The Cart and the Horse

Welcome to the latest edition of the Meaning of Money live podcast. I'm excited to have with us here today Russ Lazaruck. Welcome. Thank you, Stefan, and thanks for having me on. You bet. So we are connecting two great cities — Austin, Texas here, and Russ calling from Victoria and the West Coast of Canada. Russ, give us a quick update on what you've been up to these days. What's your work? What kind of interesting problems are you working on, and where are you investing the majority of your time today? Quick background: I am a portfolio manager for a family office here in Victoria, and, like all of these, a number of projects. We've got some core mandates that we're now running for other family offices, and we're refining those, building them out, and getting them out to other family offices — just building the business. Our roots are as a single family office, and we're growing out to be a multi-family office. So it's exciting. It's a lot of work, but progress is going. Yeah. And, as I recall from talking to you before, you had success in building and running a business before, but chose to stay on at the multi-family office to continue building it. You don't have to, but you want to. Tell me a little more about what it is that keeps you engaged, that keeps you there, that makes you want to be part of that. Multifaceted, really. I enjoy the business, but probably more importantly, I enjoy my clients. I've had some clients for over 30 years, because my background before the family office was retail wealth management. And I still take care of those clients — as I say, some of them have been with me for 30 years. But it's the intellectual challenge of the business. I've been doing it a long time, so parts are routine and rote, but there are always new challenges. Markets are dynamic, we know that. But it's that marriage between people, emotions, psychology, and finance — trying to marry them and make it work. That's fun. I enjoy it. I love that. It's such a blessing when you get to wake up and do something you love, because I'm reminded — even some good friends who might be making a lot of money have jobs they clearly don't love. My dad was a musician. He always told me, whatever you do, pick something that you love, because it makes life a whole lot more fun and more enjoyable.

Money Brings Security, Choices, and Responsibility

So you work with people of wealth every day. In the beginning of people's journey, money — for what money buys — is wonderfully useful. Not having any is no fun. But once you do make a fair amount of money, it doesn't necessarily mean that life is suddenly easy and perfect. No, because money brings you a couple of things. It brings you security, it brings you choices — sometimes too many choices — but it brings you responsibility as well: both for being a steward of that money, and also the responsibilities of managing it with those around you. It's interesting you mention too many choices. That really resonates, because one of the things I see happen is: people come into money, they finally get that exit, and at first there's a sense of excitement — oh, I can do this with this money, I can buy this, I can invest in this. And sometimes, for people who didn't have structure, or didn't have a family office or a wealth management firm working with them, they wake up and they have this just drawer of stuff. And while in the beginning it was really exciting — let's say they invested in 15 different private investments or something — invariably, out of those 15, not all of them are going to succeed. And yet the people they invested in have an obligation to update them. So now you have people calling, wanting to update you and give you these sad sob stories about why it's not working, and asking for more money. Yeah — we're doing a second raise. And suddenly, what was fun now feels like a job. Oh, yeah. And I think the trap there is people look at it through the investment lens first. But the investment, no matter what it is, is just a commodity. It's just a tool to get you where you want to be. And they're really putting the cart before the horse. In my practice, from day one — and I've been in this business for well over 30 years — you start with the plan. You start with the plan, you identify what your values are, what your goals are, and you do it in conjunction with your family. And then you structure it from there. Otherwise, you will be all over the map, going for the latest great idea without thinking through: why am I actually doing this? And there could be a good reason — depending on what it is, there could be a very good reason for investing in that, other than the fact that the promoter says it's going to go to the moon. Once you have that structure in place, the rest will start to fall in place.

Start With the Plan

I think the word that jumped out at me, Russ, is 'plan.' Look — if it's just you, then fine. Think of going on vacation: you can just pull up Google, decide where you want to go, get a flight, pack up, drive to the airport, and go. Fine. But when you're married, or you've got kids, or your kids have kids, and you've got two or three generations, and you've got parents, and you've got lateral family — brothers, sisters — you can't do that. Even something like a vacation, you've got to plan ahead. It's kind of common sense, but it's amazing how often you run into people where it's like, how'd you do this? I don't know, it just happened. And sometimes that's great, because, as I often say to my wife when we're away on holidays and we get lost — well, you know what, the best adventures always happen when you're lost. But you learn a lot more, you get some stories. You do. But that's not a way to plan your life or your finances. No, that's right.

What Wealth Solves Fast — and What It Never Solves

One of the benefits you have, working with a number of different people of wealth, is you get to see what works and what doesn't. So one of the questions I was excited to get your take on is: what do you see wealth solve faster than expected, and what do you see wealth completely fail to solve? In particular, thinking of the people who finally get that exit, finally come into a bunch of liquidity, finally have a bunch of money in the bank — what gets solved quickly, and what completely fails to get impacted or solved at all by having a bunch of money? The one thing it should solve, and can solve right away, is it gives you time and choices. The thing that it can fail to solve, at the same time, is time — because all of a sudden, managing that wealth takes time. But once you've had the exit and you've stepped back from the business or the venture, whatever it's been, you have that block of time freed up. And it doesn't matter whether you're middle-class retiring, or you've built a business and exited — figuring out what you want to do at the next stage of your life is so important. That, I think, is where people fail: what do I want the next stage of my life to look like? And for all of us, it's got to involve some form of purpose. What that purpose is, is up to you — that really speaks to your own values, your own life, your own situation. But it has to have some sort of purpose. And figuring that out before the big event is critical. It may change once you've either retired or had that exit — you may say, okay, I thought this is what I wanted to do, but guess what, it wasn't, and it may need some rethinking. But until you have that nailed, you will spend a lot of time spinning your wheels, and it won't necessarily give you the freedom, the choices, and the time that you thought it would.

When Letting Go Becomes the Impediment

I'll even add to that and say I think not having one can become an impediment to your having that exit — and not just financial freedom, but what I'll call emotional freedom to architect your life. For example, there's a firm that we're exploring — going to be meeting with the owners this summer to have some strategic conversations about potentially seeing if there's the opportunity to buy them. The two largest owners right now — one of whom is in his 80s — he's struggling with this idea of really retiring. He's 82, and his son, who's in his 50s, is like, hey, love you Dad, love the business, but I don't want to work until I'm 82. Yeah. And that can be... I've worked with a number of founders where it is so hard to let go, and scary, because you're the man in this business, and you built up something really great. Just trying to imagine a world that's different, where that no longer dominates your picture — and what is your role in that new picture? And how does that new role give you meaning and give you an ability to contribute? It's terrifying, and paralyzing sometimes, for people of all different industries. So, to your point, not only do you benefit by having that in advance of any liquidity event, but sometimes it can very much be the impediment to the liquidity event. I would agree totally. This probably applies more to males than female founders and business owners, but so often our entire identity is tied up with either our profession or the business that we built — that becomes us. A number of years ago, I bought a practice from a portfolio manager, and he was well into his 70s, and sadly on his deathbed, when he finally gave it up, because that was his identity. Who are you? I am a portfolio manager, I have my own company. He was a sweet guy, did a great job, but couldn't see himself past that. Having said that, he enjoyed what he did, he enjoyed his clients, so he was happy doing it — but he did not have that next stage of his life figured out. Yeah. And that, by the way, is not just for guys who are in their 70s or 80s. That's just as relevant for the CEO of a company that's getting acquired who's 42. Yeah. Absolutely. And it's probably harder for the one that's 42, because they've still got the energy. They don't know. They all struggle with it. Maybe you're right — maybe the reasons they're struggling are different, but I wouldn't say it's any less. This is a hard transition. Yeah. And I think where a lot of people go wrong, to your point, is they don't invest the time. Sometimes they don't give themselves permission to even think about it, because they're in the weeds of trying to put out this fire, make this happen.

The Responsibilities Wealth Brings

What responsibility comes with wealth that nobody is really prepared for? 'Nobody' is a strong word. I think most people realize that they still have those responsibilities to family, to provide whatever ongoing support the business that they've sold requires. Often, in our private equity practice, the founders that we've purchased from will retain an equity stake and stay on the board, or on an advisory board, and help — which is good for them, it keeps them engaged, and it's good for us, because it gives us that corporate knowledge. The other is a responsibility to society. That's very much a values-based thing, and you can't speak to where any one person would find that. Some people think, I've done well, I've got a responsibility to give back to my community — and we see that a lot. The other is a responsibility to yourself. Tell me more about that. When you think of a person that's built a business, their focus has generally been on that business, their employees. Most don't spend a lot of time thinking about themselves, other than: I've got to get to work, I've got to be in charge, I've got to run this show. And other things get neglected — often health, family relationships. We've all seen it. I would say most founders and CEOs suck at self-care. Yeah. And that's terrible, because if you don't take care of yourself, everything else is going to fall apart. No, there's no question.

Time as the Scarcest Asset

One of the really interesting things you shared — I'm a little bit obsessed with time as an asset class. I just think it's such an important element of life, and I feel it ought to be far more explicitly thought about in the context of how we design our lives, our strategy, our companies, everything. But one very interesting element that you mentioned, which I've never articulated that way — that was kind of cool — is that wealth both helps you free up time, but it often sucks people's time back out, ironically, because now they have all these choices, and if they don't manage it well, they suddenly have no time. I've never stopped to look at it from that perspective, but it's fascinating. It is such a double-edged sword. If you don't have that plan we talked about in place, you're going to lose one of the biggest benefits that wealth gives you, which is that freedom of time. And time is ultimately a finite resource. A hundred percent. Can't buy any more of it. It's even more finite than my hair. Our hair. Our hair. Yeah. It is very scarce. And the older I get, the more I realize just how scarce it is. When you're younger and you have young kids, people always tell you, spend every minute with them, time flies fast — and you're like, yeah, yeah, I've heard that, I know that. But through a variety of twists and turns of my life story, I now have three older kids who are out on their own now, in college, and I have a young one at home still who turns six in a few days. And one of the blessings — well, actually, he and I both got the same haircut, so we're twinning right now — but what I'm realizing with him this time around is... I was very involved and engaged as a dad the first time around, but this time around I have even more of a sense of just how fast they grow up. Even at this age, my son will still usually let me hold his hand when we're walking around town, and that's just a very sweet, tender thing that I really treasure. I don't do that with my 19-year-old son — that would be weird — but I miss it. I remember when he used to let me hold his hand. And I remember one day, in junior high — I'll never forget it — we pull up to the mall. This is pre-Amazon; now everybody's on Amazon, but we pull up to the mall, and I'm holding his hand, we're walking toward the mall, and all of a sudden he pulls his hand away from me. I'm like, whoa, what happened? He goes, Dad, we're in public. Oh, no. Did that just happen? We just crossed that Rubicon. And it was just... my heart. One of the saddest days. So this time, I know that day is coming, and I am that much more present to how valuable each moment of the day that we're given is. Yeah. And you can't get those moments back, so enjoy every millisecond of them. It's really interesting — I was fortunate, when my kids were younger, before I came into this business, we owned a farm on Salt Spring Island, so I was present a lot. And then I helped support the farm, went to work in the forest industry, and I was away in logging camps for a while, and it really changed the dynamic. But when I talk to my kids now, the memories are of the farm on Salt Spring — being present, doing stuff together, chores, all the rest. It was a great grounding for all of them. And now it's really interesting to see them go through raising their own families, because they're all grown, with families and mortgages and all the rest that goes along with being an adult, and to watch their parenting styles — how it's influenced by the stuff they've had.

Capturing the Stories Before They're Gone

A little bit off topic, but inspired by our conversation — something I'll share with everybody watching is: time being short can apply in either direction. I was talking about my son and how quickly your kids grow up, but a lot of us have parents who are pretty old. They're not going to be around forever. So I think it's really important, if you have parents of any age — but especially as they age — to not take that for granted. If there are things that need to be said that haven't been said, make sure you say them, to get complete on anything you might need to get complete on. That's more spiritually, but also in terms of the story. What I mean by that is: almost by definition, nobody's got a scheduled date to go. It happens unexpectedly, and sometimes with that go family stories and institutional knowledge, if you will, about people's backgrounds, their early days, their stories, their perspectives — that, once they're gone, you can't ask them again. Some people's biggest regret is, man, I wish I could have just asked about this, or asked more about that. So I would strongly encourage anybody watching: you don't need fancy equipment. Grab an iPhone, sit down with your mom or your dad, and find something that would be fun for both of you to talk more about, and capture that. My dad was a wind-band conductor for years and years, and I did this four or five years ago — I sat down and did a couple-day interview session with him, asking about leadership and his role as a conductor in the band, and different challenges and things that he experienced, and how he learned, and problems he faced. It was a fascinating conversation, and a meaningful one, and one that I'm really glad I have, to be able to share with my children, and maybe their children — to kind of get to know their grandfather, great-grandfather, his stories. I think it's the kind of thing that, by the time you really want it and appreciate it, it's too late. So you really have to keep that time element present. Force yourself to do that now. There's never a good time, by the way. You've got kids and work and life — nobody I know is not stretched today. So you just have to make it a priority. It's one of those investments of your time that you'd probably look back on and be really grateful that you did. Yeah. Speaking from our own family's experience — my mother passed away quite young; she was 59. We were definitely closer to her side of the family than my dad's. There were those things that... now, what about trying to make the family connections and have that sense of place? Of course, my kids knew her, but my youngest was two or three years old when she passed away, so there are no real memories. My wife's father died when he was 57, and he had had a brilliant career — he was a decorated naval war hero, Battle of the Atlantic, all that kind of stuff, a member of parliament here in Canada — but none of his grandkids ever knew him. So to have had that opportunity to get the stories done, the recording, the oral history, to be able to pass down to the next generation and say, here's where the family comes from — super important to do. It's easy to forget to do that. But whether you're taking a video of your two-year-old or your 82-year-old parent, it's something that people will treasure more than they might ever realize. Yeah.

Enough Is a Different Answer for Everybody

One last question. We live in a world of comparison, right? People are always comparing each other — on social media especially — but comparison, who has more, has been part of the fabric of human society for thousands of years, in one dimension or another. How do you encourage people today who are younger and going through their wealth-building stages to think about what is enough, and how do you hold that line? That's a really good question, because 'enough' is a different answer for everybody. It goes back to understanding yourself and understanding what you actually want to get out of life. For some people, enough is: I want to buy a chunk of dirt someplace, have my family come down, my family around me — that's good. For other people, it is: I want to be able to give back to community, or do extra traveling, things like that. But it really comes back to understanding yourself. And it also needs to be done in conjunction with the rest of the family, too, because you have to make sure that you and your spouse or partner are on the same page. Otherwise, it isn't going to work. We've all seen people approach the big event — whether it's retirement, or selling the business, the exit — and one partner says, yeah, this is what I think the next stage is going to look like, and the other partner looks at it and says, you've got to be kidding, really? But you have to have those conversations. Marriage is a series of compromises, isn't it? We're all individuals, but you've got to have that conversation. Yeah. Speaking of conversations — this has been a great conversation. I really appreciate your perspective and sharing, and I think it's even more valuable because you've had the opportunity to make your own views, both as a dad and in your own life, but also working with a lot of other people who grapple with some of the same issues, life questions. If somebody wants to reach out and get to know you better, and learn more about what you're doing in your family office, what's the best way to connect with you, Russ? They can reach out through LinkedIn — you'll find me under my name; I'm probably the only one up there with that name — or they can send me a direct email to R. Lazaruck at ncpim.com. November-Charlie-November-Charlie-India-Papa-Mike dot com. Well done, Russ. Great having you on Meaning of Money, and I look forward to staying in touch. Okay. Thanks, Stefan. Really appreciate the opportunity to talk. Thanks. You're welcome.