Patrick Donohoe

Conquering The Venture World With Thomas W. Jones

TWS 2 | The Venture World

 

There are so many more opportunities to be found in the venture world these days, and it’s a good time to jump in. You’ll find that you’re able to make more now if you have some capital to put in. Patrick Donohoe talks to Thomas W. Jones, the former Chairman and Chief Executive Officer at Citigroup. Together, they speak of these opportunities for investment. Your path to wealth might just be down this road – if you know where to look. Let Thomas and Patrick show you the way!

Listen to the podcast here:

Conquering The Venture World With Thomas W. Jones

It’s truly is an honor to speak with this gentleman. His name is Thomas Jones. Thomas is a former Vice Chairman, President and COO at TIAA-CREF, the largest pension system in the country, one of the biggest financial firms in the country. He’s also the former Vice Chairman of Travelers of the Federal Reserve Bank of New York and Freddie Mac. He’s also the former Chairman and CEO of Smith Barney Asset Management and the former CEO of Global Investment Management at Citigroup, the former Treasurer at John Hancock Insurance Company, the Founder and Senior Partner of the venture capital investment firm, TWJ Capital. He’s also the author of a book called From Willard Straight to Wall Street. Thomas, correct me if I’m wrong, but were you also a part of ICI, the Investment Company Institute?

I was on the board at the Investment Company Institute for a number of years.

Of anyone to understand how investment has changed over the years as well as different types of investments, different types of companies within the financial services. Tom, I can’t wait to have this interview. I thought it would be great to start with some context for the audience to understand your perspective on things. I’d love to know as you were growing up and as you got into financial services in your career, who was one of your role models? A person that inspired you either someone you knew, somebody you didn’t know. Who were some of those instrumental people that helped form what you decided to do with your life?

I would say one of the most significant role models was John Bogle, who created a modern index fund. As an experienced investor, he understood the various characteristics of risk in both the equity and fixed income markets in the US. Through a long period of experience and reached their conclusion, it was a low probability that the average investor was going to outperform the average performance and efficient capital markets have evolved in the US. He came up with this idea that the most likely way to deliver efficient returns relative to risk for the average investor was to minimize the cost of making those investments, so that the net return over time would be maximized in a way that it compounds itself. I thought it was magnificent that somebody as brilliant as that would focus on trying to create a product that was designed to serve the common man, so to speak. Designed for the average investor and accessible to investors who weren’t necessarily wealthy with large sums to invest in able to pay high fees. That was contrary to the standard Wall Street model. I admire what he was doing.

That was one of those earthquakes in financial services. It continued to compound where technology is on the scene now and the awareness of information has pushed fees, expenses and transparency. It pushed all those down in transparency up and you were one of the founders of it.

It was interesting and totally going index funds didn’t attract much of a following. Frankly, index funds came up onto the scene in the late ’50s and early ’60s and weren’t considered to be much of a factor in the market or maybe 25 or 30 years. It’s been only in the last 25 or 30 years that it’s become powerfully evident that most active investors are not consistently outperforming an efficient index fund. There will be some outperformers every year, but the problem is that most investors can’t identify them in advance.

It’s too late by the time they know. Their track record, is it that way going forward once they have outperformed it? 

That’s true also.

I thought another question that would be helpful for me to understand the career you’ve had, this success that you’ve had and the difference that you’ve made is to understand a superhero or a figure in history that has done amazing things, hero-driven things. Who have you most resonated with and maybe fit those criteria?

Most active investors are not consistently outperforming an efficient index fund. Click To Tweet

I was a bit of a student revolutionary in the 1960s. The cover of my book, From Willard Straight to Wall Street, shows me with a gun exiting Willard Straight Hall of Cornell University in 1969. That was a Pulitzer Prize-winning photograph. I’m on the cover of Newsweek Magazine in April 1969. I thought my generation of African-Americans was tasked by history to stand up and fight over the historical oppression that we had suffered in this country and to say that it had to end in our time. In that context of my hero, one of the people that I most admire was Martin Luther King, Jr. He made a way that he did change the conversation in this country that has hundreds of thousands of people doing things like participating in the march on Washington in 1963. Shaming America by personifying this high wall standard and saying that he was going to lead a movement that epitomized that high wall standard by doing a nonviolent movement and responding to hatred with love. I thought that was admirable and courageous and I admire him for doing that. Coming out of Willard Straight Hall with a gun was not a statement of love, it was a statement of resistance. I admire the way that Martin Luther King, Jr. elevated the civil rights movement and given it so much movement.

I always referred to some of the most inspirational, energetic, motivational speeches of all-time came from Martin Luther King, Jr. The reason why I asked the question that I did is you have figures in history or even in the fiction world that play this role, have this presence and state that is contagious to certain people that they resonate and essentially take onto their character. It’s fascinating because a person did stand for what’s right. The person did face the odds that were not in their favor, conquered, and made a massive difference in another earthquake in the world that set a new precedent. That’s awesome to hear about some of your heroes. Another question is what are some of the charitable causes that you have represented or continued to represent for support?

The one that’s closest to my heart was a school in Central Harlem, St. Aloysius School, which was focused on serving low income, predominantly black and Hispanic children, elementary and middle school. I became familiar with them in 1993 when I became the President of TIAA-CREF. There were a lot of newspaper articles about me and so on. One of those stories that were in the Wall Street Journal, I said that one of the ways I would like to make a difference was to support educational opportunities for inner-city children. Helping them to get better opportunities than were typically afforded to them. The lady who was the head of St. Aloysius contacted me and said, “If you’re serious about what you’re saying, you ought to visit us instead of starting something new, you want to work with somebody like me who was already in process.”

I followed up on that. I went to visit her and it was remarkable. She had these kids, the average kid. She had no special selection procedures other than you had to have a positive attitude. They had to be a person that wanted to engage positively for those. She oriented these kids through things like oratory, not the reading and the mathematics but oratory in a way they would give some of the great speeches that you would find in history. Learning how to understand those concepts and how to speak powerfully, resonantly, and emotionally. Through that process, imagining themselves being the machines and the footsteps of the great people whose speeches they were giving.

She also had side excursions going to museums around New York City, going to Broadway shows and it opened the eyes of these children to see what might be some of the possibilities beyond the daily horizons that normally were never experienced. I was impressed that we partnered with them. We started a program that was called the Courage to Succeed. I called it the Courage to Succeed because in a lot of inner-city communities, there’s a culture that reaches you back from success. There’s a culture sometimes where the kid who studies hard, the kid who tries to succeed in school, their teams. That’s not black. That’s not cool. I had faced that same thing coming up in my own life. I skipped two grades and that’s not cool. I had a mental shell, hard made of that but I knew these kids, it takes courage to stage that lack of cultural support.

I named the program the Courage to Succeed. What we did was donate computer equipment to the school with technicians from TIAA-CREF volunteering a couple of hours a week to go work in shifts to teach the kids various programs in schools. How to use the computers and the software we were giving them. The second thing was I recruited prominent, successful business people, African-American and Hispanic business people, to come and talk at school, tell their stories so the kids could identify with that’s somebody that looks like them and look how successful they are. If they can do it, I can do it too. The third thing I did was we were a sponsor of their annual fundraising efforts. We had an annual gala and win awards, which would raise $500,000 or $600,000 a year to support scholarships for the families that could not pay the modest tuition, $2,000 or $3,000. That’s something that not every family can pay. We raised the money to support scholarships for the kids. That’s been my favorite philanthropic endeavor.

I look at making a difference. I would say some of the stereotypes with charities are that you exchange money and support them because of their cause. Instead of that, it seems like you helped to perpetuate their cause by making a difference where it’s not giving a fish, but it’s teaching how to fish.

You’re trying to teach people how to fish, how to support themselves, how to be confident in themselves, how to lift themselves, how to see a way, how to see a road, how to see what an opportunity might look like.

We can go off on that topic for the entire show because the amount of influence that the children have especially around the teenage years when their bodies are changing, the chemicals in their brains are changing. There’s a huge part of their perspective that lingers throughout their entire adulthood is formed in those years. I look at how profoundly in good ways or bad ways, depending on the environment, how school influences that. We could go off on that, but I want to get to one other question for context then we can get into some of the meat of the interview. I’m grateful to you for answering the questions the way that you are because it shows who you are. It shows what you care about and even the purpose behind what you do. The last question I have for you is from a legacy perspective. If you could choose one attribute that you could impress on your children, your grandchildren, the world, and perhaps this audience. What would that attribute be?

If I had to pick one, it would be something I’ve talked about in my memoir. It’s the lesson I learned of the significance of giving 100% effort every day and try to excel at what you do. It’s a lesson I learned because when I started out in my career in the early ’70s, I thought I had no chance at all. I was going into the business world because I thought that’s where the toughest battle would be as America seemed to be opening up to more integration, inclusion, and racial equality. I thought the business world would be the toughest battle because that’s where the wealth is. I thought I would have next to no chance whatsoever because I was branded as the black radical supporter but I wanted to give it my best shot anyway.

TWS 2 | The Venture World

From Willard Straight To The Wall Street

As I thought about how to approach it and to think which is unlikely that you’re going to succeed, I concluded that you have to have a framework of reference for success that you can control for yourself. You can’t be psychologically dependent on those around you to define whether or not you’re successful. My conclusion was the only thing I could control was my attitude, my demeanor, my work effort, my product output. If I had a positive attitude, if I always carried myself in a way that was respectful and friendly towards others, if I gave 100% commitment in my best every day, that could be my personal scorecard. Every day, I could grade myself on to do that to them. Things might not work out at all in the context of the companies and my assignments. I might get fired any day.

If I could give myself that scorecard every day, then that was the best I could do. I should be proud of that. As I made that commitment, I discovered that operating at 100% to try to excel every day is different than 90% or 95%. I had been socialized, like most of us, you’re socialized at school at 90% or 95% is an A and A is the best you can do. You should be satisfied with that. In fact, I discovered that there’s a big difference between 95% and 100%. It may not seem like a lot. Who cares? You got 100, I got a 95%, big deal. What are the five points? It may not mean that much on any given work assignment. It’s hard to push it into shades of gray about the quality.

That five points of differential effort and commitment, if it’s compounding every day, day after day, week after week, month after month, it becomes an enormous reservoir of differential effort and likely achievement that sets you apart. That was the basis of my career because I did not know it at that time, but the most successful people in Corporate America, the guys that reached the top, the guys that build teams, one of the reasons they’re at the top is because they have the teams. They can’t do all the work themselves. One of the ways they build teams, they’re like sports coaches. They’re always on the outlook for talent. People that they want to try to bring onto their team.

I did not realize it at that time, but some senior guys we had to pay attention to them unless they heard about me. They began to pay attention and people would show up if I was doing a presentation. A report that I admit and might have been read by a number of different people who then ask me questions about it and people would begin to approach me. It always started with discussions about work, conversations about my work efforts, my projects, clients. It would slowly engine to asking me about my family in the background and what my goals were. It would go a little bit broader into social, they would invite my wife and me maybe to dinner.

Ultimately, I was adopted by the whole series of people who became my mentors and they gave me the promotions, the compensation increases, and protection. I did need protection because not everybody wanted me to be in the company. People who would have fired me because I was the black radical from Cornell and people were like, “You don’t belong here.” I got protection, promotions, and compensation. That mentorship was a reciprocal relationship. I made them look good by the work I did and they took care of me. To come full circle, the point I would make is I learned through that 100% effort to achieve what I call self-actualization.

Self-actualization is your highest potential and you don’t know what your highest potential is. You put a 100% effort and to try to get there. I learned through doing that, It was a spiritual gift to myself because it was not only was it successful in a career sense or job sense, but I felt spiritually uplifted just the joy of knowing that you’re achieving your highest potential and being everything that you can possibly be. I recommend that to your audience because I guarantee you, it’s a spiritual gift to yourself to give 100% effort to be everything that you can be.

This is inspiring because if you look at the athletes in history, and I’ll refer more to the Olympic athletes. The gold medal winners are the ones that go down in history. They’re the ones that are celebrated. They’re the ones that people remember. The bronze could have been a fraction of a second off from the gold. The fourth place, no one even remembers. They look at the tiny margin that exists between those 1st, 2nd, and 3rd place. It’s incredible that the ones that go down in history, it’s a fraction, it’s a hair, it’s that tiny bit of effort. I’ve heard before that in our day and age, a good effort is going to give you poor results. An excellent effort is going to give you mediocre results. It’s an outstanding effort that gives you those moves. It’s a rung on the ladder toward Maslow’s self-actualization. It’s powerful that you say that because it’s not that those that succeed, excel and achieve that excellence do so much more than everybody else. It’s a little bit more than that threshold that most people stop at.

It’s a little bit more but they’re doing it for themselves. Nobody’s forcing them to do it. LeBron James is out on the basketball court as a kid at night shooting hoops. Nobody’s forcing him to do that.

That compounds, it creates the way in which you view your role in everything. That behavior side of things, it’s that compounding because the detection of making that little bit extra effort is noticeable. The other stuff is the cliché of people doing enough to get by.

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It becomes a way of life. It’s different that doing whatever you can get away with, which is the way some people approach work. You do as much as you need to do. What can I get away with doing? What can I skip doing now? It’s a different orientation to how you approach.

You look at the philosophy, you have everything you listed and then you look at your bio. I know there are other roles that you’ve played throughout your career but you’re not surprised. If you were to look at some of the philosophy that you have, the perspective you had, and then look at your experience, it won’t be a surprise. That’s what’s amazing. I appreciate you sharing that.

That’s one of the messages I try to communicate in my memoir. I want to tell you a second message, the second point, briefly. I wrote my memoir in part because I’m concerned about this negative tone that’s developed in the country with regards to the political divisions and cultural divisions, racial divisions, and we seem to form the negatives well incessantly. What’s wrong? What divides us? From my perspective, I look at this country now compared to America in the 1960s. I say that if you described America now to people in the 1960s, most people would have said this country could not possibly change that.

It’s impossible, but we have. It’s such a better country. We ought to give ourselves credit for how much the country has accomplished with regard to race relations and cultural issues. Even as we recognize, it’s not perfect. We still have ways to go. There’s much to do but give ourselves credit for how far we’ve come. That’s important to our collective psyche, especially if we raise a child, we can’t always be negative and saying, “You didn’t get this done and you didn’t get that done and you’re not good at this. You’re not good at that.”

If you’re raising a healthy child, you’ve got to praise them for their achievements and accomplishments and then say, “Also, there are some areas where you could get better, some things you want to focus on because that’s not quite up to par with other things that you’ve accomplished.” You’ve got to have that balance for the psyche because psychologically, you’re trying to help your kid understand that you are capable of these achievements. Look at how much you’ve done already and now there’s a little bit more that you also need to get done. That same thing is true of our society. I wrote my book in part to try to communicate that message that our country wants to be proud of how far we’ve come with regards to race relations, women’s equality, the LGBTQ acceptance in society. We’re a country. Nobody came in from the outside to impose these changes on us. The country has decided to try to live up to its higher standards, it’s higher ideals. We should be proud of how far that down road we are.

There’s a saying that I’ve connected with that is, “Pessimism gives you the crumbs of life.” There’s always going to be something wrong if you look for it, we’re humans. What’s right is also always there.

It is there. When I look at America now, I see that in every profession, law, medicine, business, every academic field, entertainment, sports, law, government, African-Americans have achieved at the highest levels, recognized and accepted. In the middle of fears of our society, millions and millions of African-American families have been lifted out of poverty through access to better education and better economic opportunities that have occurred in the last 50 years. An African-American has been elected president of the United States.

He’s one of the most influential presidents.

We should be proud of that. That doesn’t mean that Black Lives Matter doesn’t have a good point when they march and demonstrate against this violence against unarmed black men that occurs. The truth is, those kinds of incidents of violence against unarmed black men occur proportionately. The frequency was 50 times greater 50 years ago, and 100 years ago 100 times greater. I’m not sure we’ll ever eliminate it because it’s humans and there are going to be some bad apples who dislike other people for some nasty reasons. I’m not sure we’ll ever get rid of it entirely and Black Lives Matter is right to demonstrate and publicize the incidents which still occur, but at the same time, we should recognize the frequency is greatly diminished. We should recognize that it does not take away from how much our society has accomplished in the last 50 years. We could be proud of what we’ve done even as we recognize that we still have ways to go. We’re never going to be a perfect society. You still have ways to go.

TWS 2 | The Venture World

The Venture World: You’re trying to teach people how to support themselves and be confident enough to lift themselves up.

 

We’re humans, we’re fallible. Since the beginning of time, anything that’s different or as perceived as different, people are afraid or are naturally afraid of. It goes to the caveman inside of us being afraid that the saber-toothed tiger is going to eat us in the morning. I look at that but I also see so much good that’s happening in the world. The news headlines, it’s easy to get the chemicals in our brain firing because of the negative things that are happening. There’s so much good that’s happening if you know where to look for it. We can go off on that. I believe that the focus that you have on how you show up with the different roles you have in life, there is going to be an overwhelming amount of things that are wrong, but there’s going to be as much more that you could be grateful for and what’s right. You have to look for it.

You have to look for it, you have to see it and you have to appreciate it. One of my tenets would be to associate yourself with those who are positive people, the positive events, the positive dynamics. You individually need to be a positive person and associate with positive people.

In the past, I’ve thought about disassociating with negative people. I don’t know if that’s always the thing. In the end, what influences a person that may be naturally pessimistic is you changing first, you adopt a different perspective, a different state in which you show up and that person over time will be influenced. It is having an awareness of that instead of assuming that a person is going to be influenced by you or by you. It shows that the people in the world that I would say are the most pessimistic are the ones that are suffering the most. You could be a positive influence on them if you understand these principles and then show up differently. That’s ultimately what’s going to be the greatest influence.

Tom, I wanted to get into investment and we’ve talked about our philosophy. I love what you’ve said and it magnifies the respect and admiration I have for you. A few questions on finances and investment. This life experience that you’ve had and the perspective you have in regard to yourself, life, our society especially the Western and the American society. How have you taken that to the financial world, whether it’s the way in which you’ve run these massive companies and the theory behind how they invest? You’re in the private sector as far as investment is concerned. It applies to the companies you invest in and aligning your philosophy with theirs. How have you taken what you’ve learned about life and brought that to the financial service’s roles that you’ve played?

I’d like to give you two examples. One is that more of a microscopic, personal level because your audience may have some questions with regards to how they can become wealthier. How can they be financially more successful? I want to tell you about the anecdote. When my wife and I got married, on our honeymoon in 1975, I said to her that one of the things I was thinking about was that we were both working professionals. We both have a nice income. I said I have thought that if we could, we should try to live on one income. If we could live on one income, save the other and have some money that we can invest and try to build economically, building an economic venture, this is the time to try to do that while we’re young.

I’m not sure what we would invest in but I know that in a capitalist society, you’re a lot better off having some capital to invest. Looking for opportunities to then build wealth by using wealth. She agreed, which seems self-evident 40 years later, but in fact, at that time it meant we couldn’t live the same lifestyle as many of our young dual-income friends. We couldn’t have the same clothes. We couldn’t go out to dinner as often. We couldn’t take the same vacations and so on and so forth. My wife agreed and within two years, we had a $25,000 nest egg. We lived in Boston at that time. One Sunday, I’m reading the Boston Globe and the Boston Redevelopment Authority and some ads for abandoned properties that they had taken over, which were available for redevelopment.

We lived in the south end of Boston, which at that time was in the early stages of urban renewal. One of the properties that the Boston Redevelopment Authority advertised was too boarded up, abandoned, burned out, brownstones about a little over two blocks from Copley Square in Boston, which is hard to believe now as much as that area that gets developed. We put in an application to redevelop those two brownstones. We were the only people in the whole city of Boston to even bid on it. It’s a long story, a lot of hurdles, a lot of tough stuff to deal with. Three years later, we had completed a ten-unit, totally refurbished apartment building.

We lived in one of the units, the top floor. We had a two-bedroom apartment with a roof deck that was overlooking Copley Square. The other nine units were cashflow positive. The building was cashflow positive within a year, which meant that income was paying down the mortgage which accrued to our benefit, and then in that era there were all kinds of tax advantages to owning investment real estate. We were living essentially rent-free while the asset was growing in value. It then ended up making hundreds of thousands of dollars out of that initial investment. That’s a microcosm of how you get from nowhere to somewhere in America financially. It’s not what you earn on your job, it’s what you do with what you earn.

You need to try to accumulate some capital somehow so that in a capitalist society, you need to have the advantages of having capital work for you so that you can get the capital gains and the income that is thrown off by capital. That example I gave you, Wall Street is a million-scale magnification of what I described to you. More complexity in some of the kinds of deals, but as essentially various versions of there’s an equity piece of capital, there’s some debt layer around it. There are some assets, be it a building or be it a business. You’re trying to build that asset with the combination of the equity and the debt. If you’re successful in building that asset, it pays down the debt for you. You end up owning the whole thing even though your equity portion was only a fraction of what it costs. That’s what happens in capitalist economies. You need to understand that and make it work for you personally.

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There’s a saying I love, which is when you have the capital or liquidity, opportunity seeks you. It’s not that it wasn’t there before, it was always there. If you don’t have the means to do, your brain doesn’t see it. It’s an interesting phenomenon. I love that example. Let’s fast forward to now because you’ve taken the wealth of knowledge that you’ve accumulated over the course of time and experience, most importantly. Now, you run a VC type of fund and you’re investing in different companies and other assets. What are you paying attention to? What do you see as the opportunity that exists right now? There are a lot of things that you could focus on that are negative. At the same time, there are also a lot of positive things that you can focus on. What are you and your investment strategies focused on right now?

When I started several years ago with the venture business, this has changed a little bit, but my theory at that time was at venture capital that becomes something of a concentrated industry. Most of the capital, so to speak, under the control of a relatively small number of medium and larger size venture capital firms, typically on the East and West Coast. These firms had accumulated such large pools of capital that smaller deals, meaning $5 million and $10 million type deals, didn’t move the needle for them. Meaning    if you’ve got a $500 million fund, a $10 million deal is 2% and it takes a lot of work. If you’re going to try to make your fund successful with doing deals that are only 2% of the fund and it takes as much work, due diligence, document structuring and so on to do a $10 million deal as opposed to doing $50 million. My theory was there’s an inefficiency that’s developed in this marketplace, what I would call a smaller commercial size, smaller industrial size opportunities don’t have as much money, don’t have as much sophisticated investment money looking at them as doing larger transactions. That was true at that time.

Shortly after we got started, we had a $60 million fund and I would network. Over the course of my career, I’ve come to know a lot of people. One day, I’m having lunch with somebody I had known for a number of years. She’s also an investor and she says, “Tom, we’re in this deal with a company called Floor & Decor Outlets of America. We do hard surface stone tile. We helped them to grow to five stores. Entrepreneurs started out, we helped them grow five stores but they have violated one of the deck covenants that support their inventory. The bank was going to pull the plug in the next 60 or 90 days.” It says, “We’re at the limits of how much money we can put into the deal. Would you be willing to consider investing?” I said, “I’ll tell you that I will do my diligence. I could do that. I will do an intensive look at it and I could give you a decision within that timeframe, but I’m not going to promise you that we’ll do it.”

I went and I spent a lot of time with the entrepreneur and it turned out the entrepreneur, the leader of the company, was a brilliant entrepreneur by the name of Vincent West who had family company down in Georgia that had been wiped out by the early stages of Home Depot. This guy, Vincent as a kid, had learned this business, the stone, the tile, ceramics, different types of wood. He developed relationships with all the sources of this product around the world, the different quarries, the different manufacturers. His idea was this, he says, “If you are remodeling your house, you had your interior designer come. He gives you some ideas, you like the ideas. You go down to the tile shop, you see something that you like, you order it there. It goes to six different pairs of hands because the tile shop doesn’t have it in stock. You’re going to order it from the distributor and the distributor doesn’t have it in stock. He’s going to order it from the importer. The importer’s got to get it, place it to the shipper and everybody’s adding 20% markup.”

His idea was to let me import a unique product. I’m going to put it in 50,000 to 60,000 square foot warehouses. I’m going to put up these beautiful examples, almost artistic types of examples using that product. Here’s what you can do design-wise with the product so that when you come in with your interior designer, if you see something that you like, it’s right there in my warehouse. This eliminates one of the problems. He says, “When you go to the local design store and you see something you like, when it finally gets imported through all these different pieces of hands, it may not even be the same as what it looked like in the store because it’s coming from the quarry. It’s coming from the rock. Some of the little colors in it, the grains may be a little bit different.” This was his idea. The problem with this type of business model is that you have to be precise with the modeling of your revenue versus cost because although your cost is upfront, you’ve got to get the store, you’ve got to get all the inventory into the store, you’ve got higher roles of people to be in your store, you’ve got to train them. All the expense meters running. Unless you understand how the revenue currently builds, it’s easy to run out of cash. This was the problem.

When I did my due diligence, I figured this guy has a business model through these five stores that they’ve got going. He’s got a good idea and it looks to me like they pretty much learned to operate the model but they made a few errors with regards to some of these unpredictable, tiny variances. I offered them a deal. I’ll put in $2 million and cure the bank covenant default. People think you’re going to screw up in a circumstance like that. I said, “What I’m going to do is I will come in pari passu with the economic terms of your most recent rounds. That’s generous. Here’s what I want. I’m going to be pari passu economical but I want a separate class of securities. If your last round was series B, I want a separate round, which is series C or series B1.”

Series B1 covenant, you’re going to say that under circumstances where everything’s fine, budget and all of that, everything’s pari passu. There’s going to be a whole list of conditions if we miss budgets, if we have any defaults on bank debt, if we want to raise new debt, if we want to raise new equity, anything like that you’re going to have to have a majority of the series B1. In effect, I have negative control. If everything goes well, we will all share the economics. If there are problems, I’ve got the seat at the table. To make a long story short, I put in $2 million then a couple of years later, I put in another $2.8 million. We grew that out to 25 schools to $250 million in revenue runway. We sold it to Aries Capital Management out in LA.

They scaled it up to over 50 stores and they took it public. FMD is the symbol on the New York Stock Exchange. That’s the thing that we do. A $2 million initial investment is scaling-up $4.5 million and that was a ten-bagger for us. A larger fund wouldn’t even look at a deal like that. Let me make one last comment. What is changing though and this has got me concerned, there’s a lot more money in the venture world these days, a lot more angel groups, there’s a lot more money chasing every opportunity. If we do one deal a year during a period like this, that’s a lot because there’s a lot of money chasing them. What happened was we work in terms of the market saying this is crazy. They’ve gotten out of control. They’re throwing money at a guy and they’re losing hundreds of millions of dollars a year. I hope that’ll bring some sanity back into the marketplace.

There’s a big article in the Wall Street Journal that talked about $100 billion or so disappearing. A lot of it was initiated by WeWork debacle but not just that, it’s also what happened with Uber and some other companies that were betting on a certain valuation. What I wanted to get into because I totally love this train. Going to where your expertise had been established over the years and with this deal, what were the ingredients of your engagement in the deal? Number one, it was the actual individual, the entrepreneur behind the company. The second ingredient sounded like understanding their finances, understanding where their finances, where their costs and then what costs would be and as well as revenues if they start scaling. Another ingredient that I picked up on is the terms of the deal. Was there anything else in there as far as your recipe for a good deal that you use consistently with some of the other deals that you do?

TWS 2 | The Venture World

The Venture World: There’s a lot more money, many more angel groups, to be found chasing every opportunity in the venture world these days.

 

You’re accurate. First and foremost, what is the product? What does this company do? What problem does it solve? In the case of FND, it was solving that problem of going through multiple layers of mark-ups in order to home improvement supplies that were attractively done and artistically set up. What’s the value creation that accrues from your product because the value creation tells you here’s what people are likely to pay for it. This design or setup enabled them to get 40% gross margins even while they were selling at 40% less then you would have paid in the local tile store. That was the value creation. The third one was the people. I’m not saying it’s always in that order but those are the three elements. What is the product? What’s the value equation for you? Who are the people? What’s the quality up to you? At the end of the day, you’re betting on people but good people can fail if you’ve got a poor product concept or a poor value equation. The other thing also happens, you can have a good product concept and a good value equation but if you don’t have good people, that doesn’t work either. You need all three of those elements.

This has been fascinating. The best way I would say to learn about you is going to be from your book. Anything else that you’re doing whether it’s anything online or anything that’s public other than your book where people can learn more about you, learn from you, learn from your expertise. What’s the best way for people to connect with you?

My Facebook page, From Willard Straight to Wall Street. We focused around the book but on a regular basis, I get comments on that Facebook page. My website is TWJCapital.com. You’re going to see a little bit of information about the investments we do.

The best way to get your book is through Amazon or any publisher? What’s the best way to do that?

Amazon has it. They also have an audio version which is done by Audible. If you’re one of those people that while you’re driving and like to listen to the book, you can get the audio version at either Audible.com. Since Audible is owned by Amazon, that’s also available through Amazon, From Willard Straight to Wall Street.

In a capitalist society, you're better off having capital to invest in things. Click To Tweet

Tom, this has been such a pleasure. Thank you for sharing all that you’ve shared. There are some fundamental principles in there that I’m excited about. Hearing it from you makes me even more excited. I’m grateful for you taking the time to be with us. It’s been an incredible interview. Would you like to depart with any final words?

I would say thank you for taking the time to do this. To me, it’s an example of what the opportunity of social media is. We see so much that people say social media is negative. This is an example of you’re being able to take the time to develop this topic. There’s a wonderful example of how you can add value through social media. Thank you.

Thank you, Tom. We’ll have to have you on again.

I look forward to it.

Important Links:

Tony Robbins Unleash The Power Within
San Jose, CA
March 12-15, 2020
Special Event Pricing for Listeners of The Wealth Standard:
General Admission
Retail = $1,145
Discounted price = $495
Silver Admission
Retail = $1,495
Discounted price = $695
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Retail = $1,795
Discounted price = $795
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Phone: 858-535-6271
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About Thomas W. Jones

Thomas W. Jones is former Chairman and Chief Executive Officer of Global Investment Management at Citigroup, and former Chairman and Chief Executive Officer of Citigroup Asset Management with approximately $500 billion assets under management. Mr. Jones was appointed asset management CEO in August 1997, and sector CEO in August 1999, and continued in that capacity until October 2004. This business sector included Citigroup Asset Management, Citigroup Alternative Investments, Citigroup Private Bank, and Traveler’s Life & Annuity.

Prior to joining Citigroup, Mr. Jones was Vice Chairman and Director of TIAA-CREF since 1995, President and Chief Operating Officer from 1993-1997, and Executive Vice President and Chief Financial Officer from 1989-1993. Mr. Jones was Senior Vice President and Treasurer and other positions with John Hancock Mutual Life Insurance Company from 1982-1989, and spent the previous eleven years in public accounting and management consulting primarily with “Big 8” public accounting firm Arthur Young & Company (predecessor firm to Ernst & Young).

Mr. Jones is a Director of Assured Guaranty Ltd, and Trustee Emeritus of Cornell University. Past board positions include Vice Chairman of Federal Reserve Bank of New York, Altria Group, Freddie Mac, Fox Entertainment Group, Travelers Group, Pepsi Bottling Group, TIAA-CREF, Eastern Enterprises, Thomas & Betts Corporation, Howard University, Investment Company Institute and Economic Club of New York.

Mr. Jones holds Bachelor of Arts and Masters of Science degrees from Cornell University, and a Masters of Business Administration degree from Boston University. He has been awarded honorary doctoral degrees by Howard University, Pepperdine University, and College of New Rochelle. In addition to these accomplishments, Mr. Jones is a Certified Public Accountant and author of the new book From Willard Straight to Wall Street: A Memoir.

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Investing: The 2020 Kickoff

TWS 1 | 2020 Kickoff

 

It’s a new year, and just like the numbers 2020, it’s time for another topic to see things clearer in The Wealth Standard podcast. In this first episode of a new season, Patrick Donohoe invites us to look forward to deep diving in investing. He outlines the season for us, giving a background on why he chose the topic and the structures of the episodes to come. As with Patrick’s mission throughout the past seasons, we’re all just after more freedom that will allow us to improve our satisfaction and meaning about experiencing life. He brings that into a whole new angle with investing. Tune in and get excited about the great and awesome learning ahead this 2020!

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Investing: The 2020 Kickoff

This is the first episode of our new season where we’re going to be talking about investing. I’m excited to outline the season, why I chose the topic, the structure of the episodes, what I have going on, which is going to be perfect for this specific topic. Also, the topic aligns well as a capstone in a sense of our previous five seasons. This kickoff episode will be relatively short and I’m excited to have the guests I have on. I’ve already done a few episodes. The conversations and the topics that I’m thinking through are going to be awesome. I can’t wait to learn right alongside you.

First off, let me take care of a few things. Thank you for your support for the 2019 season, specifically the support in the second season on entrepreneurship. That was a long season. There were many different episodes in there, a lot of different topics and tons of information. I want to make sure that you knew that the invitation to the Tony Robbins Unleash the Power Within event is still open. You can still register. If you go to TheWealthStandard.com, Jeffery’s information is in there. He is the representative that I work with at the Tony Robbins organization. There’s a steep discount for all of the tickets. It’s going to be amazing. It’s in Northern California in March. For dates, information, get ahold of Jeffrey. It’s going to be an amazing event. I’m excited to meet you there. Those of you who have signed up. It’s an event that is powerful and it works well to what I’ve been talking about over the last couple of seasons. You are going to see some more language and topics. I can’t wait for that and we’ll definitely have a report from the event from my office as well as the audience.

Let me make sure you are tuned into how to download new episodes. If you’re new, you can subscribe to your app and it will auto-update the episodes, so make sure you do that. We also have a YouTube channel. Almost all, if not all of the episodes are videos. Go to our YouTube channel. Subscribe to the YouTube channel as well. It’s a great way to be notified of new episodes. Also our email list, we’re going to be a lot more proactive with our email and engage a lot more with you because I’d like this to be not just me speaking to you and conveying information as well as guests doing that, but vice versa. It’s you talking about your experiences with this theme, questions you have, comments you have and deals you’re working through. I’d love to have those questions and also your feedback so that we can talk about the things that are the most important to you.

You are your best asset. Click To Tweet

Another reason why I chose to talk about investment is because of some of the events that I’m attending. I’m going to a business mastery event. I’m also going to an investment summit with a group that I had joined and invested with. They are mostly doing a startup type of investment in the energy sector, but they have an investment summit every year in Southern California. I’m excited to talk through that. These are not investments that I usually make. In fact, I’ve never made these types of investments and I consider it very speculative. The investment in part made sense to me because of the group that I got to hang around with. Not only am I invested financially, but also from a time standpoint and from a network standpoint, it’s a great opportunity. I can’t wait to learn from that event and then report back to you. I’m going to the finance event that Tony Robbins puts on for his Platinum Partners. It’s my second year going. The previous one was in a Whistler. This one’s going to be in Sun Valley, Idaho.

If you are new and haven’t watched the video series that I did, I think there are 3 or 4 episodes, please check them out on our YouTube channel. I went through and gave an overview of what I was learning and what was being said. I’m going to do the same thing with the one this coming February in Sun Valley. There are going to be a lot of people there, a lot of networking. I’m hoping to not just do solo episodes, but have some surprise co-hosts with regards to these events. It’s going to be busy months for me, but I’m excited to keep giving you information, teaching you and sharing with you ways in which you can get closer to your financial independence.

TWS 1 | 2020 Kickoff

2020 Kickoff: What might be good and wise and prudent investment for one person may not be that for another.

 

Why investment? I chose investment or investing and all the subcategories: investment strategy, investment theory, philosophy, as well as wealth strategy. Why investment plays a role or should play a role? What is an investment? How to make a wise investment? What’s wise and not wise? Why is it wise for one person and not for the other? There are a lot of topics in there, but the objective was to have this as a capstone to our previous seasons. For those of you that are new, in 2018, I went on this path of life, liberty and the pursuit of property, which is a very famous saying from the 1700 from a man named John Locke who inspired the Declaration of Independence, Thomas Jefferson, “Life, liberty and the pursuit of happiness,” which is what most people are familiar with. I chose this topic because of how intrigued I was based on what John Locke meant by the rights of life, liberty and property.

We spent a season on life and looked at life as you are as your best asset. Liberty, the second season I perceived that as what everyone is after when it comes to wealth strategy, financial strategy, which is financial independence and freedom. The property, which I consider resources, is the physical world around us. As the human being interacts with the physical world, amazing things happen. In 2019, we spent an entire season talking about capitalism, which is the infrastructure from a societal standpoint that best houses those rights and allows human beings to capitalize on those and pursue interests in the smoothest way possible.

As the human being interacts with the physical world, amazing things happen. Click To Tweet

A guest that I wanted on but wasn’t able to make it happen due to some illness and health issues on his part was Hernando De Soto, who wrote a book called The Mystery of Capital. It’s an amazing read into the nature of the system in which people interact and how the system itself, the foundation, and the infrastructure facilitates or inhibits progress and prosperity. I’ll probably speak a little bit more about that whole idea and I’m hoping to still get him on the show. Those were the seasons. The last season was entrepreneurship, which is essentially the individual and what they can do to improve themselves and subsequently improve their financial situation by understanding the structure in which they operate capitalism as well as the rights of life, liberty and property.

There have been some incredible stories about what readers have been able to understand with regard to ways in which they can improve themselves to make more money in their profession or maybe you switch professions or maybe switched companies. Also, from a wealth strategy standpoint, how could they start to make investments, make wise choices when it comes to where they put their money? We’re going to expand on a lot of that because investment, in theory, is the end result of all of this. When you invest, you hope to get more than what you put in. From a financial standpoint, that’s getting more money back then you put in. From an investment standpoint, not everybody qualifies to use that definition because a lot of people lose money, then the majority of time, you have individuals who don’t know what they’re doing.

When you invest, you hope to get more than what you put in. Click To Tweet

Whenever there is a gain, it’s not because of anything that they did or understand. It just happened. I put that right in line and parallel to gambling. It’s one of those things where investment and the evolution of our society is interesting because there could be tons of opportunities and options. At the same time, what might be good and wise and prudent investment for one person may not be that for another. We’re going to talk through that and use examples because we’re not just going to talk philosophically about investment. I’m going to have investment providers on here. People that have a business in which they take money from other people and give them a return and how their business operates in ways in which you can do due diligence.

I’m going to have a Securities attorney here, who has been around a lot of private investments. He’s seen the good, the bad and the ugly. As you can probably imagine, there’s a lot more ugly than there is good. I look at the different topics and hopefully, that is going to allow you to understand business and investment at a higher level. Most importantly, it’s the purpose of investment. I look at the deep-seated perspective that the United States has, especially Americans when it comes to what their end results of investing, wealth management, wealth strategy, which is our retirement. I talked extensively in my book about the nature of retirement and how flawed it is. It’s a very difficult thing to do.

TWS 1 | 2020 Kickoff

Heads I Win, Tails You Lose: A Financial Strategy to Reignite the American Dream

Planning and subsequently retiring is very difficult and risky as well. I look at the pursuit of financial independence, which we’re going to keep defining over and over again. It’s much easier and it can happen much sooner, and I believe it’s what people are after. I’m going to discuss that whole philosophy throughout the season. You look at most investment products and they support the theory that I’m talking about when it comes to retirement. If that’s what you subscribe to right then, there are tons of financial products out there that are designed for that end. If your pursuit is financial independence, financial freedom, then you have to look at how investments play into that different end result. We’re going to be talking about what financial independence is and expand on how to achieve that.

What are some of the criteria? It’s not the same for everybody because I believe financial independence is a mindset. Having certain things in place, whether it’s cashflow, working in a profession that’s meaningful and aligns with who you are and you’re continually growing and making a difference in other people’s lives. All those are components of it, but it’s going to be different for everyone based on where they’re at. We’ll get into that in much detail. I think 2020 is a pretty significant year. It’s the year of clarity and I’m hoping that you are starting out on a good footing.

My goal is to build upon the philosophical foundation that was established in 2018 and 2019. I believe that you, as an individual, are after ways in which you can improve your degree of independence. Money is a huge part of that. We’ve approached it philosophically. Now we’re going to get into the practical with regards to investment strategy. At the same time, I want you to step back a little bit and think through what I mentioned and hopefully take this into the next several episodes, which is what is the purpose of you making investment? What is the purpose of you working? What is the purpose of you continuing to want more? Where is that drive coming from? What’s the end result of it?

In the book that I wrote, Heads I Win, Tails You Lose: A Financial Strategy to Reignite the American Dream, I argue extensively that what we’re all after is more freedom and more independence. That is going to allow us to make decisions that are going to improve our degree of satisfaction and meaning with regards to life and our experience of it. I believe that you’re after that, I’m after that and I’m hoping that the dialogue, the discussions, the information that I go through with all of the guests as well as solo and with some surprise co-host, that reinforces what you want for yourself. I believe it’s possible. I’ve seen it many times. I realized that there are a lot of challenges that stand in the way of that.

Financial independence is a mindset. Click To Tweet

First and foremost, being the whole financial world is structured to help you retire. If you want to retire and you want to be financially independent, you have to rethink the investment choices and the financial products you’re using because it makes a huge difference. We’re going to get into a lot of that. I believe there’s no better time in history to gain clarity about your wealth strategy, your investments, your financial future. I believe the next years are going to be exciting because of everything that’s going on. There are many different innovations that are going to allow less work and more meaning. I also believe that with the Baby Boomer generation, the older generation, the amount of money that’s going to be transferring from one generation to another in the tens of trillions of dollars is going to shift how businesses operates.

It’s going to shift the demand for different goods and services. It’s going to shift where people are living and how they’re living. It’s going to shift employment. I believe that the disruption that’s going to happen is much needed. It’s an opportunity where you, as a good steward of your wealth, can take advantage of incredible opportunities to make money, start a business, join a force with another business, and to acquire another business. The sky’s the limit and I believe that what you want for yourself is possible. I’m going to focus on the information, the opportunities as well as answering the questions that you have working through some of the challenges you face in order for you to achieve those ends.

Thank you for reading this episode. It’s the introduction. It’s the kickoff. I’m excited to bring on the next couple of guests. In the first episode, our guest has been in the financial industry for a long time in a traditional sense. As you’ll see in the discussion, it shows you how inline people are. They are successful with some of the principles and things we’ve talked about in previous seasons. I had my good friend, Andy Tanner, on the second episode who brings an incredible perspective when it comes to money, financial freedom and financial education. From there, you’ll have to wait and see. Thanks for reading. I appreciate it. Thank you for your support. Make sure you bookmark the website, TheWealthStandard.com. See you next time.

Important Links:

Tony Robbins Unleash The Power Within
San Jose, CA
March 12-15, 2020
Special Event Pricing for Listeners of The Wealth Standard:
General Admission
Retail = $1,145
Discounted price = $495
Silver Admission
Retail = $1,495
Discounted price = $695
Gold Admission
Retail = $1,795
Discounted price = $795
To register for the event and take advantage of your special listener discount, please contact:
Jeffre Arguello
Phone: 858-535-6271
Be sure to mention that you are a listener of The Wealth Standard!

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Customer Fulfillment: Evolving With Your Customers’ Needs With Dr. Joseph Michelli

TWS 35 | Customer Fulfillment

 

Customer experience is vital to the long-term success of any brand, organization, or enterprise. Today, Patrick Donohoe interviews Dr. Joseph Michelli, an internationally sought-after speaker, organizational consultant, and author of numerous national and bestsellers, including Airbnb: A Five Leadership Lessons for Igniting Growth, Loyalty, Community, and Belonging. Dr. Michelli talks about the importance of evolving with your customers’ needs and expectations from your brand, and shares some tips on how you can deliver optimal value to them. Get further educated about marketing and customer fulfilment on today’s episode.

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Customer Fulfillment: Evolving With Your Customers’ Needs With Dr. Joseph Michelli

It’s our season on entrepreneurship and we’re almost done. This is one of the final guests and it was a great interview. This guy is so smart and so experienced more importantly. You guys are going to be entertained as well as informed on some of the things. We haven’t necessarily got into this season which is below the surface of the customer, client experience and how vital that is to the long-term success of a brand, organization and enterprise. Dr. Joseph Michelli is an internationally sought-after speaker and organizational consultant. Dr. Michelli is the author of numerous national and bestsellers including The Starbucks Experience: 5 Principles for Turning Ordinary into Extraordinary and The New Gold Standard: 5 Leadership Principles For Creating A Legendary Customer Experience Courtesy of the Ritz-Carlton Hotel Company. His New York Times number one bestseller, Prescription For Excellence: Leadership Lessons for Creating a World-Class Customer Experience from UCLA Health System. He was named as one of the Top 10 Thought Leaders in Customer Service by Global Gurus. His new book, which is about a more recent company, The Airbnb Way: 5 Leadership Lessons for Igniting Growth Through Loyalty, Community, and Belonging.

Dr. Michelli, it was a pleasure getting into the necessary variable to success which is the customer. It’s not just what they want, need, desire, dream of now. It is how to keep tabs and keep a pulse on that and be obsessed with figuring out ways to continually do that. It’s going to be a necessity in order to sustain a healthy brand and a healthy company. As a final reminder, if you are interested in the invite I gave in regards to the Unleash the Power Within, the Tony Robbins Experience, it’s going to be in March in San Jose, California. I’m going to be there and some members of my team are going to be there as well, and we would love for you to join us. It’s an incredible experience. This would be maybe six times. I can’t remember, going to this specific event. It is life-changing and you will have a blast. It is well worth the investment and well worth the time you spend on it. We got a pretty steep discount on the tickets based on my relationship with the organization. I hope you can join us. Let’s get to my interview with Dr. Joseph Michelli.

Joseph, it’s awesome to have you on. Thank you for taking the time. I know it’s a busy time of year, but I’m excited about the conversation we’re going to have because you’re an expert in a field, I believe, is one of those variables that’s often overlooked and ultimately leads to catastrophe in the business world. First off, welcome and thanks for joining us.

Are you kidding me? Given the kinds of folks you’ve had, I’m honored to be here.

You’ve done so much work and continue to do it. As entrepreneurs, as business owners, you come up with an idea, but oftentimes the way in which you view the world is your way. It may not be other people’s way. Sometimes that gets in the way from understanding who’s going to buy your stuff. Marketing is a big piece of it, customer fulfillment is another piece of it. You specialize in this area and written a number of books on it. The customer always comes number one. Is there an argument to the contrary of that?

No, Peter Drucker said it best. He said that we’re not in business to create a profit. We’re in business to create a customer and it’s through all the customers that profits come. A successful business has to define value and create value and then it has to market to the people who find value in it. Once those people show up, you have to deliver the value you marketed against. You have to constantly refine the delivery of that value based on the needs set of your consumers. That’s the space I live in. Thank God, I don’t have to deal with the other elements of business like making enough money to stay in business. Those factors are some financier types, but I’m truly trying to help brands figure out what it takes to deliver the value for the customers that are optimal for them.

A successful business has to define and create value. Click To Tweet

Talk about the changing of customers. One of the examples we talked about briefly was in Blockbuster. Blockbuster fulfilled the need. The customer wanted more and they wanted the same need, but less friction and less hassle. Let me talk about you meet a need, but then it’s the necessity of constantly being in tune with your customers so that they don’t leave you.

I am so grateful to Blockbuster when my kids were little. Certainly, we spent our Friday afternoon traipsing around the stacks of videos, normally not being able to find the ones we wanted most and defaulting to others. We were among that set of people who ultimately paid more for the videos and late fees than it would have cost us and we bought them new. There was such a wonderful distribution on your corner, access to entertainment. Delivery systems changed and Blockbuster did not. They also made what I would call bad profit. They made a lot of profit on those late fees and that kind of profit alienated the consumer over time and Blockbuster wasn’t ready to pivot. They weren’t ready to buy Netflix when Netflix came begging to be purchased by them at one point in their evolution. Netflix faces the competition of Disney+ and all the others. They got ahead of the power curve in terms of what consumers wanted in downloadable delivery.

I would say that they benefited from the whole monopoly idea. There wasn’t much competition out there. They kept frustrating people. The late fees, changing these, they went out of their way to make a profit right at the expense of the frustrated customer. It was like when a new, more viable option, like Redbox and all these other things start to appear, they were ready to go. Blockbuster was capitalizing on a monopoly that they had formed over the years.

If you think about Netflix as the entrant that challenged them most, Netflix had to rely on the United States Postal Service as their delivery system. It was fraught with its own sets of problems and over time they were able to make the pivot to streaming and here we are now. Sometimes we can trap a customer relationship with us. That doesn’t necessarily mean that when an option becomes available, they’re going to do anything more than flee with abandon.

It seems that the evolution, it’s like you look at Maslow’s hierarchy of needs and we’ve gone as a society from over the last 100 years being afraid to die during a hard winter. Living in such an amazingly abundant world. I would say as far as a business need is concerned, they should insert in the customer experience because people didn’t look for experience 100 years ago. It was all like, “I don’t have enough food storage.” Wood cuts so I don’t freeze during the winter. Right now, there’s so much entertainment that people have been conditioned for an experience. There have been brands that have capitalized on that understanding whether they did that intentionally or not. Would you speak to that as the importance of the experience and having a customer feel important based on the way you treat them or your business treats them?

I was sitting across from Howard Schultz, the Founder legend behind Starbucks. Howard once turned to me and said, “Joseph, we are not in the coffee business.” It shocks me. He said, “We’re in the people business serving coffee.” If you get down to it, people may need a warm cup of caffeine at some fundamental level to get jump-started in the morning, but they need a sense of community. They need a sense of belonging. It’s the things that are up higher in that Maslow pyramid that you talk about. Basic safety, security needs, those are table stakes for most of us nowadays. We’re wanting to get that if that’s what we’re seeking out. We want to get that plus, we want to get the social benefits of feeling like we belong to the tribe of the company that is delivering that for us.

TWS 35 | Customer Fulfillment

The Airbnb Way

We did a new book about Airbnb and I would say housing and accommodations which are very primary. Give me a safe shelter. It’s on the very bottom of the Maslow pyramid. You can do that and also create a space where people feel like, “Welcome. You belong in my physical place.” That’s what great brands are doing whether they’re entrepreneurial brands or they’re established brands. They are constantly looking for what are the higher-level emotional belonging, self-actualization, personal success, identity needs of a consumer. Can we address in the context of our deliverable?

You hit something that I hadn’t thought of before. The lower levels of the hierarchy of needs is expected. It’s self-esteem and self-actualization. Self-esteem is people want to feel, they want to experience. That’s what they’re looking for personally. They have also connected to all of the efforts to do these socially, environmentally conscious. There are socially conscious investment funds. You have the tax credits. It’s incredible, the direction people are going as far as giving back and get into that self-actualization phase, which is all about contribution. This becoming part of a lot of businesses that I’ve seen. I haven’t connected that before where when you see that a business is out to do good, you’re more attracted to them than the business. It’s out to turn a profit. It’s interesting.

That business doing good is an expression of my ability to do good in the world. Often brands are little more than extensions of our own identity. Am I a Starbucks or am I a Dunkin Donuts? Am I a Ford or am I a Ferrari? These things are ingrained in the way we see ourselves. My dad was a Ford guy and I worked for Mercedes Benz. I must tell you, I ultimately bought a Mercedes partly out of my business relationship with them. I remember sitting in that dealership going, “Would my dad be okay with me buying this car?” In many ways, if Mercedes doesn’t connect with my sense of self-expression and identity and the Ford does, then I can have some buyer’s remorse off for that purchase.

I bought another car. It was a BMW. I never bought a BMW before. I had to pre-order it and put a little deposit down and timelines were messed up and there were few things they didn’t do. I got a handwritten letter and a check from the CEO and another executive refunding my deposit. I’m like, “I can’t believe this.” What it did internally, I had those feelings of, “I’m not going to deal with GMC for my wife’s car. Screw them. This is where I’m going.” They made you feel important. They made you feel valuable. They cared about your experience with them. They knew that part of their business model was repeat business and they understood how it all played into things. 

You’re an important guy. The CEO wrote to you. Let’s go one step further. Look how smart you are because you’re purchasing from a brand that behaves like this. You are good and wonderful. I say that to you in the sense of the brand’s effort to communicate to the consumer that you are smart. You chose us. There are a lot of brands that don’t get it and it is all about the product. It’s all about the exchange of cash for the service. There’s very little understanding that beneath every purchase intent is an emotional driver, is a psychological driver. People will justify purchases in their frontal cortex. They’ll say calculating the benefits and the deficits. I’ve concluded that this is the wisest, most prudent decision. In point of fact, that’s the language we use to make it okay to be a pretty emotional being that says, “That’s cool what they did. I’m even more in for the next BMW.”

Would you speak to the resilience of good brands? I look at big failures with customer loyalty. Wells Fargo for example. Did they screw up? They’re still alive. They’re trying to rebrand. I’m not sure, I haven’t studied them. Maybe you have. What I’ve discovered is you could try certain things and do this and do this and still retain brand of our customer loyalty because there’s a resilience factor there. Sometimes people won’t innovate for fear of poking the bear, having the customer go elsewhere. What are your thoughts around that? I can see there’s this constant evolution of what customers are expecting from a brand. If you’re not on top of that, you may be good now, but a couple of years from now, you’re gone.

Brands are often little more than extensions of your own identity. Click To Tweet

I’ve studied Wells Fargo because one of my clients is a major bank that is merging with another major bank. I’ve been in the space for a long time. I can tell you that generally banks partly benefit in a Blockbuster sense by getting you in multiple products and making it complicated for you to disrupt your life to leave them. There were definitely people who did in the aftermath of Wells Fargo, a very big breach of trust for a lot of consumers. You saw people move out, but not as much as if there had been a single product industry where I could pull and run. The price of transition in banking is a bit of a challenge that some banks have taken advantage of that. Innovative banks that deliver up enlightened experience.

You’re seeing some of these capital one cafes and some other things going out in the space where people are innovating and attracting a whole group of people who are saying, “I’m tired of that other crap. I don’t have to go to a bank anymore physically. All of the grandiosity of banking isn’t for me. Give me great technology, make it easy for me to do my banking with you, educate me on financial literacy.” Those are the things that seem to be resonating now. I would say one of my favorite lines and I feel like I’m quoting Howard Schultz left and right here. Howard often would talk about making deposits in the reservoir of trust. What he would say is let’s do a lot of good things socially because invariably things are going to fall apart, particularly in human service delivery.

People let other human beings down. In the context of describing Starbucks, he would often say, “One of our greatest disadvantages is we’re not Coca-Cola. Our product doesn’t sit on a shelf where people can’t screw it up.” He would turn around and say, “One of the greatest advantages we have is our product doesn’t sit on the shelf and we can elevate the product through humans.” Given that humans will let others down, we need to make lots of social positive deposits. When in Philadelphia, a barista does not allow people of color to use the bathrooms without a purchase. We can withstand the wrath and the aftermath because our track record going in was one that was fairly socially conscious. I would say to you that’s a complex question, but if you try to fix it after all of the horses run out of the Wells Fargo stable without a lot of investments, you’ll find yourself in a world that hurt.

Let’s maybe step back a couple of steps. When you have this entrepreneurial spirit in a lot of people when they come up with ideas and they’re connecting to see whether those ideas are relevant to other people and build a business out of it. What are the steps to take to understand that you’ve seen successful across enterprises? 

There’s a lot of data that you can inquire about customers. Pay attention to the data of what people are doing. I also think you have to warm up all that big data with some voice of customer listening. If you’re launching a business, talk to the people who you think are optimal customers of your business. Don’t assume you understand them because you’re like them. You may be like them in a lot of ways, but you’ll find out frequently that customers who are willing to pay for your services, are going to want some things that you haven’t even contemplated. Talk, listen, ask a million questions and then observe their behavior with whatever data analysis you can. Do they touch the items when they come into your retail store? What items do they touch? Do you need to put more of those touchable, tactile experiences for them? When you ask them about what are the products? If you asked them after they’ve been in your store, what do they remember about when they were in your store? The things they remember, you want to put more of those types of things in your store. For example, we were in to say, “What stood out based on what was talked about now?” Based on whatever I would hear from your readers, I would be thinking about adding more of that in future guesting appearances. The key is to give this blank canvas. Don’t assume that anything that you’re thinking about doing is going to resonate. See what resonated and do more of that.

It’s a fascinating approach and I look at the signs out there whether it’s the use of focus groups or beta testing. I’m starting to remember the conversations I’ve had. It’s one of those constant testing and constant improvement of doing, even more knowing what needs are. That’s a comment you made that I remember from the Wells Fargo example. It’s resilience. It’s for multiple products and there are multiple financial products out there. The more you have, the more resilient a customer could be. If you come up with a crappy one and they have already multiple then you could get rid of that one and do another one without losing the customer. It’s interesting because oftentimes you have one-trick ponies, one service, and one product. Do you consider that dangerous as far as company health is concerned?

TWS 35 | Customer Fulfillment

Customer Fulfillment: When launching a business, talk to the people who you think are optimal customers.

 

It depends. For example, if you make a good hamburger, a good French fries and a great milkshake, it’s a very solid business play. Should you explore adjacencies that seem reasonable? Most brands do and they do well from it. There are the five guys of the world who will do very well sustaining a focus, not getting too broad and not having lots of limited-time offers. Executing well and knowing that your customer wants that and it’s a frequent enough need state for consumers, you can do well with the one single product. There are those brands that find those sweet little adjacencies that customers also want and that’s the perfect mix.

I remember feeling curious about the success of GoPro. Going public with one product, maybe they look a few different versions. It’s interesting because they’d been successful. I haven’t checked their financials. I’ve always been curious as to different products and multiple products and is there a happy medium? I would assume that these enterprise companies, and maybe you can correct me if I’m wrong, but they have ways in which they’re in tune with their customer, getting feedback, using data, creating profiles, creating avatars and understanding what words they use, the messaging that most resonates and test. 

That’s my world. That is what I do. That’s exactly what I do with my full-time gig. I write books about a lot of that. We’ll take an optimal customer. We’ll put them into a persona. We might create an avatar around them. We’re going to anticipate the entire journey that they’re going to have with the brand, all of their various use cases, how they integrate with all the contact points with the brand. After we’ve anticipated that, we’re going to go and talk to them and we’re going to say, “What is it that happens? Sometimes we talk to them in focus groups. Sometimes we do ethnographic studies that essentially says, “A day in the life of or keep a journal of use of our product.” As you’re opening the box, what are you thinking, feeling, doing, saying to yourself? All of these things are designed for us to get insights into what would increase the connectivity, the stickiness, the likelihood to recommend this product or brand to others. We track all the metrics to support those things and design to optimize for those folks.

I have two concluding questions. The first is with nonprofits where you have a more mission-driven than customer-driven. How to do successful nonprofits? How do they sustain and maintain their growth by connecting? That’s the first question I have. 

We’ve worked with a lot of nonprofits and they have customers. The people who support those nonprofits have to be connected to the mission as well. It’s being able to inspire people to help you achieve the mission. There’s no mission without money. In any nonprofit, you have to be able to generate enough revenue to achieve the mission. It’s getting people to buy the vision alongside you. It’s helping them tell stories about their journey in support of that with you in the mission. If you could think of some of the wounded warrior projects and others, they have storytellers who are telling the story of the impact of the organization’s mission. That story is part of engaging their customers, those who support these nonprofits. While it may not be formally the same, there is still a need to generate engagement of those who support the cause on behalf of the impact the cause creates.

That’s amazing storytelling, especially if you’re telling a story that a person can sympathize or empathize with. When you go without a story, it’s hard to connect. I look at it a lot. There have been a million books written on storytelling, but it’s one of those things that it’s a constant. We’re connected to that as human beings. It’s fascinating because I would say it’s relevant to a poor profit brand. The public company, private company, it’s being able to connect the story. Human beings like being with human beings. It gives them a sense of meaning. It’s people that are like them that they want to be with.

Don't assume that anything that you're thinking about doing is going to resonate. Click To Tweet

We bought a lot of technology to make our lives easier. We want you to think through the experience with lots of convenience and friction reduction through technology. We want to be inspired by human beings. The 21st-century company is a technology-enabled human-powered organization. Part of human power is service delivery, human storytelling, the impact of your brand on other humans.

Final one, what trends are you paying attention to? What are you seeing as far as customer behavior and how it’s changing? Do you see the same thing with maybe a little bit different angle?

There is Martec’s Law, which says you better track what customers do in behavior exponentially because most organizations are only improving incrementally. The gap between what customers are doing exponentially behaviorally and what brands are doing is the disruption gap. It’s the gap that Airbnb shot. For the most part, consumers are wanting everything mobile, so everything’s got to be mobile and you’ve got to be able to deliver your sales service, experience mobile. You should be able to give them a multitude of channels. Rather than forcing them to have human contact at every turn, they should have the option of an all-digital journey. You said also give them options like this, a virtual experience where we are human, human to human, aided by technology, but we’re not sitting in the same room. I know that’s a total demystification of the magic of your show.

You don’t have to have two people in the same physical place to allow them to have human interaction. It’s thinking through that reality that people want to engage with brands wherever they want, whenever they want using the technology available and to have people ready and able to help them in the event, the self-serve technology isn’t sufficient for their given needs. That’s one. The other quick one that we see is a lack of desire to own things and more and more willingness to rent and share the marketplace. It’s no longer the prom dress has to be newly purchased. If you purchase one, why can’t we rent that out to other people in need? Conspicuous consumption is being changed to stewardship, environmental consciousness, and those things. Brands need to be paying attention to those trends in particular.

I know you talk a lot about touchpoints and knowing what type of experience to have at different touchpoints. There is a conversation I had about somebody that’s trying to invent the smell. You have a memory like you take a picture or a video but the things that are missing. You can have sound but the smell and somebody is working on how to replicate a smell anyway.

Martin Lindstrom is a great guest to have someday. He specializes in multisensory marketing and he’s a big fan of the smell and drives profits associated with it. He’s a great person to include in that conversation, an important touchpoint.

TWS 35 | Customer Fulfillment

Customer Fulfillment: There’s no mission without money. Nonprofits need to generate enough revenue to achieve the mission.

 

Joseph, this has been awesome. It’s one of those interviews I was excited about because the customer is sometimes elusive if you don’t know what to look for and if you don’t have a good strategy to understand them.

You’re reflective of a lot of trends for people and a lot of awareness of the customer. You’ve thought through what people want to hear and who they want to hear from. You give them access to things that they would not otherwise be able to get access to themselves. It is no easy feat to get someone like Michael Gerber on a show. Those are trends that people want. They want exclusivity, they want access, they want somebody to curate information. If all of the information out there is curated, you give me impactful knowledge. It’s an honor to have been part of that and to spend time with you.

It’s an honor to have you. I know you’ve worked with some successful brands. It’s inspiring to know that human beings continue to and in a weird way care about each other and do that through commerce, through service and try to figure out better ways to improve or magnify the human experience. It’s always cool to realize what’s going on from that perspective.

I commit myself to serving brands that are committed to serving well. I don’t work with those leaders who say, “We want it to be the year of the customer this year,” as an add-on. People have an authentic commitment to elevating the life and the experience of their consumers and in the process benefit themselves and all the other stakeholders. That’s the company for me. I’ve been honored to get to work with those brands. There are a lot of them out there. You read the news and you think what’s gone wrong with business and trust in the world around us. I’ll tell you, I work with some remarkable leaders who are genuinely concerned about making the life of the people they serve better.

Joseph, thank you again. It’s been awesome. We’ll definitely have you back. 

Thanks. We’ll do a book in a couple of years on Godiva chocolate. Maybe we can score you some chocolate as part of that deal.

I have to share it with my wife.

Hopefully, she’ll leave some for you. That’s what I was thinking. Thanks a lot.

Take care. 

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About Dr. Joseph Michelli

TWS 35 | Customer FulfillmentJoseph A. Michelli, Ph.D., C.S.P., is an internationally sought-after speaker, author, and organizational consultant who transfers his knowledge of exceptional business practices in ways that develop joyful and productive workplaces with a focus on customer experience.

His insights encourage leaders and frontline workers to grow and invest passionately in all aspects of their lives.

 

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Let There Be Water With Seth M. Siegel

TWS 34 | Let There Be Water

 

A water crisis is happening at present, and we have been lied about it for a long time. Let serial entrepreneur, water activist, and Let There Be Water author Seth M. Siegel open your mind to the reality that affects you now and your future. Seth joins host Patrick Donohoe as he shares the unmistakable science that proves how your definition of safe water has been wrong all along. He also talks about surprising facts that will move you to require reform and explains what you can do to initiate a change.

Watch the episode here:

Listen to the podcast here:

Let There Be Water With Seth M. Siegel

Before I get into my guest, his bio and a fascinating story as well as cause, I want to remind you about the Unleash The Power Within Event, the Tony Robbins Event that I would love for you to join me on. I have secured tickets at well-below with their top ticket, the best seats, more than $1,000 off of that. I would love to have you join me. It’s in March at San Jose. There are some people coming from our office and it’s going to be an awesome event. I hope you can join us. I love for you guys to join me. It’d be an incredible experience for you and it will help you understand yourself at a higher level and perhaps give you that motivation that you need to implement some of the things we’ve been talking about on this season of the podcast. To my guest, I’ve hinted at the social ideas, the environmental ideas that people have when it comes to the challenges that exist. I would say that the past has put the onus of solving some of these environmental challenges, social challenges on the shoulders of government, public servants. The guests I had a couple of years ago, Josh Lannon and Lisa Lannon, I had them on a couple of times with a little book called The Social Capitalist.

There are other books that have come out about social consciousness, conscious capitalism. There’s this focus on doing things that are good for everyone. There are socially conscious investment funds now. There are tax credits for doing environmentally conscious things. This is a topic that I would say is gaining in popularity. My guest is touching on something that I was surprised by which is something that we all need to survive which is water. The overwhelming amount and scope of the challenge that exists with water. Even in the United States and we mentioned on the episode about the Netflix docuseries of Bill and Melinda Gates Foundation and what they’ve done in emerging markets third world countries in regards to the cleanliness of water and the sanitary benefits from having good plumbing, good infrastructure. This is at a new level and it’s interesting. We have to pay attention to it because it’s a challenge. The responsibilities as far as water is concerned, the cleanliness of water is right now on public utility companies or it’s on those that don’t necessarily get funding to improve and adapt to changes in whether it’s city’s growing and so forth. We talked about the EPA as well in this episode and some of the challenges that exist there but Seth is on top of this. He’s a successful attorney, entrepreneur, business owner and he’s taking the skills that he has acquired.

He’s taken those skills and brought that to the marketplace in writing books and increasing awareness of the challenges that exist with the simple drinking water and why that’s the result of changes in human behavior. It’s fascinating. I’m hoping you pay attention. That’s the sexiest thing in the world. Seth is writing books. He’s a New York Times bestseller on water but that’s all significant of an issue. He believes it is. He’s dedicated the rest of his life to bringing awareness so that something can be done. It’s a universal problem. I would say there are solutions. He has solutions. He’s met with scientists, there are inventions, there are huge opportunities there. It’s the shift from the structure that exists right now into a new structure that allows that’s going to come by more social awareness and sharing it and speaking to it. I hope you pay attention. I hope you enjoy the episode.

Seth Siegel is a serial entrepreneur, a water activist and a New York Times bestselling author. He has a critically acclaimed award-winning book, Let There Be Water: Israel’s Solution For a Water-Starved World. It has been published in seventeen different languages. It’s on sale in 50 different countries. He has his other book, which is called Troubled Water: What’s Wrong With What We Drink. It sets forth an ambitious agenda for a fundamental rethinking of America’s drinking water system. Seth has been recognized for his thought leadership and advocacy on water scarcity and quality. He’s a senior fellow at the University of Wisconsin Center for Water Policy. His commentary has been in the New York Times, the Wall Street Journal and the Washington Post.

We have a system right now that is forcing us to not have the most pro-health orientation possible. Click To Tweet

One more thing I’ll say before I bring him on. Do you remember a couple of episodes when I had Mike Moyer on and we talked about a bottle? This is a Kissingen Water by the Hanbury Smith Company out of New York. What’s cool and I shared this with Seth, one of my ancestors in 1800 brought one of the first mineral water bottled water companies to bring clean water, drinking water to the limelight in New York City. It was a fascinating story. I’m still in the process of writing that out. I know I would share that with audiences but it’s an interesting coincidence. Seth is coming on and we had a conversation about it. He’s in New York City. It was cool. The issue of clean water isn’t a new thing. I would assume most of us believe that’s fixed. That we drink bottled water or filtered water. That’s not the case. You are going to want to pay attention and definitely follow Seth. He’s on social media. Without further ado, please welcome my guest, Seth Siegel.

Seth, it’s such an honor to have you on. Thank you for taking the time. This is going to be a fascinating topic. I’m excited to interview you. Welcome to the show.

Thank you. I’m excited to be here too. I’m following you a little bit and I’ve been enjoying learning more about you.

Seth, I became fascinated with Bill Gates’ documentary on Netflix or documentary series of taking business knowledge and business wisdom and bringing that to some of the social and environmental challenges that the world and society has. Peter Diamandis and his XPRIZE were there raising money to reward entrepreneurs, challenging them and rewarding them to solve problems. It’s a fascinating approach to some of the challenges that we have and will have in the future. That’s why I’m excited to talk to you because you have two books, one a New York Times best bestseller and then another one as well, Troubled Water. It’s dedicated to bringing awareness to a problem that most people may not recognize as a problem or as a challenge. Would you speak to what you have been trying to help improve the awareness when it comes to something as what we assume abundant commodity of water?

That’s precisely what my life’s work is. It has been for about ten years now. I had a wonderful, enjoyable, successful business career. I believe in the power of business and the markets to transform the world. I believe also in a non-finger pointing, nonvillain seeking a way of problem-solving. I’ve written both of these books. The first one, Let There Be Water, which is about water scarcity and the other one, Troubled Water: What’s Wrong With What We Drink about water quality. Both of them have a similarity which is I’m trying to expand awareness of people of what is this great vast commodity, water. It is not inexhaustible like sunshine or air. What we need to do is to get higher quality, more certainty of supply. We need to raise awareness. When people think about water, at least as much as they think about energy supply, we’ll be in a much better place. Except this is more personal because the fact that drinking water completely affects our health and the health of our children, the health of our communities.

TWS 34 | Let There Be Water

Our drinking water supply is not as healthy or as safe as we have been led to believe that it is.

I’ve taken it upon myself to campaign for a more rigorous health standard around the drinking water and to raise awareness of the significant number of gaps. Like most people, I believe when I started this book, the research for this book that everything was fine. The EPA was looking out for me, the municipalities were looking out for me. What I learned is, unfortunately, the standards that are set are significantly below the health standard that we need. The last time the EPA has regulated any contaminant for drinking water and there are over 100,000 candidates. There are only 70 chemicals that are regulated by the EPA, but less than they are regulated any contaminant is many years ago. This led me to understand that we have a very serious problem and a gap and this is going to lead to something of a citizens uprising at some point. I wanted to head that off. I wanted to be a little bit of a Paul Revere calling out a problem and very much of a Johnny Appleseed calling out a solution. That’s the tack that I took in Let There Be Water about water scarcity. That’s very much the tack I’m taking here. The difference from last time to this time is that with Troubled Water, I’m not just writing a book. I’m writing a book as a jumping-off point for what I hope will be a social movement that will demand greater involvement, more research, more technology, smarter pricing and consolidation of utilities to assure a better health outcome for all of us.

I like to share one last thought because some audience may be asking themselves, “Why am I doing this? Or sure, it’s easy to talk about it. I’m hyping the issue so I can make more sales.” My wife and I made a decision early on in the process of the first book that if I’m going to talk about a society altering problem, I want people to take me seriously. I will need to make sure that everyone knows what my motivations are. As was the case with Let There Be Water, I have donated 100% of all royalty. Not the net, but the gross to water theme charities. I am completely in this as a volunteer to help make society better. I hope every one of your audiences buys 500 copies and gives it to 499 of their best friends. The truth of the matter is that whether they do or don’t, there’s absolutely no material impact on my life.

That’s helpful. For better or for worse, we live in a society that goes to motive as to what we talk about especially when it comes to social issues. We won’t necessarily go there. Maybe as a couple of final questions, what is the outcome you’re hoping for if somebody reads the book? What do you want them to understand from reading that book? More importantly, what would you want them to share or talk to others about?

What I want everyone to understand is that our drinking water supply is not as healthy or as safe as we have been led to believe that it is. I’m a center of the road, business guy, family-centered guy, community activist, I’m not a conspiracy theorist on any topic at all. The science here is completely unmistakable and that is that there are many contaminants, thousands of contaminants that are found throughout the American drinking water system. We don’t know what the health effect of these are. There is no entity that is out there protecting us by either filtering them out or by doing advanced research on them to make sure that if they are harmless that we know that they are harmless. My goal is to raise awareness first and foremost and hopefully to galvanize some activism where people will say, “Now that I know more, I want to do more.” I want to do more as I say create a social movement to kin to the rise of environmentalism. The difference here is that drinking water should be thought of as a public health issue and not as an environmental issue.

What I want other people to tell other people, I want people to tell their friends about this is to say that we have a problem here that we have not been led to believe is a problem, but that everyone or a large numbers of people I suspect already know it’s a problem. How do I know that? In the United States, 70 billion containers of bottled water were sold in the United States. While the EPA has been inactive or not adequately active, what has happened is that America has adopted a parallel drinking water system by default. We’ve created a solid waste problem of 70 billion containers that need to be disposed of, although the vast majority of them are never recycled. Much worse than that is that we have an opportunity with current technology at very affordable prices to make the water as clean and as safe as science could allow.

There are 10.5 million lead pipes in America. We’re literally poisoning our children all over the place. Click To Tweet

Seth, maybe one of the final questions I had because this is for better or for worse. Our society doesn’t pay attention to something unless it seems that there are extremes. Unfortunately, that’s how the news seems to be running social media is whenever there’s this extreme on the tail of the bell curve as far as the urgency associated with it, that something has to be done is when people pay attention. What is maybe some of the extremes that you have discovered that most people would be surprised by?

If you want data, I’ll give you some data points I’ve got. I’ll share with you that your mindset is absolutely right. It’s been the cable news suffocation of American society whereby if it’s not in the hot news, it’s not relevant. Because of my charitable work, I’ve gotten to know on a very close and warm basis, a number of senators and congressmen from both parties. I was in a conversation with a senator, a well-known person, one of the few who’s not been a presidential candidate. He said to me, “We public officials, we senators, we’d rather spend 6, 7 or 10 times the money when it becomes a crisis than to hit it off because we can’t get public support for doing things.” What I’m trying to do is to give the tools to those elected officials by having ordinary citizens, by having suburban moms knowing about the fact that there are all kinds of what are called endocrine-disrupting compounds. These things that monkey with the hormones in the body system that are affecting their children, that are affecting their parents, that are affecting them in all kinds of different ways. We need to figure out a way, using existing science to transform our system. If you want me to give you a couple of instances, the number one for instance is the fact that every day, 70% of Americans, twelve and over, take at least one prescription medication and 20% of Americans, twelve and over, take at least five prescription medicines.

What people don’t think about is what happens to that. What happens is we excrete it either it goes down our toilets, our washing machines or our showers, it gets pooled together. The wastewater treatment that we use is about a 100-year-old system. Society has radically changed in the last 75 years, for the next 50 years for sure, we are much more industrial. We have many more chemicals. There are now 50,000 FDA approved pharmaceutical products and another 5,000 over the counter ones. These are getting into our drinking water and coming back at us because it’s not being treated at our water. If you think about these medications, each of them has a purpose. The FDA approves a medication for the proper person and proper dosage for the proper duration to solve the proper problem. What happens when we are all ingesting a cocktail of these pharmaceutical products at different doses for all kinds of different people, for all kinds of different longevities and with what effect? We’re not sure. What we do know is there’s been an explosion in the United States over the past handful of years of a whole host of health conditions.

ADHD is one of the most prominent of them but others as well. Obesity is another and all of these are functions of the endocrine system or the hormonal system being interrupted. This affects fertility. This affects sexual desire. This has all kinds of effects. This is not mixed with some of the scientists. I am quoting esteemed scientists who I interviewed and who led me to this conclusion. We understand that there is a very serious concern that we don’t know what the effect is on our bodies. We see what’s happening in society with a sense that very possibly this environmental attack is coming at us from our drinking water. One other element I’d like to say is the other thing that you said that will surprise us. I would say another thing that will surprise us. What will surprise you is the fact that there are so many drinking water utilities in the United States. A rational number I believe would be about 250 to 400 utilities around the US. There are 50 states. Not every state needs to have their own utility, but I could see why everyone would want to have at least one and big states like Texas or California. I could see having 6, 8 or 10 and that would make sense. It would be a proper number. You could get the right amount of science and technology and finance and all that you would need. If I was playing a game with you, I’d ask you to guess, but the actual number is 51,535.

There are so many utilities, 46,000 of them are very tiny populations. They add up to millions and millions of people. What happens is that they are so small and so underfunded that they don’t have the capacity to attract the most recent graduates of the best engineering programs. They don’t have the ability to buy or even to know about which are the best technologies they should be installing. The innovation that is stifling innovation. Finally, if I heard that we have a very old national water infrastructure system which is starting immediately but certainly over the next twenty years we’ll need replacement. These utilities which amass large parts of the country don’t have the funding or the knowhow to replace the 1.1 million miles of water mains that need to be replaced. There were 240,000 water mains last year that broke in the United States because they’re too old and they’re defective now. Unless you think that there are so many utilities because they’re in the Northern reaches of North Dakota or rural Arkansas. I want you and your audiences to understand that in Los Angeles County alone, there were more than 200 water utilities. How this all came to be? I talk about at length in my book, why and how are we going to fix this and change this? The fact remains that we have a system right now that is forcing us to not have the most pro-health orientation possible.

TWS 34 | Let There Be Water

Let There Be Water: Small and underfunded water utilities don’t have the capacity to attract the recent graduates of the best engineering programs or the ability to buy the best technologies they should be installing.

 

One thing that this keeps going through my mind is what I mentioned at the beginning, which I’ll repeat is as far as these types of whether it’s utilities or it’s infrastructure, there’s always been a dependence on it coming from a government. Whether it’s local, state or federal and you’re hitting the nail on the head because of lack of innovation. There are gaps and those gaps compound and now you’re starting to see the results of that. There’s this misconception that bottled water or certain filtration systems do the trick so you don’t drink your tap water. You’re arguing that is not the case and that there is a much bigger problem at hand. 

I heard the statistic that some 60% of Americans have bought or currently use some filtering system in their homes, which sounds high to me, but it’s certainly not impossible. The problem is that there are very few systems except for the very expensive ones that bring the water to the quality that you would think that it would. If you buy a countertop pitcher system unless you’re very lucky that your community only has one single contaminant and you match it with that contaminant with the filter, that you’re going to be fine. Here’s the phrase that I’d like you and all of your audiences and followers to know. That is that legal does not necessarily equals safe. The EPA creates these standards. They say there are 91 contaminants, 70 chemicals of that 91. These are the regulated contaminants. A utility is told as long as you keep those contaminants below a certain what they call health level, you can transport the water all you want. We’re not exactly sure that all those “health levels” are healthy. It’s possible that they’re higher than they should be. Let’s assume that the EPA is right. What then doesn’t happen is that anything else that’s in the water, any other contaminants that’s in the water, there’s no legal obligation whatsoever by any utility to filter or treat out those other contaminants. The water may be legal.

That may or may say, “We have not had a violation of the EPA in five years or ten years or ever,” but it doesn’t mean that the people in the community are getting safe water. The other thing that should be kept in mind is that there were 80,000 violations of the Safe Drinking Water Act. The official listed number is about 12,700 of them are health violations being the water is unhealthy levels of contaminants. Experts who studied this believe that because it’s an honor system, a self-reporting system. They believe that the number of actual health violations might be as much as 40,000 or 50,000 violations in a given year. This is a pretty standard fixed number year to year. Our testing system is wrong. Our reporting system is wrong. Our accountability by the state and by the EPA as well upside down and backwards. We are too focused on making sure that the utility has the tools that they need and that they’re not unduly burdened when our entire perspective should be on public health. At an affordable price, but we know with this technology is completely doable.

Seth, this is maybe a final point so we don’t make the audience stir crazy and anxious. What are a few of the solutions that you talk about? Maybe the top two.

If you allow me to have three. The first and most important and the reason I wrote the book and the reason I’m traveling from community to community and the financial community. I’ve spoken before a number of very well-known banks. If any of your audiences are in the financial community, I know you’re going to give everybody contact information. I would love for you to contact me and let’s find a way for me to speak either by Skype or live before your audiences to talk about this. The first thing is to create a citizens’ movement akin to the environmental movement of the ‘70s and ‘80s whereby citizens understand that this is a remediable solvable problem at an affordable price which will have an almost immediate positive effect on society’s health and well-being. Most people think about lead pipes in Flint, Michigan, there are 10.5 million lead pipes in America. A survey taken by New York State is at 82% of New York State schools have lead pipes in them. We are poisoning our children all over the place. That’s number one. The first thing is I want to create a citizen awareness. By citizen awareness, people will start grousing and will start demanding more. The solution then comes from the fact that we will have a systemic change. The second solution I would like us to have is if we can’t do it nationally. I’d like to have us do a community by community.

We won't have the changes we need until it becomes conventional wisdom that we have a fractured drinking water system that could be better. Click To Tweet

I profile in the book Orange County, California and I do that deliberately because I want everyone to understand that here’s a community that made a choice to ignore the EPA guidelines and to choose something that brings the water to basically no contaminants or whatsoever. They made a choice to purify their water at a much higher level. They do this at a cost of about $0.60 a week per person and as part of that cost, they also have a whole problem about ocean infiltration. The rest of America wouldn’t have that, but even if we did, it’s $30 a year per person. The $20 billion a year we’re spending in America for bottled water. That’s to say nothing of the waste problem that creates. The third solution is if you can’t do it nationally, you can’t do it in your community, I offer at the end of my book solutions for you, what you can do in your own home. How you can make and do your best to try to protect yourself, your families because it’s possible that you and I will not be affected by this. We’re healthy in the prime of our lives type of people although even that’s not clear by the way. What is almost the certainty is that pregnant women, fetuses, newborns and children of the age of five, people who are immunosuppressed because you’ve had a bad cold or you’ve had a disease. Anybody on chemotherapy is all at risk from these contaminants.

Therefore, for our own sake, we need to protect ourselves whether it’s nationally, whether it’s community or whether it’s individually protecting ourselves and our families in our own homes. I want to say one last word, which is there’s faulty thinking that bottled water is universally healthier than tap water. 70% of the bottled water sold the United States is subject to no federal regulation or whatsoever, nothing. It’s zero. Not FDA, not EPA, zero. There’s a quirk in the law which is crazy which exempts all these water companies from any federal regulation. They’re subject to state regulation for those few states that regulate drinking water. We don’t know the amount because no one’s regulating it, but a vast amount of the bottled water sold in the United States is literally tap water put into a bottle that is in sealed. That’s not true of some of the bigger brands or some of the more prominent brands, but on a volume basis, it’s totally true of most of the water that’s sold in the United States.

Is there some index or something that’s done privately that rates the types of bottled water that’s out there?

I’ll tell you this, the last time anyone did a study and it was done by the National Resource Defense Council many years ago, they surveyed several hundreds of bottled water brands. They took three examples of each of them and they found something quite remarkable that a very large percentage of them had contaminants or E.coli in them. It’s hard to believe but no one knows it was there. Number two is they found that even when you had three bottles from the same producer and you tested them side by side, some of them were contaminated and some of them weren’t contaminated. It doesn’t necessarily mean that everything from Brand X is bad and that everything from Brand Y is good. The other problem with plastic drinking water bottles is that we now know that the plastic leaches hydrocarbon chemicals into the water if it’s kept in a warm environment. Since we don’t know how the bottled water was kept in the summertime or some warm warehouse. Therefore, we have good reason to fear that the water may not be as pure as we are led to believe it might be even for the very good bottled waters. That’s the concern that people should have about bottled water. Therefore, defaulting to bottled water as the solution is what used to be called a fool’s paradise.

Seth, this has been a fascinating discussion. We could keep going. I know that a lot of what you’re talking about is in your book so we’ll make sure we get the word out because it was surprising to me. Doing some research for the interview, it intrigued me at the same time it made me concerned because I love water. I drink water more than anything else which I assume is healthy. In the end, I looked into some of the stuff that you’ve been talking about and I can’t wait to read more in your book. We’ll make sure we post it on our social media channels so we can get the word out.

TWS 34 | Let There Be Water

Let There Be Water: There’s a faulty thinking that bottled water is universally healthier than tap water. A vast amount of the bottled water sold in the United States is literally tap water put into a bottle that is in sealed.

 

If people don’t have the patience to read a whole book, I’m on Twitter, virtually every day talking about water issues. I’m also @SethMSiegel but the book is the more comprehensive approaching. I would suggest also to people if you have a friend or a government official or a journalist that you know. I’m so delighted to be on your podcast. As a result of this, please spread the word. We will not have the changes we need until it becomes conventional wisdom that we have a fractured drinking water system that could be so much better.

Seth, it’s been a pleasure. Thank you so much for sharing your mission with us. We’ll stay in touch because I have some contacts I’d love to get you in front of.

I’d love to.

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About Seth M. Siegel

TWS 34 | Let There Be WaterSeth M. Siegel is a serial entrepreneur, water activist and a New York Times bestselling author. His critically acclaimed award-winning book Let There Be Water: Israel’s Solution for a Water-Starved World has been published in 17 languages and is on sale in more than 50 countries. His newest work, Troubled Water: What’s Wrong with What We Drink, sets forth an ambitious agenda for a fundamental rethinking of America’s drinking water system. Seth has been recognized for his thought leadership and advocacy on water scarcity and quality.

He is a Senior Fellow at the University of Wisconsin’s Center for Water Policy. His commentary has appeared in many leading publications, including The New York Times, The Wall Street Journal and The Washington Post. Seth has spoken on water issues at more than 275 venues in 66 cities, 24 states and on four continents.

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International Living: Finding Your Purpose Overseas With Dan Prescher And Suzan Haskins

TWS 33 | International Living

 

Living and retiring abroad can change the way you look at the world and even help you find your true purpose in life. Today, Patrick Donohoe talks about living life abroad with Suzan Haskins and Dan Prescher, the authors of  Live Richer, Spend Less: International Living’s Ultimate Guide to Retiring Overseas. The internet has shaped the way people travel and view the world. Dan and Suzan share their guidelines in choosing their next adventure and their experiences living in different countries and communities. They also explain how retirees are driven to join their charities and live abroad at the same time.

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International Living: Finding Your Purpose Overseas With Dan Prescher And Suzan Haskins

I have the pleasure of being with Suzan Haskins and Dan Prescher. It’s so awesome to have you guys on. I appreciate you taking the time. I understand you came back from a pretty tropical place into the Midwest. I’m assuming you guys are from Omaha, Nebraska.

I’m born and raised in Omaha. Suzan only raised her son here, so it’s not from around here.

No, but enough years. I moved here when I was 21. I guess I’m basically a Nebraskan by now.

Warren Buffett calls it home.

There’s nothing wrong with that.

As far as your accolades and your history and what you’ve done, it’s incredible that you’ve had this extensive career doing what you do and writing about what you write about. I’m excited to have this interview. Let’s start out with those rapid-fire questions so we can get an idea of who you guys are and what you’re about. The first one is before your professional life, who was a role model to you, someone that you looked up to or inspired you?

I can tell you that strong independent women have always been my role models. Before my professional career, I would have to say those teachers that I had back in high school. I had a history teacher in Middletown, New Jersey that taught me how to write, which is what I’ve done all of my life and taught me to love history and travel, which has taken me far. I would say she was probably one of my most important role models, as well as some of the language teachers I had, which has also been a great thing to have been able to actually use. The United States as a place where we don’t often speak two languages. To be able to have that background has been a good thing.

For me, it’s probably Jimi Hendrix or Joe Pass, two guys who dedicated their lives to learning their instruments and took that field of knowledge as far as anybody has ever taken it. I’m not a good guitar player myself. I’m a barely passable musician, but those guys were masters and I like the idea of mastery. I like the idea of dedication and mastery and those guys mastered something cool.

The principle of mastery, especially seeing masters and experiencing masters, there’s nothing like it. Second rapid-fire, what superhero, fiction or non-fiction or icon in history do you most resonate with?

There is no end to opportunities towards helpings kids and the elderly. Click To Tweet

My superhero right now is Ruth Bader Ginsburg and I hope that she keeps going and keeps working. It looks like she is going to keep working until the day she drops dead, which is probably what I will do too, so she’s a living superhero for me.

Mine, historical and superhero and comic book, you name it and he’s been at all, is probably the historical Buddha. I’m fascinated by his life. There’s been a lot of work done lately to peel back those layers of religiosity that got layered onto his life. His original life and original message is compelling for me and it informs everything. There’s nothing that it doesn’t apply to for me when I think about it. That would be Gautama.

A third one, what charitable causes do you guys support?

My favorite is an organization called Helping Kids in Ecuador. We lived in Ecuador for many years and got to participate in some of their fundraisers and hear them talk. I’ve followed the work that they have done. I will probably tear up when I talk about it because they are changing kids’ lives. These are kids who cannot afford simple life-changing surgeries. Eye surgeries, cleft lip and cleft pallet surgeries that make a tremendous amount of difference and these families can’t afford it. This organization is helping them pay for these surgeries. That’s my favorite charity.

I’m with her. The volunteer opportunities for expats who move abroad, we’ve lived in that society, that demographic that know you for almost two decades now. You can volunteer for anything but volunteering on the ground where you’re at to help the kids that live in that community or the elderly just to help the community. There is no end to the opportunities to do that. It’s whatever helps the local communities.

It’s amazing the idea of contribution and charity. There’s giving money, but then there’s actually the activity and the experience of it, which there is a stark contrast.

It takes organization, it takes time. Money, that’s fine. They need money but the time, the organization, the effort, the cooperation, making it happen, that’s the value of it.

Final one, if there was one attribute that you could impress on your kids, your grandkids, the world, this audience, what would that attribute be?

TWS 33 | International Living

The International Living Guide to Retiring Overseas on a Budget

Tolerance. First of all, one of the things that we have seen in our travels is that we all want the same things. Everybody, no matter where you live, no matter what religion you are, you want your kids to be healthy, happy and you want a safe place to live. For me, to be tolerant of other people and to understand that similarity is probably the most important thing. The other thing that I’ve always impressed upon our kids is to be debt-free, if you can, to not have credit card debt and all of that stuff and simply to be a good person.

I would only add to that curiosity in the sense of ongoing curiosity. If you get to the point where you think you’ve got it all figured out and you’re running on your biases, you’re missing most of what’s going on in the world. I think that’s one of the great things about the expat lifestyle that we’ve been living. You have to be curious all the time to figure things out. Everything is a challenge. Everything takes a little bit of out of the box thinking and that keeps you young. It keeps you going all the time. If you’ve got it all figured out and you’re just resting on your morals, you’re done. You stop.

It’s amazing how complementary those two attributes are. Tolerance is stepping back and trying to see another way of looking at things. There’s only one way of looking at things, but the curiosity behind looking at something different can be a huge window to tell the opportunity to learning to grow. To me, it’s amazing. Thank you, guys, for answering those questions. The reason why we ask them is to give the topic at hand some context where you are coming from. I think this is going to be intriguing. The reason why I wanted to have you guys on is because international living has been around for about 40 years now. Correct?

40 years this year, 2019.

It’s an opportunity because of the tagline of your book, which is How to Live Well in $25,000 a Year. Plus, I know you have a new book, but that the idea though is that there are lifestyles that people can live in their retirement. Those years, they’re actually possible. If we look at just the typical retirement planning, it’s very inadequate for the lifestyle that people want to live and people are getting stressed out about it. The atypical way of approaching the future, this is a perfect example of it. Would you guys speak to what your mission has been, what you’ve been trying to communicate to people for the better part of 40 years in regards to the opportunities that exist internationally for people to live out golden years or maybe even before? I know there’s a lot going on with the Millennial generation, even next generation where they’re going international, living international and it’s evolving too. Over the course of 40 years, I can imagine that your experience being on the front lines has been motivating and inspiring. It’s more acceptable now than it was 40 years ago.

I think that’s the biggest change. You’re right. When international living started, the demographic was people who wanted to make fixed incomes go as far as possible. That was the old-style retirement, “I got my pension, I got my Social Security. I want to live the life I want to live. How do I make that fit my lifestyle requirements?” The answer was just to move to a place where things cost less and the weather is better. You skip the heating bills, you skip the air conditioning bills. You pay lower property tax, you may get free medical care with the national health service. It’s like lifestyle arbitrage. If you can suddenly move someplace where your cost of living is cut in half or more, it doubles the value of your resources. For 40 years, that’s been the message.

There are dozens and dozens of places around the world that are happy, healthy, safe places to live that costs less. That’s not such a novel idea anymore. The internet has changed everything. You can talk to people in real time who are doing that in Panama City, Mexico City, in Belize, Malaysia, Chiang Mai, you name it. There are people around the world who are doing exactly that. We talk to them every day. We’ve been living that life. That was the value proposition when we first started out. Now it applies to more people than ever. It applies to people with families. It applies to young singles, it applies to single females who are past retirement age but want to have the adventure that they always wanted to have. All of those people can find a benefit in that lifestyle.

What questions have been like over the years in regards to that atypical way of thinking? I’m assuming some have been the same, but they’ve probably changed over the years. What are those questions from your audience and readers like?

The big question is often is it safe.

I think that’s the biggest concern. People always want to feel that they will be safe in the place that they live, as I alluded.

Everything takes a little bit of out-of-the-box thinking, and that keeps you young. Click To Tweet

It’s human nature to be content with the devil you know, even if statistically the place where you’re living is not that safe compared to other places, you know it. You feel better, there’s a comfort zone there. Moving abroad is a lot about moving out of your comfort zone and being comfortable with that. It’s being comfortable with being challenged, having that adventure. “Is it safe?” is a question we can easily answer. Yes, it is.

We wouldn’t write about places that we didn’t feel were safe, that we wouldn’t feel comfortable if our mothers came to visit us or our grandkids. That is not an issue. I think more and more people have been traveling in our generation and the generations that follow just with modern technology, as many people weren’t traveling 40 years ago as they are now. A lot of people are comfortable with the idea of at least exploring living overseas. It comes with a lot of intimidation. They think that maybe it’s not as easy as we make it sound. Maybe it’s in our personal nature where we’ve never been uncomfortable. We’ve lived in seven different communities in four different countries over the last twenty years, so we’re very comfortable with picking up stakes and moving on. Not everybody is. People are creatures of habit, like Dan said.

That’s a great point to make too. Moving abroad at any time in life is not something that most people will do. Most people stay right where they are and that’s fine. If you’re happy there, if you’re comfortable there, if it has everything you need, if you don’t want to go anywhere, that’s great. Even if you try an international lifestyle, if you move somewhere and find out it’s not for you, you’re the wiser for it. It’s not a pass-fail thing. You learn from it. You take your experiences, you go back home and you carry on and you’re smarter. I think the safety factor, the ‘Will I be comfortable?’ factor, ‘Will I be welcomed in this community?’ is always a big question.

People want to know that they’re going to be able to find their tribe of like-minded people, that they won’t feel lonely. That’s one of the biggest, saddest things in the world right now, the lonely feeling that a lot of people have, especially when they retire right here in the United States. People are treated a little bit differently in many of these countries where we write about. The elderly are looked up to and revered for their life experiences. Being included in community events and having people put you at the front of the line in banks and hospitals, it’s not something you’re necessarily used to if you live in the US, but you are when you go overseas. Many of these places now have growing expat communities and the expats who live in these places tend to be welcoming, gregarious people and they welcome you in. You don’t have to worry about being the wallflower. Even if you’re not a Type-A personality, you will still find plenty of things to do. We like to say that your social calendar will be much fuller when you live overseas than it likely will be if you stay where you are.

What are some common things you see people do? What’s something that they would have to do to go from this desire to have a degree of certainty associated with those years, which is being in the same community, having stability as far as knowing who friend groups are, knowing where income is coming from, knowing that income can actually stretch to support the lifestyle. What are some things that people do to go from that state to this new belief that international living somewhere else where I have a social group, where there is that appreciation? There are opportunities to serve, there are opportunities to live in a nice warm weather and beautiful location. What are some things that they do consistently that gets them to make the shift?

Research, for one thing. The internet has changed everything and allows us to find out anything instantaneously. Via Facebook groups, you can actually meet people living in these different communities that we talk about. It’s not the scary thing that it used to be. There are books like ours that people can read about. You can come to a conference with international living hosts and 5 or 6 places around the world every year. You can meet those like-minded people and get your support group.

You can assemble a support group before you even think about moving abroad. Even if you’d never move abroad, those people will still be your friends. They’ll be Facebook friends, they’ll be online friends, but the internet has changed everything in that respect. The other thing is to get boots on the ground and give it a try. As we say, if you get to a place like Cotacachi or Córdoba or any place that you might want to try out and you find out that you don’t feel right there, that’s something immediately you get a gut feeling. If you do get that warm glow and you meet the people there, you start to participate in the activities, we recommend spending as long a period as you can on that first trip to find out what it’s like to actually live there instead of just being a tourist. If you need to find out where you can get your mail, how to hook up your utilities, whether or not the local bank will accept a direct deposit of your Social Security check, those are things that will make a difference in your quality of life once you move there. That’s what you need to find out.

This might be an off the wall question or statement. I haven’t experienced it personally, but it’s experiencing it through the relationships that I have. When a person goes from working years until they get into retirement years, there’s a change as far as the meaning they have for themselves and what they do. When you look at a career, whether a person likes it or not, they’re making a difference. There is meaning there. They’re contributing. They’re paid for it. They’re creating some value and then going right through these years where they’re not doing that anymore. People seek or are seeking meaning and that’s why they moved to retirement communities or they go on service missions or they do something else. What are opportunities or have you seen examples of what you’ve seen where a person is able to take their skillset that they established over a 30, 40-year career and move abroad and then do something to continue finding meaning, growing, contributing and so forth?

TWS 33 | International Living

Live Richer, Spend Less

There are people who want to retire and primarily move overseas for financial reasons. They may end up doing the exact same things they would do if they stayed at home. For instance, they like to watch their movies or stay home and cook. By and large, I think that people who move overseas and retire overseas in the first place, have an adventuresome spirit. They get together, they travel. They go and explore new places. They go to little villages. They end up seeing a need that the local community has. As we were talking about, we’ve seen people start animal rescue missions. We’ve seen them start soup kitchens to feed the elderly in a community, teach kids English so that they’ll be able to work in a tourism industry in their own country or go abroad. English is the universal business language, of course. They’re giving these little children in a remote village somewhere an opportunity that they might not otherwise have. We’ve seen people start businesses, they see niches that need to be filled in their community.

One friend of mine started a business where she makes aprons and potholders. She hires the local women as seamstresses, she’s been able to give them jobs and her stuff is now in museums all over the world. She’s from Mexico and her stuff is very Mexican-flaired and it’s being sold in these fabulous museums all over the world. She’s making a huge difference. We have story after story like that of people who are finding things, whether it’s something they’re doing that they never thought they would do, paddling down the Amazon or something or they’re starting these cottage industries.

It’s a two-edged sword and you’re right. People who have worked at a particular skillset all their lives and decide to retire often decide to retire because that job may have defined them as a person and it may have paid the bills, but it didn’t satisfy their curiosity about life. They want to go out and find out something new there. There’s a big world out there. On the other hand, people may be so happy and so well-defined by what they do that they take that job with them and the internet has changed all of that. If you want to work from abroad, there’s almost nothing you can’t offer online. If you have a valuable skillset that another person won’t pay you for, you can do that from anywhere on the planet where there is an internet connection.

You guys teach about that and talk about that in your publishing business?

Yes. International Living has a couple of three email letters and one of them is called Fund Your Life Daily. With that, there are all kinds of ideas shared about how to make a living overseas, whether it’s on the internet or in a bricks and mortar business or in a consulting role or something like that. We have all sorts of things that we’re seeing. Many years ago, people were retiring overseas. Now they’re becoming younger and younger when they do that. There are digital nomads, there are ways to make a living when you’re anywhere in the world, like Dan said. We have all kinds of little niche avenues and rivers in International Living that can help people no matter what they’re looking for.

There’s an article that came out and there’s this interesting dynamic with longevity and life expectancies. In the US, life expectancies are actually going down. At the same time, they should be going up based on the understanding of health and the principles of longevity. What they see is among teens, Millennials, there’s drug abuse, prescription medication abuse and suicide. Also, there’s interesting statistics in regards to longevity. When a person stops working and contributing, life expectancy does go down. That’s what’s what I find fascinating about the idea of international living is it offers a different environment, but it’s an environment that creates that spice of life. It creates all these different experiences that are possible with a peer group. It also provides opportunities to continue to provide value, give value, which brings a ton of meaning. That’s where I look at it from the practical standpoint. You have the financial side of things. You have how far your dollar can go or your money can go, the lifestyle that you can live. It goes way beyond that. That’s just my opinion and my perspective based on information I’ve gathered. Would you speak maybe to that and how there’s been an evolution over the 40 years as far as why a person will go international?

Many years ago, retirement was a different thing. If you made it to 65 in your chosen profession, you were used up, you were done. If you were in manual labor, if you’re a farmer, if you worked in a plant, almost anything you did by the time you were 65, 40 years ago would have sapped your valuable years. Now people live a decade, 2 decades, 3 decades past what traditional retirement is actually structured for and they’ve got to figure out what to do with that time. If you’re going to live another 30 years, you can’t sit in a rocking chair. You can’t play golf for 30 years. You’ve got to do something. The people that discover moving abroad are selected to be the people that know there’s more out there no matter what I decided to do. If I decide to do nothing, just live on my Social Security. If I decide to do it in Chiang Mai or if I decide to do it in Cuenca, Ecuador, my life is going to be a lot more interesting and a lot more challenging. I’m going to have to wake up and open my eyes to make sure that I know where to go to get a cross-headed screw or the right plumbing fixture or to get 500-thread count sheets if that’s what I want. I’m going to have to figure those things out. That keeps you young, that keeps you going in our experience.

You can make a Social Security payment that you qualify for it. 65, 67 or 70, go another twenty years in the right place with the right economy, but you’ve got to find something to do while you’re there. Life abroad gives you something to do. It makes you pay attention. We’ve seen it time and time again. People move abroad and their blood pressure goes down, their weight goes down, their eyes brighten up. They start learning the local language. They acquire another skill or 2 or 3. They move to another place. They don’t just move to Cuenca and quit. They moved to Cuenca and figure, “Maybe Ek’ Balam is a nice place.” We know somebody who made that move. It keeps him young.

A lot of people do tell us that they feel healthier once they move overseas. It’s not like there’s the fountain of youth or some magic potion or anything, but most people tend to move to a place where the climate is more suitable, where they can be outside in the fresh air every day, day in, day out. They walk more. A lot of the folks that we know who are retiring overseas give up their car because they live in a walkable community. That’s one of the things about the United States is you have to have a car to get from one place to another. In many of these places around the world, communities are set up to be walking communities. You might have a little tienda next door right down the street where you go to get your eggs and your bread and you carry it home with you. You don’t need a car. People tend to be more active and healthier overall, get more vitamin D naturally. Fruits and vegetables aren’t carted in from halfway around the world. They’re grown right there and pulled out of the ground that morning or the day before and sold in the farmer’s market. You’re eating healthier, you’re more active and you tend to have a more engaging lifestyle, I think.

As we conclude, this has been fascinating and I’m so grateful for your time and your insight into this. I would say it’s a huge opportunity, which obviously has been around for a long time. In this day and age, there are so many benefits that can come from the education that you’re providing. This is something that’s on my mind. What are you guys focused on right now? What are some of the topics, the themes? It sounds like you just came from a conference that you held. What are some of the focuses now, themes and things you’re consistently seeing that you think would be important for the readers?

The safety factor is always a questions when it comes to traveling and living abroad. Click To Tweet

We’re going through something that a lot of retirees are going through. We’re not technically retired. We’re still happily working and we will until we drop. We’ll probably die in the harness, but we’ll be old when that happens. We’ve got grandkids and family stuff going. I think we mentioned being a part-time expat is now a much more viable option than it used to be. If you want to come back and be with family and friends, if you’ve got grandkids whose lives you want to be a part of, if you want to try several different places and keep a home base, the roaming retiree, a serial relocator we call them, something that’s completely possible. It used to be that once you got to 65 or 67, you got your Social Security, you found that place where you could live cheap, you went and laid in the hammock and you had your 5 or 6 great years and that was it. There are two or three different life stages after that now. Finding ways to do that, to change, to go with the flow, those are huge topics for us right now and huge topics for the people that we deal with.

Another trend we’re seeing is that a lot of people aren’t coming back. They are aging for the rest of their lives in some of these places where they’ve made their homes. The world is moving forward a pace right now where assisted living centers that they did not have in Mexico, in Costa Rica and Panama. Some of these countries are now becoming the vanguard. We know people who, when the time comes for them, transition into an assisted living center that is a fraction of the cost here in the States. They’re choosing not to come back. The point is there are so many options out there that makes sense depending on your personal wish list.

That raises a great point. In the United States, we’re huge on quality of life, but we’re not big on quality of death. It’s something we don’t address. There are expats living lives out there now who have fought ahead to the end of their own lives and how they want to do it and how they want to manage it. It is more doable and more manageable in some of the countries that we’ve lived in than it is in the United States, no doubt.

I know that there are report after report that talk about how much money is spent in the last couple of months of a person’s life just to hold on. I look at it again as the experience of life and the meaning that comes from that is what I believe people are after. My wife is from Mexico and we spend a lot of time down there, but we’ve also been privileged to travel the world. Although I love where I live, I can appreciate it as different than other places. I love other places too. It’s been interesting to see how much travel has changed over the course of years because I didn’t go anywhere. I went to the outer banks and the Poconos when I was growing up. Driving right now, people are used to going to Europe, South America and in Mexico. I look at retirement and how much pioneers like yourselves have helped to develop the support system and the information of how to do it the right way so that it’s not an experiment, it’s an experience.

There are plenty of people who have done it and there’s plenty of information out there for anybody who wants to do it.

Talk about ways in which the readers can engage with you guys. The newsletters you’re writing, the events that you’re putting on. What’s the best way to connect with you?

Because the internet has changed everything, we’ve become an internet-based business. At InternationalLiving.com, almost everything we produce is available. It’s a one-stop shop. It’s broad and deep. Once you get in there, you can pick a specific country to research. You can pick earning money after retirement. You can look about healthcare options, visa options. The place to start the research, as with almost everything right now, is the internet. Start at InternationalLiving.com and work out from there. If you still need hard copy, we’ve still got hard copy for you, but it’s all available online.

We have two books that we’ve written on the subject of moving, retiring overseas. They’re available at Amazon.com, from International Living. The last one is that LiveRicherSpendLess.com. You can see what the book is all about and if it interests you, pick up a copy.

We’ll make sure that they reach out. It’s one of those topics that I think people are aware of because of your history. It’s in a centralized location, you could probably find 99.9% of it.

We also work the conferences that we have. We have five conferences a year, possibly six. Those conferences are listed on the website as well. It’s a great way to get boots on the ground. If you want to try it, you want to see what it’s like and talk to some like-minded people, it’s a great way.

You can come to a conference and then usually there are some tours offered before and after the conference if you want to go out and see the area, meet some of the expats, see what housing options might be available to you. These conferences are another great way to find your tribe and see if a place is for you.

This has been a great interview. I appreciate what you’ve done and we’re going to get the word out. There’s another group that I’m involved with that I believe that this would be applicable to because it’s one of those topics that to me that’s common sense. Common sense is no longer common, it seems like, and so that’s where I look at with how things have evolved and how safe things are and how much money can be stretched in different environments. It’s amazing. It gives people hope, but there are those few psychological hurdles they need to get over. You guys have tackled that.

You need to break out. You need to have a sense of adventure. You need to realize that it’s not jumping off a cliff. It’s a learning experience. Even if it doesn’t work out the way you planned, very little works out the way you planned. Life is what happens while you’re busy making plans. You’ll just be better for it.

Thank you again for your wisdom.

Thank you very much.

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About Dan Prescher

TWS 33 | International LivingDan Prescher was born and raised in Omaha, Nebraska, and is a graduate of the University of Nebraska at Omaha and the University of Iowa with degrees in Journalism and Creative Writing. He and his wife and co-author, Suzan Haskins, joined International Living in 2001, writing about their lives in Quito, Ecuador.

From there they moved to Mexico in late 2002, and in 2006 they moved on to Panama and then Nicaragua before returning to Merida in Mexico’s Yucatan state, where they renovated a colonial home. They also lived for eight years in in Cotacachi, Ecuador. In addition to these locales, they have explored dozens more expat havens around the world, including locations in Brazil, Argentina, Colombia, Belize, Costa Rica, Honduras, Ireland, France, Thailand, and beyond. They are currently residents of Mexico.

Dan is now a Senior Editor with International Living. As well as regularly writing about his experiences as an expat living overseas, he produces most of the company’s podcasts for www.InternationalLiving.com and serves as master of ceremonies for IL’s seminars, conferences, and other events held around the world. He and Suzan have produced in-depth webinars on several of the most popular expat destinations. Dan has been interviewed about living and working overseas for articles appearing in The New York Times, Fortune Magazine, Kiplinger, Reuters, The Wall Street Journal, Forbes, CNN, USA Today, The Business Times, CNBC, The Globe and Mail, Chicago Tribune, MSN, PBS NewsHour, AARP, and more.

In 2014, Dan and Suzan co-authored their first book, The International Living Guide to Retiring Overseas on a Budget, which quickly rose to the #1 spot in its category on Amazon. Following that success, the Haskins/Prescher team wrote an even more detailed guide to life abroad, called Live Richer, Spend Less: International Living’s Ultimate Guide to Retiring Overseas.

You can purchase it at LiveRicherSpendLess.com or at Amazon.com.

About Suzan Haskins

TWS 33 | International LivingSuzan Haskins hails from the great American Midwest, where she earned a degree in Journalism from the University of Nebraska at Omaha and spent nearly 25 years working in corporate advertising and marketing. Finally, in 2000, she said “not another winter in Omaha” and began looking for a way to live where the climate and scenery were better and lie moved at a slower pace, allowing her to do more of the things she had always wanted to do.

An International Living subscriber, she started pestering the company for a job. In 2001, the company hired Suzan and her husband, Dan Prescher, to write for them at InternationalLiving.com from Quito, Ecuador. From there, they moved to Mexico in late 2002 and in 2006 they moved on to Panama and then Nicaragua before returning to Merida, in Mexico’s Yucatan state, where they renovated a colonial home. They also lived for eight years in in Cotacachi, Ecuador. In addition to these locales, they have explored dozens more expat havens around the world, including locations in Brazil, Argentina, Colombia, Belize, Costa Rica, Honduras, Ireland, France, Thailand, and beyond. They are currently residents of Mexico.

Suzan is now Senior Editor for International Living, where she contributes editorial essays and speaks at conferences worldwide on the topic of retiring abroad.

In 2014, she and Dan co-authored their first book, The International Living Guide to Retiring Overseas on a Budget, which quickly rose to the #1 spot in its category on Amazon. Following that success, the Haskins/Prescher team wrote an even more detailed guide to life abroad, called Live Richer, Spend Less: International Living’s Ultimate Guide to Retiring Overseas.

You can purchase it at LiveRicherSpendLess.com or at Amazon.com.
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