The Evolution of Family Wealth Management
Episode 27 with family wealth consultant Dr. Jim Grubman
Have you ever wondered how the wealth management industry has changed over time and where it's headed in the future? Tune in to hear Dr. Jim Grubman, expert in family wealth and dynamics, unpack his model of "wealth 3.0" - a new approach that moves beyond the fear and negativity of the past to create a more robust field of family advising.
Dr. Grubman sits down with hosts Wes Brown and Dr. Sonya Lutter to share effective strategies for nurturing financially savvy children, confidently navigating complex wealth issues, and more.
-
Jim Grubman 0:00
I think you know, it goes to the heart of what it would be like if I didn't know your audience. And that was my question sort of, who typically, are you either targeting or your audience? Because the degree to which they're just all thinking about therapy, and you know, that I would have patience and all of that, that this may be pretty far afield. But if they are more financial therapists and they understand consulting and stuff, then yeah, it will fit in easier. And it just maybe a good glimpse into the role of psychology in things that are not traditionally like clinical psychology.
Sonya Lutter 0:46
Yeah. Maybe I'll let Wes comment on the listenership.
Wes Brown 0:52
Okay, I mean, I think I think that distinction is an important one for anybody to understand. I think the listener listener base would probably be a combination of individual clients, so wealthy individuals, high net worth and ultra high net worth. And then, and then I would imagine, based on sanyas work, that there's advisors that are listening as well. It's not necessarily geared towards advisors, so to speak. But I would imagine that there's, there's a mix would you agree?
Jim Grubman 1:31
Okay, so it's more the wealthy clients themselves, or therapists.
Sonya Lutter 1:38
I don't know that we have a lot of therapists listening actually. Okay. All right. So we can bash I probably won't bite us.
Jim Grubman 1:50
Okay, that sounds good. Because I'm just adjusting some things so I can be looking at the camera a little more easily. Don't worry
Wes Brown 1:59
a ton about that. We don't video very often, we may use it for, you know, a screenshot for the, for the when we post it, so we're not gonna Oh,
Jim Grubman 2:09
okay. So it's gonna be more of the audio than the video and I have a cardioid. Nice microphone here. Can you hear me? Okay? Because I might using a headset. Excellent is great for me. Yeah, it's a really, it's a Shure Mt. Five, one of those little round cardioid. So it's pointing right at me and generally has some pretty good quality. Good. Wes, anything else got stimulated from my the questions that I sent you?
Wes Brown 2:42
Look, I mean, it was right in line with I appreciate the distinction. You made clarification. And I think it's right in line with what we're interested in talking about. Jim, you may not remember you and I emailed actually about a year ago. Not about the podcast.
You were not memorable? It's okay. That's all right. No, no, no, it's all right. I really
Jim Grubman 3:04
I remember you distinctly. Yeah, we
Wes Brown 3:08
have chatted, so I'm very familiar with your work. And, you know, had a longtime colleague who worked with Cheryl Holland, for many, many years was on her team. I used to work. Right, it was in a study group with Cheryl for a long time. And so I've been familiar with you and your work for a long, long time. But we we emailed about a client situation, very briefly. And so it actually did, I hope it worked out very well. And so you know, what, 3.0 Strangers in paradise those, you know, read those. I think talking about all of that would be great. And have the concepts in there.
Jim Grubman 3:52
Okay, there, we got a plan, we've
Sonya Lutter 3:55
got a plan. And Wes is very good about closing it out. And we will be very cognizant of the time finishing up
Jim Grubman 4:04
an MFO that I have to connect back with at two o'clock. And so we got to do that. All right, good. So we will take it however, we're going to do I printed out the stuff that I sent you. And any of the other questions and stuff but I will just follow your lead on.
Wes Brown 4:27
Listen, we're thrilled to have you here and Sonya and I daydream often about you know, we should get so and so in your name.
Jim Grubman 4:35
Only Daydream
Wes Brown 4:40
keeps things fun. Yeah. But you know, yeah, I think you are so admired by us and your work and we've we've both we've sort of crossed paths with you, at least for me as at a distance. I know Sonia, you've probably crossed paths professionally several times. But for our list There's that look, you know, let's just start with kind of your background, what got you to where you are and maybe include some of the it sounds like you've had various iterations to your career you've kind of turned corners that at points.
Jim Grubman 5:14
Oh, I've had about past lives. Yeah. Okay, I will take your lead and trying to keep my responses. Fine.
Wes Brown 5:25
Yeah, just start at the beginning. If you don't mind, just tell us what got you to, you know, kind of, you can either work back from where you are or you can just or you can work forward however.
Sonya Lutter 5:36
Okay, are you can take a circular path, dopey nerd into frontwards. Or backwards.
Jim Grubman 5:42
I can take like a random walk down some street and see if we can get there please do that way. So are we recording now? Where do you start with something or other backfill that so we're
Wes Brown 5:57
recording? Yeah, yeah. We're on? Oh, okay.
Jim Grubman 6:00
So we're on,
Sonya Lutter 6:01
we're gonna use all of this to.
Jim Grubman 6:05
Okay, you have to start over again. We're
Wes Brown 6:08
very kind of there. I will say, all right. So don't worry. You're safe company.
Jim Grubman 6:15
Okay, so asked me wouldn't mind
Wes Brown 6:19
share a bit about kind of your early career where you got started, kind of the various stages of what brought you to where you are today?
Jim Grubman 6:31
Sure, and I'm really happy to be talking with you both. You know, you are quite important in this field. And it's great to have a conversation that particularly, I don't often get a chance to focus on more of the psychology or, you know, psychological practice aspects of what I do. I'm often talking about other things in financial services. And so it's actually really fun to speak with people who understand the practice components. And from a perspective of being in the psychological field. I actually, I'm one of those people where it's like, you have no idea how your career is going to turn out. It's a random walk. And you can only as Steve Jobs said, in his Stanford address, it's like, you can only turn and look back from where you came from, and see how you got here. You can't see from the beginning to where you're going to be. I originally went to college with the intention of being pre med, and then switched to psychology, which my parents thought, Well, geez, you know, you don't have to go to a good school for that you can go to a state school for that, but I persuaded them. But the relevance of that is the toward the end of my college career. For some strange reason, in the early 1970s, I became interested in drug action of recreational drugs for a reason and we will we will leave to another time we've
Sonya Lutter 8:08
already talked about people researching what they are into. So yes,
Jim Grubman 8:13
yes, purely theoretical interest. And the relevance of that is that when I came down to go to graduate school for the first time, I actually went to a pharmacology program, and learn psychopharmacology. I took a lot of medical courses. I did brain cutting with neurology, students and things like that. And so I actually have a master's degree originally in psychopharmacology, but it was way too much of a hardcore science field, I got out and to save my sanity. I actually did volunteer work at a drug call in line in Ann Arbor, Michigan, which if you can imagine in the mid 1970s, was a happening place for fallen lines for drug help. And that's where I learned active listening, empathy, listening, the basics of counseling, and found I had a knack for it. After the woman who's now my wife, we moved to New England, and I worked for a few years doing biofeedback and things related to the healthcare field. I went back to clinical psychology graduate school, but because of my medical training, also new neuro psychology, so we're going to add that into the mix and health psychology behavioral medicine, and not out and then for the first half of my career for nearly 20 years, did private practice psychology I worked in the healthcare system, which is relevant for now and for the work that we do. And through the 80s, and 90s, was part of the whole primary care integration initiative. That taught me a lot about skills for training physicians in physician patient communication, the role of behavioral techniques in healthcare, which I later helped pored over to the role of behavioral and psychological techniques in financial services. And it was sort of, you know, in retrospect, a piloting and a proving ground for building a lot of skills that then when I made the jump over to financial services in the.com era, in the early 2000s, I was drawing from a lot of experience in a wide variety of fields. And the catalyst for that, unfortunately, was it in 1980, as I was going off, to get my PhD, my father died, suddenly one day of heart attack, and left my mother and the family Cemani. He was a successful businessman, in the scrap metal business of all things. And so I was also plunged into the world of trusts and estates, and investments and finance, and it intrigued me, I have my father's business head. So you can see, I had to describe all that the idea of you know, many, many threads came together with an unusually broad set of experiences and areas of expertise. And all of them, you know, I don't say prepared me for but I have drawn on all of them, as I have worked with families of wealth and advisors, individuals, couples, in all the many ways that, you know, I've tried to be helpful to people.
Sonya Lutter 12:07
We've known each other for quite some time, Jim. And that was a lot more information than I knew about you. So that was really fascinating to hear about, and you've been a pioneer in the area of financial therapy. I'll put that in quotes, financial therapy, whatever that is. But this merging of this idea of mental health, with psychological well being with the financial side of things, and one thing that I had never pieced together before, until you went through that history, there is the significance of that time period of what you are becoming a mental health professional and the rapid movement within the Diagnostic Statistical Manual, the DSM for people who are familiar with that during that time, and just our society's awareness of the origins of mental health, and really trying to understand that communicate that to the public was a massive undertaking during that time, and then add on personal finances on top of that is huge and extremely impressive.
Jim Grubman 13:07
Well, you make a really good point, Sonia. And I remember when you actually had a different name, back then
Sonya Lutter 13:14
don't tell people keep on the move. And
Jim Grubman 13:18
yeah, you know, it's fluid. The, the, as you pointed out, the 80s, and 90s, were a very important era, for psychology. And then for me personally, in terms of building, not just a variety of skills, but building a perspective of framework that became very important and useful. When I made the jump to financial services. The idea of I mean, the development in psychology itself, of what has been called health psychology or behavioral medicine are things I have that as sort of a template in my head of how a field gets created, that is interdisciplinary, integrated, collaborative, and provide psychological concepts and services, but not in a psychological domain. And as I look back, you know, I was, in a sense, perfectly prepared, that when I chose to actually, quite literally walk away from healthcare as the area that I worked in. I carried that framework with me and so I have always had a vision or a model in my head of what financial psychology, which is what really we do, but we can't use the term psychology because it's a controlled term with licensing. So we have to say things like of financial therapy. I came ready made with the kind of the vision of the field. And one of the things we could talk about is my most recent book, but Dennis Chafee and Kristin kefir called wealth 3.0, and how it lays out a vision, which is very much like the development of health psychology and behavioral medicine, in healthcare in the 70s 80s and 90s.
Wes Brown 15:27
I'm, I'm really interested to jump into that. But could we go back just a second? Because I'm wondering if you could share about your personal experience? I know, sounded like, if I heard if I was tracking correctly, your dad's passing and the inheritance he received was the catalyst for that was the inflection point for you professionally, also? What was it like for you to go through that as you went through that personally? What were the things? I mean, you obviously had the professional training and background to maybe objectively observe better than some other people might what you were experiencing, and, and whatnot. But could you? Could you talk a little bit about that. What was what was that like for you? And what I'm curious what the things were that came to mind that maybe later sort of had you go, Oh, geez, I could I could help a lot of people who are going through this or may go through this?
Jim Grubman 16:24
Well, it's funny, because, you know, it's actually you ask a very good question. Wes. And I have not often talked about that personal side of things. Not that I can't or don't want to, it's just, you know, it often doesn't come up. My father's death is probably the major transition point in my life, changed everything in the family, it because of you know, we lost him, and then gained the money. And I would never have thought of going into financial services, probably without that. But you have to keep in mind, I was 2728 years old, when he died, and just about the, you know, go back into a graduate school setting, I was a young guy. And there, it was a very difficult period, my mother was very unprepared to handle anything about, you know, she, she barely had written checks. You know, he took care of most things. And in a lot of ways, I'm very much like my father. So I, as I said, not only had his business head, but understanding of law, having to understand trusts. You know, the whole infrastructure of wealth is pretty complicated. And for a lot of people, you know, a foreign language. And I think, interestingly, for what I later wrote about what, what I call the cultural model of wealth, in the metaphor about immigrants, and natives of wealth, that was grounded in my own experience, I was sort of an overnight immigrant, to the land of wealth, through a tragedy, and I had to learn everything, quite literally, my father who had a great back then there was basically you had a broker that did in 1980, there's not a lot of options. And he had a broker. And it was a great guy. And it's funny, I haven't thought about this for years. At my father's funeral, this guy name was Eric. and I were talking, and I said, I think I need to start learning some things about finance. And he said, he said, your father was amazing at it. And they actually made a decent amount of money together on some things he knew about metals and other stuff. And he sent me my very first book on personal finance, the nuts and bolts, the basics of stocks, and bonds and mutual funds and all of that. And I read it in the first several weeks after my father's funeral, and I came back to him, I said, Okay, give me more. And let's start talking. And Eric Grossman was, the first person introduced me to that area, but I had a lot to learn at that time. And I kind of had a knack for it. And now when I also coach other psychologists about financial psychology, one of the things that I emphasize is, you need to learn other things in the field. It's not just learning psychology, there's a knowledge base, that if you're going to work in this interdiscip multidisciplinary field, you need to know trusts, estates estate planning. on how Wealth Management works. It's like, if you're a psychologist in your work and healthcare system and diabetes management, you have to understand endocrinology and renal function and how diabetes works. And that it's like this is part of the specialty. And so I always encourage and help provide coaching and mentoring to other people who come into the field, on the fact that you cannot just be a psychologist and make guesses and extrapolate from general knowledge to this. This is a area of expertise. And you need to apply yourself to learn the literature and the knowledge base.
Sonya Lutter 20:48
We've done webinars before Jim and I have always walked away with way more questions and conversation points then I went in with and the same is already happening, like, just like and see West is jotting down so many notes, too. There's no way we're going to make it through everything. That's yeah, yeah, that's alright. So can I then take you back to your title, your family wealth consultant? And why do you use that title versus something else that represents a little bit more, and I couldn't Sure, throw in some of the things from the marriage and family therapy side of things, too. With that, but all of that to say I wrote down one really key thing that you said that, I hope that you'll come back to within this description of what your title is, and why you use that title. And it's gonna seem disconnected. But you said, when you're referring to your dad's death, not that I can't talk about it, or that I don't want to. And I think that's really huge. And it's something that really does matter for anybody who's listening in that differentiation of Camp versus won't talking about the big issues of life. So if you can weave that into your description, that would be amazing. But I've got it written down, I can come back to it.
Jim Grubman 22:07
No, okay, that sir, and I'll count on you to bring me back to it. If if I wander off on some tangent or go down a rabbit hole. Oh, first of all, for quite a long time. Now I say I'm a family wealth consultant, or family business or family enterprise consultant. But as I talked about in wealth 3.0, the idea that family wealth is has always been under the shadow of family business consulting, and needs to come out from underneath that. So I really talked about it as family wealth consulting, and wealth psychology or family wealth psychology. When I remember, I came out of healthcare, and I continued to have my clinical license all the way up until five or six, seven years ago, before I relinquished it. And when you do relinquish your license, you cannot use the term psychologist or psychology. It's a controlled term. I mentioned that before. And so I say I'm a family wealth consultant. However, I also emphasize it is not just a semantic issue. I often have to when I work with families, but sometimes, you know, couples within families or something, I have to clarify, I'm not acting as a psychotherapist, that this is not clinical work. This is not therapy. It's consultation, which has a mixture of educational components, systemic work, its consultation. And so being a family wealth consultant, quite literally is the activity of consultation versus therapy. But it also it draws from that multidisciplinary cross domain knowledge and set of skills that goes beyond, you know, just the focus on therapy also. And so that that speaks to your your first part of the question about sort of how I describe what I do. I used to say, I'm a fairly well psychologist back when I was licensed because I could, but I think being clear on the role is an important part of what we do. Your your point about, you know, I don't mind talking about it. I just don't often talk about what happened with my father. But interestingly, it was part of and this is something I have rarely talked about. So you're drawing from me something unique here in this podcast, that actually, I was working in healthcare and made the transition, because I knew I had a variety of wealth issues myself. And I went, I found came across, and I attended a little peer support group, run by a woman who became a very good friend, social worker, train woman name and the name of the group was excess baggage. Interestingly, later on, we all change the name of a group from the the more positive, more negative term to a positive one have lovely luggage at her behalf, which was a bit of a stretch. But if she were this is a woman who has wealth herself in the Western Massachusetts area. And she ran a support group for individuals have wealth, to talk about wealth in their lives. And I thought, you know, I, as they say, I have issues. And it was a very good group, she did a great job, we all talked and I began to grow into being a person with wealth in a way where not only an artifact, you can't talk about it with friends, you really can't talk about it with some family and I have a very tiny family anyway. But particularly, you cannot talk about it in healthcare, and healthcare, you you are not supposed to know anything about money. It's almost a badge of honor if you're bad with money. And we know from you know, the research clients and Kaler and everybody about mental health clinicians actually have terrible money messages and money scripts. And I was running a multidisciplinary behavioral health clinic in the Dartmouth Hitchcock system with a million dollar budget. And nobody knew that I had any money because you're just not supposed to talk about money. And so it was my coming to grips with hostile envy. You know, all the issues, isolation and other things. And that, growing into that, I actually began to think and I got introduced to some other groups, where I realized I had a knack for helping others learn and talk about wealth and money. And it was a very easy segue into what became my life now. Yeah.
Sonya Lutter 27:50
That's pretty neat that we get the inside scoop and the unique perspectives. I know, Wes is dying to ask questions. So I'm going to reserve myself. Yeah, you
Wes Brown 27:58
know, Sonya, and I have this strategy of Sonia is very, she's very good about having questions planned. And then I have permission. I don't know if I have permissions on here. But I, like I have all the script, questions that come to mind, you know, as we're going, yeah,
Jim Grubman 28:16
yeah. I see him holding his head shaking back and forth. Like we're just talking. But
Wes Brown 28:22
one of the things that struck me as you were saying that, and I have worked as an advisor with clients at both ends of the spectrum. And it's interesting to me that what you said, is not intuitive to most people. And this idea that there would be a support group for those that have excess wealth. You know, I think the vast majority people would say, Well, geez, like, I know, that'd be nice, you know, that, like, I can't even like what's wrong? So I'd be curious for you to maybe, because you get specific on some of the things that either you discussed in that group, like, what were the things back then that you were wrestling with? Or you could even talk about what you see today? And I think that's probably a good segue into talking about strangers in paradise. You mentioned the term, overnight immigrant. You know, what does that mean? Was it mean to be a an immigrant in a foreign land? And so on? And what are some of the struggles in that, you know, when that happens?
Jim Grubman 29:28
Well, you know, I think it's a good example, that of what many people go through of sometimes people you know, develop a business and make the slow gradual transition to in the metaphor that Dennis Jaffe and I came up with, which was amazing to think that was like 2006 or something. The idea that if you grow up at a certain socio economic level, which actually is a culture And at some point during your life, you migrate to a higher socio economic level or culture, because it really is. It's a culture. It has its own language and terms and attitudes and activities. It's like moving from one land to another, that you are very much like an immigrant. And when we later worked on this, and a lot of things fell into place of wealth as culture, not just as class or something, that when we hear people talking about the generational issues of, you know, I look at my grandkids, and I think they have no idea how I grew up. And the life I had, I mean, remember, and I'm not sure I said this in this podcast, but both my parents were Holocaust survivors. And they were brought over and came to Ohio after the war, we had nothing. I mean, they started they were they were working class, my father was given a make work job by my mother's cousins in the scrapyard, because they just, you know, we're taking care of family, he was trained as a textile engineer. And in Ohio, he was directing trucks of where to takes big piles of scrap metal from one place to another. And so, you know, I was raised in an economic culture that went from working class, to upper middle class, over the course of my early life. And when my father died, then it went even farther from that, but nobody prepared me for, like, how to think of myself in that way. I was the classic, you know, I'm a middle class person, I just happen to have a lot of money. But my identity was as middle class. And so in my wife, and I, you know, she also was raised middle class, as we had more money, we had to get used to that. My wife once talked about walking around Kmart, when, when there was some points reached about different levels. And we were, you know, over a million dollars and something or other and she would be walking around Kmart thinking herself, I had a million dollars, and nobody knows this. It's like, she'd look at other people, and they don't know that I have this, and death, just sort of wonderment. And, and a little overwhelming. And, and just, you know, it's like, I gotta get used to this. And I think my experiences, and then we had to think about raising kids, which is actually part of the derivation, I started reading with how I learned about wealth psychology, I was, you know, what has been written about how you parent with wealth, that was our lives, just like it is for many other people. And that was part of the wealth issues of, I need to sit in a room and find out from other people. So how do you handle this dilemma or that issue or something. So we had all the same challenges, dilemmas, reactions, and things that most people do very naturally. And as I got some help for it, and as a psychologist thought about it, and then later got connected to organizations and got reading and stuff, I realized, you know, I could turn and in an intern, help others with the same sorts of things. And I use my psychological expertise, particularly with couples. And, you know, we could talk about that. But I think that's really often where things start. And often where the major set of issues really lie as what happens in couples when they're either both going through it or they're going through it but with very different approaches to the money and the issues and you get conflict within a couple. Yeah,
Wes Brown 34:26
there's I'm pausing because I have so many questions. I'm trying to I'm watching the clock because I know I gotta
Jim Grubman 34:35
need like four or five hours on this.
Wes Brown 34:40
You know, I think the thing that I'm thinking about the question I did write down or at the top of the list, though, is and you brought it up was how to train train children. What are some of the things that that you've learned, I guess, in your, in your work? Because the there's a quote from some adults that we interviewed just recently. And he was recounting a story about somebody who had become very successful. And somebody asked him, you know, what does it mean to be wealthy? Or was it mean to be rich, or to be a wealthy person or whatever it was. And he said, I'm not wealthy, I'm just a poor person with money, you know, and kind of getting at what you're talking about. You know, and I'm thinking about that story about walking through Kmart. It's, it's a, I think sometimes when people arrive my, in my experience with having worked with individual clients, when they get to a place where they have arrived, and I only have air quotes, for those that can't see me there's this sort of sense that that should be, should be sort of this, this moment, I've hit my number.
Jim Grubman 36:00
The heavens open up and the Coors Light shines down, and it's like you are in heaven, you are done. And they get there.
Wes Brown 36:10
It actually what it, what really happens is it creates all this existential angst because they had so much riding on the expectation for when they would arrive. And that and what I've seen in working with clients over a span of time is that they wrestle with that idea of that question of, you know, who am I? If, okay, now I've done this thing, and I don't feel any different. So anyways, that's a long way of, of asking your question, but I'd love to know, you know, how do you get in front of that? And how do you you know, in particular, when you're talking, you know, trying to train them.
Jim Grubman 36:49
It's funny because, again, the this metaphor that Dennis and I came to about immigrants and natives in the land of wealth and becoming wealthy, for for the first generation, or, you know, if you marry in, you're an overnight immigrant. If you win the lottery, or there's a windfall again, there are many ways that people come to the land of wealth. And to your point, if you're not in the land of wealth, most of what we talk about, obsess about focus on is getting to the land of wealth. Nobody ever talks about what are you gonna do when you get there? And what's it going to be like, living in a different culture and a different place? Everybody's just saying, Oh, I really want to get there. And it'll be great. Because I won't be where I'm at now that they're thinking of, I need to leave where I am, because it's anxious and scarcity, and difficult, it's adversity and stuff. They're mostly people are thinking of relief from the stress of their current life. And that all of that will be relieved. And they will not have the problems that they currently have. They're thinking of, in behavioral or psychological terms, they're looking at the offset of what problems they have. They're not looking at the onset of a different set of circumstances in the new place that they're going to be. And that's, you know, and in my work, I'm often asked about, you know, what about wealth inequality? And should more people get a chance to become wealthy, as tough as like, oh, yeah, all of that is fine. I agree. And we can talk various things about who should get to the land of wealth, how easy to how fair opportunities and stuff. But mostly what I've spent my this part of my career on is, but most of what we got to talk about is what happens when you get there. And the adjustment that has to occur once you are there, because that has been a very big gap. For your question about what about children? Traditionally, and I wrote about this in wealth 3.0, you know, traditionally, actually, what they said is, don't tell kids that they're going to either be wealthy, that you are wealthy, that wealth is around whatever because that will destroy them. Wealth is toxic. They shouldn't know what's coming. The Miss begotten idea is if you're raised middle class, that's the best way to be. You have values you have skills, you're all fine, and just raise your kids middle class and then they'll turn out well, when there's more money. And we very much know that is far from the case. and often backfires. I was working with colleague one time, and we were talking about, and she said, you know, parents who denied to their kids, that they really are wealthy, but they sort of want to indicate that kids are not stupid. They see, look around and see their life. It's like getting on a plane and you go from a difficult country, and you land in the United States, and your kids say, This is great. Where are we? And you say, We're in Canada. Like, like, we're not in the US. That's other people. We're in Yeah, Canada, like we're in Canada, it's close to it. And it's sort of like it, but that's not us. And it's lying. Basically, you lie to your kids, and figure that, at some point, they'll learn that there's no actually there in the US, and not Canada, and that this is the land that they have to live in. But it just doesn't work. When we had kids, I got three kids who are now grown and having kids of their own. We started, we would talk to them about it, we would talk to them about money, not about wealth. And I think that that's one basic principle, you have to have money skills. And you have to be adept and responsible in money decision making, as the foundation for understanding and dealing with wealth. And I think that people often confuse that it's like you need to lay down a solid base of good money skills, in order to be able to do well with wealth. And so we did that our kids had allowances. Because again, part of the reading I was doing, this will date me. We began to move into the electronic word a little bit. And I actually my kids had accounts on the computer, those IBM little computers and stuff in Quicken. And when we gave them allowance, we give them some in cash each week. But I said, I said no, you'll have short term savings and long term savings. And I set up little accounts in Quicken. And it would accumulate automatically. And it would be great. Because in addition to the cash, like if they were saving for the holidays, or something, they come to me and say, How much do I have in Quicken? And I'd say let's take a look. We get on the computer, look at Quicken. You know, they had $112 Because it was out of sight out of mind. So it accumulated. And at some point, we would take money and go to the bank. And I would put $120 in an actual savings account in the bank. So it turned back into real money. And they learned through having exposure to you know, that sort of accounting and money as concept. From a very young age, and our kids all are responsible with money now they handle money. Well, we actually hold family meetings and have done so every year since my youngest was 17. And that was 17 years ago.
Sonya Lutter 43:43
You had to think far too long about that? I had to think yeah,
Jim Grubman 43:45
I don't think about that, because she just had a birthday actually. And, and family meetings are really important because the ability to communicate and be open the first time. You know, we had a family meeting was sitting around the kitchen table. And my wife and I talked about it we and we showed the kids we put a piece of paper in front of them and show them the family balance sheets so they could see assets and liabilities. And to those in the listening. I was like oh, what did they say? We showed them and then I said so what do you think? And they said it's about what we thought. And it's amazing how anticlimactic you know, the big reveal often is that either kids don't know or they figure out it's in some range. I've often told a story about my daughter when she was about 1213 We were walking someplace and she did the classic Dad. Are we rich and Because of my work, I was prepared for it. And I said, Joanna, there's basically three ways to be in the world, you can have enough, you can have not enough. And you can have more than enough. We have more than enough. And then I stopped, I shut my mouth. And she walking alongside me, thought about it for a second nodded her head. And she said, I thought so. Okay. And that's all she needed to know. She didn't even numbers, whatever it is, it's much more about what we were talking about by identity. And it's like, you know, where are we in the world? And do we have to work? Are we scarcity abundance? And so, you know, we've always been open in a age appropriate, clear way with kids, and you have to know how to kind of talk about things in that age appropriate way. So to your back to your main question of kids need to be prepared for the decision making and the complexity, and the skills and the ways of thinking about and the relationship issues for living in the land of wealth. And if you're not honest with your children, and you don't prepare them, they're unprepared to do that. It's brilliant.
Wes Brown 46:38
Yeah, honestly.
Sonya Lutter 46:42
I live in a different wealth world, but it is a very different world than what it myself or my husband grew up in. And we still struggle with the same issues of yes, we do have more than enough. And yet, the children are still questioning why we aren't doing the things that their friends are doing. So I'm curious how you handle that, even though we, we do have an abundance, but we choose not to use our abundance in the same way that other families do.
Jim Grubman 47:10
Well, that's, that's one of the central things. And it's funny. An interesting point in my career was when Malcolm Gladwell reached out to me and we talked about it, and he put some of my stuff in his book, David and Goliath. And the thing that he focused on there is parenting with wealth, and how it must be adapted and changed. For exactly what you just said, Sonia, the idea that going from we can't, to we won't, is a major step. You have to be able, when when the choice on spending is not well, sorry, we don't have the money. We're just limited by that. So not my choice. We just can't do it. To say, no, no, that's not part of our values. I don't think that's a good use of our money, we have other things that we'd rather do. It actually is really healthy. And kids need to hear that they need to hear you thinking out loud. This is about decision making. You know, we we make decisions about how we're going to use the money that we have. Other people may make different decisions. We don't know how they're making their decisions, they may be spending a lot but not having much in reserve. What you see with people is the tip of the iceberg. In our family. This is how we make our decisions. And you my son or my daughter, someday will have to make decisions of your own. And we can talk about, you know how you can do that. Being able to talk about we won't, rather than the convenience of we can't, is crucial adaptation and parenting.
Sonya Lutter 49:09
Yeah. Yeah, I'm gonna have to pay you some time, Jen to go into a conversation about this, because our children are going to hit the age of 18 and have a significant amount of money, like probably even more than what we have right now. And my husband and I are like, we don't even know how to have this conversation. He says we should just not tell them. No, we need to talk to them, but maybe not. Yeah, too young. To that point, we'll save your second appearance and then I don't have to pay you and everyone can learn from this experience.
Jim Grubman 49:48
Well, it's actually that's a great example. And, and it goes to the heart of where we began when you're asking, you know, what are the issues and how do I work with couples and families? stuff, which is there are normal dilemmas of wealth that pop up predictably. And most people are unprepared to handle that, because nobody told him or they've never talked about anybody else, or you haven't read anything about it. And I think that's what really contributes to difficulties with wealth is the fact that most people are making their best guesses. And maybe they guess, okay, and maybe they don't, but we should not be guessing you should have resources at your fingertips. And and you and your husband should have a very clear idea in a comfortable way. But nobody tells you what you're supposed to do when you live in the land of wealth.
Sonya Lutter 50:49
I'll send him a link to the episode. Absolutely,
Wes Brown 50:55
I know, we only have a few more minutes here. I was hoping maybe you touched on kind of the traditional kind of fear, based pessimistic, pessimistic approaches to wealth. And you lay out a very different approach, or philosophy in wealth. 3.0, could you talk a little bit more about that, and maybe some of the distinctions in and I think, in particular, the outcomes, you know, that, you know, a more positive approach could produce?
Jim Grubman 51:33
Well, it's funny, because, again, and when I told the story about when we showed the balance sheet to our kids, and it was a non event. Sonya, for your situation, again, to be 18 years old, and to come in a lot of money actually can be quite overwhelming. I recently was working with a family of extremely significant means. And we were doing the first family meeting and talking about preparing them with training about financial skills, we're gonna do some how trusts work this and the other thing. And the I had coached the Father, that we're going to do it in a very progressive manner, starting with low levels of money and putting more in their kids hands, and doing this, that and the other thing, and in his earnest, but unaware sort of way, when it came time to talk about that. And he had, they have several children, the family, the youngest was an 18 year old girl, the oldest was in his mid 20s. So he said, Yes, we're going to start, you know, giving us some money in a controlled way, and putting some wherever and we're gonna start very small, we're gonna give you a million dollars. And the room exploded a million dollars each. And in just an amazing comment, this 18 year old girl who was brilliant going to one of the top Ivy League schools, solid human being everything else. She said, No, I don't want that. I'm just a child. And, and I never forgot that. It's like, I'm just a child. And it's like, you know, help give me time to prepare for that. And I turned to her, and, you know, got the room under control and everything. And I said, What would be the smallest amount of money that you would feel comfortable starting with to begin to understand that? And she thought for a moment hesitated. She said, $100,000? And I said, How about 75,000? She said much better. And that's where we're going to start. So for you and your husband, the idea that it's a progressive system, and your children look to you to help them grow into it. And that's really what they want from you. And who else would they want it from?
Sonya Lutter 54:17
That's great advice. But let's be clear, they're not getting a million dollars.
Jim Grubman 54:23
Yes, there are there are different levels in the land.
Wes Brown 54:26
That's great. Well, Jim, I know, I know, we're at the top of our time together and you have a hard stop. So final parting question that we always like to ask, which is what book you're reading now.
Jim Grubman 54:44
Well, I am here I'm going to have to admit, having just published wealth 3.0 In the middle of last year, and then the tremendous responses got it. I have not had a chance to do much reading about other sorts of things I've been trying to keep I head above water so I don't have something on the tip of my tongue or to recommend you know, and I've read other books psychology of money, Morgan Housel is book actually met Morgan. I wish I had more time, my wife who's an ex children's librarian reads like 100 books a year or more. So you should ask her. But unfortunately, you're catching me at a moment where I do not have a book on the tip of my tongue that I'm reading and what I look forward to his finally having enough free time, again, to go back to be able to read for pleasure and to be able to come back to you with a name of a book.
Sonya Lutter 55:43
That'll be great, because we have a lot of recommendations for you. We were just discussing before you got out, we won't go into it right now.
Jim Grubman 55:50
Oh, my time is going to be taken up now. Jim,
Wes Brown 55:53
thank you. Yeah, it's been really, really fantastic. And, you know, like you said, we need probably, I feel like we do need four or five hours. So maybe we can piece that together over time and chat again soon.
Jim Grubman 56:08
It's you guys are educated observers and practitioners in the field, both experienced also in your own way. And we have like a lot of things to talk about. I really appreciate this has been a great conversation because you've asked questions that often I have not been asked, and that's what really makes for an enjoyable dialogue and conversation. So thank you for having me. And for this kind of conversation. You so much.
Sonya Lutter 56:36
Have a good weekend. Take care