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Definitions are important; therefore, before I begin let me define or explain two:
The Next First Generation are the successive generations who adopt the vision and values of the initiating or first generation. For example, the first generation may have definite views or formulae for their success. The next and successive generations become the Next First Generation if they adopt the independent, creativity and management style of the first.
FUTR’s Board of Governors is unique in this business. While they are all golf buddies save one, each knows me well and does not mince words nor comment. After all we play golf together! If you click on the link, it will take you to our Biographies for the Board of Governors. Now for the real reason for writing this blog without further interruption.
A few comments from last week’s blog came over the transom . . . the nature was “why did you give up 15% of the fee?” . . . My response was “I see the fee as belonging to the client until it is earned.” . . . FUTR is different because of executing this value when no one is looking. FUTR’s team sees our relationship with our clients as a long-term partnership with each Next First Generation of family members and committed to their family’s vision and values.
At the last Board of Governors Conference in June, the Governors experienced first hand FUTR’s commitment by becoming a proxy for two families linked together by a common relative and separated by competing goals. These goals kept them from seeing a common Family Vision and Governing Values. During the conference, they discovered teamwork, the responsibilities of leadership and the ever changing roles as a participant. What a surprise for them to learn that the two “family proxies” had compatible visions and congruent core, governing values. The Family Leadership Conference was acclaimed a valuable resource! No other financial services company has ever presented such a program to this group of sophisticated, worldly people . . . the best line was “I have an adventuresome spirit personally; I don’t want that adventuresome quality to become part of the family’s core values when managing our wealth.” Another commented, “This program would help any family understand one another, their goals and value better . . . alignment and focus with a common goal or vision.”
Family wealth is financial and human capital. Each member has a role to play and a role to step into. The great question is ‘who is ready for what?’. Family leadership is responsible for recruiting members to the Family’s Vision and mentoring the adoption of the family’s core Governing Values.
One prospective client called FUTR’s paradigm a “game changer” in the management of family wealth: financial portfolios, portfolio risk and cash flows required to sustain the family’s lifestyles.
This Fall, FUTR is sponsoring and presenting a series of five to six Family Responsibilities of Leadership Workshops. These workshops will be a “brown bag” luncheon feature a presentation about leadership’s responsibility for family investment policies. You will learn about leadership, management and communication styles and how to make them work for your family productively.
Let us know if you have an interest in receiving more information about this Family Responsibility of Leadership Workshop series . . . there is value in a common vision and bringing a family together.
One motivating factor for creating FUTR Family Management is transparency, truthful disclosure underlying all activities. Several name plate, national trust comanies, with whom I have personal experience, do not (and will not) disclose the nominal and actual total fee paid for management of relationship assets in either dollars or percentage rates. Today is Friday, August 13th . . . it turns out to be quite lucky and satisfying . . . FUTR’s first client’s billing went out after double checking and reconciliation. The billing rate was 2.05 percent on the assets under management . . . it ended up slightly less than 1.75 percent. This reduction occurred naturally, proactively and transparently . . . a 15% reduction is easily understood because FUTR’s clients only pay for service fulfillment!
All FUTR’s fees are billed in arrears and payable monthly. Our relationships gain a protective benefit from a custodial bank with trust powers in all 50 states of the United States. They benefit from security selection criteria based upon Benjamin Graham’s precepts of “margin of safety”, “intrinsic value” and “special situations” or market anomalies. “Fundamentals . . . fundamentals . . . fundamentals” is just like successful real estate investing based upon “location, location, location”.
FUTR Family Management is dedicated to preserving multi-generational wealth through superior organizational and financial advice to families, protecting their legacy and encouraging family member participation in the process . . . which is fully transparent.
Each generation is presented challenges to CONVENTIONAL WISDOM — our grandparents by The Great Depression, our parents by Woodstock & People’s Park and now the confluence of Social Security-Medicare-Housing Finance bubble bursts. There is Value in Returning to Fundamentals. When was the last time that you considered the following:
The Declaration of Independence
The Constitution of the United States of America
The Intelligent Investor by Benjamin Graham
FUTR Family Management employs all three in its governance, investing discipline and client care. Families will enjoy the benefits of “three branches” monitoring the activities of the other — Custody, Portfolio Management, & Family — to better focus on the fulfillment of the family’s goals. Portfolio Management is characterized by security selection having margin of safety and intrinsic value with constraints of the defensive, enterprising and special situation criteria. All this is accomplished by the inalienable Rights created and identified in The Declaration of Independence to establish the divine right of the Individual versus Ruler, to establish property rights and the pursuit of that which makes us happy. Three important fundamentals: Life, Liberty, Happiness (Aristotle’s reflection of credit on the individual).
FUTR Family Management is dedicated to preserving multi-generational wealth through superior organizational and financial advice to families, protecting their legacy and encouraging family member participation in the process . . . which is fully transparent.
 - Wet One Match Fire Leadershp
The Leadership rests on three responsibilities everyone wants from people who give them direction. First, everyone is looking for SOMETHING TO BELIEVE IN, Vision, Mission, Purpose and Values. Second, everyone is looking for SOMEONE TO BELIEVE IN, a person who “Walks-the-Talk” or Role Model. Third, everyone is looking for SOMEONE TO BELIEVE IN THEM which is practices that Empowers the Individual to take action to achieve personal and organizational goals.
Consider the picture taken in Chile on a very cold and rainy day. Our VISION was a roaring fire created by the MISSION of getting fuel, heat source and intelligence to create fire for the PURPOSE of personal solace and comfort. Jake, seated on the cooler, was definitely the leader since he knew how to start a no-match fire and identified and demonstrated the selection criteria for fuel and he wanted to get warm without further delay. We, FIVE-Doers, followed the leader who encouraged us as we collected dry tinder, kindling and wood for the fire . . . each of us had a try at the one match fire until Jake wisely ordered up stronger fuel from the boats and lit the pictured blaze.
FUTR Family Management believes these Three Responsibilities of Leadership can be developed and nurtured as a culture to improve investment discipline and extend the family’s legacy through development of family members as leaders and advocates of the Vision. This summer look for our Family Leadership Workshop schedule for September and October . . . consider enrolling in a workshop . . . you will be glad you did.
The Moral of this Story: There is a time for all things, so choose what pleases your heart and your God’s. Be one of the “World’s Greatest Role Models” as you parent the next first generation. Teach your children well about compound interest so that they can enjoy life through the benefits of cash employed 24/7.
Do you know that Pete Seeger still collects a royalty from writing the song “Turn! Turn! Turn! (to Everything There is a Season)” for The Byrds in the sixties? All but six words are from Ecclesiastes 3. Consider the benefits of compound interest on this song’ writing whose subject is “everything is meaningless”! A recent wedding and an Easter service were the catalysts for re-reading Ecclesiastes. Here are notes on the story line:
The Bible’s Old Testament represents a compendium about long-term investment in people and goods to produce a return on investment. Consider the following points:
- Everything is Meaningless
- What does a man gain from all his labor at which he toils under the sun?
- What has been will be again. What has been will be done again There is nothing new under the sun.
- Is there anything of which one can say, “Look! This is something new”? There is no remembrance of men of old (Benjamin Graham’s Intelligent Investor), and even those who are yet to come will not be remembered by those who follow.
- For with much wisdom comes much sorrow; the more knowledge, the more grief.
- Pleasures Are Meaningless
- “Laughter,” I said “is foolish. And what does pleasure accomplish?”
- “I undertook great projects: Built houses for myself; Planted vineyards; Created gardens and parks and planted all sorts of trees; Engineered reservoirs and water systems to water crops and trees; Resources were acquired that delight the heart of man; Nothing was denied to delight the heart
- All that was sought was like chasing the wind (or like a dog chasing its tail); nothing was gained under the sun.
- Wisdom & Folly and Toil Are Meaningless
- A Time for Everything – Seeger’s Song
- All labor and achievement spring from man’s envy of his neighbor.
- Sole focus on building wealth as a measure of achievement and advancement leaves one friendless and without brothers.
- Sorrow is better than laughter, because a sad face is good for the heart.
- When times are good, be happy; but when times are bad, consider: God has made the one as well as the other. Therefore, man cannot discover anything about his future.
- The end of days is the conclusion for us all; and each next first generation remembers only the love and friendship of the preceding.
- To show each generation the fruit of time, teach them about the power of compounding and God’s Grace. If those lessons are well taught, the next first generation will benefit of the slavish nature that employed money has: tireless work 24/7 each season of the year.
The Moral of the Story: there is a time for all things, so choose what pleases your heart and your God. Be one of the World’s Greatest Role Models as you parent the next first generation. For more information about Family Succession Planning and The Next First Generation, visit us at FUTR Family Management LLC.
Next week the discussion topic will be: The Responsibilities of Leadership and the power of 3 beliefs everyone wants.
Where does one begin the conversation about succession planning for families? This is the first in a series on this very important issue.
What a topic: life cycle stages, human capital, financial resources, governance, end-of-life health decisions, unexpected events, economic and political cross currents, family crisis, financial risk, financial expected return on capital, family generational financial richness and more.
Succession’s root is Success. Let’s define Success. My definition comes from a speech given by Paul J. Meyer of Waco, Texas some years back. “Without success there is no need for a Family Succession Plan.”
Success is the progressive realization of predetermined worthwhile personal goals.
This definition resonates with me because it is succinct, pithy and eloquent.
Just consider that we cannot wake up one day to great success. It takes a progression of education, experience and supportive relationships to wake up one morning to the realization that you are successful.
We must realize and recognize where we have come from, where we are at this moment and where we must still go to arrive at our success. This requires a measure and standard to determine how much we have accomplished, what we still need to learn and how far we still must travel to arrive. My son admonishes the old man using Plato’s quote: “Any measure that falls short of reality is no measure at all” . . . Socrates to Glaucon in The Republic Book VI “Are we to believe the old men of youth?”
Age and experience create the perspective to foretell the future much like the ancient oracles cryptic utterances . . . all measured by life.
Predetermined is a word that always causes confusion. Is this pre-destiny? Do we have control over what we can expect the outcome will be? Reality points us to the fact that each of us identifies our own wants, desires and expectations. For example, most of us wanted to please our parents; therefore, we learned to understand their expectations and strive to deliver those expectations as a gift for them. Or, have you coveted the acquisition of a new automobile? Or, met someone with whom you wanted to spend more time? Or, created a “bucket list” of things to do before kicking the final bucket? I believe that all of these things are predetermined things to accomplish.
Worthwhile is obvious because it is the reason for accomplishment. The benefits that accrue to those that complete the task that they set out to do. Usually, it is found in compensation, capital gain or social/psychic recognition. (Not sure I understand this – is it the reason or the outcome?)
Personal is the attribute of success. It matters little what others think about what we are working to accomplish. If they are critical, those people become obstacles. If they are encouraging, they become resources. Who really matters is ourselves andwhat we think about the goal. For example, I play golf and fly fish. My best performance is produced by visualizing sinking a putt or a fish leaping for the properly presented fly. Positive thinking produces a good result most times unless the Golf gods or Fish fingers are thwarting your enjoyment.
Lastly, success is created by SMART goals. These are specific, measurable, attainable, resourceful and tangible with a time in which to accomplish them and they are in writing.
The moral of this story is: GOALS provide the motivation to accomplish great things by which we can measure success. Success creates family legacies through consistent application of core values that are passed down to the Next First Generation that is passed to the Next First Generation The secret to family legacy is the teaching of each generation about the fundamentals of the family’s success.
Next we will talk about the power of compound interest.
This blog series covers a fishing trip in January 2010 to Coyhaique which is in Chile’s Patagonia region. Our outfitter was Alex Prior, the proprietor of Southern Exposure (http://www.flyfishingcoyhaique.com/index.php). The fishermen included one of my best friends, Bill Potter and two Army NCOs who suffered life altering effects from IED bomb explosions in Iraq. Jacque Keeslar and David Booth were on special assignment for Project Healing Waters (http://www.projecthealingwaters.org) as part of the graduation process to “normal life”.
Many ask if we eat what we catch. Another friend fusses to me about eating meat. Good fish are like good friends and investments . . . you want to keep them around to experience the joy of growth.
Each fly fisherman is hunting the fish to be caught. The process is much like making friends . . . especially girl friends. A fly is gently cast upon the water and presented in an engaging manner. Young fish are so enthusiastic about being caught that they become the first to bite since size means much in this food chain. These small fry put up the most fight per ounce of fish muscle. Gladly, they are returned to the water to hook-up with again. If it is the end of the day, these fry-pan sized fish often become dinner.
Until this Coyhaique adventure, I had only viewed submarine fish at one locale near Mammoth Lakes/Owens River in California. What a thrill to hook a large fish and enjoy the process of scooping it up out of the water and photographing the prize! After this happened a few times, it struck me to be thankful for catch and release. Without this, many of those fish would have been consumed at a younger age and smaller girth.
Relationship with the fish becomes very important. Fishermen make every attempt to begin to think like a fish. It is the relationship and expectations for good fortune that create the joy and smiles for the day.
Our best catch and release is exemplified by the picture nearby. Alex Prior had a favorite hat . . . a SIMM’s Hat which complemented his Simm’s Rods and Reels. David Booth and I were fishing in Alex’s boat on the notorious “X-Lake”. This was a favorite fishing locale for Potter. The wind was blustery and gusting on a very sunny day on a headwater, mountain lake. Alex was working on my back-cast tangle, struggling rowing against the wind to get into a position to recover the fly. It was a familiar scenario that day as Booth and I were definitely the novices. Then a gust scooped under Alex’s hat bill and tore the hat from his head . . . meanwhile the wind hastily blew the boat down the river. Alex thought his beloved hat lost forever . . . David bet a “burrito” that he could find it. Note the picture . . . he accepted a Pisco Sour in lieu of the “burrito” off the truck at work. The next day, Alex lost this same hat on his beloved Simpson River.
The Moral of the story is: Relationships are personal and long-term much like Warren Buffett buying the company. Catch a fish small and return it to catch it big. This practice produces a big grin if fishing and if investing!
 Neil's Rainbow # 2 ~ The Most for the Trip
 Best Catch of Trip
This blog series covers a fishing trip in January 2010 to Coyhaique which is in Chile’s Patagonia region. Our outfitter was Alex Prior, the proprietor of Southern Exposure (http://www.flyfishingcoyhaique.com/index.php). The fishermen included one of my best friends, Bill Potter and two Army NCO’s who suffered life altering effects from IED bomb explosions in Iraq. Jacque Keeslar and David Booth were on special assignment for Project Healing Waters (http://www.projecthealingwaters.org) as part of the graduation process to “normal life”.
Today, we are talking about flies. Flies catch fish. The right flies catch more fish. Alex has spent over 20 years developing fly patterns that work in Chile’s Patagonia area. There are two things that happen when casting a fly:
- Flies get caught in the back cast, get caught by debris or reeds in the water and get taken by petulant fish who are jumping with their sign of goodwill.
- Flies can be the wrong sort to attract fish: Dry flies are unattractive food source when the fish are not looking at the surface; and wet flies are best when the fish is feeding on the bottom.
Oh!, the third thing that happens is the Fly is not presented well and the fish recognizes the fake food.
One day I hope that each reader has an opportunity to make fly selections and to tie the fly to the tippet or leader while the boat is pushed by the wind or the flow of water.
Oh! again, the fourth item that happens is running out of Flies that are catching fish because of 1 or 2 above.
Flies do different things. Dry flies float on top of the surface and attract a fish that is lying just below the surface watching bugs flow by. They instantly assess the calorie count to determine if they will get more value from the fly than the energy expended to catch it on the surface. It is great fun to watch a fish take a dry fly on the surface and disappear below the surface until it is landed or an LDR (long distance release) occurs.
A wet fly is cast as far as possible and then stripped through the water at different depths. The hope is the fish thinks it is a worm, nymph or other water creature with high caloric value. It is a lot of work because sometimes the wind is against you. The stripping process requires much energy to get the fly noticed. The unfortunate thing for the fisherman is not being able to see the fish take the fly. For all practical purposes, it could have been bait or spinning gear like what is used for bass fishing. Acutally, Jake Keeslar used his bass fishing skills to good effect since he caught the most fish (30 +) and he caught the largest (7 to 8-pound Brown Trout).
The moral of the story is: one can have the most experience fly fishing; however, unless he knows what the fish are eating, the ability to catch fish is reduced. The tools used by professional investment guides permits them to find “fish” in every market condition because they can read the market’s waters produced by the economy. This research produces trophy fish that others are not aware exist below the surface . . . the fly is the tool that attracts the fish.
 Jake's First of Many
This is the third fish story related to the readers of FUTR’s Blog. This one is a bit difficult because many think “charity begins at home”. This is written with the knowledge that the current budget proposal delivered this week to Congress eliminates charitable deductions for wealthy citizens of these United States of America.
The Bible’s Old Testament instructs its readers to be humble in their charity, to promote scant personal attention for making the gift and to help others in producing The Good for society.
The current budget creates the Federal Government as the focal point for charity’s funding and promotes a return to “let them eat cake” fostered by the divine right of kings.
One evening at Mincho’s Lodge in the outskirts of Coyhaique, we sat around our “kitchen table” discussing what a wounded warrior experiences during the process of returning to “normal life”. Jake Keeslar and David Booth related inspiring stories about common citizens creating delivery resources for these vets to get needed rehabilitation care. They described the cycle of anger, frustration, submission, hope and joy which punctuated their lives. Each man wanted to help return the gifts that have been given by these great Americans so no wounded warrior is left behind.
There were two stories that caught my attention. First, a “Lieutenant Dan” story . . . only this time it is about an enlisted soldier with two legs taken by the IED bomber who railed at and blamed the United States Army for his predicament rather than the enemy of our freedoms who detonated his bomb. Second, the hot rod story . . . a young solder given a grant of $$$$$$ for the horrible injuries suffered . . . a story of squander because the soldier lacked proper training in the handling of an estate that was to help him the rest of his life . . . a new BMW and gifts for his family extinguished the cash and left credit card bills to pay.
Our “kitchen table” outlined a solution:
- It is a process with recognizable stages
- Reward for closing the gate upon entry to the next stage
- Recognize accomplishment and what still needs to be done
- Focus charitable intents on a common goal to create fungible resources
- Cash resources will follow sustainable projects which can be measured
If “charity begins at home”, then The question becomes “Is the Federal Government the sole resource for rehabilitation?” What is their cost for delivering resources through their channels? Would private individuals exemplifying the Judaeo-Christian ethic of charity be better able to focus time, effort and money on solutions? What will happen to this fountain of generosity if the government removes the source through increased taxation at the source of generosity?
The moral of the story . . . many can live the “good life” when they are taught to fish, to engage their mind’s creative power, to accept personal responsibility and to keep a positive focus on the fulfillment of personal goals.
My recent trip south to Patagonia Chile fly fishing provided me much experience in humility and gratitude. First, Coyhaique is a modest town whose streets and roads are dirt and gravel. Second, the internet connection was intermittent. Third, all that matters little when one is unable to function as a whole human being.
The catalyst for the trip was Bill Potter and the humbling experience were the beneficiaries of his favorite charity, Project Healing Waters. (http://www.projecthealingwaters.org) Two fabulous men from the United States Army – Sergeants First Class Jacque Keesler and David Booth – on an official detail with a special assignment . . . destination, Mincho’s Lodge in Coyhaique – Chile – as recognition for planning and participating in the process of the return to “normal life”. Iraq IED explosions left both men with life altering injuries; they taught me that despite injuries, fish can be caught if you know where they are and how to get to them.
“Jake” Keeslar was the professor for creating the one match fires. A fire was important to for cooking the fabulous river/lakeside picnics served with china and cutlery on table cloths. Besides catching fish, this became the highlight of the day . . . a respite accompanied by a local brew and a couple of bottles of Alex Prior’s favorite Cabernet or Merlot. Creating a fire under wet conditions takes talent, ingenuity and preparation.
We all had a good chuckle regarding our Wet One Match Fire since Jake completed all his preparations. Dry wood was abundant under trees. Jake carefully employed his knife and a wood hammer to cut these dry pieces into small shavings and slivers. Patience was a virtue because it took a lot of work to cut this kindling. Then, Jake called out the order to find the grandfather’s beard moss to use as a starter . . . it had to be dry. Only then would Jake begin building his TEEPEE admonishing all about the benefits of preparation in building a fire in a survival situation.
Well, all was properly prepared. There was a wad of dry paper among the picnic supplies Alex Prior’s wife, Alexandra, prepared. Unfortunately, the matches got wet and unusable. Solution, improvised from necessity, a toilette paper fuse, a bit of gasoline from the boats and a Bic lighter with a quick hand . . . voila! . . . a fire for fine cuisine.
The moral of the story . . . Planning, Preparation, Patience and Persistence can overcome any obstacle to enjoying the “good life” . . . a positive attitude will bring laughter to impossible situations . . . creating much joy.
 Booth, Potter, Keeslar, Campbell at Santiago Airport
 Preparation of Cooking Fire
 Wet One Match Fire
February 23, 2010 Posted in
Investment Analogies |
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