to-day basis or as part of their career. And you’re in the midst of litigation right now with a major financial services company. Maybe talk a little bit about what’s going on there.

Julia (00:24.801)
Yeah, so I am in a high profile lawsuit with my former employer. I would say this is not a path that anyone chooses on purpose. In my particular case, Frazer, I spent 20 years at Wells Fargo, 15 of which were pretty spectacular. I have come to realize almost maybe fairy tale like in terms of my experience.

I want to talk about some of the things later on that made it a fairy tale. So yeah, I wouldn’t have chosen this. I did not see the culture at my former employer coming for me. I was blindsided by it and it got ugly quickly. One of the things that I think I am doing here. Or at least trying to do is not be shy about it. Not hide from it. Try to show women a different way for how to deal with these situations. Because I have very strong feelings about the fact. With the rollback of DEI and the current administration’s point of view on women, that we’re going backwards. If women don’t start fighting for ourselves in a more public way and without fear, then I don’t know where we’re going to be in the next five to 10 years.

I am soldiering on and it’s not easy to your point. But it is what it is and it’s a fight that I believe is worthy.

Frazer Rice (02:03.608)
So it’s a daunting task taking on a big bank. Big financial services firm, whether it’s in this situation or frankly any. It’s just these well-resourced big behemoths. What has been the experience been like so far? As far as gathering information? Of getting the walls built that you need to in order to live your life while you go through this conflict with this bank?

Julia (02:29.822)
It’s hat that is the million dollar question. Right? I will say that in my case i got really fortunate and came across a quote. It’s going to sound really strange. But i came across a quote that said fear is fake and danger is real but fear is fake. I believe that the patriarchy wants women to be afraid.

So it tells us these bad things are going to happen if you take on a big firm like this. It is grueling. The days are long sometimes. But once I internalize the reality that it is all fake in terms of all of the bad things that you think could happen really can’t happen. Worst case scenario, there’s nothing

Like I’m not going to die. They’re not going to, you know, take away my family. Like all of these things, right? We tell ourselves that it could get really nasty. And in my case, I have to stay really grounded in the fact that what I’m doing is worthy. We tried my lawyer and I tried for 14 months to come to a different answer. And so in a way, not just telling myself fear is fake. But in another way, I kind of feel like it’s my destiny.

Because, I just want to say this real quick, I had 20 years at a place that was not toxic. And so I know what good looks like, and this is not good. So in that way, I really feel like it’s my destiny. And so that’s what you do, and you have to have a good support network. I have a great husband, so that really helps.

Frazer Rice (04:14.21)
The, as I’ve told people, sometimes doing the right thing or going after something that upholds justice. It can be expensive and hard. I give you kudos for standing up. Not only for yourself, but others who are going through a difficult situation. Where you’ve had a significant wrong done to you.

You’ve written a book about this experience as well. We can take some time to think, to talk about what the book tries to do. First of all, writing one in tandem with the process here, I think is a bit unusual. Some people do it after the fact. To go through a catharsis after going through a difficult process. Talk about first the why of the book.thhen we’ll talk a little bit about what you talk about in it.

Julia (05:17.241)
The book is called Walking on Broken Glass: Navigating the Aftermath of the Glass Ceiling.” It was co-written with a fabulous woman named Shannon Nutter. I hope people follow on LinkedIn. The book is not squarely about what happened to me the book came together.

With Shannon and I meeting on LinkedIn. Then discovering that we had a lot of the same shared experiences as we are Gen X. in hindsight. Our generation has had the opportunity to have the most benefit of the Gloria Steinem Women’s Movement.

Think about the fact that we got the advantage of the birth control and all of the DEI efforts that have been in the last 15, 20 years. And we really felt like there was still a long way to go. Then all of that is starting to go backwards. So last year when we met or the year before, we’re like, my God, the idea that we got the best of the best is shocking to us. And so what are we going to do about it?

We really wanted the book to speak to women of all ages in their career. But it was written from a lens of two then 53 year old women who had seen a lot. We wanted to give the book as a love letter or a gift to our 35 year old self. To say, this is what we should have or wish we had known 20 years ago. Because we would have done things differently if we had really faced kind of what the challenges were that women are facing at work. In a real way right not in a way that sugarcoats it or pretends to throw it under the rug.

And or always makes it the woman’s fault like the woman always has to be changing and evolving in order to adapt to the systems and i you know it’s exhausting right so the book was written for that reason and it does tap into a lot of the things that we both experienced.

Julia (07:35.17)
But it isn’t a kind of a personal journal of what happened to me with my former employer.

Frazer Rice (07:39.82)
Right, one of the things that I found useful about the book is you divided it into three sections. I think it brings us sort of clarity into what you’re trying to achieve here. The first one is just diagnosing the situation that you’re in. Maybe talk a little bit about that. Part one the understanding of your surroundings. What’s happening around you. The conditions that women are facing as they embark on these big situations in the workplace.

Julia (08:08.982)
Yeah. So the first part of the book does give a primer on kind of the history of feminism and how did we get here and what are some of the big open questions that are still left to answer. We also want to set the stage that makes it very clear that women are accountable for our actions in the workplace.

Like this is not in any way a book that seeks to make someone who’s failing feel good about the fact that they’re failing, right?

Shannon and I both reached really high levels of corporate success at major global firm. There is a lot of work to do. So we really try to dimension how, what are some effective ways for you to approach that work? What are some of the pitfalls and how are some of the ways that you can handle that?

In a way that’s kind of clear-eyed, but never about putting the blame or the onus on the company. And if you don’t mind, I want to say something about that because it relates to my lawsuit. One of the things that I’ve heard criticisms about is that people on social media often I saw when I kind of scanned the landscape of it recently are, this woman is naive. She thinks.

HR is her friend because one of the things that I have sued my former employer for is a weaponized HR department and I want to get very clear. mean, Frazer, you don’t manage hundreds of people in 13 states like I did for a very long time successfully innovating, having great client experience team scores and having great employee team scores, right? If you believe HR is your friend.

So that’s not what i’m trying to say what i’m trying to say in my lawsuit is. HR shouldn’t be picking off people for political reasons either. We are saying all the way along there is shared accountability between the employer and the employee. That’s really important. I think that you know one of the backlash is going too far field here.

Julia (10:27.401)
We went so far politically correct on some things that some employees do show up to work and think that they just need things handed to them. And I do think that that was part of the backlash, right? So I just am always striving for balance. I think we should all be always striving for balance.

Frazer Rice (10:45.13)
One of the concepts too, I think in the book that I sort of grabbed onto and enjoyed was the idea of taking steps to protect yourself. You’re dealing with a lot of different asymmetries when you work for a big company. You’re dealing with information asymmetry, you’re dealing with political asymmetry, you’re dealing with resource asymmetry. Sometimes you’re even dealing with just…

Accountability asymmetry in terms of, you some people get free passes at other times people are judged on things or unfairly judged on different criteria that just don’t make a lot of sense.

If we step back for a second and for people who are trying to understand, I’ll put it in quotes, how the world works and how to how to be aware of one’s and to protect yourself, what would be the first couple of things that you would tell people to think about on that back?

Julia (11:38.471)
The number one thing is I would be very aware of the kind of culture that you’re operating in. And it’s very easy to take for granted what a culture really is, what your own personal bias and history is, and then how is it that you are fitting. into that culture with your own shared history.

So I love to be candid, right? And provocative about my own situation. If I could do something different, I would be very aware of what my biases were going into Citi with 20 years of being at a place where

It was a really fair game, but probably because I had a lot of political capital and I grew up there. So I understood it. But I went into that place thinking that I was a fancy managing director, that obviously I was hired to be a change maker. I can do a lot of great things.

And I was, you know, doing my thing, not realizing that I was swimming in a different lake and that lake was filled. with a lot of different kinds of wildlife that I was unprepared for. So, I mean, that’s really important.

Frazer Rice (13:12.398)
As we talk a little bit about some sort of bullet questions as far as how your experience has gone, the demographics of the workplace are different and changing. On one hand, college graduates are now majority women or higher in just about every college situation. Yet institutions like the CFP, the women make up…

Believe the number is somewhere in the 24 % range. So you have this weird dichotomy of more women entering the workplace, but not in the numbers necessarily that would indicate that they are in places to make as much change as they would like.

They are still in the vast minority in terms of boards of directors and executive positions at almost every Fortune 500 company that I can think of. As we chart a path forward where, let’s call it merit.

Julia (13:58.813)
Mm-hmm.

Frazer Rice (14:04.494)
presides over sort of misogyny and I guess I would call it sort of political gamesmanship. How do you think about that in terms of advice for people entering the workforce?

Julia (14:16.461)
Yeah, look, so nobody gets to say that women aren’t in the pipeline, right? I mean, that just, doesn’t hold up, especially at the more junior levels, right, of entering the workforce after college. What starts to happen is that it starts to go downhill as you get higher and higher up into hierarchy.

And I believe that there is a mismatch between women who want to work and do the right thing. And we’re going to talk about this. Then what does it mean to also then become a mother and give birth and have to manage all of that?

And then coming up against institutional misogyny. Obviously my perspective in the last 18 months has changed about the degree to which institutional misogyny exists.

Because I had a fairy tale experience before I was able to be willfully blind about the realities. so a really direct way of answering your question is that our book is seeking to hit women in the face with the realities of this because I don’t think we’re gonna change it overnight, right? And it is so entrenched, it’s getting worse and it will get worse.

Before it gets better, but I do believe that it will get better eventually because the old system that’s, know, aging out, baby boomers are aging out. Like I think that there’s going to be cracks in that. And then there would be a tsunami of change. But right now the old guard is hanging on and, we are going backwards. And so we just have to be realistic about what it requires to go forward. And we talk about what that is.

Frazer Rice (16:05.58)
One of the things, right, and so let’s touch back on the motherhood issue, is, that is biology. And so women who go that route and have kids. Which is frankly one of the big precepts in society. Unfortunately. n some ways takes you out of the normal trajectory of a corporate path, just from a time perspective.

Certainly, the balance of work that happens at the household level. Where that ends up alling usually, creates a stress that is not well understood or received at the corporate level.

What are your thoughts on that front? As far as charting a path that recognizes that reality and at the same time doesn’t put upon going the other direction necessarily in terms of favoring one outcome or the other.

Julia (17:02.019)
I know a lot of women who did not have children because they felt like that it would, it would harm their career. And, um, certainly it’s a personal issue and there’s no judgment from me. I don’t think I would have had children if I hadn’t met my husband. He was willing to do 50 % of the workload and he has, and, always has probably does maybe more than 50.

It is a very deeply personal issue. What I have strong feelings about the fact that companies who lean in to, don’t expect the woman to lean in, but the company leans in to supporting pregnant women, have higher loyalty scores. They have better team member satisfaction. They get a lot from those women that they have supported.

This is a crazy story, Frazer. I was pregnant and or just coming back from maternity leave all three times I got major promotions at Wells. I mean, think about that. And I now, because I lived my life kind of in a vacuum for a long time, I didn’t realize that this wasn’t happening to other people, right? So look at me now. I am 25 years from when I got hired, still saying that Wells is a great company.

because of my own personal experience. And they got a lot out of me, but I gave a lot back. So to me, supporting women who are pregnant doesn’t have to be a zero sum game. Yet somehow that is the narrative. And I would love to ask you why that is. Like, I mean, what has happened to corporate culture that this is such a pervasive issue when

If you were to scan a lot of my Gen X friends, we did not have the same experience.

Frazer Rice (19:04.147)
I mean, from my perspective, I don’t know. I think that I blame some of this a little bit on the COVID blip in the sense that managers of all types just have no idea where to go as far as how to treat people fairly, either from a work from home experience or how that reconciles with…

women in particular who are having careers and families in addition to what’s going on with other folks like the men in the world. My short answer is I don’t know. The longer answer is that I think between the shorter news cycle, social media, work from home, there are a lot of different change agents out there that have taken the focus off of.

maybe the issues that worth talking about right now. And as a managerial class, especially as millennials are taking up the mantle on that front, they’re either forgetting about this particular issue and understanding the importance that it has, or they are just so overwhelmed by change at this point and self-preservation that it’s just an area where they’re triaging the different issues that they can deal with.

Julia (20:22.492)
Do you do you at all think that it is a problem of losing common sense and like letting rigid ideology take over from common sense. I certainly was benefited from working from home for most of my career, right? So it’s fascinating.

Frazer Rice (20:46.061)
Common sense isn’t common. And depending on the institution that you’re dealing with, work from home is either an excellent tool or a cover to hide under if you’re a mediocre performer. If you’re a manager out of sight, out of mind is a difficult place to be.

I think that we’re I think everyone is reconciling to the relative absence of work and sort of acclimating to Zoom phone calls and things like that. And that gets you then away from taking care of the real issues, which is to make sure that the company’s doing right, the employees are doing right by the company, and at the same time that people are being treated fairly, because I think when people are so disparate, it just becomes a real management challenge.

What we’re talking about as far as making sure that women are treated fairly in the workplace,

Combine that with, I would say, message confusion that occurs in social media, where some loud voices may not be the right voices to be taking up this mantle, versus some of the quieter, stable people who are really the exemplars that we’d really like to point to. Sometimes that gets mixed. And I think the brew, if you stir it together, I think is created.

Maybe if we think that there was progress since the 70s on through the 80s, 90s, 2000s for fairness and women progressing within the corporate ladder nicely, I think this the COVID blip has been a bit of a toe stub on that front. That’s an opinion, extremely uninformed, but more of an observation.

Julia (22:35.713)
No, no, but well, listen, I just I love it because I do want to unpack it just a little bit. It’s what’s fascinating to me is that I negotiated 15 years before covid to work remote and then my boss knowing that I had to be on the road three to four weeks a month regardless was like, I’d rather you be happy where you live because you’re to be on the road regardless. So

I got to work from home and then during COVID when they tried to bring everybody back, they’re like, well, you can’t be the only exception. And I’m like, okay, I have been an exception for 15 years. So that’s where I go back to, know, where is this right balance? did, I mean, COVID is as good a reason as any that it’s things are upside down. I mean, really it’s a great theory.

Frazer Rice (23:22.671)
Well, it also bespeaks different corporations have different cultures and certainly some people are worried about other things than others. Muriel Siebert, who I think is an amazing example of someone who took a look at Wall Street and said, look, I refuse to be held back by anything here. She started her own company and to call it a company is to not give it the respect it’s due. She’s a major absolute force in Wall Street and one of the real legends.

To me, entrepreneurism is one way through this. to create the company that you want to work in is, in some ways, to me, one of the solutions for people who are having difficulty in a corporate environment that they’re in right now.

Whether they’re able to be the change agent within, which is often hard at a big, you know, bulky company that turns with the agility of a battleship as opposed to being nimble in doing things or going out and starting on their own, which involves its own risks.

That to me is one of the solutions. But again, not without risk, not easy by any stretch. Where did that fit into your mindset as you were thinking about this?

Julia (24:37.16)
Well, so, so she is an icon, not just because of what she was able to accomplish, but she also did it, I think, without a college degree. And she did it. And this is important. She did it fearlessly. And what I would love to go back in time and have a conversation with her about where did she tap into that fearlessness? And you will start to see.

Frazer Rice (24:48.665)
Mm-hmm.

Julia (25:06.77)
On my own social media, am trying to tap into that whole mindset of women need to lose fear. I’ve already talked about it, but here’s what’s important to know, right? By 2030 in the US alone, women will control $34 trillion of investable assets. I believe that that is when you start seeing the game change.

Look at how Mackenzie Scott is giving without glory. I posted that in a remark that’s gone semi-viral on LinkedIn. Like she is giving without glory. She wants to give, she wants to be anonymous almost about it, and she’s giving without handcuffs. And what is she giving to? She’s giving to communities, she’s giving to schools, she’s giving to healthcare. I mean, it gives me goosebumps every single time. And so I feel like women

When we start to control more, we’ll start giving in, Alice Walton is the same way, giving in a different way to change society in a more meaningful way at scale.

And Muriel was a pioneer in that regard. And she is someone I think we need the next generation to know about. because she was so fearless and it’s an inspiration. But you and i both know that all kinds of things that women have accomplished are never spoken about in the same way that they are about man and about men.

I do think that that’s one of the great things about some of we can go into social media some of the social media change that we see happening with alpha female and all of these great accounts that are just starting to say, know what ladies, we don’t have to buy into the patriarchy.

We can do it our own way. And so I think we will finally see change, but I wanna be very clear, Frazer, it’s going to get worse before it gets better.

Frazer Rice (27:12.195)
Got it. So for people who are in a corporate structure, corporate environment, aren’t ready to make the leap to starting their own business, which is obviously a difficult decision, but when you’re in there, what are the things tactically that one can do to prepare, not only prepare themselves, but protect themselves against these forces that are out there?

One of the thoughts I had is making sure that in the job description that you’re able to point to numerical or formulaic successes so that if a narrative is being built against you, you can point to dollars created or jobs saved or metrics that in the boardroom.

Not only just qualitative successes, but also quantitative ones that makes it difficult for people to ignore you from a pure dollar perspective. Things like that, what pops up in your mind? That you would tell people to think about in terms of art directing their career.

Julia (28:15.023)
Yeah, well, the number one thing that I always say, and I’m kind of, it’s kind of a legend for it. So it’s ABE and it stands for Always Be Executing. And when I look back and see how successful I was in a corporate setting, of course, in my case, it was that I had a great boss and a great mentor and sponsor in him.

But actually, I was always focused on executing and doing it in a way that is collaborative so that you don’t have the knives coming for you from every direction. think a lot of people who the more successful that you get in your career, you think, I’m fabulous because I’m fabulous. No.

You need a mindset of I’m fabulous because I am creating a team around me, no matter who I am, even if I’m not the boss, to protect each other and help each other and lift each other up. if you are always executing and you hit on it, right, as a woman, you should always be keeping track of your metrics in a way that is tangible and defensible. But you also should

never take for granted the fact that no matter how senior you are, you need to be getting something done. And I do think that it is a big mistake for people to get high on their own supply and forget that. And then, and then the sharks will come for you. So always do something. And this is just a final thing, cause I have lots of people that I mentor. They’re like, just name one thing. I’m going to give you one thing. Send meeting notes.

If you go to a meeting, and everybody’s on a call, 15 people are on a call. If you’re the one who sends meeting notes and this is a hot button, right? For women, they’re like, well, I’m not the secretary. I don’t wanna take me. You know what? Put your ego, park it in a parking lot and send meeting notes. You would be shocked how much goodwill and how effective you’re perceived when those notes, like say a project is going downhill and somebody goes, but.

Julia (30:30.157)
Such and so committed to this and you’re like, those meeting notes were written by Julia Carrion. Nobody has to do that. But corporations get unwieldy. lot of churn happens. A lot of stuff doesn’t get done in a day. If you can demonstrate that you are someone who is acting in good faith and doing small things to keep the needle moving, somebody in senior management is going to notice that, I promise.

Frazer Rice (30:53.763)
The other thing I sort of, and this doesn’t just go for women, this is for people generally, is the ownership mentality and the move toward equity, and by equity I mean stock equity, where the mindset to me shifts when you move from sort of salary and bonus to equity in the firm.

And that subtle shift suddenly puts you in a different position in terms of sitting at the same table as someone who is, let’s call it quote unquote, making the decisions. When you’re there and your ownership of the firm, however small it is, is rendered unimportant.

First of all, that tells you to go. Second of all, I just feel like the people who exist on that plane bring up different things and then are thought of differently. Does that track with your experience?

Julia (31:48.819)
It does, but I think that this goes to kind of how is the corporate world changing and then how does that impact employees? So, and where I’m going with this is when I was at Wells, my compensation was a third, a third, a third. So it was a third cash, a third cash bonus and a third in stock. Do you want to know what’s going on?

And I don’t know if you know what’s happened on Wall Street.

Every single major bank is moving to you only get a quarter in equity and the rest of it is cash. So I think that the onus to here is on corporations to be thinking about how they’re treating employees. And to your point, what, what does that mean when you show up and how vested are you in the option? Just real quick, I want to give a shout out to Maureen Clough.

I don’t know if you follow her, she just yesterday did an amazing six minute post on why companies are losing loyalty from employees. so like, again, this goes back to is everybody backsliding right now because these corporations have to realize that in order to keep good talent, you want them to have a stake in the game, but that’s winnowing, I think.

Frazer Rice (33:11.819)
I know. I agree. Frankly you know to me at the larger institutions that aren’t willing to sort of play ball as far as involving people in the ownership that’s a signal and when it’s a signal then you know if you’re good at your job and you bring things to bear you know there are other there are other places out there.

I think those places that value you want you around and they want you to be able to participate and how the broader governance of the company works. It’s a lot like how Goldman Sachs was back when it was in the partnership days.

Everyone who was a partner there understood how everything else was working and ultimately that meant that, I don’t know, I feel like Goldman still does well now, but it’s a different climate, different firm where you’re completely involved in everything else and therefore the information is out there and… it’s something that you’re not blindsided as much by what’s happening in other divisions within your firm.

Julia (34:15.472)
Yeah, totally agree.

Frazer Rice (34:16.911)
One other thought that as we were sort of squiring through this was the idea that it’s important to have information sources or networks both within your company that are outside of your reporting line, but also information networks and support outside your company.

I call it sort of the kitchen cabinet of people who are similarly situated or in different spots so that you have context into which to sort of find out what your what you’re up against both inside the company and outside of it. Is that something that makes sense to you or is it something that was lacking in your current situation? How did you think about that?

Julia (34:57.906)
Hmm. I love that because in 2017, I took stock of the fact that I had become too comfortable in my lane and I was seeing that my influence at Wells was waning for whatever reason.

And so I started blogging on LinkedIn in 2017. Because of a conversation with a Harvard sociologist that I write a lot about. Fscinating guy who predicted the current turmoil 10 years, almost 10 years ago. And so I started networking outside and I could not agree with you more that you need to be building your networks, not just inside. That goes without saying, right? Like I had a great career partly because I was a boss at gaining political capital at Wells all the time, right?

Giving goodwill and getting it back but outside is critical. during our book, what we found out is, that women are more likely to put that aside. Because we feel like we’ve got too many other things going on, work, know, kids, all of the pressures, trying not to, you know, have a nervous breakdown on any given day, trying to stay fit, dealing with menopause. Which of course is a whole other thing that is a whole other bag of tricks.

And so we don’t do it as much and it hurts us. So I absolutely think being deliberate about an external network is essential. When women ask me how to do that, I say to commit to a certain number of hours, half an hour to two hour, whatever you can give a week to doing it deliberately. I wish I had done that earlier in my career for sure. So it’s great advice.

Frazer Rice (36:49.865)
Along that line, I’m a big believer in being aware of your surroundings. In a sense aware of yourself and what your skills. Things that you’re annoyed are at are and what you’re good at and what you’re not good at. Did you take any tests or anything to understand what your aptitudes were or what you were interested in or more importantly not interested in or how you interact with other people personality wise and

Is that something that resonates with you? sort of am a big sports fan. Dan Quinn, who’s the Washington commander coach. He got fired from the Falcons. He did a real deep soul searching and went in and got tested on a whole bunch of different things and where he came up short, where he was really good. And that allowed him to get hired again and to have at least some initial success with the team and hopefully going forward from my rooting perspective.

But where does that fit into your analysis for people?

Julia (37:50.351)
Did somebody set that question up? That’s what I want to know. I am a huge believer in strength finders. Some people take discs, some do Myers-Briggs. The reason I asked if it was a setup is because strength finders saved my life. I was deemed top talent when I was like 34 years old at Wells and they gave me a career coach who by the way was Sarah Grady is her name. and she was Dick Kvasevich’s legend on Wall Street.

She was his leadership coach and she gave me strength finders and I very quickly was very clear my top five strengths and then my bottom five strengths are not a surprise. Like I am zero. I’m like negative zero at woo. I was like, it won’t even shock you for a minute.

Yes i do think that those kinds of valuations are critical and in fact i’m gonna talk to my twenty year old son about taking one i think you’ll end up taking disk but. One thousand percent if you if you do not know what you’re good at and why then try to find out because it can save your life i mean the awareness and the learnings that i got about myself.

From taking one test have stayed with me for 25 years. And I’m gonna be really blunt here. I forgot those lessons when I stepped into a new culture and it was painful. So I think you have to also be disciplined about…

Take it again, remind yourself, reread whatever book helps you stay grounded in who you are and how you’re showing up. And get some friends to give you feedback.

Frazer Rice (39:44.111)
Well, mean, people get better or change or worse at certain things. And so you’re not the same person you were 20 years ago. And, you know, it merits revisiting every once in a while. As we wind down here, unfortunately, we probably could go on for about three hours, which I wish we could do.

But one of the things that I think is interesting, too, you talked about political capital and building it up, is that I think one piece of advice that I tend to give to people who are starting out and might be useful in the situation that we’re describing here is that when you have political capital, you’ve got to be willing to spend it occasionally.

Careers, in my experience, take quantum leaps in that you’ll be going around for a while and then something good will happen and then you’ve got to kind of take advantage of the advantage while you have the advantage of having the advantage and moving up and then reestablishing the plane.

And it’s a little bit like a ratchet where when the wrench turns, it doesn’t turn backward. You can kind of continue to elevate on that point. Is that something that you saw where, you know, as you were making the moves up the ladder that didn’t happen at the last situation that maybe might’ve been something that could’ve turned out differently?

Julia (41:01.791)
Yes, and I think that being more aware of my surroundings would have helped. I don’t think it would have changed the outcome in the other example. But the political capital that I was able to gain is that I got promoted every single time Wells did a major merger when people were panicking about their jobs.

Frazer Rice (41:08.623)
Mm-hmm.

Julia (41:31.061)
And one of the things that I did that you and I could probably discuss for two days is I gave up control of trying to manage the outcome. In other words, I went to senior management with two major mergers and I said, you know what? I don’t care what I do for the time that the companies are trying to come together. You give me something hard to do and ugly and I will get it done the right way.

And then you decide whether I get rewarded or not. And when I crushed both of those tasks, I got major promotions. So I think it, I think a lot of people think, I’m going, I had a, had an employee who told me I should just get promoted because I’m sitting here and I’ve been sitting here for two years. mean, it really, life just really doesn’t work that way.

In my experience, you got to work your ass off for it. And, and you have to put your ego aside and you have to hope that the universe is gonna pay you back. And I believe that because the universe always has. I believe that even now with my current situation, like everything that has brought me here has made me a spokesperson for like a better way because of what happened to me, right? I had 20 years of goodness and then I had something really hard happen.

And I’m trying to make lemonade out of a very difficult situation because it is the only way, the only way out is through. So I just have to keep going through and I love the idea of yes, you’ve got to spend your political capital. can’t, know, George Bush said that you can’t just collect it. What are you collecting it for? If you’re not going to spend it.

Frazer Rice (43:17.817)
Exactly. Okay, we have to disembark here, unfortunately. How should people keep track of your situation? How do they find the book? And how do people get in touch?

Julia (43:31.846)
Yep. I have, um, I’m on LinkedIn. I have a website, juliacarrion.com. If you are looking for, I’m doing some consulting on a digital transformation always and org design or whatever. So you can find me there. And then, um, you know, today’s a big day. We are filing today or tomorrow, a response to my lawsuit.

So it would probably make the news. Thank you to you for being a great ally to women and having me on. The book is walking on broken glass.com. It’s such a great name. So you can order the book on the website from any of your favorite book resellers.

Frazer Rice (44:14.639)
Super, well good luck with the legal proceedings. All of your information will have that in the show notes so people can find it easily. I think you’re coming off of a difficult situation. I think you’re gonna turn it into something far more transformative. Even you’re envisioning it right now. So I’m hoping for the best here.

Resources & Links:

• Walking on Broken Glass: Navigating the Aftermath of the Glass Ceiling
• StrengthsFinder Assessment
• Julia Carrion on LinkedIn
• Julia Carrion’s Website

Connect with Julia:

• LinkedIn
• Website

Stay tuned for updates on her legal case and ongoing advocacy efforts. Don’t miss her insights into transforming adversity into empowerment and systemic change.

https://www.amazon.com/Wealth-Actually-Intelligent-Decision-Making-1-ebook/dp/B07FPQJJQT/

Keywords:

Gaslighting, Corporate Culture, Women in Leadership, Workplace Equity, Julia Carreon, Wells Fargo, Citi, Legal Battle, Glass Ceiling, Political Capital, StrengthsFinder, Work-Life Balance, Systemic Change, Weaponized HR