Amy Castoro. Wealth vs Family: An Expert’s View
Episode - 55
Amy Castoro. Wealth vs Family: An Expert’s View
Today’s episode is different. My guest isn’t an exited founder but she’s someone we all need.
Amy Castoro helps families have honest conversations about wealth—the kind most of us were never taught to have.
She shares practical tools from her firm’s 50 years of experience advising some of the wealthiest families in America.
Her work focuses on the emotional side of money—how we build trust, protect our closest relationships, speak openly, and prepare the next generation to handle wealth well.
We talk about raising children with money and how to rethink our own relationship with it after a successful exit.
It’s one of the most useful conversations I’ve had. Amy’s views challenged my own.
I hope it helps you as much as it helped me.
What We Discussed:
00:01:59 Amy’s Background & Work with the Williams Group
00:03:30 Why 70% of Families Fail at Wealth Transition
00:05:18 Trust, Communication & Heir Preparedness
00:08:18 How Early Should Kids Be Taught About Wealth?
00:10:31 Age-Appropriate Conversations About Philanthropy
00:13:17 Creating Motivation Without Financial Desperation
00:16:23 Responding to Kids Asking About Inheritance
00:20:35 Involving Children in Wealth Management Early
00:22:33 Teaching Kids to Say “No” & Handle Peer Pressure
00:26:44 Skills Young Heirs Often Feel They Miss
00:29:09 Should Children Be Encouraged to Be Entrepreneurs?
00:32:28 What If the Family Came into Wealth Late?
00:36:04 First Family Meeting: What to Discuss
00:37:28 Re-engaging the “Unmotivated” Youngest Child
00:40:29 Coaching vs. Therapy in Wealth Transition
00:41:41 Families with Young Kids: How to Start Early
00:44:33 Relationship Skills & Communication Patterns
00:47:06 Why the Skills That Build Wealth Won’t Transition It
00:48:20 Balancing Entrepreneurship & Parenting Post-Exit
00:50:39 Modeling Purposeful Wealth, Not Just Growth
00:54:36 What Successful Families Say the Purpose of Wealth Is
00:56:49 Defining Family Values Around “Education”
00:58:41 Reconciling Different Values in the Family
00:59:50 Allowance Strategies in Wealthy Families
01:01:38 Knowing When to Shift from Parent to Mentor
01:03:28 Creating & Living a Family Mission Statement
01:06:06 New Program: Next Gen Leaders
01:07:25 Common Mistakes Families Make Around Wealth
01:10:34 Should Families Hold Regular Meetings?
01:12:37 The #1 Shift Families Must Make for Success
01:13:38 Amy’s Recommended Books on Family Wealth
01:15:15 Final Thoughts: Preparing the Family for the Assets
-
Anastasia Koroleva: [00:00:01 - 00:00:11]
Welcome to Exit Paradox, where we explore what actually happens after a successful business exit. I'm your host, Anastasia Koroleva.
Amy Castoro: [00:00:15 - 00:00:25]
Many of the folks that we work with in First Generation wealth, their children don't have to work, and yet the skills that they're learning is more important than the money they're earning.
Anastasia Koroleva: [00:00:25 - 00:02:08]
Today's episode is different. My guest isn't an exited founder, but she's someone we all need. Amy Castoro helps families have honest conversations about wealth, the kind most of us were never taught to have. She shares practical tools from her firm's 50 years of experience advising some of the wealthiest families in America. Her work focuses on the emotional side of money, how we build trust, protect our closest relationships, speak openly, and prepare the next generation to handle wealth well. We talk about raising children with money and how to rethink our own relationship with it after a successful exit. It's one of the most useful conversations I've had. Amy's views challenged my own. Amy, thank you so much for joining me today. You are one of very few people in the world who actually understands and can relate to the problems that my community and this audience finds probably the hardest one after a successful exit, which is the problem of how we deal with raising children with wealth, how do we not spoil them with wealth? How do we keep the family together? And you know all the answers. And I'm very excited to talk to you today. I've heard your talks before. There's so much value you can offer to my audience, so let's go ahead. May I ask you to first tell us a little bit about your experience?
Amy Castoro: [00:02:09 - 00:03:39]
Yes, absolutely. I've been so fortunate to have found the Williams Group about 15 years ago. Prior to that, I spent some time with Grant Thornton as a management consultant. We looked at family businesses, both large and small. In those conversations, we were asking questions like, should we keep it? Should we sell it? Questions like, are the right people in the right positions? Should we go to third party management? I also had the honor of working with the Walt Disney Company for I was part of what they call the Disney University. And there we got to do things like how do we develop a culture, how do we train a team? Are the right executives in the right positions? And what all of that experience has brought to me is a real sensitivity to who are we as a family, as a culture, as a business, and what are we committed to? What's our purpose educationally? I have a background in organizational psychology and I got a master's in coaching. They call it somatic coaching. Through the Strozzi Institute. And it was through that journey that I met someone who was doing this work with the Williams group, went out to meet Roy Williams and fell in love with the work and could see a really great loop for how it fits so perfectly with my background.
Anastasia Koroleva: [00:03:40 - 00:03:57]
So you often stress that wealth goes beyond money, and it's also about values and responsibilities. If you can help us understand why it's so important for people like us who are first generation, you know, I.
Amy Castoro: [00:03:57 - 00:07:45]
Have to say we did some research with over 3,000 families. The Williams Group has been around for 60 years. Started by Roy Williams, came out of the NFL. He played for the San Francisco 49ers. And when he came out, he looked around and he saw a lot of his peers who had come into significant wealth. But that wealth was dividing the family. Oftentimes they were losing control of the wealth through divorce or through bad investments. There was just not a lot of communication. So he wanted to know, why is that happening? These people can afford the best estate planners, tax accountants in the world. And yet still 70% of the families were finding an unsuccessful transition. And so the research revealed that of the 70% failure, 65% had to do with trust and communication, which is a very different focus. Most families will put 95% of their focus on estate planning. And estate planning is designed to take care of the assets, not the people. And so what was missing was this skill base of how do we become what I like to call relational Jedis, right? How do we get really good at managing the relationships, which is the foundation for everything? So 65% had to do with trust and communication. 25% had to do with air preparedness. And for a lot of families, that means, you know what, let me teach them how to read a financial statement. Let's make sure they are financially literate. Let's send them to a boot camp. And there again, you've got the focus on the asset, not on who they are becoming. Why does their pillow come off the. Or rather their head come off the pillow? And Roy, he was also famous for saying, the two most important days in your life is the day you're born and the day you find out why. And so there we're looking at that same, that very question, what are the values of our family? Who are we becoming? And we sort of flip that question from, how much are you going to get to how are you going to contribute? Very different focus. And then lastly, I'll stop after this. The other third pillar that this research revealed had to do directly with values. 10% of the families did not have an aligned value structure or they didn't even know what they were. The danger that a lot of families face is they start with those values and they say, you know what? Let's just hit the pause button. Let's figure out what our values are. The challenge is if you haven't done the work on trust and communication so that you can have open and honest conversations, then those values tend to be built on a weak foundation, and you get something called cordial hypocrisy. You get a lot of people saying yes because it's not safe to say anything else. Usually families that have built their values will come to us and say, we've done all this work, but we're still not able to navigate the conversations where there's still not a lot of trust. We just have to back up and do a little bit of that work on the front end. Does that answer your question?
Anastasia Koroleva: [00:07:45 - 00:08:38]
Yes, but I'm very intrigued now because now I have so many more questions. So the main one is that, okay, say I just had a liquidity event and I'm overwhelmed with so many emotions. And you and I talked about this before. So much is going on, and one of the many issues is this worry that how do I make sure my children don't become these spoiled brats? How would you go about this step by step in terms of timeline, to make sure that we don't miss that moment when we should bring the kids into the conversation? Because obviously it sometimes takes a decade or more for adults to adjust to this new role of wealth and of managing wealth.
Amy Castoro: [00:08:38 - 00:10:39]
Do you know? I would say 30 is probably too late. I'd say even 20. It depends on the conversation that you're in. If you're in a conversation about how they're going to be a responsible steward, that's an asset conversation. That's a governance conversation. I would rather see the conversation focus even at a very young age, at 5 years old, it's okay. So what's your job today? Can you collect the napkins off the table? It's teaching them very early that their job is to contribute. What are the values of that family about how they're organizing? We worked with a family where they said they pick the kids up from first grade and the nannies and the moms would all be carrying all their backpacks. The mom said to me, in this family, we carry our own backpack. Her kid would be the one leaving the school last because he's carrying this heavy backpack. But that age they're learning. Oh, we have to be independent here. Another story from a famous family you'd recognize. She said, you know, I was hanging from the monkey bars and my aunt walked up to me and I was yelling, help, help. Somebody get me down, I'm stuck. And the aunt said, well, what do you think you can do about this? So it invited her to solve the problem at a very young age. And so I think those are the tricks. If there was one hard and fast rule that I believe makes a huge difference, it's that these kids get a summer job as early as possible, any job, so that they are starting to gain some sensibility and sensitivity to what the world is like out there. So the practices of the family make a difference.
Anastasia Koroleva: [00:10:39 - 00:10:50]
So how early should the family, in terms of children's age, should the family talk to the children about the wealth?
Amy Castoro: [00:10:50 - 00:13:24]
You know, we had a family where the kids were 6, 9 and 11, pretty young. And so we got into a conversation about what are they paying attention to like you, you know, if they, what are they learning about that has them concerned. The six year old said, well, you know, I heard about these turtles and they're eating way too much plastic, so I'd love to see if we could find a way to put those turtles in a hospital. So now the family gives to a turtle rehab facility and they have a conversation about it all the time. One of the other kids said, the teacher's always looking for supplies, we never have enough. Now they make sure the schools have supplies. Someone else, I think it was the older one, saw someone in a wheelchair in front of the hospital and they said, boy, I'd love to make sure there's health care. Not in these words, but in their own words. The conversation that that family's in, this was a very wealthy family, multibillion, and their first generation ended up in a divorce. So the mom was really struggling with who are these kids becoming and how are they going to grow up and be responsible contributors. So what she did was she just brings the conversation in. She manages all the philanthropy, but it's alive, it's, hey, this is what we did today. Obviously they can all have the save the spend the buckets that will help them understand these three pillars, right? The save, the spend, the give. I think that's important. We had another family where they flew private, landed somewhere beautiful. The 10 year old daughter said, boy, I really want this item from a shop. And the dad said, great. If by the end of the week you have earned your allowance, you can have it. The Friends they were with were in a state of shock. They said, wow, that's discipline. And he said, yeah, I'm really more committed to their character than the things they own. And so in that family, what's different is they have a regular conversation about who's driving you or the wealth. Right. Is the wealth driving this conversation or are you driving this conversation?
Anastasia Koroleva: [00:13:25 - 00:14:08]
So for people who built their wealth through building a business, one of the most common fears as, as you know, is that if the kids are not hungry themselves financially, they may not want to build value and contribute in that way, which is for most entrepreneurs is the most natural way to contribute, as opposed to, say, philanthropy, which is a very new type of activity at that point. So what would you say to that? Should we artificially create this financial hunger or should we look for other motivations to develop in our children?
Amy Castoro: [00:14:08 - 00:16:31]
You know, one of my clients once said to me, I can give my kids anything, but I can't give them desperation. Right. I think that's what you're pointing to there. In our interpretation, what makes the most sense is uncovering a yearn, something that is motivating them from the inside, where they are compelled to action because they care about something. They care about something. They care about making a difference, they care about being a contribution. Many of the folks that we work with in first generation wealth, their children don't have to work. And so the conversation about how they're going to get a summer job seems absurd. And yet the skills that they're learning about how to contribute, how to make someone's day better, whether it's in food service or hospital, that quality of character is more important than the money they're earning. And then we've also found in our families of entrepreneurs that that quality of being able to see an opening in the market, how to fill a need, that's a skill that's learned because they've been in the conversation around the dinner table since they were born. And so inviting conversations like how can you make this better? Or what do you see is missing? What's the opportunity? My daughter, she's 27, my mother is in the hospital and we're bringing her food because the hospital food is notoriously not great. My daughter said to me, I think there's a business here encouraging their articulation. The what often gets missed is that mom and dad think they need to have all the answers, that when the kids come to them, that they need to solve the kids problems. But if we reverse that and we teach mom and dad how to listen and how to ask great questions. It's pretty incredible what these kids will come up with on their own. So it's really finding that place where you can turn the conversation and hand it back to them.
Anastasia Koroleva: [00:16:31 - 00:17:32]
So, Amy, I didn't know you when I first had to deal with it, with these issues with my kids. And I wonder how you would kind of what your feedback would be with respect to some of the decisions I made which I thought were maybe controversial. So. And please feel free to tell me I was totally stupid to do that. So one of them was that when my kids asked me about inheritance, which they did, I told them that I don't believe I can promise any money to anyone because money tends to come and go and I don't feel I always have control over it. But what I can give them instead is the skill to earn money if they don't get any inheritance or if they lose money at some point in the future. Do you think it's a good approach to parenting?
Amy Castoro: [00:17:32 - 00:18:52]
I do. You know, it borders on the cat and mouse game, right, where we're always trying to hide the wealth. I think that your emphasis on who they are becoming and your commitment to family unity and their self sufficiency, I think those are essential messages to send. Where it gets tricky is maybe around 12 or 13, they figured out how to find the cost of the, or the value of the home. Maybe they've got some ideas of what other businesses have sold for. They can put the pieces together for the family vacation. They see, oh, life has changed. We now have three houses and a chef. And so they're putting it together. And when you're not speaking to them about expectations, we start to build this quality of distrust. They don't trust you to transition it. Well, in your conversation, there's been, there's a lot of distrust in the market, a lot of uncertainty, and that's true. And then you're not really trusting that them. That their wealth won't derail their motivation. So we have these two pretty powerful forces of distrust already happening in the relationship.
Anastasia Koroleva: [00:18:52 - 00:18:58]
If I came to you for advice before doing that, what would you recommend I do instead?
Amy Castoro: [00:18:58 - 00:22:41]
I would say, yes, we're wealthy and you have a huge responsibility as someone, as part of this family. There's a certain quality of values that we have that we stand for. There's generational wealth opportunity here. The statistics are that you've got about a 70% chance of failure here. Every culture in the world has a saying for the third generation falling into poverty. Let's talk about how you're contributing and not worry about the number. The number will change. I think it's a powerful statement. My job as your mom is to make sure that you've got the skills to be successful in your own right. And no, I'm not prepared to tell you how much wealth there is. That's not a relevant conversation right here. I might then flip the conversation and say, why do you ask? What's your concern? When I interview these kids, their number one concern and it's valid is that gold bricks are going to land on their head and they are going to have to be responsible for an incredible amount of money and they have no idea how to do that. Your comment is by the time that hope happens, God willing, you'll be prepared. You and I will be in a lot of conversation about what prepared looks like. I also have a team of people that will support you. They know how to do this. And so it's what you're doing in that conversation is you're opening the lines of communication that they will be supported and that this is a we conversation. It's not just you pulling the strings, it's how are they contributing. I have a family where they are also wealthy, very wealthy, and they have, one of them has a passion for fishing, recently custom built a yacht. He had his, I think he was maybe 10, involved in all of the conversations on the phone with the people saying, how much does this cost? How much does this cost? So that that son is learning not only about boat building but how to ask the tough questions, how to, how to really assess. Is it worth putting that kind of thing in this boat or not? So they are included all the way through the process. Yeah, there's a lot of wealth there, but not something that needs to be hidden. The other thing that I see happen is these kids are in college and they're not comfortable with their wealth. And so they, they recurrently pay for the Uber, they buy their friends lunch, they pick up a tab at the bar. And it's because they're struggling in this way that everybody knows they are wealthy. Perhaps the wealthiest the room. They feel obligated because they don't know how to be comfortable with the wealth. There hasn't been a conversation with them about how this is generational wealth, about how they have a responsibility to be a good steward and learn how to say no and how to have long eyes on this wealth. Right. It's not, it's not mine to manage yet, guys. I'm only responsible for what they give me. And so no, I'm. Yeah, who can. Who can venmo me some cash here? So it's learning how to have those conversations with your kids.
Anastasia Koroleva: [00:22:41 - 00:23:03]
How would you go about learning kids to say no? Especially given that it's one of the biggest challenge. Challenges for adults themselves. As you know, it's a very common conversation we have. First generation people. How do we say no? But how do we also help kids to do that? Because they're talking to different type of people as well.
Amy Castoro: [00:23:03 - 00:23:12]
So when you have to say no, how. What, what goes on in your mind when you say no to something? That's a real question for you.
Anastasia Koroleva: [00:23:12 - 00:23:55]
Well, what helped me personally was flipping it to what I say yes to. And now it's already a habit. But in the beginning, it was actually a bit tricky. But. But I was basically saying yes to the peace of mind and to saving that relationship. Because I did make a few mistakes in the beginning, as many do, and I wasn't able to say no. And that really destroyed relationships and became very painful. So I flipped it to first. Remember that feeling? I bottled it. And I remember that feeling of how it was not worth it destroying the relationships, but also I was saying yes to peace of mind.
Amy Castoro: [00:23:56 - 00:26:51]
Do you know if they're clear on the purpose of the wealth? If they are clear on who they are as a human being, it's easier for them to say no. So in the Uber, when they're all driving somewhere, if there's already been a conversation with their parents about, hey, what it looks like for you and I to be a responsible steward, you're not just picking up, you're not saying yes to everything. You are able to say no. Guys, this isn't actually my wealth. This is generational wealth, my job. I have a responsibility to be a good steward here. And so who's going to Venmo me or hey, guys, it's not my wealth, it's really mom and dad's. I need to make my own, so fork it over, right? So in the I need to make my own way, they have the. They have a vision and they're compelled to. To preserve that. They have a purpose for saying no. Also, saying no in our world is a way of taking care of the relationship. So if they build the practice of always being the one that says yes, they're building resentment. And so ultimately they'll. They'll break up with those friends because they are uncomfortable in the relationship. So it might sound like something like, hey, guys, I got dinner last time. Can someone Else get it this time. So how do they make an effective request? Yeah, and those conversations should be happening regularly. We had a situation where the daughter was at Stanford, and she. She was. There was an expectation in the family that she would work while she was there. And she took a job in the school newspaper, but felt really guilty about it because there were other kids that would only get financial assistance if they had a job. And she was taking one of those jobs. She didn't need the financial assistance. So she was pretty. She was upset about it, and she was starting to isolate at school. She finally brought the conversation up in a family meeting, and the mom said, I got it. In this instance, it's okay if you don't work for the school newspaper. What other stretch assignments can you do? What else can you be? How else can you be a contribution at the school? Maybe you don't get paid, but what we're after is, are you learning how to report news? Are you learning how to write? Where's the opening? You see, that the school isn't already addressing? So it wasn't about just saying no to the job. It was about, okay, what else can we do? I got it. But it had to be a conversation which opened up the daughter to a whole new space of possibilities that she could explore. Sounds a little like entrepreneurialism, if you ask me.
Anastasia Koroleva: [00:26:52 - 00:27:41]
Someone, a good. A good friend of mine is dealing with an interesting issue. I'd love to hear your perspective on it. So he's in his early 30s, and his father passed away, and the guy inherited substantial wealth. And that family did take care of preparing him for the wealth. But by the time he reached maybe 33, he realized that he actually would much have preferred his father to teach him how to be an entrepreneur because he realized that he did not have the skills that his father had and he wish he had. So he actually is not very happy with being prepared to just be a steward of wealth.
Amy Castoro: [00:27:42 - 00:27:50]
He didn't have the skills to think about how to make decisions the way his dad did. Is that accurate?
Anastasia Koroleva: [00:27:50 - 00:27:58]
Yeah, he. Basically, his problem is he wishes he could create value and not just be a steward of wealth.
Amy Castoro: [00:27:58 - 00:29:17]
Is what I hear so often from these kids, is they want to sit down and be part of the conversation before it's too late. Right. When mom and dad are on the other side of the daisies, it's very hard to have a good conversation with them other than a Ouija board. And I don't think we want to leave or put the risk of the wealth in the hands of a Ouija board. And so the more mom and dad can invite these kids into conversations about how to think about things, what's their thought process? How do they decide whether or not they can trust an advisor? How do they decide if something's worth an investment or not? And what I find is always so amazing is that the families we have the honor and the privilege of working with, the matriarch and the patriarch, are not wired like the rest of the world. They look at things differently. And so teaching the kids to fish, how do we think about these situations? Including them in those conversations is really powerful. And for some moms and dads, it's an uncomfortable place because they don't know the answer. Always right. But learning how to make mistakes is also a valuable lesson for these kids.
Anastasia Koroleva: [00:29:17 - 00:29:29]
Would you recommend to these families to inspire the children to follow the entrepreneurial path? I'm talking about children of entrepreneurs.
Amy Castoro: [00:29:29 - 00:31:15]
You know, I think in a world where parents are always asking us, what questions should I be asking now? How do I open these conversations? Where do I start? I would like to suggest that start at the very beginning. I might even say, guys, do you think we're wealthy? And see what they say. I think it's also a great conversation to say, hey, what's important to you? What impact would you like this wealth to have in the world and in your life? Right. If you were in my shoes raising kids, what impact would you like it to have? That's a really important question. Obviously, the question I mentioned earlier, in what way do you see you could be a contribution to the wealth that would be useful? In what way do you see you can help grow it? I don't mean through investments, but when we talk about this word, wealth, it means so much more than money. It means education. It means our network, it means our identity. So what ways do you see you can contribute there? I also think it's a useful conversation to simply say when we don't agree, how do we want to work through that? What suggestions do you have as the next gen that when we hit these places where we might not be on the same page, what's your recommendation on how we work through that? You'll be surprised at the wisdom these kids can bring to the table. They really most often just want to be heard.
Anastasia Koroleva: [00:31:15 - 00:31:36]
So say a family came into wealth when kids are already older, say, 13, 14, like this dangerous early teen age. And by that time there was no preparation done for wealth. How do you deal with. With those families?
Amy Castoro: [00:31:36 - 00:39:43]
Yeah, you know, oftentimes it's really getting everybody on the same page that we really do have something to work on. In other words, the. What we see happen in families is everybody else is pointing a finger at somebody else. Like, no, it's their problem. They don't communicate. They run away. Just the other day, I was with a family and there was an interpretation that the brother is somebody who just doesn't care. And then when I got into a conversation with the son, he said, no, I care deeply. It's just that I don't have the skills to have a good conversation and not. And be afraid I'm going to make things worse. And then I said, so where did you learn that? And he said, my dad does the same thing. And so that pattern. If I were to ask his dad where he learned how to run away from conflict, he would say, my dad taught me. So we don't just inherit wealth, we inherit these communication practices. And truthfully, that's all they are. Now, there's not too many quotes of Aristotle that I can think of, but there is one that I remember, and it says, we are what we practice, and we're practicing all the time. And so for families that have reached this point where maybe the kids aren't responding to texts as often as they used to, or they seem disconnected and they don't want to show up at a family meeting, or mom and dad are afraid to have a conversation with them directly, so they go through the advisor to have that. Those are all what we call red flags and maybe yellow flags. Right? A yellow flag might be lack of direction, or there's more joking and banter than there is honest communication. There's this. This current of behavior that's bordering on entitlement as it's. As a standard in the family. The kids might be jockeying for position, like who's going to be mom's favorite or dad's favorite, or who's going to get the top job at the family business. So all of those little flags, we would say, are opportunities for the family to say, okay, let's hit the pause button. We happen to have an assessment that's based on our research of the 3,000 families, where we can say, what's your likelihood of success? Based on the three core variables that we know successful families do well. The first is trust and communication. They know how to have a difficult conversation and have it go well. The second is air preparedness. They have the same standards for what it means to be a prepared heir. That doesn't mean they know how to balance the checkbook it means they know who they're becoming. And then the third piece is we're all on the same page about what our values and purpose is of the wealth. The purpose of the wealth. So we, we can benchmark a family in terms of the likelihood of success for those three core variables. Once we've got everybody saying, okay, yeah, this I think is worth an exploration, we then bring everybody together for the first family meeting. And in that meeting, we are not talking about how much they're going to get and when. We're not even talking about how much wealth there is today or even the different divisions of the company or what happened in the sale. All of that is asset related. We're talking about how do we have a difficult conversation and have it go productively. What do we mean by this word trust? What do we do when we feel that judgment? What happens when we want to say something to mom and dad but we self edit? Why are we stopping the conversation? So we do a lot of work on how to become what we call relational Jedis. How do we get really good at managing relationships? Because communication is built on relationships. Wealth transition is built on communication. So we have to back it up a little bit and say, how do we speak truth to power? How do we navigate conflict productively? How do we build, manage and repair trust if trust has been broken? We worked with a family where they made quite a bit of wealth. They sold the business. It's a name you might recognize. First generation, three kids. Two were in their 30s. One got married, the other was trying to figure out a path forward. Working, but not really enjoying his work. And then the youngest one was playing way too many video games in the basement and he'll put him at about 23. So we have the first family meeting. The 23 year old doesn't even show up. And so I called him because we interview everybody before the meeting and I say, hey, what's going on? And he said, you know, I don't think it's worth it. What's not worth it? I said. He said, every time I show up at a family meeting or in some family conversation, everybody tells me why I can't do what I want to do because I'm the youngest. Everybody tells me what to do and nobody listens. And then when they do listen, they shoot the idea down. So you know what? I'm good in the basement. I got a great dog. Maybe I'll pick up a hobby, but I'm okay. So not okay with the rest of the family. So I say, okay, Come to the meeting tomorrow and let's have a conversation about that. And he said what? I said, how nobody listens to you. So he shows up, we put him at the front of the room. We say, hey, if conversations were happening more productively for you and this family, what would that look like? And he said, oh, well, people wouldn't shoot my ideas down, or they wouldn't tell me why I can't do things, or they wouldn't tell me why, what I should be doing. And then I said, so if there was something you could do right now, you'd like to give it a shot? He said, real estate. And everybody said, they did what they do. They said, no way. We've never done real estate. We only know people who lost a lot of money in real estate. We don't have any background in that. We don't even know people in that whole thing. And I go, okay, time out. That's the pattern. So then the spouse at the end of the meeting said to this, to this guy, hey, you know what? I'm in construction. If you want to come and walk around the site, see who you can meet, maybe you can shadow someone. Come on down. About five years later, that kid and his son are doing some really exciting real estate deals together. So the breakdown wasn't that he didn't have motivation or that he was entitled. That was the assessment that people had about him, but it wasn't true. People think their assessments are truth, and that is really where the division starts to happen. So the opportunity was naming the dynamic and then inviting the family to solve it themselves. We're coaches, not psychologists. There is a really valid place for psychologists in these families. Often that work has to do with the past. How do we reframe the past? Our work as coaches is very different in that we're looking at, what are the skills, what can we now learn that we didn't have in our toolbox before? And where do we want to go? How are those skills going to get us where we want to go? So as coaches, we're not in there doing it for them. We're teaching them how to do it themselves. So that's a big difference. When we work with a family, it's really about skill development more than anything else.
Anastasia Koroleva: [00:39:44 - 00:40:08]
Yeah, that's brilliant, because I find the same problem in all areas of our lives when we suddenly become, you know, exited founders and we have to deal with wealth and this whole new world. And of course, dealing with. With a family also requires skills. And most of us don't Appreciate it. Because we think we have all the skills.
Amy Castoro: [00:40:08 - 00:40:08]
Right.
Anastasia Koroleva: [00:40:08 - 00:40:09]
But we don't.
Amy Castoro: [00:40:09 - 00:40:10]
Yeah, we don't.
Anastasia Koroleva: [00:40:10 - 00:41:05]
And we learn the hard way. But, Amy, let's talk about another scenario. So a family in their early 40s and kids are still young, and suddenly a company is sold. And the father, let's say father, because it's just more typical, is suddenly at home very willing to be there for the family, very hungry for that kind of connection that he didn't have before. And that usually triggers lots of different questions. How do we now raise these kids? And we feel that responsibility. They are still small. How do we do it? Right. To avoid exactly the scenario you described to me before when the kids are already adults and you have to address it later. What would you tell a family like this in terms of the steps they should be taking?
Amy Castoro: [00:41:05 - 00:41:13]
So the steps they should be taking to. Let me make sure I understand your question. To reconnect with the children.
Anastasia Koroleva: [00:41:14 - 00:41:30]
No. To make sure that the family is not negatively affected by the wealth. And also now we're talking about a situation when both parents, which is very typical for my audience, are at home very willing to do it. Right?
Amy Castoro: [00:41:30 - 00:41:30]
Yes.
Anastasia Koroleva: [00:41:30 - 00:41:35]
But not having the skills from their own past. Naturally.
Amy Castoro: [00:41:35 - 00:41:48]
Right. Yeah. So there's two aspects to your question that's interesting. One is what they're doing, and the other is who they're being while they're doing what they're doing.
Anastasia Koroleva: [00:41:49 - 00:41:52]
Okay, I like that.
Amy Castoro: [00:41:55 - 00:46:56]
I think the fundamental piece that kids pay attention to is how they feel when they're around their parents. Right. And so if mom or dad, let's say they built a great business, they sold the business, and now they're wondering, well, what's my next Mount Everest? Right. The joy of that pursuit. The joy of building up something again, including the kids in those conversations about, hey, what brings you joy? What's exciting to you about what just happened with this business? So the first step in my world is really having those open and honest conversations about what they now see as possible that they didn't see before. It's almost like treating the kids as adults and taking the money hat off, Taking the coach hat off and having a really honest conversation about, here's what brought me joy. Here's what I'm excited about. This is what I would like for you. So step one is really going for a walk and having an honest conversation where the hearts are facing in the same direction and not so much talking about what you've done or how much money you've made, but the contribution it has been how it brought you joy, because in those conversations, you're starting to build a sense of the values and the character that's really fundamental to who these kids are becoming. Sometimes it's useful for families to talk about their parents. What are the values? What drove them to build this business? What are they most excited about and have a conversation on that level, not on what they're doing. The other thing I would do is I would really look for places where they could start building more skills around how to have good conversations, around how to build, repair, manage relationships. If I had one piece of advice, the number one thing that I see in every family is when there's a bit of tension, people start to distrust the intention of each other. They start to think, oh, dad doesn't trust me, so I'm not going to talk to him. Or dad thinks, you know, I try to get my kids attention to go out to dinner, and they keep blowing me off, so they must not want to be around me. So they distrust each other's intention. And the breakdown there is that it's a false assessment. It's a false interpretation of what's going on. And so when they can look at the tip of the spear and say, hey, you know what, son? I often text and invite us to go spend some time together, but it feels like you're always busy. Do you have any suggestions on how we could spend some time together or what's happening there? Right. So you name the dynamic, you go straight into the tip of the spear and you say how it is for you. Here's my experience. Is there a way we could find a way to spend some time together? I think it's talking about what brings you joy. I think it's naming the dynamic as a second level piece, and then it's building the skill. It's learning new conversational Jedi moves that maybe you don't already have in the toolbox. That's probably the trickiest part of our work, Anastasia, is that people come to us and they're already wildly successful. So they're like, well, what do I have to learn about communication? I'm already an expert. But the truth is, as the wealth grows and the family expands and the kids get older and things get more complex, you need a new skill set. The same money. I'm sorry. The same skills that built the wealth are not the same skills that give it away or transition. That's a whole different skill set. And the families who successfully transition wealth, ones that do this, well, they take the time and make the investment on saying, hey, how can we become a high performing family team? What else can we learn about how we coordinate action together? How do we manage our mood around each other? How do we manage judgment? What could have us go from being a great family to an even better family? Right. So that we have more confidence that this wealth is not going to divide us. Every family that ends up in a divided situation did not take the time to learn these skills. And that's just a fact.
Anastasia Koroleva: [00:46:57 - 00:48:19]
Yeah. So, Amy, a rather typical situation happens with younger exited founders because these days, especially in the technology world, we have people who exit in their 30s and it's common early 40s as well. So these people often want to go back to building, go back to business. And they face a dilemma because they feel guilty that they haven't been there for their children for years while building the first business, yet they have this yearning to do it again because they're still very young and full of energy and they're interested. And maybe their genuine motivation has transitioned to this desire to contribute to the world. And it's painful not to. So the dilemma is very complicated. And part of that dilemma also is the fact that these people want to model hard work and the desire to contribute to their kids through work. So how would you, how would you advise someone like that who doesn't want to go through another stage of not seeing their family for years, but wants to integrate the family life and business in a wiser way second time around?
Amy Castoro: [00:48:19 - 00:50:58]
Yeah, I mean, that really is a question of balance. And the way that we stay balanced is we stay attention, we keep our attention on what we care about. Right. So there's this place where I care about building another business that brings me joy. And I learned the first time around that I want to do that in a way that I don't break relationship with those that love me most. There was a 23 year old or 24 year old that said to Warren Buffett, what's the one lesson you really learned through all of this process of building all this wealth? And Warren Buffett said, you know, it's that those who you want to have love you, love you at the end of the day. Right. And so in those moments where mom and dad are making a decision to go to a board meeting instead of somebody's baseball game, that's the place to go. What am I committed to here? What do I really want to take care of? So the wealth may not grow at the same speed, or maybe it will, maybe it'll grow even faster because they're moving from a place of center, they're making decisions on their terms, not in the wild chase for more. We often in the tiger meetings will go around the room and say, what's the purpose of your wealth, guys? What are you really, what are you organizing around as you're building it? Nine out of ten times they say, making more. Right? Making more that it's the chase of bringing in more money, building a bigger portfolio. That's the purpose. And so then the next question you can guess is, well, what's the cost of that? Right. It's nearly, let me say, I'd say 80% of the families. Somewhere in there, there's a conversation where mom or dad are apologizing for not being present while the kids were growing up. We had a family where the dad said, I just, you know, I don't get why my kids don't want to hang out with me. They're, they're 28, 30, they live next door, but I never see them. And I said, well, do you take them on vacation? He said, you know, we all went to London and, and I said, what percentage of your time while you were in London, were you on your phone? He said, I got it right. Right. And so it really is, it comes down to what am I committed to.
Anastasia Koroleva: [00:50:58 - 00:51:27]
But in terms of the balance between the desire to model hard work and contribution through entrepreneurship and being there for the kids. Because I think for many people in our community, that's the real question. It's not actually the question of making more money, is the question of, I found my purpose. I want my kids to share the value and see what it means. But how do I do that if I'm not fully committed?
Amy Castoro: [00:51:27 - 00:53:40]
Right. I think really you're asking the question, what is fully committed look like in this family? I interview many kids that have anorexia, that are on medication to manage anxiety and depression, that are turning towards technology as an escape. Every one of those kids have worked themselves to the bone trying to recreate or get their parents attention by working exceptionally hard. Just last night had a conversation with a globally recognized physician and he's concerned that his son, who works in the investment banking world, working too hard. Right. So how do. It's more important to model the balance. That's what they want to pay attention to. That in the place of where the kid, there's an interpretation and assessment that the child's not working hard enough. That's a conversation because our generation grew up with, hey, shoulder to the wheel, work harder, put in the hours, make it FaceTime make it matter where. Today, ChatGPT can save people an awful lot of time. There is a way that technology is saving time. There is a way that these kids have learned just by growing up with technology how to use networks. Many of them work. Looks like they're working part time, but they're in the gig economy and they have four or five different revenue streams. So what does working hard really mean? At what cost? So to balance it, it's really, yeah, mom and dad have to set the standard, but it's also a conversation. Is it about the hours or is it about the impact? And is it about impact or is it about efficiency? So really having conversations about those aspects at those levers of productivity that I think are really important.
Anastasia Koroleva: [00:53:42 - 00:54:01]
So you mentioned that you ask people in particular in Tiger 21 meetings about the purpose of wealth. In your experience, those families who are successful in handling wealth as a family, what their purpose of wealth commonly is.
Amy Castoro: [00:54:02 - 00:58:54]
Yeah, it's a great question. You know, when we work with families, we get to that point after we've done some work of these skills and we've worked on actual live conversations that the family wants to have using those skills. Right. Because we know that unless we're practicing, we're not really learning. We eventually get to that place where we look at the values and we look at the mission statement for a family. Nearly every family has some of the same pieces. It's education, it's family unity as the purpose. It's generous, like caring about the future of where everybody's going. It is philanthropy might be in there, growing, the wealth might be in there. So it's not usually one purpose. It might be a paragraph that has a few aspects of here's what we care about as a family. Then the work is really, how are we living that mission? So for example, we had a family where one of the kids had a child that required special education, an infant, and she wanted to hire a French speaking nanny so that the mental development would start to expand and they'd learn not just French, but they'd have a better shot at having more linguistic capability. She went back to the family because at this point, when you build these family mission statements, it's not just mom and dad dad making those decisions now, the whole family makes those decisions. And she said, I would like a certain amount of distribution every year so that I could afford the French speaking nanny. And the kids all sat back and they said, boy, you know what? We have decided that what education means in this family is that it's Accredited, it's got a fixed amount of time that it's a certain gpa, that it's a coach ticket, back and forth. It could be technical, but it's accredited. A French speaking nanny doesn't fit in that. So as far as we're concerned, we don't see that that kind of education warrants a family funded distribution. And so, you know, maybe this is a conversation she has with her father about how to, how to handle this situation, but it's not something that the family says, hey, that's not what we mean by the values of this family. It's not what we mean by education. The important point that I'm making here is that when you build out this purpose that you have action items and it's a recurring North Star, you come back to that paragraph to say, how should we make decisions here? We worked with another family where the mom thought the purpose of the wealth was to put it into a foundation. And she said, I would love for the kids to run the foundation together. And so we said, great, let's interview the kids. And of course, one is a fisherman and he works very hard and he is a devout Catholic and really uses very little of the family wealth and invests what he does have. His sister, on the other hand, is a volunteer at an LGBQT facility that she runs and more than happy to use the family wealth and really an atheist. And so those two work together to say, you know what? Our values are so incredibly different. There's no way that we could make decisions together. And so through the process of learning how to have meaningful conversations, how to address some of the tension that was happening in the family, they ultimately realized that what they are both committed to is young people. The son wanted to do missionary work and the daughter wanted to fund suicide hotlines. And so as they explored what really mattered to them, what, what they cared about, they realized they have very common values. They're just expressed differently. So they ended up hiring a third party to run the foundation that they come together every six months to talk about what they're up to. Today. The daughter got married and she invited her brother to be the godfather of her child. So it may look like a family as far apart, but actually if you really get underneath the trust and communication, you find out the values are very similar and then you can start living them by paying attention to them.
Anastasia Koroleva: [00:58:54 - 00:58:59]
So, Amy, these successful families, how do they go about allowances?
Amy Castoro: [00:59:01 - 01:00:39]
That's really different for every family. In some families it's a fixed number. By taking care of certain chores. In other families it might be matched. If you save this much, I'll match it. Or if you make this much other, it's milestones in other families like if you get a certain gpa, you get X amount. If you get promoted in a year, you get X amount. So some families, they'll have a investment portfolio and they'll say let's meet as a family to talk about how we're investing and how we think about that. And as that grows, I'll match it. So there's lots of different ways. It's not, it's really something that's best organized from within as opposed to some model laid on top of the family. And I want to make that point, Anastasia, that many times families will come to us. They've worked with some of the best consulting companies out there and they've put in state of the art governance. The challenge and why they come to us is that they can't execute the governance because they don't know how to have the conversations in a way that are productive. So it's not like here's the solution, it's more like how do we, you say to the kids, guys, I'd love to incentivize you. What would be meaningful for you? We had another family. What meaningful for them was a trip to Hawaii. It wasn't money at all. Right. And it usually isn't money, to be honest.
Anastasia Koroleva: [01:00:40 - 01:01:07]
So a very wise man who has six adult children and they have amazing relationship in their family once gave me an advice which I have been using successfully for a few years now with my older kids. And the advice was that it's very important to know when you switch from a parent to a mentor. And I am very curious how you feel about that.
Amy Castoro: [01:01:08 - 01:02:31]
I love the question because a long time ago my mom and still today talks about Haim Jenot, a psychologist that she read about while she was raising us. The mantra was treat your kids as adults. And so for us it's useful when you can name that you're wearing. As your mother, I'm going to say this as, as a advisor, I'm going to say this as a friend, I'll say this. And so naming the hat that you're wearing is a really powerful way to align the relationship or create a context there. So in families where they, the children work in the family business, important especially for the parents to be able to say, hey, as the business owner, this is the way this needs to be. As your mother, I'm concerned that you're not showing up on time. What. What worries me about that is the identity that you're creating. But that's. That's speaking as your mother, as the head of the business. Hey, you're late to another meeting. We're going to have to dock your pay. So it's a different conversation depending on what hat you're wearing. But naming the hat is important.
Anastasia Koroleva: [01:02:31 - 01:02:35]
I like that. That's really cool. I'll use that.
Amy Castoro: [01:02:35 - 01:02:36]
Okay, good.
Anastasia Koroleva: [01:02:38 - 01:02:50]
So you've mentioned mission statement as something that you consider very important. How should families think about mission statements, and why is it important?
Amy Castoro: [01:02:51 - 01:05:45]
Well, the way to think about them is that they should be based on the family values. So a mission statement is not unlike a mission statement for a family business. This just happens to be for a family. So it creates the North Star for how the family is going to make decisions. It's built on everyone's values. For us, that process is actually two days. We spend the first day on five core areas. Psychology, intellectual, financial, social, and I can't think of what the other one is. There's these five core values, and we invite everyone, spouses, the most of our families. The kids are over the age of 16, minimally. But each person has an opportunity to answer some really great questions in these five domains, to learn how they see the world, to express what matters to them in those domains. And when the whole family hears it, they start to build a strong foundation of where the common areas are. Honestly, 99% of them are common. They're just expressed differently. So then they build this mission statement based on those values. And then that key piece is, okay, great, we've got this beautiful mission statement. And here it is on a beautiful color image. What are we going to do? How are we going to live it? So as I said earlier, a lot of families will put family unity in their mission statement. Then it becomes a question of, what does that mean? How are we going to live family unity? I've heard everything from, hey, no more criticism in the family. Criticism is unacceptable. And it's not going to happen to. We're going to take a wild vacation every year, and each of us are going to have a chance to name where we're going to go, paid for by the family. So then it becomes great. Does that mean nannies are included? Who pays for the nanny? Does that mean, is that money coming out of the trust fund or is it funded independently? What happens if you can't stay the whole time? Is it obligatory? What happens when we're there? Do we have to show up for Every family dinner, or is this something? So how do we actually live what we're trying to create? And if you listen, all of those questions require a certain amount of skill to coordinate action as a family. How do we speak truth to power? How do we have my voice heard? How do I carve my own path inside this family?
Anastasia Koroleva: [01:05:47 - 01:05:48]
Brilliant.
Amy Castoro: [01:05:48 - 01:06:48]
We have a program that we're launching now. It's called the next gen leaders program. And it's pretty exciting because in this instance, we're working with just the next gen across multiple families. So they're able to have these conversations about who am I? Who am I becoming? Is my voice heard? How am I carving my own path? How am I leading the company differently from my father? How am I creating a name for myself? How do I invite others into that vision? Those skills that we teach with families are super important. But when we bring the kids the next gen together and they have an opportunity to learn from each other without the influence of mom and dad in the room, it's an extremely powerful opportunity for them to gain those skills and to build their own network with other wealthy next gen family members.
Anastasia Koroleva: [01:06:48 - 01:06:51]
I think it's a great idea. So it's a group exercise.
Amy Castoro: [01:06:52 - 01:06:52]
Yes.
Anastasia Koroleva: [01:06:53 - 01:06:55]
Yeah. Brilliant. I love it.
Amy Castoro: [01:06:55 - 01:07:26]
When we do it with families, we include the spouses and the kids over the age of 16. It's very powerful practice for them. It really, it sheds a light on the values that have created the wealth. What's different is before this process, those values were operating in the background. But once we identify them now, we can name them, we can observe them, we can manage them, we can have conversations about them, and that is really what makes the difference.
Anastasia Koroleva: [01:07:27 - 01:07:35]
Amy, what are some of the most common and the most dangerous mistakes that people do?
Amy Castoro: [01:07:35 - 01:10:32]
Great question. You know, I think the most dangerous mistake is not talking about the fact that you're wealthy. That cat and mouse game of hiding, it only builds distrust over time. I think the second mistake is people talking about how much money they have before there's a strange, strong relationship that's built because once that cat's out of the bag, it's very hard to put it back in. Honestly, I. I personally don't think that they need a number. I think they need a neighborhood. You know, maybe to say, yeah, we have generational wealth here and it's a big opportunity. And then I would say to them, hey, what does prepared look like to you for you to have a sense of how to contribute to something like this? What do you think is important? So that leads me to the third mistake is not asking the next gen questions, right? So they come to you and they say, hey, how much money am I going to get and when am I going to get it? That's the moment to say, hey, that's the wrong question. How do you flip the question and say, how do you see? You could be a contribution here. I would say another mistake is focusing on being right, not being in relationship. So if you look at the construct of conversation, when mom and dad come across as certain, that will usually drive the next gen into pretense. Like, it's not worth the conversation here. Like the kid who didn't show up for the family meeting, they just sort of give up and they quit and they just. The relationship gets further and further and there's less and less opportunity for a meaningful conversation. The only way to shift that is to go into a conversational space where you're asking questions. You're curious, not critical, right? You're asking about perspectives. Why does that matter to you? Tell me what's important? What am I not hearing that you want me to hear? And when mom and dad can shift from certainty to getting into this place of exploration and curiosity, then we have a whole different conversation happening. Then people feel like they matter and they feel like what they care about matters. That is a whole different conversation that leads to a level of connection in families that's heartfelt.
Anastasia Koroleva: [01:10:33 - 01:10:38]
Do you feel it's important to have regular scheduled meetings for the family?
Amy Castoro: [01:10:39 - 01:11:17]
I do. I think that they should be annual for sure. The mistake families make is that those meetings are one direction, top down, and they focus on assets. They don't focus on the people or what people really care about. To build a good family meeting agenda, I would interview each family member and say, hey, if you were going to lead this meeting, what would you want to make sure is on the agenda? So the mistake is the conversations in these family meetings are one directional and they're too focused on assets.
Anastasia Koroleva: [01:11:17 - 01:11:31]
Amy, thank you so much. This has been so amazing. Really, really valuable. Is there anything else you feel you would love to share with my audience that maybe we haven't touched upon?
Amy Castoro: [01:11:32 - 01:12:41]
You know, if you were to ask me what's the common theme that allows families to shift from being uncertain about the impact of wealth on the family to having more confidence or trust that it's going to go well, it's that they've learned the skills to have conversations so that they can trust themselves in the conversation. In other words, these skills become embedded and part of a new fabric so that when they're in that place where they feel obligated to do something or take some action or pay for the Uber or to say yes. When they want to say no, they have a toolkit available to them that lets them say no. Actually, I'm not going to go to the board meeting. I'm going to go to the game. So they've learned how to trust themselves, to manage the relationships from a place of care. Yeah. Who they are becoming, who they are being for their family members is a bigger conversation than what they're doing.
Anastasia Koroleva: [01:12:41 - 01:12:55]
Amy, are there any books or people to follow besides you? Obviously. And I will include links to all your work that you would recommend to people in our situation.
Amy Castoro: [01:12:55 - 01:14:12]
You know, there are so many great books out there and there's new ones being written every day. I really, I do think that obviously our book Bridging Generations is one of the best because it gives actual family examples and it talks about ways families can start to manage these conversations. They can get them started on their own. There's one, there's a number. J. Hughes has done some great work. One of the bibles for him is Family Wealth, Keeping it all in the Family. I think that book is one of the best out there. He also wrote another book called the Complete Family Wealth. Wealth is well Being. I think that one is good. Long time ago, a guy named Charles Collier wrote a book called wealth and Families. And I know that's one of the early books right out there with Preparing Heirs from Roy Williams. So I would take a look at some of those, but there's enough out there you can find. They were all good.
Anastasia Koroleva: [01:14:14 - 01:14:19]
Yeah, that's the problem. They're not all good. They're not all good. That's never the case. Right.
Amy Castoro: [01:14:20 - 01:14:23]
I suppose there are many better than others.
Anastasia Koroleva: [01:14:24 - 01:14:31]
We're not going to read dozens. But it's very helpful hearing from you which ones actually are worth reading.
Amy Castoro: [01:14:31 - 01:15:17]
This is very helpful. My favorite part about doing these podcasts is our work. What we love about this work is that we have the opportunity to keep great families together so that their wealth can be a force for good in the world. And the fact that families are increasingly reading about this, how now that I've done this great work of preparing assets for the family, how do I get educated on preparing the family for the assets? To be proactive in that conversation is vital. And it's just I'm so grateful for the opportunity to be able to speak on that level. Just to if. If one of your listeners gets proactive about how to prepare their kids. I know we've done good work here.
Anastasia Koroleva: [01:15:18 - 01:15:24]
No, absolutely. Amy, thank you so much again for your time and sharing your wisdom, so generously.
Amy Castoro: [01:15:24 - 01:15:27]
You're very welcome. Thank you. Thank you for the opportunity.
