439 AJ Wasserstein And Jeff Swearingen

Jeffrey Feldberg: [00:00:00] Jeff Swearingen and AJ Wasserstein have both lived the entrepreneurial dream. They didn't just build companies, they exited them in monumental deals, but what came next wasn't what they expected. 

Jeff Swearingen built and sold two companies, including a nine-figure exit with Secure Link, a software company he bootstrapped from scratch and sold to Vista Equity Partners.

His journey began with TheGift.com, sold to 1-800-FLOWERS, and continued into leadership at PepsiCo before he returned to his entrepreneurial roots. Today Jeff Lee's a thoughtful design life. Investing in real estate and tech mentoring founders and living intentionally across three cities. 

AJ Wasserstein is the Eugene F. Williams Jr. Senior lecturer in the practice of management at the Yale School of Management. A former entrepreneur himself, AJ led one Source Water and archives, one each scaled into the top three national players and acquired by major strategics. He's now one of the [00:01:00] country's most thoughtful voices on life after the deal.

AJ also teaches and writes about search funds, programmatic acquisitions, and what it truly means to lead a meaningful business life. He received a Yale School of Management's faculty teaching award and authored What Matters Most: A Young Adults Roadmap To Life, a heartfelt gift to his children. 

In this episode, Jeff and AJ unpack their quiet, rarely explored realities of Postex exit life. So reclaim purpose, confront identity, and design. The next chapter, not around wealth, but wisdom because once you've sold the company, what do you build next? 

And before we start the episode, a quick word from our sponsor, Deep Wealth and the Deep Wealth Mastery Program. Here's Bill, a graduate, who says, the Deep Wealth Mastery Program has transformed the KPIs we're using to accelerate growth and profits.

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Deep Wealth Nation, welcome to another very special episode of the Deep Wealth Podcast. Today I'm surrounded by fellow post-exit entrepreneurs.

A.J. Jeff, welcome to the Deep Wealth Podcast.

A.J., for the Deep Wealth community, why don't you bring them up to speed? What's been going on since we last spoke? My goodness, it was episode 335 that we last spoke, and we're nearing 500 as we record this. I'd love to hear your story behind the story for this incredible case note that we're gonna be talking about, Exploring Six Key Decisions post-exit Entrepreneurs Will Have To Make. So A.J., [00:05:00] over to you first.

A.J. Wasserstein: Thank you so much, Jeffrey, for having me. It's great to be here again. I'm flattered to be included. So this post-exit entrepreneur topic continues to be of curiosity to me and Jeff and I have had lots of conversations about this both on the personal level and more in aggregate. And we wanted to write something that focused on what are the key things post-exit entrepreneurs would have to tackle in their new chapter. We did that. But what I'm really excited about this note is that we supported the six points with a data set. So we built some data around this from a whole bunch of post-exit entrepreneurs. So we have some real data and statistics to share that illuminate and provide insights into what is going on in the heads and behaviors of [00:06:00] post-exit entrepreneurs.

Jeffrey Feldberg: A.J., talk about a mouthful. Post-exit Entrepreneurs for someone in the Deep Wealth Nation who's new to that, they know obviously what an entrepreneur is, but post-exit entrepreneur. In your view, what is that exactly? How would you define a post-exit entrepreneur?

A.J. Wasserstein: Post-exit entrepreneurs, someone who's bought a business or started a business, grown the business, and at some point in their journey has exited the business substantially or completely, and now has enough wealth to think about how they're going to architect and construct their life. And they are forced to confront a whole bunch of new realities and decision points.

Jeffrey Feldberg: Deep Wealth Nation as you know with my story, my post-exit life, that's where the majority of my mistakes and unhappiness came from. Not pre-ex Exit, it was post-exit, which is counterintuitive. A.J., I know when we first met, that was a common theme with you, with me, and that's why you focus on this to really pay it forward.

So, so many other entrepreneurs [00:07:00] don't have to go through what we went through. But that said, so Jeff, welcome. Great to be speaking with you. One post-exit entrepreneur to another. You're also one of the co-authors of this case note. So Jeff, what's your story? Why don't you introduce yourself to the Deep Wealth Nation?

What's the story behind the story? What got you from where you were to where you are today?

Jeff Swearingen: Yeah, thank you for having me on. Honored to be here, especially with A.J. As as my fellow guest. I'm a post entrepreneur, sold my business in 2017. And like a lot of people in the case note we're gonna be discussing today, really had put very little thought into how I would actually spend my time in retirement.

I think most of us, although very precise in managing our businesses, are very imprecise when it comes to what we'll actually do. And we address that in the case note. So I was one that that spent a lot of a lot of time making a lot of traditional mistakes 'cause I didn't know any better buying homes and making complicated investments and trying to replace my structure and my purpose.

And got [00:08:00] lost along the way, which is where I ran into A.J.'s case note or what I consider the original writing on this topic about the the paradox of success. So, was fortunate enough to strike up a conversation and a friendship with with A.J., which which brings me here today.

Jeffrey Feldberg: So terrific and Deep Breath Nation. Go to the show notes. You'll have access to all of the case notes, including this latest. One, but also Jeff, what you're saying to A.J.'s first and then the follow up ones from there. And Jeff, a quick note of thanks to you because Default Nation had an email from Jeff just before.

Hey, they're doing some upgrades in my neighborhood on the internet. I'm gonna be phoning in. So Jeff, thanks so much for your persistence and having today come forward and doing it on the phone. So that said, though, for both of you, let's just take this very big picture before we jump into exploring six key decisions post ex entrepreneurs will have to make by and large.

Generally speaking, where do you think most entrepreneurs get it wrong after the deal is done? So the deal is closed, [00:09:00] they have all these zeros in the bank. What has nobody spoken to 'em about? What are some of the, I just don't know what I don't know. Classic mistakes that we're seeing out there.

Jeff Swearingen: Well, I guess I'm an expert on these because I think I made a lot of 'em. The first, I think, is a dramatic underestimation of how much you're gonna miss those things that you were so desperate to get away from. And as an example, sitting in the weekly sales meeting or the monthly cash flow forecast might have seemed like real trudgery when you were running your business.

And then it turns out that those things that you were you forced to do in operating your business or the scaffolding that was holding up your life, it created a structure and a purpose that that you grew to really rely on as a person. I think most of us just thought, well, if I have the independence, if I've got, if I've got wealth and I've got time, certainly it'll be easy to figure out how to recreate my life, in a way that doesn't have to have the quarterly, offsite meeting or something that you didn't want to do. So that was a surprise to me. And then I'd also add, I [00:10:00] think for some of us, and this is my experience and some other people I've spoken with, I think the things that the world quote tells you're supposed to do may not be quite right for you.

And it very common when you speak with someone or you tell them you've retired or exited your business the immediate prompt is what are you gonna do next? What's the next thing? What's the next mountain to climb? And guess what, it can't be a the same mountain or a smaller mountain.

It's gotta be a bigger mountain. And for a lot of us, we were maybe not interested in climbing a bigger mountain or we're interested, but maybe we feel like we've already summited. And it can lead to some feelings of bewilderment and confusion about what what didn't happen that was supposed to happen.

So I'll stop there. But those are two that come to mind right away.

Jeffrey Feldberg: As we're talking about this, Jeff, A.J., let me put this out to you because I know there are listeners in the default nation, they're growing their businesses, they're looking forward to having an exit, and in their minds they're saying. Come on guys, how bad can it really be? You have this [00:11:00] life-changing exit.

You have all these zeros in the bank. What's so wrong with that of losing all that pressure and those time commitments? You can do whatever it is that you wanna do, and now you have some, financial independence, some financial freedom that you never had before. You lost the golden handcuffs.

What's so bad about that? How, what would you say? How would you address that?

A.J. Wasserstein: I'm gonna try to highlight some of the data, Jeffrey. So I'm gonna don my academic wonky hat and try to put some numbers around this. In our data set, only 20% of the post-exit entrepreneurs that we interacted with prepared for their exit and post-exit life in any way whatsoever.

So the vast majority of people aren't thinking about this or preparing for in any way. So that's a huge problem. And I think what people tend to do while they're racing to the finish line is optimizing the deal and the investment bank and Wealth management issues, and tax planning [00:12:00] issues and, all good.

But they tend to forget that at some point they're gonna wake up on Monday morning. They need to figure out what their day looks like. So they miss that they're not planning at all for the exit in any way. And I'll also share another data point from our project. Only 22% of our post-exiters think that post-exit life is what they imagined. So once again, the vast majority of people have some vision of what this is going to be. And on the other side of the fence, they realize it is not what they imagine whatsoever.

Jeffrey Feldberg: And A.J., as you talk about that, it's interesting in Deep Wealth Nation, big picture wise, let me share the six areas or the six questions. How will I manage my Wealth? 

Number two, what will my spending and consumption strategy be? 

Number three, what approach will I take to philanthropy? 

Question four, how will I structure my daily routine?

Number five, where do I want to live? 

And question six, rounding things [00:13:00] out, how will I redefine my identity and purpose?

Which one of those six areas or questions really stands out for you?

A.J. Wasserstein: I think the anecdotal observation that we see is that most people over index and anchor are, number one, how to manage their wealth and that gives 'em a whole bunch of control and it's a pond that they can engineer. So they tend to sort of go deeper there. I personally think the most important riddle decision is reflecting on who you are now.

So redefining yourself. So you had this really intense experience and chapter and obviously it was very successful because you are post-exit and entrepreneur, but then architecting what your life is gonna be like on a go forward basis is. Is really challenging and I'm happy if you wanna go deeper but reflecting on who you are now is the opportunity people should explore most.

Jeffrey Feldberg: Looking at these six questions and [00:14:00] knowing what you know, you have the benefit of hindsight, now you have the benefit of speaking to countless post-exit entrepreneurs and you're at the Yale School, the School of Business, and you're teaching this, so you're really living this day in, day out.

If you can go back to the younger A.J. With one of these questions, maybe two of these questions. Hey A.J., you have some great things ahead for you. I'm no spoiler there. I'm not gonna tell you exactly what happens, but I want you to ask this question or two. What would that be for you?

A.J. Wasserstein: Me personally and most of the post-exit and entrepreneurs that we built this data set around, define themselves by accumulating more Wealth. And I guess I wish I knew that amplifying your wealth after a successful exit is not gonna make you happier.

So the incremental dollars have yet less utility. And really trying to understand what your new life is gonna be and two key issues are, how are you gonna spend your time? 

And who are you now? 

So what's gonna give you this structure, this meaning, this purpose, this identity that you [00:15:00] previously had in being a CEO, and when you take away that CEO title, when you take away all the CEO responsibilities and duties, you don't have the team anymore.

What's your life gonna be? 

And more money doesn't fill that hole. People falsely think it does. If they have X they think they're gonna be happy or 2X that's not what the data says.

Jeffrey Feldberg: And Jeff on that note. Where are you on that, both with your own experience, what the research said when you were writing the case note? What would you say to that?

Jeff Swearingen: When A.J.'s talking about redefining yourself I found one of the most difficult parts of retirement is shutting off those processes that we're running and the habits that were ingrained over, tens of years, 20 years, 30 years of working.

So, for example, when you're working it's important to have structure, it's important to be in control. It's important to optimize. It's important to defer gratification till later. And all of these muscles that you've built up that are so useful when you're running a [00:16:00] business can really hurt you when you're in retirement. 

One of the things I was really good at running my business was finding a problem and fixing it right away. And when you're in the security software business, that's an important asset to have, that's really important. But now go on vacation with that guy.

Go on vacation and check into your hotel room. That's really nice with a view of the ocean. And you're worried about the rug is spraying or the, the picture isn't hanging quite right. It's the worst habit in the world when you're trying to enjoy your retirement. So being able to cede control and embrace adventure and being able to enjoy things now and be in the moment rather than planning and deferring for later.

 I know it's surprising and this message would've been difficult to receive 10 years ago, but it's just difficult to shut those habits off.

Jeffrey Feldberg: I hear you on that, and old habits die hard, and now we're taking all that energy that focus and we're applying it to what some people would say isn't that important, or perhaps even frivolous. And Jeff, let me ask this for you. If you had to sum it up in a narrative, [00:17:00] because I know post-exit wise, like so many of us, you went through that you came out smarter and wiser and doing things differently.

What would you say though, as you look at the early post-exit days for you, Jeff, what would that narrative be like? Just to give a bit of a context for our listeners.

Jeff Swearingen: One would be simplify your investments. One of the things that the world tells you to do when you retire. You should be an angel investor or a venture capitalist.

You should invest in private equity. You should do these things that are complicated. And when you roll forward five years, you end up with a 500 page tax return. You've got a lot of headaches and frustrations, and it's not as much fun as you thought it would be. And as a added bonus, you underperform a simple index fund strategy, I think across the board.

So that would be one. 

I was one that decided to have four houses, which for me was a mistake. It was just, it was too much management, it was too much work. And so I could have avoided that one, and I certainly would've spent a little bit more time figuring out how I would spend my time.

[00:18:00] The vision I think a lot of us has as, as entrepreneurs is like an extended or permanent vacation where you're on a boat somewhere drinking a fruity drink and enjoying the spoils of your labor with others in the winter circle of life. And as it turns out there's a little bit of that.

There's a great relief for the first month, two months, six months, and then you realize you've got a day to fill. I would've, I wish I would've had a little bit more insight or a little bit more advice from myself on that. I'm not sure that I could've heard it at that time, or I would've heeded the advice.

Those are some examples of things that I certainly would've said.

Jeffrey Feldberg: I'm with you there, Jeff, and as I go through all the case notes, but particularly the latest one, one of the questions I'm asking myself, would younger Jeffrey, even if I was told all of this, would I have listened and I'm not so sure have helped that looking back, one, one would hope, but you never know.

And so bringing it back to the data, to the six question. Let's talk about managing wealth because it's so frivolous for most people to say, oh yeah, I wanna have all those zeros. Not a problem. I'll figure it out. My money is gonna be making money for [00:19:00] me while I sleep, and all these wonderful things are coming ahead.

What are some of the key challenges? 

You spoke about some of that, of getting complicated and all these different investment schemes, or setting up some kind of investment house, investing in other businesses as opposed to just set it and forget it in an ETF and some of the things that go along with that.

So what would you want us to know when it comes to managing wealth with what the data is saying, your own experience, what would be some key walkaways or insights? A.J., why don't we start with you?

A.J. Wasserstein: In our data set, we learned two facts that pop out to me. One is that. People want more money no matter what. So our dataset has an average net worth of $32 million.

And when we asked the participants in the dataset how much money they would like, the answer was $65 million. So 70% of the participants in our dataset want more money, which I find really fascinating. The second thing I'll share is that we asked this [00:20:00] group of post-exit entrepreneurs, what their balance sheets look like.

I wasn't particularly interested in what their balance sheet looked like. I was much more interested in figuring out how they would change their balance sheet. And when we asked them what asset they would like more of. The answer was index funds, and this was at the rate of six times private equity and hedge funds.

A couple things are going on here. One, people want far less private equity and hedge fund, they want far more index, and that could be for one of two reasons or both. One, maybe those private, illiquid, fancy, complex investments didn't perform for them, or two, they just realize it's not worth the headache.

So the premium, if there is a premium isn't worth the complexity of the K1 and capital calls and all the weirdness of those investments. I'm gonna share one more fact to support the [00:21:00] sort of pop of that data Point is private equity and hedge funds are the most popular asset in post-exit entrepreneur portfolios.

So 84% of our data set has exposure, private equity, and hedge fund. Yet 67% of the participants want more index and far less private equity. So, Jeff, I walked out there. Maybe you could talk about the simple complex insource outsource.

Jeff Swearingen: Yeah, the, I think the four boxes is do you manage yourself or do you have someone else doing it? And then the other axis is simple or complex. Simple is better. Absolutely better. Paying someone to manage your wealth for you.

I know it works for some, my personal preference, I don't think this is drawn out specifically in the data is you're paying for someone to blame if things go wrong and you don't feel bad about how things have gone. Financial advisors and I don't mean to, negative on the entire [00:22:00] industry, but they tend to put you in more complicated investments. They're difficult to put a value on, they're difficult to exit, but, does that make sense to you? If you're charging a fee based on the assets under management does make sense perhaps to make it difficult to exit those investments.

 I feel really strongly about that, run your own race. If there are certainly people who enjoy doing private equity investments or doing venture capital or angel investing it's just not for me. And I think in general, as you said the people who have responded to the questions are seeking this is with experience.

Now these are experienced post-exit entrepreneurs are seeking index funds more than they're seeking something more exotic or interesting to talk about.

Jeffrey Feldberg: Jeff, I love how you said, hey, on the investment side, keep it simple. And to that, I know there are those in the Deep Wealth Nation who are saying, yeah, but what about, and it's always the but, and one of the common things that I hear is, sure, I can put it into set it and forget it into an ETF, but, and here's the, but when I'm working with a Wealth Manager or a Wealth Advisor, I'm gonna [00:23:00] get access to deals and other kinds of things that I'm simply wouldn't be able to do in an ETF.

And as you accumulate your wealth, you can do more things with it to earn a higher return on investment than you could with just a simple ETF. So Jeff, to that point. What would you say, and I will preface this by saying this could be an entire episode, this one question, but to the best of your ability in a simple narrative, what would you say to Deep Wealth Nation, those members that might be thinking that.

Jeff Swearingen: I'd say, show me the money. I'd say show me a managed portfolio where 50 bips to to a hundred bips outperforms a diversified set of low cost index funds over time. And I'll eat my words. I don't think it's possible. I don't think it, I don't think it happens the vast majority of the time.

I believe Warren Buffet had a million dollar wager out for any managed fund to beat a simple index fund over a long period of time and beat everyone. You have to ask yourself what you're trying to accomplish. And if what you're trying to accomplish is using your brain to, to make a series of decisions regarding investments to be more interesting, to talk [00:24:00] about your portfolio at a cocktail party then that's great.

Run your race. It's your money. If you're interested in not having the head trash associated with trying to track down that K1 from an investment you made a couple of years ago or something else, a capital call or an investor update, or you need to sign or fax or do something if you don't want to do that don't do that.

 I don't think chasing a return with a Wealth manager or with exotic investments has any proven track record whatsoever of outpacing low cost index funds over a period of time.

Jeffrey Feldberg: And if I can quote, which I will from the case, and I love this quote, "We too began with pursuing more complex and fancier than we currently have in appetite for if it could turn back the clock, we would practice a simple index fund strategy with a do it yourself management approach. This reflects a set it and forget it line of attack. It's simple, easy, and elegant, and it affords the opportunity to spend more time on pursuits other than incremental wealth accumulation that has little [00:25:00] value or meaning." 

And what I love about that, it's the last few words of that sentence. Little value or meaning in terms of how we're spending our time and what we're doing with that.

A.J., did you wanna comment on that?

A.J. Wasserstein: You see me vigorously nodding my head up and down in the video. So, yeah I just think it's such a common and popular trap that post-exit entrepreneurs define their life after selling a business and getting a pile of money is I want more money and I'm gonna spend my waking hours figuring out studying, trying to get access to making complex investments and board meetings or LP meetings.

 I'm just not sure if you have a blank piece of paper and can architect your life any way you want that's how most people with any reflection or intention would think about spending their days. I think it's easy to default into and it gives you a sense of community, and as Jeff said, you're more interesting at a cocktail [00:26:00] party.

But I think the painful part of being a post-exit entrepreneur is finding your next calling, and we could talk about the data around that. Whenever you're ready, Jeffrey. But that takes a ton of time a ton of introspection and is really hard, but ultimately that's gonna get you to a more happy and fulfilling place then making another exotic investment and trying to make a little bit more money.

Jeffrey Feldberg: It is interesting, and as we're talking about this, you're actually bringing me back to a Warren Buffet story. Jeff, you had mentioned Warren Buffet. I may be off this. It went something along these lines that if Warren Buffett were to be abducted by aliens today. And now it's his wife who has all of the wealth that he's created.

It was 10% in short-term government bonds and the other 90% in a very low cost s and p 500 index fund. So this is coming from the world's most successful investor. He's saying, Hey, do a set it and forget it. Put it [00:27:00] into some kind of an index fund. Life is gonna be great, and off you go with that. So there's a lot to be said with that, even though as entrepreneurs are saying, well, hey, I've never managed money before other than my businesses.

This is now my financial future, my independence. I would suppose it's because of that, that we should do something that's proven and is low cost and really truly earns us money as we're sleeping. Thoughts about that?

A.J. Wasserstein: Jeffrey those are also two totally different skills. Creating Wealth and managing Wealth are very different skills, and just because entrepreneurs were good at creating wealth does not mean they're gonna be successful at managing wealth.

Jeffrey Feldberg: I couldn't agree with you more I'm gonna quote again. This is directly from the case note.

"We think spending a few percentage points anywhere from 1% to 4% of investible assets is a directionally sustainable and conservative posture. Recall that it's hard to go wrong by spending less, other than the opportunity cost of not spending more. This can be thought of as a game of sleeping versus eating spend less and you sleep easily. [00:28:00] More consumption eating might cause fitful sleeping." 

And that's quote-unquote. So Jeff, to your point on that particular quote from the case node, what do you want us to know about that? What would you say to that?

Jeff Swearingen: This is one of the most interesting. Parts of the case note to me. And you had you asked about the most interesting question or the data that I thought was the most revealing, and it's a combination of things for me. , A.J. mentioned the average Wealth level in this 32 million, something like that, still wants more.

I think that's consistent across the board. If you have a million, you want two. If you have 10, you want 20. If you have a hundred, you want 200. And yet the happiness level associated with the post-exit entrepreneurs. 

So knowing, I'll let your audience play a little game with me here, knowing that the people who were interviewed in this are post-exit entrepreneurs, have an average worth north of 30 million, and knowing that the average population United States Happiness index to 6.75, so 6.75, man off the street, [00:29:00] 6.75.

Now you've got this group of ultra wealthy post-exit entrepreneurs. What do you think the happiness level would be? It's 7.5. So better, but not off the chart so that, that number's a bit surprising.

So maybe money doesn't create happiness. Now tie this back to your question, which is what do you think about the 1% to 4%? If you look through the numbers, people in this study are probably accruing Wealth or earning Wealth at, 7%, 8%, maybe some a little better, maybe some a little worse. Our only spending, I think on average, between two and 3%. A.J. You correct me if I'm wrong there, but I think it's in there somewhere.

A.J. Wasserstein: That's right. 80%. 80% or below 3%.

Jeff Swearingen: So we're not spending the money that we could spend, still want more. And then here's the surprising part. If you look at plans for philanthropy the majority of the respondents plan to give less than 25% of their Wealth to philanthropy. So what happens to the rest of the money? If you've got a hundred million and you've got, 30, 40 years to live, that's gonna run up to a [00:30:00] billion dollars.

You plan on spending 2%, two and a half percent, and only giving away maybe 15 or 20%. Where's all that money going? 

Where's all that money going? 

I know anecdotally with me most of us don't plan on leaving vast sums of wealth to our children. Where's that money going? So while we have failed in my view, to allocate an appropriate percentage of our Wealth toward philanthropy or spending we still want more, which is vexing to me, especially given the slight happiness premium for being ultra high net worth.

Jeffrey Feldberg: A comment and then I'm gonna ask another question. What's staggering? And by the way, I'm no different. The very early days, Jeffrey post-exit entrepreneur, as successful as my exit was, it wasn't enough. I wanted more, but to go to your data, the average being in the 30 million plus range in terms of the net worth.

For most people listening, wow, I could do so much with that. What do you mean it's not enough? Why would you wanna almost double that or more than double that? When is enough enough? 

[00:31:00] And as we think about that, let me read another quote from the case study. It really hit home with me and I quote, 

"We caution entrepreneurs to keep in mind that boats, cars, planes, and multiple homes require mindshare, consume time and energy, and often come with tax and insurance bills. They also require management and upkeep. Furthermore, these toys can be the result of the post-exiter seeking to fill a void or create a cure for boredom. Once that dream home is designed and constructed. However, the dopamine rush may wear off and the post-exiter may find themselves feeling unfulfilled yet again."

So sad, yet so true. 

Jeff Swearingen: I'm an expert in mistake making. I used to read there's a section of the Wall Street Journal called the Mansion section, and I used to look at that and just salivate over the, the, the tennis court and the indoor water fountain. And I look at it now and I think, how many people does it take to, to maintain that water fountain?

'cause we had a water fountain and it was broken all the time. And there's always a person standing there with a tool belt on trying to [00:32:00] fix something that you've installed in this house. Things are maintenance. I mean, things are maintenance and it just, it seems like such a prize to have things.

I did have an airplane for a period of time, and you can't model, I call it head trash. You can't model head trash in a spreadsheet. You can make a spreadsheet, say whatever you want about buying an airplane, but you can't put a price tag on knowing that your plane has been sitting for some reason in Indianapolis for 10 days because a park can't come in I think it's a mistake a lot of us make, but stuff is work, and work is what we're trying to get away from. 

Jeffrey Feldberg: I couldn't agree more. And I wanna circle back to some of the earlier data that you're sharing. And you can't go wrong regardless of where one's Wealth is, if you're spending less, and if particularly if you're spending less than what you're bringing in. So if you're spending between one and 4%, Jeff, I believe you're alluding to two or 3% is where a lot of people are with that.

And you're earning 5%, 7% or more. At the very least, you're giving yourself some room if there's [00:33:00] mistakes, if unexpected things happen, you're not gonna be up at night. And as I learn the hard way, it's not a bottomless pit. All those zeros. If you don't have some kind of discipline, they'll quickly go by the wayside in frivolous kinds of things.

And there's things called, to your point, Jeff, taxes, insurance, other things that we never think about. Wow, they all add up. So that said, A.J., let's go back to one of your earlier points and let's talk about, well, how am I gonna structure my new daily routine and how am I gonna redefine my identity and purpose?

What's the data saying on that? What did you find interesting in terms of what the respondents were saying?

A.J. Wasserstein: So we asked participants in our dataset, how happy they were, they told us they're a 7.5 on a 10 point scale.

Jeff told you already that that the average happiness in the US according to the world happiness report is 6.7. What Jeff didn't tell you is that the average happiness in the US for people above 60 years old, and that hurts all three of us [00:34:00] on this phone call or getting close to that is I think 7.3.

So people in our dataset with a $32 million average net worth or are as just about as happy as people over 60 years old and people in some of the Nordic countries are just as happy as people in our dataset with 7.5 happiness indication. 

So only 40% of our dataset has responded by saying that they found a new purpose and self definition. So that means 59% have not. So that's pretty staggering. And just to clean up our dataset a little bit the average length of time from exit in our dataset is six years. So in six years, 60% of the people still don't know what they're doing, who they are, what their next calling is.

So this is very sobering data. If you ask people, have they found new purpose and self [00:35:00] definition if they've sold their business in two years or less, the answer is zero.

Jeffrey Feldberg: Wow.

A.J. Wasserstein: If they've sold the business in three to four years ago, the answer is 8%. If they've sold the business five to 10 years ago, the answer is 17% and 50% who sold their business 10 years ago have found new purpose and self definition.

So what does this tell you? It takes a long time.

 I'm gonna be an optimist. The further out you go, it gets better. There's a marked correlation. More self definition and purpose, but the lengths of time that it requires are quite material.

So we asked, our post-exit entrepreneurs, if they were happier as post-exit entrepreneurs or as active CEOs. And that was a jump ball. So 56% are happier as post-exit. But obviously the inverse was happier as an active CEO, so like nearly a jump ball. I find that [00:36:00] fascinating.

I mean, 'cause this is what we're all pining for. The big explosive grand finale exit yet. Yeah. It takes people forever to find new purpose and self definition. Their happiness is there's a 11% premium over everyone else in the United States, and it's sort of a jump ball, whether they were happier as a CEO or as a post-exit entrepreneur.

Jeffrey Feldberg: Yeah. So fascinating way. And you think of all that goes into getting to that point. And then we're like deer in the headlight, at least in the early years. The early days of, okay, what am I gonna do? What does that look like? And so Jeff, let me ask you, as we're going through some of these stats, would love both your personal experience and now hindsight, always being 20/20, where you're at as you look back on your journey.

And also as you look ahead.

Jeff Swearingen: Yeah. To, well, I'll start just by following on A.J.'s point about finding meaning and purpose and identity. I think if you were to ask post-exit and entrepreneurs a lot, what they were striving for, one of the words that would come up quite often, it's freedom. And having absolute freedom [00:37:00] is such a gift.

It's, it really is a, it really is a prize worth having. Where you get into trouble is when you're talking about doing something meaningful and impactful where you're an important part and useful toward a cause that conflicts with freedom. And when you think about doing something bigger, grander, pouring yourself into something, it comes at the expense of that freedom that was so, hard won.

And I think that's one of the real paradoxes and one of the things that you have to keep front and center.

A.J. Wasserstein: So I think the biggest conundrum in this whole post-exit game is finding a halfway point. So it's very easy for post-exit entrepreneurs to go back in a hundred miles an hour. So they could always be a CEO. Again, lots of people want to back 'em, support them.

They probably have the tools, skills, resources to play the movie again. So that's choice one and an extreme choice two, at the other extreme is to live a life of leisure, play [00:38:00] golf all day, ski all day, whatever. Life of leisure means to you? Travel relentlessly. The hardest part of all this building on what Jeff just said, is how you find meaning, impact, connection, community, purpose, fulfillment, without being all in all the time.

So everyone's ideal scenario is how do I find a gig, a place where I'm committed 10 to 20 ish hours a week. I have social contact, I have intellectual stimulation. I feel very useful. I have a rhythm to my week. I'm giving up a little freedom but I get other things that are very appealing to me.

That is the biggest mystery. 

How do you find that part way? 

Because no one wants to give up all the freedom. But no one, anecdotally, Jeff, most people really don't wanna play golf all day. I mean, they might wanna do that for a year but many people we've spoken to don't want that as a [00:39:00] permanent existence.

So would you agree, Jeff? Is that sort of the biggest riddle, how you find this partway point?

Jeff Swearingen: I think you said it exactly right. I think, if anyone look back at what made us successful in our business, one of the key ingredients was being maniacal about running that business. And no, and I don't think most people wanna turn at that on any level. So it's difficult to play that middle ground.

Having something out on your calendar, even if it's, even if it's something as simple as a, a 30 minute call where someone wants some advice, you think, oh, I want to do that, but then it grinds at you that you have this thing that's sitting out. On your calendar somewhere and that it snows and you want to go skiing, or a day that you get an invite to go, on a trip with someone.

So it, I haven't figured it out personally, and it seems like such an easy thing to to address. But I think that's one of the real conundrums of post-exit life is finding that, that midway point, as you call it.

Jeffrey Feldberg: And as we're talking about that, I find myself reflecting back on another section that I highlighted, and I'm gonna quote it and I quote, [00:40:00] "Post-exit, Exit Life is fundamentally a simple trade. The entrepreneur swaps their company. For and freedom. But with that comes confusion, a sense of loss and a lack of purpose, identity and goals.

We ask our survey participants what they liked most and least about their post-exit life. They enjoy freedom, having an open schedule, spending time with family and friends, and pursuing recreational activities. However, they feel lost, lack meaning, and miss being part of and leading a team. The trade is not free, and post-exiters must reflect on who they wanna be after selling their fishing boats. Otherwise, the pros of exiting might be overwhelmed by the cons." 

Very well said on that. And let me tie that in to philanthropy, and I deliberately wanted to leave that for last because I know it can be such a divide. post-exit, pre-ex Exit. Coming out of an exit, we can often have different views of what we want going into the Exit.

So when it comes to philanthropy, both personally and what the data is showing, Jeff, do you wanna start with us [00:41:00] there of what your experience has been and what you saw in the data?

Jeff Swearingen: Absolutely. I think this could be bucketed under that same, what the world tells you should do when you Exit, is spend time in philanthropy. And a couple of things, just in my experience where you think I'm gonna give my time and my talent and my treasure to existing nonprofits, A lot of times the focus is on the treasure.

And I hate to say that, but they nonprofits need money and your money and your friend's money, and anything you can do to add more money to the cost, nothing wrong with that. It just is a little bit different when you're used to being a contributor with your time and your talent. I would also say that if you participate up close in nonprofit, it runs at a different pace than most businesses.

So it can be challenging for someone who's used to. Piloting a jet boat to piloting a cruise ship or a container ship. And that can be frustrating. Back to the data, it is surprising to me, and I think I, I'm probably guilty here as well of falling into that money gap is , so little is allocated [00:42:00] toward toward nonprofit both during our lifetime and in the and in the afterlife.

So I haven't quite figured that one out yet either. But those are just a couple of observations about about the why.

Jeffrey Feldberg: Some terrific insights there, and as I'm thinking about that age, wanna weigh in from your perspective?

A.J. Wasserstein: So our dataset says 84% of our post-exit and entrepreneurs are planning on giving less than 50% of their wealth. So, the highest category, 28% of post-exiters in our data set are only gonna give five to 10% to philanthropy. And they're doing this over their lifetime. So 88% wanna do it over their lifetime.

So, I would be a little provocative. Yeah, I don't know if you agree with me, Jeff, but thi this data was slightly disappointing to me. I was hoping our participants would be more philanthropic and more philanthropic [00:43:00] earlier. So I would push people to think about being more generous and front end some of that generosity rather than push it to the back end.

And part of that's built on Jeff's math, which he explored earlier. You look at how much you're spending, you look at, what, what's gonna happen to that capital? And at least in our data set, people are building huge quantities of Wealth at the back end, which it could only go to consumption, taxes philanthropy or giving it to individual people.

Do I have that right, Jeff? Am I saying that correctly?

Jeff Swearingen: Yeah, it like, I think it just in basic terms, where's all that money gonna go?

We can't be the first people to have to have gone through this. And I would argue, especially as I'd like to think of myself as as philanthropic, and I think others would as well at least have a plan to spend it.

If you decide, I'm, but I'm gonna spend it on, travel or whatever else, at least you're putting the money back into the system. [00:44:00] We don't own this money. We're a steward of this money. And yet and I'm included in this we have a tendency to hoard and grow more than we have to let it flow.

So even if you said, look I'm allergic to philanthropy. I don't believe in it. I don't believe in nonprofit. I still don't understand the logic behind letting the pile grow bigger and bigger and bigger. Because to your point, it's either gonna go to the to, to taxes or it's gonna get inherited by someone.

So, it's the part that I'm most puzzled by.

Jeffrey Feldberg: And pure conjecture here, and again, this could be an entire episode in and of itself. When it comes to philanthropy, I'm detecting a hint of cynicism, some negativity that perhaps in years or decades past simply wasn't there. Do you think something's changed out there, or in terms of perception or the narratives that are being said now when it comes to philanthropy and charity?

Jeff Swearingen: It's a different mindset inside a philanthropy or a philanthropic organization than it is in an entrepreneurial venture. I think things move slower. And I just think it has a different feel to it that maybe is one of those [00:45:00] habits that that need to be unlearned in retirement.

I'm not negative in, in any way toward philanthropy or nonprofits. There's so many good good ones doing so many good things. I think it's just difficult as an entrepreneur to slot yourself in and be anything other than just a basic source of cash, which perhaps hurts our egos because we wanna be useful in ways other than just writing a check.

Jeffrey Feldberg: And perhaps it goes back to some of the points that we've been talking about earlier, which essentially is, Hey, who do I wanna be when I grow up post-exit? What does that look like? And perhaps there's a role now that we can begin to play on the philanthropic side of things earlier rather than later.

So that when the time does come, we're prepared. We're set up for that. We've been conditioned for that. A.J., thoughts about that?

A.J. Wasserstein: I agree with you. I think you said you should embrace and conserve philanthropy a little bit earlier and sooner. I think a big decision people need to make is, are they focused on big, traditional.

Philanthropic organizations, so no names or do they want to [00:46:00] support smaller emerging philanthropies? And that's just sort of a philosophical decision. Another dimension people can look at is do they wanna make fewer big donations or many smaller donations? And finally they need to think about the process by which they select and support.

If I could just share what our family does, and by no means are we perfect, but we only give money out once a year, and it's the day after Thanksgiving in the us. And if people ask us for money in the interim, we say, well let you know at Thanksgiving. So you're sort of making decisions cohesively within the context of a plan rather than on a reactionary basis.

Jeffrey Feldberg: And I love how that's really premeditated. It's thought of ahead of time, you see where you're at that particular point in time, and then as a `decision. And I like A.J., how you're doing that as a family of, okay, here's what we're gonna do. And I would suspect you're talking about that behind the scenes and for [00:47:00] the next generation, you're having them tune into philanthropy so that they can carry on that tradition in a way that really would work for them. And Jeff what about you? What are some of your family traditions? If I could ask, in terms of you, your family, your traditions, when it comes to philanthropy?

Jeff Swearingen: We've been more reactive than proactive. We have, we have particular causes that, that we like to support dogs and animal welfare locally, definitely smaller rather than larger. Nothing against the larger nonprofits, but definitely like to feel like you're having more of an impact and having more of an impact locally.

And then honestly I've just flat out stolen A.J.'s approach to the the Thanksgiving giving tradition, which I think is, which I think is great. Brings the family in, allows you to have a list, allows you to not have to make a knee-jerk response in the moment of request and allows you to be more thoughtful about actually making the gifts that you plan to make.

Jeffrey Feldberg: Absolutely love that. That said, before we go into wrap up mode, my goodness, there are so many other questions that are subsets of these questions that I didn't get a chance to ask.[00:48:00]

Is there a question, a theme or topic that we haven't yet discussed that you wanna share with a Deep Wealth Nation before we go into wrap up mode? A.J., why don't we start with you?

A.J. Wasserstein: So our data says people do not think about this in advance. So I would encourage people to plan and do it intentionally and do it before the Exit, not after the Exit.

Unfortunately there are no short answers, so people have to be prepared for this to be harder and take longer than they might expect. And if they are a CEO. They should think about their Exit now, not the mechanical components of the Exit, but what the post-exit experience is gonna be. You cannot start that early enough, and if you're bumping up against investment bankers and wires, you're already behind.

Jeffrey Feldberg: Some terrific advice there. And Jeff, we'll turn over to you. Same question. Anything that we haven't covered yet, question wise, topic theme that you'd like to [00:49:00] share before we go into wrap up mode?

Jeff Swearingen: Yeah, I think A.J. Said it well there it I wish I would've known then what I know now. I'm not sure I would've received it, but if I had to maybe take one thing or leave one thing, it would be change your mindset away from accumulating dollars and take dollars away as your scoreboard for how you're doing.

That's hard to do, and I would replace it with energy. If you have good energy for whatever it is you're doing, whether you're giving money away or watching tv or doing a puzzle or playing golf, if you've got good energy, you've got everything. And if you've got bad energy or you have low energy, negative energy, it doesn't matter how big the yacht is that you're on you're poor.

It doesn't matter how many dollars are on the board. As part of this journey I've been on, I've been really trying to identify and source the things that give me energy and focus on those rather than keeping track of the portfolio or trying to eke out another couple of couple of basis points of return.

Jeffrey Feldberg: It's great [00:50:00] advice and it reminds me of Maya Angelou's quote. It's not what people say that you remember, it's how they make. You feel, and if I can take that quote, Jeff, to what you're saying as perhaps a bit of a compass for life is, hey, do things not for the money, not for the ego. Other kinds of things.

Do it because it actually feels good, a good kind of good do it. So it has you feel good. That good energy as you're talking about it. And actually, as you mentioned, that is a perfect segue as we go into wrap up mode here. And it's a tradition, and A.J., you know this tradition very well. It's a tradition here on the Deep Default podcast where it's really my privilege, my honor to ask every guest the same question and let me set the question up.

It's a fun one. So when you think of the movie Back to the Future, you have that magical DeLorean car that will take you to any point in time. So imagine now it's tomorrow morning, you look outside your window. Not only is the DeLorean car curbside, the door is open, it's waiting for you to hop on in what you do.

You're now gonna go to any point in your life, Jeff, A.J., perhaps when you were a young [00:51:00] child or a teenager, whatever point in time it would be. What would you tell your younger self in terms of life lessons, life wisdom, or, Hey Jeff, A.J., do this, but don't do that. What would that sound like? So A.J., why don't we start with you.

A.J. Wasserstein: So today was the last day of the semester for me, and I just did this big wrap up lecture for my class. I'm gonna respond by telling you exactly what I told my students. So, my students are mostly approximately 30 years old, and I am so incredibly jealous of them. So they are at the beginning of everything.

Unfortunately, the three of us are not the beginning of anything anymore in our lives, but they are the beginning. They're building lives, they're building careers, they're building families. I am just so incredibly envious and jealous of them, and they are scared, they're nervous. They don't know what.

Door to take what path to go on. And I try to tell them figure out your values. Map out a 10 [00:52:00] year life plan. Plant the seeds you need to plant today to get to where you wanna be in a decade. Do not deify entrepreneurs. We are not special. We just took the first step in a lonely, scary ambiguous journey.

We were prepared to fail but we are not special in any way. And I am really confident that my students and my younger self, you're gonna crush it. You just need to map out your values, your life plan. Take that first step and relish and appreciate those early scary days because they are truly the best days.

And I would love to trade places with my students.

Jeffrey Feldberg: Some great Advisor of, Hey, take the first step. But before you do that, take some time aside, figure out who you are, what your perhaps moral compass is, what that North Star is, and then just go do it. You're gonna fall along the way, but that's okay. It's all part of the process. I love that. Jeff, what about you?

Why don't you bring us home? What advice, what insights would you give to your younger self? What would that sound like?

Jeff Swearingen: Wear [00:53:00] sunscreen. And and then I'd say it's gonna be okay. And there's no way for you to know what's going to happen. So you can't trust any plan. You can't trust any prognostication or article or, seven habits of this in 10 ways to quick Wealth. I would say trust in your ability to deal with whatever life brings you.

And if you have that, it's gonna be okay. I would say run your own race. Do the things that make you happy and bring you energy. And I would say chase experience and chase energy. Don't chase money.

Jeffrey Feldberg: So true. If you chase the money, my goodness, it usually doesn't end up well, but if you chase the passion, more times than not, the money follows. Well, that's been terrific. Well, that said, congratulations. It's official. This is a wrap, A.J.. Jeff, as we love to say here on the default podcast, may you both continue to thrive and prosper while you remain healthy and safe.

Thank you so much for sharing your wisdom and your insights today. God bless.

A.J. Wasserstein: Jeffrey, all [00:54:00] the thanks. Go to you. Thank you so much. And Jeff, thank you for being a great writing partner and research collaborator.

Jeff Swearingen: you for including me. I really appreciate it. Appreciate you both. Thank you.

Jeffrey Feldberg: So there you have it, Deep Wealth Nation. What did you think? 

So with all that said and as we wrap it up, I have another question for you.

Actually, it's more of a personal favor. 

Did you find this episode helpful? 

Have you found other episodes of the Deep Wealth Podcast empowering and a game changer for your journey? 

And if you said yes, and I really hope you did, I have a small but really meaningful way that you can actually help us out and keep these episodes coming to you.

Are you ready for it? 

The dramatic pause. I'll just wait a moment. Drumroll, please. Subscribe. Please subscribe to the Deep Wealth podcast on your favorite podcast channel. When you subscribe to the Deep Wealth Podcast, you're saving yourself time. Every episode automatically comes to you, and I want you to know that we meticulously craft Every one of our episodes to have impactful strategies, stories, expert insights that are designed to help you grow your profits, increase the value of your business, and yes, [00:55:00] even optimize your post exit life and your life right now, whatever you want that to look like.

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So all that said. Thank you so much for listening. And remember your wealth isn't just about the money in the bank. It's about the [00:56:00] depth of your journey and the impact that you're creating. So let's continue this journey together. And from the bottom of my heart, thank you so much for listening to this episode.

And as we love to say here at Deep Wealth, may you continue to thrive and prosper while you remain healthy and safe. 

Thank you so much. 

God bless.