Solving the Multi-Generational Wealth Puzzle with Taylor Adams of Belief Partners
On this week’s episode, I interview Taylor Adams, a fifth-generation family member who is an entrepreneur, investor, and coach to families on multi-generational wealth. We discuss the challenges of managing wealth across generations while empowering individuals to find their purpose, as well as the importance of education, purpose, and giving back.
Taylor suggests that money should be used to create opportunities and make a difference in the world and emphasizes the importance for families with wealth to tackle the challenges that come with generational wealth head on.
Taylor provides valuable insights into the challenges and opportunities of multi-generational wealth. It is a must-listen for anyone who is interested in growing wealth for future generations.
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Transcript (this is an automated transcript):
MPD: Welcome everybody. I'm Mark Peter Davis, managing partner of Interplay. I'm on a mission to help entrepreneurs advance society, and this podcast is part of that effort. Today we're skipping the partner meeting and we're going back to our old format and doing an interview, one conversation with one expert.
And I'm very excited. Today is a little bit of a tangent from what we're typically talking. In the startup ecosystem, we're all jumping around topics with fundraising and operational stuff. And as of late bank runs and macro trends today is about the back end of entrepreneurship.
It's about what happens when an entrepreneur succeeds. It makes a bunch of money. And we've got someone who I think is incredibly thoughtful on this space. On the show today, gentleman named Taylor Adams, who's an entrepreneur, investor himself, but he is also the fifth generation of a family that has been enterprising in his words.
And what I think is really special is he is coaching families, and he's a public speaker on this, and he's created a paradigm for thinking about how to empower future generations after the wealth is created. To not only self actualize, but to do so through building and entrepreneurship. So it all comes full circle, kind of everything I care about.
One, helping people find themselves wonderful. Two, empowering them to go and create and creating environments where that's done. But I love the idea that Taylor is on a mission to essentially take help a lot of his America's wealthy and wealthy around the. Really take action with the resources.
So it's very powerful stuff. I hope you enjoy
Taylor, thank you for being here. I'm very excited to have this conversation. Thanks, mark. Excited to be here. Do you wanna start by just doing a quick background introducing yourself? Yeah, definitely.
Taylor Adams: I myself am a fifth generation family member in an enterprising family. There's a family business legacy that dates back to the 1890s.
And so I grew up in that context and we, we have a family office and that office currently serves somewhere around 175 different family members. So my experience and perspective on multi-generational wealth and multi-generational wealth, It's informed just by a lived experience and observing what actually happens across generations.
And and I've always been pretty obsessed with like practical psychology, human evolution human progress. And I find that the multi-generational wealth kind of puzzle is the most fascinating multi-variate, non-linear equation that you can po possibly come up. And I just love, I love solving puzzles and I also think it's it's actually incredibly important in this age of abundance that we live in.
I don't think humanity has had enough generational cycles to evolve to abundance. And I see a lot of, you mentioned there's not a lot of information out there of what to do. I think there, there is a fair amount of information, but I think it's generally ill-informed. And leads families down the wrong paths and actually perpetuates the very things that they're trying to prevent.
So excited to, to get my ideas out there. Thank you. Yeah, no,
MPD: this is very cool topic. I'm a big history nerd. I listen to Dan Carlin's hardcore History. He has a quote or phrase he throws out. I'm gonna butcher it at the halls of. Echo with the sound of clogs climbing up the stairs and silk slippers coming down.
And I think the subtext there is, the kind of, there's a hard work, p poor, a value set and skill set that tends to create wealth. And then wealth is making, makes people. And they lose the wealth. Another phrase that kind of is parallel is, or we'll hear people say, Hey, it takes three generations to create wealth and three generations to lose it.
So your generation five. Can we start out with the problem? Where does a family having money cause problems? Where does this surprise people? And I think for a lot of people listening to this who are founder types, they're probably the generation creating wealth in most cases. And they probably don't know, if this pattern is a real pattern, they're probably also the people who set up the infrastructure that caused all these problems for future de generations.
So I think this context is super, super important for them to
Taylor Adams: be hearing. Yeah, definitely. So I. If you think about values and principles of wealth creation of that entrepreneur that's, going up the stairs with and clogging up it's really about risk taking and value creation and being of service to others.
And it's done in a way where we're not operating from a fear of loss. Cuz the mindset is like, Hey, we've got nothing to lose. Let's just try this. And I think once abundance is created and you look back and you're like, holy crap, we've created something that's really significant. It's important, it's valuable.
I think what sets in is a fear of loss and the idea that, that you mentioned the shirt sleeves. The shirt sleeves in three generations. I think every entrepreneur who creates wealth somebody, whether it's a wealth advisor or other whispers in their ear shirt sleeves, a shirt sleeves in three generations and they go, oh my gosh, that sounds horrible.
I don't want some entitled grandchildren to destroy everything that I work so hard to create. And so what happens is that in subconscious the operating model for value creation flips and it goes from risk taking and entrepreneurship to one of preservation. And the preservation frameworks are entirely different than the entrepreneurial frameworks.
And when you switch to a strategy of preservation, which by the way doesn't really exist in nature, you're either growing or you're dying. Stasis doesn't really. What happens when you switch to a preservation mindset and you advocate for things like stewardship of the thing that was created by previous generations.
What it does is it de emphasizes the importance of ongoing value creation. So the idea is preserve what already exists. Then what's secondary to that is like create new things that have value. And so future generations feel. Less compelled to create. And even though they haven't, we generally have an innate drive to create.
And then what happens is I think families go from a culture to of value creation, to a culture of value consumption. Also with future generations when the environment that they grew up in is really significant and and large. It's harder to figure out how they can make contributions that actually move the needle with respect to their environment.
It's part of the human condition that we all want our environment to reflect back that we exist and that our contributions have value. But when you're Avi environment's really abundant and complex, it's hard to reconcile how to actually make those contributions.
MPD: Yeah. This is interesting. Like w.
We started a multi-family office at Interplay because everywhere we went in the market, we just kept hearing people talk about wealth preservation, which I think is a joke because it's free on Vanguard, drop some money in the s and p or equivalent, shouldn't cost anything. But the missing piece, which I, this really speaks to me.
Is, I think we're looking, this is my version of it and I think it's probably limited depth compared to what the way you're thinking about this is. People just want a sense of meaning. They wanna feel like they're creating and driving value. And what I love about the way you talk about generational transfer and planning is it's psychologically oriented towards giving people the ability to have a sense of meeting.
What should people be doing? Like you've got this, someone who's finding probably a lot of meaning and building you hope they build, they create wealth. How do they avoid falling into the pitfall of flipping into wealth preservation, flipping into defense, and it sounds like that's also connected to creating environments where they're future generations.
Feel handcuffed or unable to have impact?
Taylor Adams: How do they flip that? Yeah, it's actually pretty simple. With a wealth preservation mindset, like the main subject of everything is the wealth. And it can, in a family, it can very quickly eat up all the bandwidth and the focus is on like the legacy and the wealth.
I advocate for an empowerment paradigm where we flip that and we make sure that the most important thing, the primary factor is the human capital. So the people, and we take an approach of believing in people and their innate ability to create value for others. And then we we look for ways that we can help them engineer peak moments in their life.
So a peak moment is a moment where you've, You've made a contribution in some form and your environment is reflected back that you exist and that you have value. And the beautiful thing about a peak moment is that it, it changes your perspective on what you think is possible and what you're capable of.
Now, think of peak moments in our country's history. The very first flight or landing on the moon or Elon landing rockets backwards. Two at a. It it not only changes our perspective on what we're capable of as an individual, but then also as an organization and as well as a society.
And the preservation paradigm the main, the number one goal is preserve the wealth, and then the default secondary goal is protect family members from the wealth because we've observed that wealth has the power to rob future generations of meaning and purpose entire. In this new empowerment paradigm, it's really first focus on the humans in an individual format, not in a group format.
And empower them to find ways to make a contribution. So what that looks like is meet them where they're at with respect to their interests, and then say, yes. And I'll tell you a story of how my my father's empowered me this. So many different stories. But I remember one time I was 13 years old and our family was running a direct private equity practice and we're acquiring distressed manufacturing companies.
And one of the companies we acquired was a company that manufactured automotive aftermarket parts. They manufactured superchargers. And you put one on your car and it makes your car go really fast. And I just thought it was the coolest thing ever. And I remember one night at dinner I told my dad, I, I.
We should advertise on the radio because if everybody knew that Supercharges existed, then everyone would wanna put one on their car. And if he was wearing the business hat, he would've said, Taylor it's a good idea, but this is why it won't work. This is a niche market. It's not right for like mass market advertising.
That's not what he said. He said, okay, go put a radio commercial on the air. I. What what do you mean? He's yeah I'll drive you to the radio station and I'll I'll pay for the commercial. And so that's what I did. He drove me to the radio station. I met with them, produced a radio commercial, and two weeks later I'm on the school bus on my way to school and I hear a radio commercial that I produce go over the airwaves.
That's amazing. And the main takeaway there is that, that when you say yes and like really cool shit happens, but the important thing is, Work with future generations to make sure that the feedback loops are as short as humanly possible. You could think of it as like lean startup methodology and using kind of MVP frameworks.
But what tends to happen in enterprising families is when the environment is really robust and significant people future generations feel like, whatever I do, it has to be big. So I can't start. And so they tend to open up these really big feedback loops when they're experimenting with their purpose and their meaning, and they get 10% of the way there.
And they find out it's really hard and things don't really work out. And so then they just move on to opening up another big feedback loop. And then siding can get the impression that, oh, they're just a dabbler and they're running around doing different. So meet them where they're at with respect to their interests.
Say yes, and then figure out how to repurpose legacy resources and capabilities to, to empower future generations to create their own value creation machines. And what you really want to instill is a culture of value creation over value consumption.
MPD: This language speaks to me. I think one thing I hear in this is that there's this role of management that generations.
Have to have they have to have a management skill to train and manage the next generation. And I'm sure your dad was a pretty damn good manager, right? To give you that type of opportunity. So I'm hearing that. I'm thinking, okay there's a human component to that. That the person maybe that g, that first generation, whoever that person is, that entrepreneur listening to this, who's gonna take their company public and they're gonna set up a.
They don't know if their grandkid's gonna be a good manager for their great grandkid. So there's a whole interesting, I don't think we have time for it, but a whole interesting conversation. I'd love if you have a couple of bullets of how do you structurally set up an operation so that the emphasis can be on value creation with people that you may never meet.
And I'm sure that's probably a different structural paradigm. Then what people are, most people are setting it up with this wealth protection and, hey, let's try to, reduce the mind, fuck we give to generations down the road. It's this defensive versus offensive approach.
How do they structurally put offensive in?
Taylor Adams: Yeah. I think the way you frame the question is great. I think people generally, when they approach this kind of thing they ask themselves the question of how can I empower? The next generation. And usually it's not even the next generation they're actually referring to specific people.
How do I empower Billy, or how do I empower Sally? And I think the much better approach is rather than focus on actual individuals, focus on building a capability. And the way you do that is you ask yourself the question of how do I build capabilities today? That can ensure that generations born, even a hundred years or 250 years from now, will have the opportunity to self-actualize.
They will have the opportunity to become the best version of themself possible, right? And I think when you reframe the question that way it, it changes how you think about it. And change is how you build. Because the, when you're building just for individuals within the next generat. I equate that to kicking the legacy can down the road.
And you're hoping that, all right, I hope the next generation kicks the legacy can one more time so that the future, the next generation has the opportunity to do it. There's just way too much risk in that. Cause eventually one generation is gonna look at the can and be like, Hey, what did that can ever do for me?
Fuck, that can, I'm not kicking it. And then it's came over. And what I've learned is that all it takes is there for there to be one generation that's void of an active value creator for that entrepreneurial spirit to completely leave the family. And it's, it makes sense because regardless of what our strategies are and like what we communicate to future generations, emulation is gonna be what they actually use to shape their life.
They're just gonna do what the previous generation. And so looking at it from a capability standpoint empowers us to think about, all right, what kind of structural mechanisms can we create for example, creating a, a dynasty trust or a trust that's it's only purpose is to invest in the self-actualization of family members.
That's a perpetual kind of structure where it's, the, it's available to generations, four and five, and.
MPD: Taylor, thank you for being on today. I'm very grateful that you are out doing this. I think it's not just gonna help a lot of people psychologically, but there are a lot of people with means and resources and everyone's favorite word privilege.
And the methods and perspective you're sharing is activating them, and that's a good thing for every.
Taylor Adams: Thank you. Appreciate it, mark.
MPD: I love that conversation with Taylor. Thank you everyone for listening to that. I think what he's doing is super important, activating a whole segment of the population with material resources, and equally as importantly, hopefully helping people set up constructs that will be in service of the mental health of their families.
So very powerful stuff. I don't think enough people could hear his words on this topic. He's a frequent public speaker. That's where I actually heard him first time he was giving a talk. Have and have grateful to have befriended him. Definitely check out Taylor and what he is doing.
I think he'd be helpful to you and you wanna get in touch, just reach out to us. Happy to make the intro. Anyway, I hope you enjoyed it. Very grateful to have him on.