[00:02:02] – Public vs. Private Markets Overview

• Discussion of the two main investment buckets: public markets (stocks, bonds, ETFs) and private markets (venture capital, private equity, real estate)
• Key quote: “A lot of the families we work with are business owners or former business owners, so that business is on their balance sheet is a private market, and then it’s, you know, a lot of times it’s the majority of their wealth.”

[00:04:50] – The Historical Context of Alternative Investments

• Explanation of how the S&P 500’s zero returns from 1998-2008 drove interest in alternative investments
• Key quote: “We’re 15 years into a seven year deal.”

[00:08:14] – The Diversification Framework

• Introduction of the “giving, living, and growth buckets” approach to wealth allocation
• Key quote: “If you go with a withdrawal rate of 4%, which is maybe too aggressive, maybe too conservative, but that’s kinda the historical rule of thumb, then that’s what would be a really good thing to hold in public markets.”

[00:13:32] – The Stewardship Perspective

• Discussion of how viewing wealth as stewardship changes investment decisions
• Key quote: “If you make a $500,000 investment today, that goes to zero, that’s money that’s not gonna go to charity. But if you make a 500,000 investment today, and it, you know, even if it compounds at 7% in 10 years, it’s gonna double.”

[00:16:25] – Understanding Liquidity Risk

• Explanation of liquidity as the ability to convert investments to cash quickly
• Key quote: “A lot of times you don’t know what it is until you don’t have it and you need it.”

[00:19:39] – Vetting Investment Deals

• Process for evaluating private market opportunities, focusing on professional management and diversification
• Key quote: “The big thing is not blowing up. So, and they we’re not necessarily talking about hedge funds, but really like a hedge fund manager, their main goal is don’t blow up.”

[00:26:35] – Venture Capital Success Rates

• Discussion of the low success rates in venture capital (mid-teens percentage)
• Key quote: “What’s the success rate on a venture capital where they go out and raise outside funds? I think it’s mid-teens.”

[00:29:59] – Asset Allocation Strategy

• Framework for determining appropriate allocations to alternative investments
• Key quote: “Part of the filter is if this goes to zero, is it gonna change your lifestyle? Is it gonna have a material impact?”

[00:31:36] – Real Estate Investment Considerations

• Analysis of different real estate categories and their current market conditions
• Key quote: “The two, the two, it never goes down in value and they’re not making any more of it. If I had a dollar for every time somebody told me that.”

[00:35:46] – Donor-Advised Funds as Investment Vehicles

• Discussion of using donor-advised funds for alternative investments with different risk tolerances
• Key quote: “This is the Lord’s money, like we’re gonna go have some fun with it. We’re gonna go spreading some high risk stuff and see what happens.”

[00:38:59] – Values-Based Investment Approach

• Importance of aligning investments with family values and holistic wealth management
• Key quote: “We’re never gonna push a product, push an idea, push, you know, venture capital on a family. It’s like this isn’t the right fit.”

RESOURCES MENTIONED:

• All In Podcast: Mentioned as featuring venture capital celebrities who became billionaires
• Ecclesiastes: Referenced for biblical wisdom on diversification (“Get into seven investments, get into eight”)
• QQQ (Nasdaq ETF): Used as example of public market performance over 15 years

KEY TAKEAWAYS:

1. 1. 1. Establish a solid foundation in liquid public markets before exploring alternatives
      2. Alternative investments should only represent money you can afford to lose completely
      3. Professional management and diversification are crucial when evaluating private market opportunities
      4. Liquidity risk is often underestimated until you need cash and can’t access it
      5. Investment decisions should align with your family’s values and stewardship philosophy
      6. The “don’t blow up” principle is more important than chasing outsized returns