The skills needed to create wealth are often opposed to the skills needed to preserve it.

[01:36]

"But again for the most part the bulk of our assets and that's something that's been a surprise to me in looking at families who've preserved and grown their wealth over multiple generations is how simple it can be."

[05:20]

"I would encourage anybody who's in that seat or anybody who's advising folks in that seat to take a step back, realize that hey, the person who's created that wealth might be the smartest person in the room, but there are others that are around who have seen patterns"

[00:44]

"Whittier Trust began in 1935 as the single family office for the Whittier family. The Whittier were one of the developers of Beverly Hills and the Beverly Hills Hotel. We continue to manage wealth and serve as the family office for the Whittier family, the sixth generation of the Whittier."

Full transcript

The person who's created that wealth might be the smartest person in the room, but there are others that are around who have seen patterns, have seen hundreds of reps of other families and how to preserve and grow their wealth over time. But so many of the families who've preserved and grown their wealth over generations have just done it through stocks, bonds, real estate. The skills needed to create wealth are very different and often opposed to the skills that are needed to preserve wealth over time. So encourage those folks to come to the the table with a little bit of humility.

They can learn from it. What separates those who create wealth from those who preserve it for generations. Let's look inside how family offices think in this conversation. I'm with Whittier Trust. Whittier Trust began in 1935 as the single family office for the Whittier family. The Whittier were one of the developers of Beverly Hills uh and the Beverly Hills Hotel.

We continue to manage wealth and and serve as the family office for the Whittier family, the sixth generation of the Whittier. We also serve as a outsourced family office for other families. Uh total management uh total assets under management about 26 billion. And uh the types of investing we do, we invest across asset classes as you could imagine.

Uh invest in traditional stocks and bonds, the the simple stuff. Also given the history of the Whittier family feel very comfortable making direct real estate investments. Uh we do invest some portion of our capital with outside managers. So private equity, private debt, venture capital. Uh but again for the most part the bulk of our assets and that's something that's been a surprise to me uh in in looking at families who've preserved and grown their wealth over multiple generations is how simple it can be.

Not to say that you shouldn't allocate some of your assets into some interesting and fun opportunities, but so many of the families who've preserved and grown their wealth over generations have just done it through stocks, bonds, real estate. Uh, in terms of something that's unique that that we're looking for right now on the real estate side, as as many of you know, uh, dollars the the the prices are a little bit challenging. Uh, so we haven't executed on deals much of late. We used to do three, four deals per year.

We only did one deal last year. We've only done one deal so far this year. Uh but what we are looking at historically, we did a fair amount of value add multif family investing. Um we haven't done that in in the last couple of years, but we have seen a couple of interesting industrial opportunities and and sadly I have to say they've all been outside of California.

Hopefully the environment in California will will become a little bit more uh businessfriendly. Uh but uh at the moment we're looking looking outside of of California. Uh trying to think of other interesting things that have come across my radar. Uh AQR, which is a hedge fund uh that's been in existence for a long time, has had a strong track record led by Dr.

Cliff Asesses. They have a product at the moment called the flex SMA. So S SMA, separately managed account. That's a terrific innovative uh tax product that will help wealthy families, wealthy individuals who have uh benefited from a significant capital gain to help offset those capital losses. Something that uh might make sense to dive into if you're in that position or if you're advising other families in uh in a similar position.

Um trying to think of some other other fund investments that we've been fortunate to make. We've got a long-term relationship with DFGA's growth fund. Uh DFJ is very much in the ecosystem with Founders Fund. Uh so we've been fortunate to make some early investments in companies like Anderil, uh Palunteer, Coinbase, SpaceX. I feel like everybody's in in SpaceX, but uh yeah, the Anderil defense ecosystem is something that is certainly uh exciting right now and something that's been different in in my lifetime.

When I started in uh this business, defense was not on people's radar as an innovative fund sector to invest in. Um, as we're wrapping up, thinking about the the million-dollar uh piece of advice, another thing that I've found very fascinating uh in in my seat and looking through both people who've generated wealth in their first generation and then also looking at families that have been able to maintain their wealth over many generations is that the skills needed to create wealth are very different and often opposed to the skills that are needed needed to preserve wealth over time. I'm going to pause. I'm going to say that again because it's something again that really struck me again.

The the skills that needed or create to create wealth are often very different and often opposed to the skills needed to preserve and grow wealth over time. Um so with that I if I were in a situation I wish I were that I you know had come come to this uh platform as somebody who's been a a wealth creator built a company that was worth three or $400 million. I get the the the often the hubris that that comes with that. Uh but I would encourage anybody who's in that seat or anybody who's who's advising folks in that seat to take a step back, realize that hey, the person who's created that wealth might be the smartest person in the room, but there are others that are around who have seen patterns, have seen hundreds of reps of other families and how to preserve and grow their wealth over time.

So encourage those folks to come to the the table with a little bit of humility. They can learn from others. That's great advice and right on time. Give a little round of applause for Jeff here. Nice honesty. I love the cander.

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