Broker Check


Episode 85: Creating a Culture of Giving: The Spiritual Capital of a Family Bank

In this episode of the Family Business Show, host Michael Columbus welcomed James Hughes Jr., also known as Jay, a former attorney who transitioned into helping families flourish. Jay discussed his journey from practicing law to focusing on family well-being, highlighting his approach to assisting families in nurturing their social, intellectual, human, and spiritual capital alongside their financial resources.

Jay shared the concept of the "family bank," a notion he inherited from his father. This family bank isn't about financial transactions alone but serves as a medium to foster family unity, promote mutual support, and encourage philanthropy. He recounted a personal story where his father transformed their family's approach to wealth, emphasizing the significance of using their resources to support each other's aspirations and contribute to the community.

The discussion also touched upon the Rothschild and Rockefeller families, illustrating how they leveraged their wealth to create lasting family legacies through education, social capital, and philanthropy. These stories underscore the idea that wealth should serve a greater purpose, contributing to family cohesion and societal betterment.

The episode emphasized the importance of taking a deliberate and thoughtful approach to wealth management, encouraging families to focus on cultivating a culture of giving, learning, and supporting one another. By sharing these insights, Jay and Michael aimed to inspire listeners to consider how their family's resources could be used not just for financial growth but to enrich their family's and others' lives.

This conversation serves as a compelling reminder of the power of family bonds and the potential of thoughtful stewardship of family resources to create a positive impact across generations.

Watch the entire episode!

Episode 85 Transcript


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James Hughes: Okay.

 

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Michael Palumbos ChFC, CBEC: well welcome everybody to the family business show. I am your host, Michael Columbus, with family wealth and legacy in Rochester, New York, and we have a fabulous show with James Hughes, Jr. Today goes by J. For everybody that's known him for years. So, Jay, welcome to the show.

 

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James Hughes: Michael. Thank you. I am excited once again to be joining you in this journey to help families flourish

 

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Michael Palumbos ChFC, CBEC: today, you know. So Jay's been on the show a number of times. But for those of you that don't know him. Let me just say that, you know I I you can hear one of the other episodes to get his background. But for you know, it was an attorney still as an attorney. But stop practicing and started really helping families.

 

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Michael Palumbos ChFC, CBEC: because you know what he realized is, he couldn't deal with the whole family from a legal perspective, and that was frustrating. So, as he said, in your past episodes, the law left him. He didn't leave the law. I love that that was great, Jay. What i'd like to do is just to set more of a foundation

 

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Michael Palumbos ChFC, CBEC: about who you are and the the the how much experience you have from the time that you started leaving, you know the law left you, and you started, you know, working with families, how many families through the years.

 

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Michael Palumbos ChFC, CBEC: you know, have you worked with, and and and and and talk to and help them flourish, I mean in round about numbers. I don't.

 

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James Hughes: Well, i'll answer the question in

 

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James Hughes: what a wonderful question! Let me see if I can answer it this way

 

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James Hughes: in terms of a direct relationship with the family

 

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James Hughes: Over the 55 years I've been practicing, and particularly the last 30 that have been this family work.

 

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James Hughes: I would say, somewhere between 30 and 40,

 

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James Hughes: in all different capacities.

 

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James Hughes: However, I think it's also fair to say that with people like you

 

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James Hughes: and a number of other close associates

 

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James Hughes: who turned me

 

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James Hughes: with questions.

 

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James Hughes: I would say that I've influenced in the right sense of that word through people like you, Michael.

 

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James Hughes: Hundreds of other families.

 

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James Hughes: And then

 

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James Hughes: again, I hope this doesn't sound hebristic at all. It isn't it's just the answer to your question. It has been my practice in this last 30 years.

 

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James Hughes: when invited to, and not the last few years when I'm. More or less, somebody retired. But it was my practice to accept invitations to meetings of communities like the purpose of planning Institute.

 

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James Hughes: where I felt that I could learn something, and also again influence a much much larger number of people who would be reaching in turn.

 

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James Hughes: Let's say the 20 to 30 families that they were helping as their practices to go, so I had to give a long answer. I'm sorry i'm. I'm prone to long answers that they're it's a sort of segmented, and then

 

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James Hughes: the last thing I would say

 

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James Hughes: is a is sort of an indirect and influence. But I have written as the the sites I put subside. So quite a number of books

 

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James Hughes: helped other people write books written forwards to books. and i'm pretty sure that that's probably reached hundreds of thousands of people in a different in very different ways. So I hope that doesn't sound you brilliant. But I think

 

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James Hughes: there is that progression that is relevant

 

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James Hughes: to how I've tried to live my life, and in the sense of trying to provide ways for people to think in the different mediums that might reach a family and

 

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James Hughes: cause them to think of something, maybe a slightly different way.

 

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Michael Palumbos ChFC, CBEC: Yeah, and it's the impact that is.

 

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Michael Palumbos ChFC, CBEC: you've had through the years that I just find. So endearing because you do it in.

 

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Michael Palumbos ChFC, CBEC: You're so gracious with your time, and this this passion of

 

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Michael Palumbos ChFC, CBEC: helping families flourish is real. It's like your core purpose, and you're doing things, and

 

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Michael Palumbos ChFC, CBEC: we we thought, and i'll just share real quickly. We thought our core purpose was to inspire change.

 

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Michael Palumbos ChFC, CBEC: and and and then, over the last 6 months we realized, we that wasn't our core purpose. Our core purpose was to strengthen families, strength and businesses, and strength and legacies.

 

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Michael Palumbos ChFC, CBEC: And and so, when we, when when we do those things, we, the inspiring change is important because oftentimes

 

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Michael Palumbos ChFC, CBEC: people do have to change

 

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Michael Palumbos ChFC, CBEC: whether you know, if they were somebody that i'm not a lifelong learner. Well, in order to do these things. We need to be a lifelong learner. If i'm, you know an older, not an elder. I might need to make some switches on how i'm doing things. So I really I I got those 2 confused, and it was really helpful when we do this, and I love.

 

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Michael Palumbos ChFC, CBEC: That's why I think you and I, for can talk about these things for so long. That's at the core of the flourishing family and strengthening families. And, Michael I'd say one more thing, and then we'll get to our subject

 

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James Hughes: without making the audience so crazy. I've been working with some friends over the question.

 

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James Hughes: Does anything change, or does everything evolve?

 

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Michael Palumbos ChFC, CBEC: Hmm.

 

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James Hughes: And I think maybe it's a little gentler to think of evolution.

 

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James Hughes: So I think it's actually what happens. I think we have stages of life. We move through them in a kind of natural way.

 

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James Hughes: always hoping that we're accrediting

 

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James Hughes: more spiritual and intellectual capital

 

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James Hughes: to become more human. So I I love where you're changing. I think you're evolving.

 

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Michael Palumbos ChFC, CBEC: Yeah, I think that you're absolutely right in a good way. That was absolutely. Oh, no, this is the most natural

 

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James Hughes: thing. I but so I just

 

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James Hughes: throw that in for our audiences deleactation. It's a wonderful word. Love it

 

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Michael Palumbos ChFC, CBEC: all right. So today what we're gonna be talking about is the huge family bank.

 

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Michael Palumbos ChFC, CBEC: And this was a concept that

 

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Michael Palumbos ChFC, CBEC: you know you thought of many, many years ago. This is, you know it's been around, I mean like i'm looking at the copyright who I'm. I'm on your website right now the the James E. He was junior foundation website.

 

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James Hughes: Yes.

 

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Michael Palumbos ChFC, CBEC: and for anybody that wants to go find it. It's J. H

 

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Michael Palumbos ChFC, CBEC: jf.org.

 

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Michael Palumbos ChFC, CBEC: And so it's the the James E. Hughes Junior Foundation. This was copyright 1,999, so the idea probably was formed prior to that, You know you you probably were using it. So

 

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Michael Palumbos ChFC, CBEC: Let's talk about you know

 

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Michael Palumbos ChFC, CBEC: you have a what is. What is it? The idea behind the family bank?

 

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James Hughes: Well, Michael, I have to tell the story because it's a very important story to who I am.

 

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James Hughes: My father, whose name I have, and who practiced law in New York City for 50 years.

 

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James Hughes: also was deeply interested in the question of flourishing families more, a little bit more, perhaps, from their enterprises.

 

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James Hughes: Then I have been interested more in the family, but very, very similar.

 

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James Hughes: He had a funny way of being.

 

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James Hughes: because he was very cerebral man. Good, good father, good emotion, but really cerebral. very, very smart man.

 

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James Hughes: and so he would have a funny way. I was the oldest of 4 children. I should, so I am the oldest of 4 children. and so he would communicate to me in a Victorian way in which I was then to communicate to my brother and sister. So obviously we don't do that much anymore. But that was the way he operated.

 

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James Hughes: So one day, about 3 weeks after my younger sister graduated from college.

 

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James Hughes: But see, she was born in 1,950, so let's say the early 19 eighties 80, probably 1,982.

 

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James Hughes: He called me one day literally in a kind of Victorian way, and said i'd i'd like to talk to you. Which meant going into his study, and he had a little study something like this office, I guess, or yours.

 

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James Hughes: And when he would make that invitation I knew that I was going to leave with duties.

 

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James Hughes: but usually also with something useful to learn.

 

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James Hughes: So I went into his study and sat down, and he said: now, Jay, he said, I want you to understand. Your mother and I are now a bank.

 

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James Hughes: What

 

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James Hughes: I did what

 

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James Hughes: your bank, your your lawyer, what do you mean? You're a

 

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James Hughes: so it's very simple. Now, Michael, when my father said, it's very simple. That was at least an hour of great complexity, but I got used to it, and I was practicing law with him. I had a pretty good idea of how to think when he talked.

 

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James Hughes: So I said that what are you really trying to impart to me? He said. Well, he said, look your mother and I had a plan when we got married in 1,940 end of the depression.

 

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James Hughes: both depression and our kids. I mean, that's a long family story, too. and

 

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James Hughes: your mother and I made a plan. We've been planners, and we made a plan, and that is that we would try to

 

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James Hughes: earn sufficient funds. She worked as a mom at home, the typical family at that time. He went to New York every day on the train, including Saturdays in those days, and he.

 

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James Hughes: he said, with a plan, was that we would try to reflate our families, but both that had very difficult times in the depression. and we would try to send all of you through

 

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James Hughes: private schooling. He believed profoundly in progressive education.

 

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James Hughes: as did my mother was an early childhood educator. My Dad was actually the chairman of 3 different or 4 different schools, 2 colleges, I mean. It was very committed to progressive progressive liberal education.

 

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James Hughes: I said, Well, Yes, that's true. And he said, Well, do you understand that the plans completed again? I would like what you're talking about?

 

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James Hughes: He said. Well, your sister graduated from college right now. I'm beginning.

 

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James Hughes: You hear him a little more clearly.

 

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James Hughes: I said, oh, I see so. But Barbie graduated from colleges. Yeah, so it's simple. You know it's so. We're now a bank, I said. What what I mean is that your mother and I have completed our plan.

 

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James Hughes: We have some resources, and again. We were professional family, not a business family, but my father and mother were credible savers. They bought a savings bond, Michael every week

 

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James Hughes: for 50 years

 

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James Hughes: every week. Wow! So, he said essentially, we have a more resources then. Your mother and I think we will probably need for being old people, because we don't want to be dependent on you.

 

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James Hughes: And he said, I don't really believe much in inheritances. I don't think they're much use. I prefer the use the money in my lifetime.

 

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James Hughes: So he said, here's what i'd like you to do, he said. I'd like you and your younger brother and your 2 younger sisters to form the board of a bank. Not we're not creating a company. We're not going to create an Llc. No. Just of the bank.

 

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James Hughes: and from time to time we would like you to ask each other's thoughts

 

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James Hughes: about a grant or a loan from the bank.

 

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James Hughes: I thought, Well, this is very interesting.

 

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James Hughes: and he said, if you find there's something that one of the 4 branches would benefit from. then you would you bring that to your mother and I? And he said frankly, you're all pretty sound people.

 

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James Hughes: I can't imagine we would veto it, but we would like to know what you're doing.

 

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James Hughes: But he said almost always, I mean. And, by the way, it was absolutely true. He never. They never said no to anything in the right sense.

 

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James Hughes: So we've commenced this Family Bank

 

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James Hughes: and Michael. It's the most powerful idea I've ever encountered in our field, because my father was and mother were saying

 

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James Hughes: the funds, not the money, but the spirit of the family now was inclusive of the 6 of us, and our spouses, by the way.

 

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James Hughes: was no, never any distinction in our family between those that were a certain DNA and those who chose to join us. My mother and father always treated everybody who was, who was foolish enough, as they used to say, do you want to sit at our table? Well, maybe maybe maybe they'll make us better with their attitude, which was a frankly also

 

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James Hughes: a very advanced, I think, an appropriate attitude. So here we found ourselves, my brother and sisters and I, and the understanding was that

 

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James Hughes: if there was a need for a loner or grant.

 

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James Hughes: we would prepare a business proposal and bring it to a meeting of the siblings.

 

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James Hughes: The purpose of the meeting of the siblings was not so much to say. No, it was to benefit from what we might know about a similar issue.

 

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Hmm.

 

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James Hughes: So we could have conversation

 

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James Hughes: and grow the social capital of our family. Essentially that internal capital that was that is us.

 

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James Hughes: So my father and mother were really saying. we are making a spiritual gift of our resources

 

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James Hughes: for the next rising generation.

 

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James Hughes: which is an amazing spiritual act. It's really not a a a physical act. It's a spiritual act.

 

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James Hughes: and that has stood our family in great stead, and many, many other families

 

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James Hughes: that I have suggested that I to idea, too.

 

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James Hughes: it's natural.

 

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James Hughes: and there's something for my father and mother in it that my mother. who wasn't, I think, entirely certain

 

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James Hughes: about this idea.

 

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James Hughes: But if my father thought it was a good idea, she thought. Well, all right. Jim probably knows it's probably. Okay. I'll go along with i'm not sure. She was ever quite as keen.

 

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James Hughes: But for him they release. so to speak. of a responsibility that he didn't feel

 

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James Hughes: he was a patriarch in many ways, but he didn't feel responsible for those funds other than they're being invested properly and properly managed.

 

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James Hughes: and that there were enough for he and Mom, they got to be old, so we they were not a see themselves as a burden on us.

 

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James Hughes: But what he was really saying is, look you, take over it's appropriate. Now I've done my I've met. I've completed my plan.

 

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Michael Palumbos ChFC, CBEC: How profound, what I what a great great

 

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Michael Palumbos ChFC, CBEC: through when you are doing, you know. Is there any stories of things that you know you can share about what were some of the what were some of the

 

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Michael Palumbos ChFC, CBEC: loans, or we have but quest for it?

 

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James Hughes: Well, because we were deeply involved at

 

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James Hughes: ourselves, the 4 of us in education

 

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James Hughes: and committed to service, and I don't want to sound like we're holding you. We're just very simple people, so it's like very simple people.

 

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James Hughes: but my parents interest in education and the gift they gave us of a private education

 

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James Hughes: which is an incredible gift. No disrespect to public education at all, just but an incredible gift.

 

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James Hughes: So

 

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James Hughes: it's a question of service on boards of schools and things that our children might attend, many of whom our kids did go to public school and had a very good experience, or

 

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James Hughes: we were very interested in supporting

 

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James Hughes: one of us who would go on a board. In looking at projects at that school that that particular person felt

 

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James Hughes: the school could benefit from. No, we did. We couldn't endow these things, but we we could follow service with action.

 

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Yeah.

 

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James Hughes: I guess if I could put it in the philosophical terms for a moment.

 

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James Hughes: if if someone was willing to give his or her human and intellectual self in service.

 

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James Hughes: And they came and said, Look, would you help with this particular action at the school? Not its annual fund. That's your responsibility, but something special.

 

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James Hughes: Then we would very often say, that's a great idea, because you've invested yourself in that project.

 

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James Hughes: We are now coming along with you with some financial capital. and I think that's a that is

 

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James Hughes: often it wasn't just education or things like this. But what we were almost always do. Michael is say, Well.

 

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James Hughes: are you invested? Yeah, this is a nice idea. But are you invested in what we are? You invest? So we were using the principle of matching.

 

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James Hughes: but we were doing it, I think, in a much more substantive way. matching dollar for dollar. That's good. but matching human and intellectual investment

 

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James Hughes: in the cause with some financial capital is a very interesting and I think intriguing way of matching

 

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Michael Palumbos ChFC, CBEC: time, treasure, and talent.

 

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James Hughes: Yeah. And and we get to know what each other is doing. Yeah.

 

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Michael Palumbos ChFC, CBEC: that's really that's pretty awesome.

 

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Michael Palumbos ChFC, CBEC: So from that seed

 

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Michael Palumbos ChFC, CBEC: what germinated for you, what you know. So when you look when we talk about the huge family bank today, and you're introducing this to You know one of the families that has adopted it. What are some of the things that you know have grown from this idea. For you and for the families you serve.

 

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James Hughes: Well, let's look at it culturally and structurally.

 

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James Hughes: and we all know the great paper written by our colleague, Mark Matt Wesley. Culture eats structure for breakfast.

 

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James Hughes: So a lot of work in this field about family banks. Unfortunately, Michael. as it's filtered into the world, has been picked up by structuralists.

 

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Michael Palumbos ChFC, CBEC: Hmm.

 

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James Hughes: And they'll talk to the family where you need this structure of that structure. No, you don't.

 

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James Hughes: You need a culture of giving.

 

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James Hughes: and then find a structure that supports that culture that's fundamental.

 

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James Hughes: Okay. what is the culture we're talking about here

 

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James Hughes: an ancient philosopher named Aristotle. That is the founding ideas of a Western world.

 

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James Hughes: By the way, the Eastern world, the Buddha and the Hindu, have the same principle.

 

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James Hughes: What's the difference between a gift and a transfer

 

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James Hughes: Doesn't it isn't the same thing. No.

 

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James Hughes: Aristotle said, for something to be a gift? This is culture.

 

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James Hughes: It must be magnificent.

 

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James Hughes: he said. That was a virtue like courage and justice, or in the East equanimity and empathy. What did he mean? He meant magnanimity, hard to say.

 

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James Hughes: hard to do, big heartedness. Whoo

 

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James Hughes: real up.

 

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James Hughes: Yeah. So he said. First of all, if you're going to make

 

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James Hughes: something for another person.

 

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James Hughes: Ask yourself, Are you making a gift or a transfer?

 

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James Hughes: No transfers are okay. but almost always they carry with them some kinds of obligations. They're not big hard at this.

 

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James Hughes: They're not. I love you. I act

 

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James Hughes: Yes, I don't want to harm you, but I act

 

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James Hughes: so.

 

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James Hughes: I would say one of the things from our family again. This is not the Us. We have all the same problems everybody else has for Heaven's sakes.

 

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James Hughes: But when we act in the family bank

 

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James Hughes: toward the world

 

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James Hughes: we act. Are we making a gift

 

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James Hughes: now? From a structural standpoint? We did. My dad and I did decide to create a very small foundation.

 

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James Hughes: So we have up the James. The he was James E. And Elizabeth. The Hughes foundation is very small.

 

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James Hughes: but it enables the rising generations to get together and decide to give away. I don't know $5,000 is not, but the important is they're getting together is social.

 

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James Hughes: and then acting toward another, and the one thing we asked them to do is not make transfers.

 

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James Hughes: We asked them to make gifts.

 

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James Hughes: This isn't subtle. This is culture.

 

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James Hughes: Now people are saying, Well, what does he mean? Well, i'll say this

 

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James Hughes: Grants write a check to somebody. It's it's not a bad thing. Something happens. But are you involved?

 

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James Hughes: Is your heart involved?

 

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James Hughes: Oh. is there a magnanimity? What are you transferring?

 

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James Hughes: Oh, transferring No, Are you making a gift to see if they're they're they're very different

 

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James Hughes: things. Actually. So

 

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James Hughes: a family bank affords a family. That's a lovely word.

 

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James Hughes: an opportunity together

 

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James Hughes: to do something without a lot of structure. No structure at all frankly, unless you really need it.

 

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James Hughes: to assure that you're learning about each other as you're acting with big hearts

 

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James Hughes: to another. Now that doesn't mean that a donor advice fund isn't a good idea. It's a great idea.

 

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James Hughes: I I have one myself. They're a great idea. Well, my wife does, and I work with her. But

 

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James Hughes: the key is what is the culture of your intention

 

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Michael Palumbos ChFC, CBEC: and is Go ahead. I was just. It's just interesting

 

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Michael Palumbos ChFC, CBEC: that your family bank was more

 

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Michael Palumbos ChFC, CBEC: charitably inclined.

 

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Michael Palumbos ChFC, CBEC: and most people would think of that as the Donor Advice Fund, or you know, we've got. We did another podcast where we talked about the grandparent grandchild. Philanthropy, you know right exactly.

 

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Michael Palumbos ChFC, CBEC: and so that it seems like it would go to that whenever

 

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Michael Palumbos ChFC, CBEC: I I I've known you for years when I thought of the family bank. I had not heard this story, and this story makes it so much more meaningful and different, because

 

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Michael Palumbos ChFC, CBEC: immediately i'm thinking about entrepreneurial things. I'm thinking, i'm thinking about education, or what are we doing to help the individuals flourish? And you

 

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Michael Palumbos ChFC, CBEC: surprised me in a great way. and it's about

 

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Michael Palumbos ChFC, CBEC: that the the culture of that gift of being able to say, Take your time and your talent.

 

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James Hughes: and we'll match the treasure to go with it. That's the key, and that makes it a magnanimous gift that makes it meaningful. That is, that's right. And you're doing it together.

 

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Michael Palumbos ChFC, CBEC: Yeah, and right, and you know, so go back to in other podcasts that we've talked about that together, Ness. And how do we have that time to share with one another, and get this family to flourish, so that we don't have the third generation. The cousin generation start to drift. We can bring them in together and find ways

 

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Michael Palumbos ChFC, CBEC: to to keep them together, and it's so important

 

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Michael Palumbos ChFC, CBEC: for families. It doesn't matter about wealth.

 

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Michael Palumbos ChFC, CBEC: No, no about well, though it's I, if you, if you don't do it there, they any issues or cracks, will start to

 

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Michael Palumbos ChFC, CBEC: appear because they're not together. They don't have those things so that you know for a family up wealth of means. It's really 10 times as important.

 

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Michael Palumbos ChFC, CBEC: It's not no more. It's not more or less important. I shouldn't say that, but it's just

 

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he

 

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Michael Palumbos ChFC, CBEC: it it goes back to be intentional.

 

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James Hughes: Michael. It does, and

 

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James Hughes: the wealth word as you and I have discussed in other forums actually, wealth actually means well being

 

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Hmm.

 

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James Hughes: Financial capital means financial capital.

 

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James Hughes: Now, the word wealth has taken on

 

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James Hughes: a connotation of money. but it's not. Actually it's derivation. The word wealth comes from

 

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James Hughes: 2 old Anglo-saxon words. We all we still have common wealth and common using. The word but the word actually means well being

 

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James Hughes: so. If a family wants to grow its wealth.

 

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James Hughes: it needs to grow its qualitative self. It's spiritual, social, intellectual, and human

 

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James Hughes: still.

 

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James Hughes: and then grow its financial capital to support growing those like this.

 

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James Hughes: So the family bank's wealth is actually the spiritual and social action that it enables

 

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James Hughes: using financial cap. This is my father's brilliance.

 

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James Hughes: Yeah, he said, we have your mother and I have a little more financial capital, and we think we need.

 

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James Hughes: but we like it employed in a qualitative way, first in the house and then outside to everybody else.

 

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James Hughes: There's a when the Pope some story I love

 

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James Hughes: When the Pope and Easter stands on the balcony. They're in St. Peter's Square, and they're 100,000 people standing there

 

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James Hughes: waiting to hear what he has to say.

 

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James Hughes: and he always gives the speech with the same title. He just says different things. He says, ex herbie to the city x, or be to the world. He speaks to Latin. There doesn't speak in Latin, but he speaks the ancient

 

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James Hughes: in terms of X or B to the city X, or be to the world. So he speaks first to his congregation a family bank.

 

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James Hughes: and then he speaks to the world.

 

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James Hughes: How do we act to the world?

 

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James Hughes: Isn't it! It's it's so beautiful, so human.

 

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Michael Palumbos ChFC, CBEC: right! And

 

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Michael Palumbos ChFC, CBEC: I think today in this world where we're constantly doing.

 

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Michael Palumbos ChFC, CBEC: we're constantly running.

 

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Michael Palumbos ChFC, CBEC: We're not taking the time to be thought-filled or purposeful. an intention filled with what we're doing, and what this is a mechanism to say. Let's slow down a moment.

 

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Michael Palumbos ChFC, CBEC: Let's get people to communicate and share and be together, and let's go do something good together.

 

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James Hughes: And my father would say, as you just beautifully did, hasten absolutely.

 

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James Hughes: You need to get somewhere, but maybe at a pace

 

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James Hughes: that is more human.

 

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Yeah.

 

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James Hughes: And that gives you time for contemplation and conversation.

 

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James Hughes: So the spirit, the the family bank is basically a spiritual operation.

 

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James Hughes: It's to. It's to aspire, to inspire, to perspire as we've talked about. At other times

 

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James Hughes: it's an aspiration. He had an aspiration. We were inspired by it. and then we had to perspire.

 

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James Hughes: find out what to do, how to help each other, how to help the world. What?

 

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James Hughes: And again I want to say it a second time just when we're hearing it. What makes a great gift

 

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James Hughes: is something to which one of your family members aspires to help and is inspired.

 

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James Hughes: and you come along and

 

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James Hughes: help a little bit with the financial capital

 

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James Hughes: to support that aspiration of that human being. Oh, is that fun?

 

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James Hughes: And I think Aristotle would be clapping when so when I go to the website and i'm looking at it.

 

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Michael Palumbos ChFC, CBEC: I it it's, you know.

 

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Michael Palumbos ChFC, CBEC: being be in, and I always struggle with this. I am

 

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Michael Palumbos ChFC, CBEC: technician.

 

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Michael Palumbos ChFC, CBEC: and I and I always have to put my other hat on, and it's it's sometimes a challenge. So for the years that I have read this. I look at it from the the technical standpoint of things like, you know, only family members, and over 21 advisory voting, and you know, you know, a chairman and a secretary, and I just.

 

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Michael Palumbos ChFC, CBEC: I get so in my head around that piece.

 

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James Hughes: So for those who might

 

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Michael Palumbos ChFC, CBEC: go to your website go to the the James E. He was Junior Foundation website, and they're looking at this outline of the family bank. How do you pull those 2 pieces to get. I mean, I hear what you're saying. But now, so

 

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James Hughes: how does you know? Adopting the Rothschild model in these things, you know, and and put it all together. How how do we pull this together?

 

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James Hughes: Well, let me say first of all, that

 

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James Hughes: humane organisms

 

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James Hughes: need to evolve to a structure to support their humanity, not the other way around.

 

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James Hughes: So I've always often said to clients and friends, and people like you and our audience today

 

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James Hughes: Think first about the culture. Try it out for a while. and then see what rules you need.

 

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James Hughes: See what structure you need. Start. get out, try it out. See how it feels. See how you do it. Not so well, somebody else doesn't.

 

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James Hughes: Now i'm going to say something. Now that's a little bit the elephant in the room for some of our technicians. They'll notice that not one thing my father said had anything to do about structure or taxes.

 

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James Hughes: Nothing

 

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Michael Palumbos ChFC, CBEC: right.

 

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James Hughes: Nor have I said one thing in nearly 40 min about those things. I'm not ignoring them. I've been a lawyer for 55 years.

 

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James Hughes: I have my license. Yes, for the last 30 years I haven't practice, but I understand

 

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James Hughes: motivation.

 

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James Hughes: But, Michael, my entire life and my dad's before me, and this was part of his wisdom is

 

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James Hughes: figure out

 

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James Hughes: something that makes sense. Try it.

 

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James Hughes: play with it. There's a a wonderful philosopher named Heizing the who said

 

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James Hughes: that the way to define homo sapiens our species is that we play.

 

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James Hughes: We're not toolmakers. That was earlier species we we play, we are creative, curious species, aren't, we

 

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James Hughes: and gregarious. We have to do stuff together, so we can't survive alone, like a many animals can from the day they're born. But we can't

 

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James Hughes: so play.

 

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James Hughes: and Dad would say, and Jay would say, and I think Michael would say to a family, if this is a good idea, play with it

 

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James Hughes: Highest kind of play.

 

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James Hughes: then decide what rules you actually need. And, by the way, purposefully. No, I will. so that I was a little bit.

 

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James Hughes: Oh, no, I was playing this in that paper I wrote. I very carefully did everything I can not to have structure in that paper.

 

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James Hughes: not because it isn't necessary, so I minimize it on purpose, not minimize. That's not fair. I I did as little as I could, hoping that's that a family who that was interested in this would try it out, and then see what rules they like to have.

 

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James Hughes: what structure helped

 

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James Hughes: them do. The culture.

 

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Michael Palumbos ChFC, CBEC: Every family is different, right?

 

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Michael Palumbos ChFC, CBEC: And so and so it. It was really interesting now that you.

 

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James Hughes: when I gave that you in in a previous podcast, we talked about the grandparent grandchildren

 

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Michael Palumbos ChFC, CBEC: project that I call it, and I gave the paper to a client, and I asked if she would like any help. No, i'm right. She wanted to play. She wanted to play. Come on. Yeah. So. So this

 

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Michael Palumbos ChFC, CBEC: you know, we can give to people. And just I I think it needs to be paired from my perspective for someone like me. At least it needs to be paired with this podcast, so we can listen to the initial intent.

 

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Michael Palumbos ChFC, CBEC: so that we don't get lost in the outline.

 

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James Hughes: That is exactly what I was hoping I achieved.

 

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James Hughes: So if I've achieved it with you, i'm hoping I can achieve it with one more person who's listening to us, because it is easy to start making rules and writing stuff down and giving people titles.

 

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James Hughes: What? Here's the problem with that. It's subtle.

 

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James Hughes: Someone first has to write the play there has to be a plot.

 

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Yeah.

 

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James Hughes: the plots, the culture, what it what is the play about?

 

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James Hughes: And when the when the artist

 

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James Hughes: who is leading the play

 

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James Hughes: of the head of the mummers, or Peter Quincy, and a leading those funny players in the midsummer side stream.

 

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James Hughes: You have to the play has to emerge.

 

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James Hughes: Then you have to figure out who can play what role?

 

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James Hughes: Not everybody can play every role. No.

 

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James Hughes: And then then you have a play that has substance.

 

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James Hughes: And, by the way, you end up with a comedy which is the Greek said, is everyone standing

 

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James Hughes: at the end of the play rather than bodies lying on the stage.

 

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James Hughes: We want to write comedies. No, ha, ha! Ca: but play plays. If I can make a bad pun plays the play.

 

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Michael Palumbos ChFC, CBEC: Yeah.

 

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Michael Palumbos ChFC, CBEC: Okay.

 

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Michael Palumbos ChFC, CBEC: this is how this is very, very, very helpful. And I I think it's important that

 

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Michael Palumbos ChFC, CBEC: I I heard this so that I can impact families in a much more meaningful way. Some families

 

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Michael Palumbos ChFC, CBEC: entrepreneurship is their core value. and so they'll utilize this to to play in that sandbox.

 

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Michael Palumbos ChFC, CBEC: while others education, it may be it might be health care for another thing. So this is the magic

 

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Michael Palumbos ChFC, CBEC: is You're just planting a seed and just letting it germinate, and we don't even know what that seed, what it's going to grow into.

 

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James Hughes: and that's the wonder. This is wonder

 

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James Hughes: this is a place to my father was so clear wonder.

 

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Wonder?

 

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James Hughes: Yes.

 

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James Hughes: let me just touch for a moment. So we sort of have a comprehensive conversation all the different elements.

 

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James Hughes: There are a number of people in our field. Michael, who come from the technical, as you were saying, side.

 

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James Hughes: who have taken this idea and turned it into what I call a venture capital fund idea that you were just talking about entrepreneurs.

 

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James Hughes: I think this is fine. It just isn't what my father had in mind.

 

332

00:38:05.980 --> 00:38:06.730

Michael Palumbos ChFC, CBEC: Right.

 

333

00:38:06.920 --> 00:38:11.680

James Hughes: It's perfectly fine. and it has appeal.

 

334

00:38:11.830 --> 00:38:20.120

James Hughes: and I can certainly understand the utility in a family making a long multi journey generation journey.

 

335

00:38:20.500 --> 00:38:26.870

James Hughes: of developing a fund for the venturing ideas of family members.

 

336

00:38:27.250 --> 00:38:35.690

James Hughes: I think that's a very worthy idea. It's not, in my opinion, a family bank, so i'm not putting my previously. You're like. No, no, I made it that way.

 

337

00:38:36.220 --> 00:38:39.590

James Hughes: I just think it isn't in the spirit of what he had in mind.

 

338

00:38:40.950 --> 00:38:44.560

James Hughes: I think both are useful is really what i'm saying

 

339

00:38:46.390 --> 00:38:49.260

James Hughes: what I'm also saying is, though i'm much.

 

340

00:38:50.360 --> 00:39:00.030

James Hughes: I strongly urge. Let me put it that way. A family, to begin with, the family bank from the spiritual component of growing the spirit of that family.

 

341

00:39:00.810 --> 00:39:04.840

James Hughes: Then, if there is an investment question and it

 

342

00:39:05.470 --> 00:39:13.470

James Hughes: why? Because every family is composed of artists as well as scientists.

 

343

00:39:14.950 --> 00:39:25.200

James Hughes: The problem that I have for a family that begins with the Venture Capital fund is it doesn't Give the artists any chance to grow and glow

 

344

00:39:27.450 --> 00:39:30.430

James Hughes: it doesn't it isn't inclusive.

 

345

00:39:31.290 --> 00:39:34.880

Michael Palumbos ChFC, CBEC: and a world of all science would be boring.

 

346

00:39:35.560 --> 00:39:40.270

James Hughes: I I. In fact, it's. I think it's inhumane

 

347

00:39:40.560 --> 00:39:44.590

James Hughes: in the high sense of the humanities, the nature of the human journey.

 

348

00:39:44.620 --> 00:39:48.360

James Hughes: So I again I want to be very clear to our audience. I am not

 

349

00:39:48.460 --> 00:39:52.820

James Hughes: in any way suggesting a venture. Capital fund isn't useful.

 

350

00:39:53.280 --> 00:39:57.880

James Hughes: What i'm trying to do is to bring my father's remarkable gift

 

351

00:39:58.740 --> 00:40:05.910

James Hughes: into the world of saying, Grow the spiritual capital of your family through a common enterprise

 

352

00:40:06.250 --> 00:40:09.180

James Hughes: of grants and loans that enable things.

 

353

00:40:11.470 --> 00:40:15.090

James Hughes: Yeah, I think that is a discrimination. That is a difference.

 

354

00:40:16.750 --> 00:40:19.200

Michael Palumbos ChFC, CBEC: agreed 3.

 

355

00:40:23.510 --> 00:40:34.070

Michael Palumbos ChFC, CBEC: So inside of there are a couple of things that I think are worth talking about inside of there, like you, you know, adopt the Rothschild model. What does that mean? What does that mean

 

356

00:40:34.510 --> 00:40:41.710

James Hughes: to you? Well, old Meyer, i'm sure raw child in the middle of the eighteenth century, and a Ghetto and Frankfurt

 

357

00:40:43.560 --> 00:40:47.290

James Hughes: was lucky enough with his wife to have 9 children.

 

358

00:40:48.930 --> 00:40:52.950

James Hughes: and most of them lived, which is even more amazing

 

359

00:40:53.240 --> 00:40:55.650

James Hughes: among them 5 men.

 

360

00:40:56.920 --> 00:41:02.320

James Hughes: And for when I think that's right. There may have been more women, but let's I think that's right.

 

361

00:41:03.440 --> 00:41:04.880

James Hughes: He was a banker.

 

362

00:41:05.450 --> 00:41:09.050

James Hughes: very capable banker

 

363

00:41:09.280 --> 00:41:19.610

James Hughes: who helped the local aristocrats when war came, protect their jewels and things, or lend them money to have soldiers. He was a very, very astute banker.

 

364

00:41:21.120 --> 00:41:32.940

James Hughes: and he was so astute that during his lifetime. His his sons didn't have to live in the Ghetto. They were honored to go. They could live where they wanted. so he's so hmm.

 

365

00:41:33.100 --> 00:41:41.440

James Hughes: I have financial capital that I'm earning as a banker. I want to intermediate into the world. That's how bankers make money right.

 

366

00:41:43.280 --> 00:41:53.470

James Hughes: But he was much smarter. He said, No, what I have is human capital in abundance. 9 children. 5 men.

 

367

00:41:54.860 --> 00:41:58.310

James Hughes: And he said, what we need is intellectual capital.

 

368

00:41:59.440 --> 00:42:02.280

James Hughes: I can educate my sons and my daughters. But

 

369

00:42:02.630 --> 00:42:11.040

James Hughes: no, we need to understand the world. We're we're going to be bigger than Frankfurt, and bigger than the Ghetto. That's an enormous aspiration isn't it.

 

370

00:42:12.010 --> 00:42:13.320

James Hughes: So what did he do?

 

371

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James Hughes: He sent 4 of the sons. one to London, one to Paris. one to Naples. and one to Austria.

 

372

00:42:26.300 --> 00:42:28.800

James Hughes: He stayed in Frank for the oldest son.

 

373

00:42:30.690 --> 00:42:37.460

James Hughes: and he said, Each of you is to set up a bank. I will lend you the capital. By the way, you have to pay interest just less than

 

374

00:42:37.580 --> 00:42:40.150

James Hughes: stranger would pay. It's gotta pay interest.

 

375

00:42:40.590 --> 00:42:45.340

James Hughes: But he said, that's not important to me. What is important to me is that every week

 

376

00:42:45.620 --> 00:42:47.050

James Hughes: you send me a letter

 

377

00:42:48.170 --> 00:42:57.330

James Hughes: and you let me know what's going on in your financial center. your politics, your social, your economic. I want to know.

 

378

00:42:57.570 --> 00:43:02.740

James Hughes: and I in turn will circulate that he created the first knowledge based Bank

 

379

00:43:03.230 --> 00:43:07.600

James Hughes: your national back. It could say, Internet, i'm an international bike.

 

380

00:43:09.200 --> 00:43:14.270

James Hughes: Is it good to be a rock trial? Yeah, huh? Still, today it's good to be around from.

 

381

00:43:14.440 --> 00:43:16.050

James Hughes: But what else did he do?

 

382

00:43:17.420 --> 00:43:22.780

James Hughes: He not only encouraged them to be a social system growing social capital

 

383

00:43:22.920 --> 00:43:30.750

James Hughes: inside the family. But they were highly gift philanthropic from the beginning.

 

384

00:43:31.230 --> 00:43:36.560

James Hughes: Now that is, in part, because if you are a practicing Jew.

 

385

00:43:37.440 --> 00:43:41.590

James Hughes: There's a covenant with God, if you remember the rainbow after Noah.

 

386

00:43:42.720 --> 00:43:46.380

James Hughes: So that's a beautiful idea from Judaism.

 

387

00:43:46.660 --> 00:43:57.460

James Hughes: You have to be philanthropic, otherwise God might send another flood. You have a responsibility. So the run outs not only are known

 

388

00:43:57.570 --> 00:44:04.280

James Hughes: for being very good bankers today, they still have their 2 pieces left of those 5.

 

389

00:44:04.760 --> 00:44:09.420

James Hughes: But they're also involved in all kinds of wonderful causes

 

390

00:44:10.810 --> 00:44:13.550

James Hughes: and institutions that are hundreds of years old.

 

391

00:44:14.590 --> 00:44:27.220

James Hughes: So what was he doing? He was employing his human capital to create intellectual capital, to create social capital with spiritual capital.

 

392

00:44:27.740 --> 00:44:32.920

James Hughes: with the money essentially the Greece. to enable those to grow.

 

393

00:44:34.850 --> 00:44:37.300

James Hughes: and that's why it's not bad to be a rotten.

 

394

00:44:40.980 --> 00:44:46.410

Michael Palumbos ChFC, CBEC: He invested it it it it's very much like your father.

 

395

00:44:46.700 --> 00:45:00.240

Michael Palumbos ChFC, CBEC: their time, their talent, his treasure, and he made, you know he did it as loans, because so there was some a sense of responsibility to what you were doing, and there was

 

396

00:45:00.390 --> 00:45:05.340

Michael Palumbos ChFC, CBEC: but very, very similar thought process.

 

397

00:45:05.350 --> 00:45:11.510

James Hughes: Yes, and I would say a little more economic than my father's. But not but so what

 

398

00:45:11.590 --> 00:45:22.840

James Hughes: we are a capitalist I am in favor of capitalism. But I think you're absolutely right, Michael. This was in the old man's consciousness.

 

399

00:45:22.950 --> 00:45:23.630

Yeah.

 

400

00:45:23.890 --> 00:45:29.590

James Hughes: And I think his wife as well. Why, we know, left less from what her she was offering.

 

401

00:45:32.350 --> 00:45:36.120

James Hughes: These these things are so important. they.

 

402

00:45:36.660 --> 00:45:47.130

James Hughes: i'll add for a moment also the Rockefeller story, which I think, is also interesting here, because Rockefeller story, which is an American family.

 

403

00:45:48.150 --> 00:45:58.220

James Hughes: When the old man Rockefeller had retired at 50 from the oil and gas business. doing philanthropy and things. They had 5 children also.

 

404

00:45:58.240 --> 00:46:10.830

James Hughes: not 9, but by 4 daughters and a son. Of course, at that time in the late nineteenth century the the boys had to go to business. The girls got capital and real estate. The boys had a good.

 

405

00:46:10.960 --> 00:46:19.080

James Hughes: so John D. Rockefeller, Jr. Essentially, when his father retired, and even before that had to go on boards and things and be a capitalist.

 

406

00:46:19.470 --> 00:46:34.390

James Hughes: Well, a series of conversations that they had. I made it one in my first book, but it's a series of conversations at which is the house the the sun built for the Father, which you can visit on the Hudson River. It's a very simple house

 

407

00:46:34.700 --> 00:46:35.640

James Hughes: could have been

 

408

00:46:35.720 --> 00:46:39.540

James Hughes: entirely different. It isn't it's a home. It's not a house.

 

409

00:46:40.130 --> 00:46:45.480

James Hughes: but the father and the son engaged in conversation, and i'll shorten it this way.

 

410

00:46:45.840 --> 00:46:52.000

James Hughes: Junior, as he was called, which is a hard thing to do. But he had his father's name as a tough thing to be junior.

 

411

00:46:52.120 --> 00:46:54.410

James Hughes: I'm. A junior. I know something about that.

 

412

00:46:55.820 --> 00:47:01.230

James Hughes: finally went to his father and said, Father, I would like to leave the family business.

 

413

00:47:02.710 --> 00:47:15.130

James Hughes: Father said, Really, son, what you do, what what do you want to do? And, Jr. Said: Father, I want to spend my life growing a great family. and doing philanthropy

 

414

00:47:15.380 --> 00:47:20.670

James Hughes: by growing a great family. You can read at Rockefeller Center today. There's a plaque.

 

415

00:47:20.940 --> 00:47:32.130

James Hughes: As you approach the skating R, where you can read his philosophy. Now, what's so fascinating about that story? Michael is, the father said. Then you must do that. He didn't say you can't do it.

 

416

00:47:33.090 --> 00:47:37.800

James Hughes: And then he said, and by the way, i'm not doing so well with my philanthropy. Will you help me?

 

417

00:47:40.460 --> 00:47:43.610

James Hughes: You feel the spiritual capital of that family?

 

418

00:47:43.730 --> 00:47:44.510

Michael Palumbos ChFC, CBEC: Yeah

 

419

00:47:45.150 --> 00:47:49.840

James Hughes: lies in that son and father's conversation. And what did

 

420

00:47:49.870 --> 00:47:52.910

James Hughes: Rockefeller, Jr. Go on to do? He had

 

421

00:47:53.010 --> 00:47:58.300

James Hughes: 5 sons and a daughter. They all turned out pretty well were there Issues? Yes.

 

422

00:47:59.420 --> 00:48:01.730

Michael Palumbos ChFC, CBEC: because they all, it turned out pretty well.

 

423

00:48:02.420 --> 00:48:05.320

James Hughes: and the philanthropies still support

 

424

00:48:05.760 --> 00:48:12.320

James Hughes: all kinds of important things in America today, most of which people have no idea was Rockefeller money.

 

425

00:48:12.800 --> 00:48:16.810

James Hughes: No, i'm not praising people. but they were also a family bank.

 

426

00:48:19.000 --> 00:48:31.460

James Hughes: They were responsible to the world as well as to each other for exchanges for learning. These are, you know, these people knew what they were doing

 

427

00:48:34.190 --> 00:48:38.450

Michael Palumbos ChFC, CBEC: different times, and but we can. Still.

 

428

00:48:38.540 --> 00:48:48.800

Michael Palumbos ChFC, CBEC: I I think there's a lot to be said, and I, when I said it, it really resonated for me. There's a lot to be said in taking time to slow

 

429

00:48:49.080 --> 00:48:50.160

Michael Palumbos ChFC, CBEC: that one.

 

430

00:48:50.710 --> 00:48:55.950

James Hughes: as my dad said that basin slowly, Jason.

 

431

00:48:56.460 --> 00:49:06.800

Michael Palumbos ChFC, CBEC: there's a there's a a book recently written a few years ago by a couple of navy seals about about about running their business called extreme ownership.

 

432

00:49:06.960 --> 00:49:13.730

Michael Palumbos ChFC, CBEC: and they said, smooth, slow, is smooth. smooth, is fast.

 

433

00:49:14.780 --> 00:49:15.760

James Hughes: just

 

434

00:49:15.870 --> 00:49:19.700

James Hughes: as wise

 

435

00:49:21.980 --> 00:49:30.470

Michael Palumbos ChFC, CBEC: A. And I think you know. Is there any other notes about? You know any other comments or notes that you would like to talk about the family bank? I,

 

436

00:49:30.570 --> 00:49:33.010

Michael Palumbos ChFC, CBEC: Michael? I feel very

 

437

00:49:33.340 --> 00:49:36.590

James Hughes: complete, thanks to your wonderful questions.

 

438

00:49:37.010 --> 00:49:43.470

Michael Palumbos ChFC, CBEC: Yeah, thank you. You You you're welcome and thank you for joining us, because now, when

 

439

00:49:43.560 --> 00:49:50.280

Michael Palumbos ChFC, CBEC: we talk about this with families. I think I need to do more. Stepping aside.

 

440

00:49:50.550 --> 00:49:53.940

James Hughes: and less and less, and and and just

 

441

00:49:54.130 --> 00:49:59.070

Michael Palumbos ChFC, CBEC: offer the paper and the podcast, and say.

 

442

00:49:59.290 --> 00:50:02.070

Michael Palumbos ChFC, CBEC: Go, play with this. If this is something.

 

443

00:50:02.230 --> 00:50:05.270

Michael Palumbos ChFC, CBEC: fight excites you, then play with it.

 

444

00:50:05.960 --> 00:50:14.180

James Hughes: and my dad would be blessing yours in my conversation today. A very humble man. But he would say.

 

445

00:50:14.460 --> 00:50:16.970

James Hughes: if we can continue the lineage

 

446

00:50:17.610 --> 00:50:20.460

James Hughes: of that spiritual magnanimity.

 

447

00:50:22.130 --> 00:50:23.640

James Hughes: it's a good thing to

 

448

00:50:25.330 --> 00:50:33.070

Michael Palumbos ChFC, CBEC: wonderful. Jay Hughes. Thank you so much for joining us today on the family best show.

 

449

00:50:33.190 --> 00:50:52.160

Michael Palumbos ChFC, CBEC: It's been great to have you? I want to remind people the James E. Hughes Junior foundation website, has a library. There's lots of J. Of your of J's writings and reflections available there, well worth if you're looking to

 

450

00:50:52.720 --> 00:51:04.200

Michael Palumbos ChFC, CBEC: ensure that your family has a chance at flourishing. A lot of those writings will really help you to think about how to do that, and a thought filled in purposeful manner.

 

451

00:51:04.710 --> 00:51:21.440

Michael Palumbos ChFC, CBEC: So again, thank you, Jay. My name is Michael Columbus, with family wealth and legacy in Rochester, New York. This has been the family business show, and we look forward to having you on future episodes and sharing more information with the with us.

 

452

00:51:21.470 --> 00:51:22.480

Michael Palumbos ChFC, CBEC: Thank you.

 

453

00:51:22.780 --> 00:51:23.890

James Hughes: and thank you.

If you’re a family business or a family business consultant and want to be on the show, share your story and help other family businesses, send us an email to producer@thefamilybizshow.com or fill out a contact form here!

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Michael Palumbos is a registered representative of Lincoln Financial Advisors Corp. Securities and investment advisory services offered through Lincoln Financial Advisors Corp., a broker/dealer (member SIPC) and registered investment advisor. Insurance offered through Lincoln affiliates and other fine companies. Family Wealth & Legacy, LLC is not an affiliate of Lincoln Financial Advisors Corp. Lincoln Financial Advisors Corp. and its representatives do not provide legal or tax advice. You may want to consult a legal or tax advisor regarding any legal or tax information as it relates to your personal circumstances.

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