Trust Over Tactics: Reimagining Wealth with Tad Fallows Episode - 572

Among people who generate this wealth themselves, there's generally a lot more risk tolerance versus the people who inherited that wealth, where the person again who made, let's call it $25 million by the time they were 40, they certainly are not looking to lose that money, but they will look at it and just say, well, the risk return here, I could put this all in bonds and it'll sit there for the next 40 years and maybe over 40 years it will double. You know, I'll get sort of 2% real return.

Many high performers are financially successful, yet quietly uneasy. Is it the markets, the advisors, or something deeper? Discover why traditional wealth strategies often amplify pressure and how long-term thinking and peer learning can restore clarity and calm. Welcome to Streams to Impact, brought to you by State Talker Capital. I'm your host, Dr. Allen. If you're a high-achieving, high-income professional who loves your work but wants your money working just as hard for through intentional passive investments, this conversation is for you. There comes a point when wealth is no longer about earning more. It becomes about alignment, clarity, and freedom. And that's why we created Beyond the Paycheck: The Financial Clarity Compass, a private educational mini masterclass for professionals ready to move from pressure to purpose. You can access it here. It's our free gift to you at www.go.stetucker.com/beyond-paycheck. So now let's explore what happens when trust, not pressure, becomes the foundation of wealth. Before we get into today's conversation, just a brief disclaimer. All information shared on Streams to Impact is for educational purposes only. It is not to be construed This program is not intended to be construed as investment, financial, legal, or tax advice. All investments incur risk. You should not invest if you are not prepared to lose 100% of your investment. Always consult your legal, accounting, and tax advisors before making any investment decision. Well, what happens when financial success no longer feels like freedom? Our guest today works with high-performing professionals who have built impressive careers and earned substantial incomes and accumulated meaningful assets. assets, yet still feel pressure around money and decision-making. Tad Follows is the managing director at Long Angel, where he helps accomplished professionals build trust-based wealth through peer learning, long-term thinking, and intentional decision-making that go beyond traditional financial advice. Rather than optimizing for more, Tad focuses on alignment, How incentives shape advice, how community shares judgments, and how trust can reduce anxiety and restore clarity. So, Tad, welcome. We're glad you are with us today. So, as we go into the show, you have worked with many high performers and financially successful individuals who still feel pressure. And from your experience, what's really driving that tension beneath the surface and how much of it is psychological versus versus structural in this financial system that we live and work in?

Yeah, well, thank you for having me here today, Alan. It's a great question. So background on how I got into this is I bootstrapped a software company shortly out of college. I ran that for about 10 years, got to about 100 employees, then sold it to a strategic acquirer. And so in the process of that, had a Significant change in my personal net worth on a single day and had a bunch of new questions around estate taxes, raising kids with wealth, private market investments, umbrella insurance, you name it. And I felt like all the advice from that was coming from somebody with a product to sell, like a Credit Suisse or a Goldman Sachs. And I wanted to set up a group of friends of mine who were in the same situation, who are not trying to sell each other anything, just kind of peer-to-peer advice. So that's why we started Long Angle about 5 years ago. And then that need turned out to be a lot more broadly felt than I'd expected. So over the last 5 years, we've grown to about 7,500 members just as current members refer their friends. And we interview every member and kind of validate that they're in the same net worth demographic, but we don't charge any membership fees, just sort of peer-to-peer learning. So that's kind of the context and where I'm coming from here. So I'm not a financial advisor or insurance salesman or something like that providing services. I'm just organizing this community of people in a similar situation. And I would say, you know, in terms of pressure, that could come in a lot of dimensions. I think there are a set of people who maybe they've got a $25 million net worth, but they are still literally worried about money. And I think that can come partly of just sort of a habit of the way you became very wealthy is you were risk-averse and you thought about money and you were optimizing for things. And so, you know, you can spin a story on even $100 million about how you might run out of money. like, well, what if the market corrects 50%? And what if I get sued by this guy? And what if it turns out, you know, I'm in the hospital, need long-term care, et cetera. And you can always make that story. And so I think there is a set of it, of people who are actually just still thinking like, hey, you know, can I afford to do X, Y, or Z? And excuse me. And then I think the other part is maybe pressure on non-financial aspects of one thing I've learned from talking with I've interviewed literally 1,000 members who have joined the community, and the problems you had when you had $100,000 do not suddenly go away when you have $10 million. There's a short set that go away, like, hey, I hate cutting my lawn. Okay, you can get a yard guy and that problem is fully solved. But if you were overweight and unhealthy, you are still overweight and unhealthy with a big bank account. You know, if you have a bad relationship with your spouse or kids, you still have that bad relationship. Adding money does not— probably makes that relationship worse. So I think there are questions or pressures that in that world, I would say they're largely driven around, okay, I now feel a lot of pressure to— everyone, their most important thing is raising their kids well. But then if you add money to that, it kind of creates this set of pressure of, okay, I now could do any— I could get them any coach they want. I could send them to any school that they want to go to. And so how do I make sure that this wealth then becomes a resource to them and not a liability? How do I not infantilize them or take away their ability to succeed on their own terms? If again, let's say I was so fortunate to make $100 million, it's very unlikely they're going to make that kind of money, but you don't want to compromise their ability to succeed on their terms. And then I think finally there's this, you could describe it as pressure, pressure to do something meaningful. Most of our members have been successful earlier in their careers. So let's say you're 40 and you have enough money. that you don't need to work again. A lot of people aren't going to feel that comfortable just playing golf for the next 40 or 50 years. They're going to want to do something. But once you sort of take away that excuse of, well, I'm just working for the money because I need the money, and now you actually have to think it through and say, well, why, why am I working? Why am— what am I trying to do here? Am I trying to help my kids? Am I trying to help my society? Am I trying to, you know, discover a cure to cancer or whatever it is? But you sort of have to think about that pressure to make use of your time and resources now that money is not an obvious answer.

Well, you certainly emphasize peer learning over top-down advisors. So how does actually being in a room with equally accomplished individuals who are long-term thinkers, how does it change the quality of the financial and life decisions compared to relying on paid advisors?

I think a lot of it is confidence that, okay, Allen, you're telling me I should get a life insurance policy. If I'm hearing that from a life insurance salesman, I think, well, he's getting a huge 6-figure commission on this million-dollar, or if it's a very high premium policy, he could be getting a huge commission on this. So I don't really believe it. Whereas if you say, hey, I looked at it carefully myself and I said, well, whole life is a bad deal, but private placement life insurance can be a good deal because you get much more impact and there's much lower fees, et cetera. Maybe I would've gotten that exact same advice from an insurance salesman, but because I'm getting it from a peer who doesn't have a financial motive, I can just have more confidence in it. And I think that's one of the challenges when people are in this situation of, you know, insurance brokers are probably the extreme example, but even if you think about a wealth manager, if you ask them, hey, can I afford to upgrade my house here? Can I afford this vacation house? If you're wondering in the back of the mind, if he says no, well, is that because I really just took $2 million away from his AUM? And he was making $20,000 a year on that. If I put into a house, he's no longer making a commission on that. And so it's just not that useful to have an advisor where then you're having to do the second-guessing research about, well, do we have misaligned incentives and why am I getting that answer here? Or if he says, the guy from Goldman says, we'll put into this ETF rather than the Vanguard zero-fee ETF, is that because the Goldman product is actually better? Is that because, you know, he gets some sort of motivation there? So I think a lot of it is just that reducing the mental burden of having to think about the motivations of the person you're talking to.

Well, when someone begins using wealth as a tool for presence and freedom and clarity instead of status or accumulation, what practical shifts do you see in how they really allocate their capital and their time?

Yeah. One thing that's interesting is if you think of the traditional rich guy stuff. There, across these 7,500 people, there's very little interest in Ferraris, in Rolexes, in, you know, membership at Pebble Beach, etc. Um, you know, a lot of people still driving their same Honda or, you know, not necessarily designer clothes. So, you know, one thing that's interesting is I don't think it's even so much a shift, but what you would traditionally think about, you know, priorities of like the status spending There just doesn't seem to be a lot of motivation around status-based spending. I'm sorry, can you repeat the rest of that question? I think I missed the second half of it.

Well, so once they're using wealth for presence and freedom, what are the shifts that actually occur?

In terms of their asset allocation and investment?

And their time and what have you. So yeah, it makes sense to me that They have no need for status. They've already proven to themselves that they can make money and they don't have to prove that to anybody. So yeah, what are other things that go along with that?

Yeah. First, I would say there's no single answer. You're going to have a lot of different personalities, but I have, through the process of doing this, gotten to know a lot of people who are more in the traditional wealth management industry or who know people who— ours are almost all first-generation wealth creators. And so I've now gotten to know a lot of people who more focus on serving second and third and even seventh generation wealth. And so I can have some generalities, even though these won't be universally applicable. I would say one is among people who generate this wealth themselves, there's generally a lot more risk tolerance versus the people who inherited that wealth, where the person again who made, let's call it $25 million by the time they were 40, they certainly are not looking to lose that money, but they will look at it and just say, well, the risk return here I could put this all in bonds and it'll sit there for the next 40 years, and maybe over 40 years it will double. You know, I'll get sort of 2% real return. Or they say, hey, I can put it in stocks. It's going to be a very bumpy ride, but over the next 40 years, it's probably going to go up tenfold in real terms. And the vast majority of people who are first-generation wealth creators will say, I want my money to be working hard, and I care more about optimizing the long-term expected return. then minimizing the volatility along the way. And I do think that is fairly different from the person who maybe inherited $25 million and is then saying, okay, well, I got this once. I don't know if I could recreate this. And, you know, I don't, I sort of owe it to the next generation not to lose this. And so people will generally have not irresponsible risk tolerance, but just saying, hey, you know, I think traditional wealth management says it's really all about a balance of expected return versus volatility. And I think they use volatility and risk as synonyms, and I don't agree with that. I think volatility and risk are 2 different things. And so people in this community say, well, if this is a good bet and it may just take 5 years to pan out, but I'm confident that it's going to make money in 5 years, pretty comfortable doing that. And you could logically look at it either way. You could say, I've got so much money, I don't need high returns, or I've got so much money I could afford to lose 80% of it and I'm fine. And those lead you to very different outcomes.

Well, for high-income professionals who are used to optimizing for more, what really changes when they begin optimizing for alignment instead of just more? How does that affect their risk tolerance?

Yeah, I would say a lot of people also don't have a fully thought-through, okay, here's exactly what I want to do. what my money is for. The same thing I was saying, they're trying to figure out, okay, what is my purpose? How do I want to be spending my time? A lot of them will say, okay, yeah, I want to earn high returns. And if you ask them, well, why do you want to earn high returns? They say, well, I'm not really sure, but they sort of know that they want to get high returns. And it's not that sort of Scrooge McDuck of, I want to sit on a huge pile of gold coins and go swimming in them. But I think a sense of, well, it would be silly to have my money just sitting there not not driving something. So yeah, what are they optimizing for? A lot of it would be say, okay, well, I want to find ways to buy back my time and yeah, spend my time on things that's meaningful, whether that's time with my family or time with, you know, organizations I care about. Um, and so I think there's a lot of interest in things that, for example, a house manager saying, I don't enjoy trying to figure out now my garage door is not working. Where can I find a good garage door guy? And it looks like the gardener's doing a bad job. Now I need to go, you know, have an unpleasant conversation with the gardener about doing a better job. So something like, okay, if I can find a house manager and I'm paying him $1,000 a month, let's say, and now I can give him my honey-do list and say, you know, these things are problems, please go fix them. That sort of thing, you know, virtual assistants. And I think a lot of people will think about, okay, there's some activities you do for your family that they're just meaningful. Like personally, I actually like driving my kids to their sporting events. I could hire a nanny full-time just to take them all to their events, but It's a good time to chat with them. I'm there at the event cheering for them, et cetera. So it's not that people want to outsource everything, but I think ideally are looking at the things that feel silly. Like, I don't get any joy out of fixing my pool equipment. I just want someone else to do it. So instead, I am focusing on, okay, you could say that coaching my kids' sports team or helping them with their homework is a low-value task I could outsource, but personally, I find that a high emotional value activity.

So if listeners today realize they've been outsourcing trust rather than intentionally building it, what's one concrete step that they can take, say this week, to create a more thoughtful long-term relationship with their wealth?

I would say one thing is you can't There are plenty of people, again, even in our group who use wealth managers, they might say, all right, it costs me 1% a year and 1% of my money could be $100,000 or $200,000. It's real money, but I'm still happy to do it because maybe I personally don't find it very rewarding, or maybe I know that I don't have the emotional risk tolerance during COVID I'm going to panic sell. And so I need somebody there keeping me away from the sell button, et cetera. So there's plenty of good reasons to use it. But I don't think you can go so far as to say, well, I'm just not understanding it, or I'm not thinking about it anymore. Like many things, you know, I would make an analogy to a home renovation. If you have no idea how home renovation works and you just blindly say, okay, contractor, whatever you think, you're going to end up way over budget. Well, maybe you'll have a great honest contractor and everything will be fine, but you have a high risk of being way over budget, things not being installed correctly, and then later something's leaking and you realize the flashing was wrong and you had no idea what to look for. And so even though I personally hate construction, I've learned the hard way that I have to actually understand what flashing is and what a waterproofing system is and what my options are for roof tiles, et cetera. And I would say it's the same around your wealth that you have to understand enough for— you don't need to know all the nuances of what is the difference between a roll-up private equity strategy and a distressed private equity strategy, et cetera. But I think you do need to know at least these basics of, okay, I understand what stocks are. I understand what bonds are. I understand what correlation means. I understand what a rate of return is. I understand who is charging fees and what they're getting. And if you don't, I personally find it very interesting. So I like going into these details and we have a lot of discussions in the community around, hey, is it a good time to get into upstream oil and gas because there's high return on equity at drilling, et cetera? You don't have to do that, but you need to understand the basic asset classes and the basics of taxes and how these things move. So at a minimum, you can be a well-educated client is a good client.

Yeah. So we've really had a really timely and important conversation here today. So we've unpacked why even financially successful high performers still feel pressure. And Tad has helped us to examine how incentives shape advice and why trust is eroding in traditional models and how peer learning and long-term thinking can restore clarity and calm. So we explored the shift from optimizing for more to optimizing for alignment and how using wealth as a tool for freedom and intentional living can change everything. So Tad, thank you for helping us rethink the trust equation behind wealth. And if you would like to learn more, you can go to find out more about Tad's work and you can go to his website at www.longandstrong.com. And if you're a high-achieving professional ready to move beyond simply earning income and start building intentional passive streams of income, I invite you to access our private masterclass Beyond the Paycheck: The Financial Clarity Compass. And you can find that at www.go.steedtucker.com/beyondthepaycheck. So, thank you for joining us on Streams to Impact. Until next time, build wealth with intention and let your money serve your mission.

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