Finding Purpose with Money at Later Stages with Peter Merrick | E024

Philanthropy and finding purpose.

In this episode of Financial Planning for Canadian Business Owners, Jason Pereira, award-winning financial planner, university lecturer, and writer, talks with Peter Merrick, Financial Expert and the author of the book The King of Main Street. Peter talks about finding purpose through philanthropy, the ways people can give back, dynastic wealth trends, and overcoming charity fatigue. 

Episode Highlights: 

● 01:20 – Peter Merrick explains philanthropy. 

● 03:14 – What awakens people to the desire to give back? 

● 06:11 – How much is the will to give driven by people feeling they have way too much? 

● 12:47 – Andrew Carnegie talked about giving wealth after you are dead. 

● 15:10 – Generations are now living longer beyond 65. 

● 19:40 – What causes charitable fatigue to set in? 

● 25:38 – What causes some advisors to not advise their clients about philanthropy? 

● 37:31 – Revisit the client every year and adjust what is important to them. 

● 39:44 – Advisors don’t find philanthropists, they find them. 

● 41:20 – Peter Merrick shares a personal story about his father’s desire to give. 

● 42:50 – Time is your most valuable asset. 

● 47:30 – Peter Merrick says that you should read The Gospel of Wealth by Andrew Carnegie and Maimonides’ Eight Levels of Charity. 

● 50:40 – Jason Pereira tells a story of an oil man who gave more than half of his wealth and JK Rowling’s charity. 

3 Key Points 

1. The first generation tends to earn wealth. The second generation witnessed part of the journey towards that wealth and maintains it. The third generation tends to spend it all and has to go back to work. 

2. Andrew Carnegie talked about giving in three ways: giving to your family, giving after you are dead, and giving to causes that are important to you through your time and money. 

3. Around age 55 is when people tend to plan their exit strategy and philanthropy starts to mean more. 

Tweetable Quotes: 

● “People that have means also want to give, and the way they want to give is with purpose. Purpose is finding something they care about, something that has touched them in their life and they want to make a difference.” – Peter Merrick 

● “There is no such thing as charity. They call it justice, meaning, if you’ve done well on this planet, you have benefitted from the society and the people who’ve come before you, and also the society as you live, and it is your responsibility to give back.” – Peter Merrick 

● “If you can give back, you can act quicker than let’s say a government or a committee. This is something that a lot of people as baby boomers retire, who are the richest generation that has ever lived on the planet. They have the ability to make a difference.” – Peter Merrick 

Resources Mentioned: 

● Facebook – Jason Pereira’s Facebook 

● LinkedIn – Jason Pereira’s LinkedIn 

● FintechImpact.co – Website for Fintech Impact 

● jasonpereira.ca – Website 

● Linkedin – Peter Merrick

● Thekingofmainstreet.com – The King of Main Street book 

● Book:The Gospel of Wealth by Andrew Carnegie 

Full Transcript:

Speaker 1: Welcome to The Financial Planning for Canadian Business Owners Podcast. You will hear about industry insights with award-winning financial planner and entrepreneur, Jason Pereira. Through the interviews with different experts with their stories and advice, you will learn how you can navigate the challenges of being an entrepreneur, plan for success, and make the most of your business and life. And now, your host, Jason Pereira. 

Jason Pereira: Hello. Welcome to Financial Planning for Canadian Business Owners. I'm your host, Jason Pereira. Today on the show, I brought back Peter Merrick. Peter was previously on the podcast to discuss the concept of finding purpose after you're done working through mentorship as a means of keeping yourself engaged, stimulated, and again, feeling purposeful. Today on the show though, I brought him back to talk about another dimension of how to basically find purpose after you've retired, and that's through philanthropy. And with that, here's my interview with Peter. 

Jason Pereira: Peter, thanks for joining me again. 

Peter Merrick: Thank you very much, Jason. 

Jason Pereira: Always a pleasure. Your first interview went very well and was very well received, so I thought I'd... We were chatting, I thought it would make a good idea to expand upon finding meaning after you retire. So let's talk about philanthropy as a means of doing so. Tell me about your experience in this area. 

Peter Merrick: My experience in this area is people, when they start looking at philanthropy, what they're doing, Jason, is they're looking at what they've accumulated in their life, and that's not just money, it's also their experience. And hopefully, they've gleaned wisdom. So a lot of people want to share that. And people who have the means, they also want to give. But the way they want to give is with purpose, and purpose is finding something that they care about, something that's touched them in their lives, and they want to make a difference in people's lives. And that's really what philanthropy is. And one thing that people confuse with is the word charity in certain traditions, there's no such thing as charity. 

Peter Merrick: They call it justice, meaning if you've done well on this planet, you have benefited from the society and the people who've come before you, and also the society as you live, and it's your responsibility to give back. But you have the ability if you can give, is you can act quicker than let's say a government or a committee, and this is something that a lot of people, as baby boomers retire, who are the richest generation that's ever lived on the planet, they have ability to make a difference for the young generation of today and the generations to come. 

Jason Pereira: Interesting. I mean, personally-held belief, I too agree that we all stand on the shoulders of giants of those who came before, and there's a need to give back to the communal pot. But not everybody feels that way, but those people self select out. So let's talk about what the triggers are for their desire to do so. I mean, I've seen everything from people who tithed 10% per year on purpose, of course on purpose, to associations, charities, religious causes, whatever it is, to people who just get to a point where it was a goal down the road, and now they're trying to realize it. To your experience, what specifically happens with these people? What awakens them to the desire to do this? 

Peter Merrick: I believe what happens is life. And what I mean by that, Jason, what I've seen personally is, let's say someone's died, they've been really sick, a cause that they're really passionate about and they know that they can't do it by themselves, and they have the means. I think what it comes down to is just one realization for people who really choose to give. And they realize that one day, they won't be here, they've come to terms that one day they will not be walking this Earth, they will die. And at that point, they start asking themselves a very introspective question, "What has my purpose been? What will I be remembered for? How will I leave this Earth after I'm gone? Will it be better? Will I have done my part to make the world better than I found it?" 

Peter Merrick: And I believe it all comes down to the realization that you and I, if we're lucky, we're very lucky right now, we might get maybe 80 to 100 circuits around the sun. That's it. It's a blip in time. And what did we do, and what did we leave during that blip? 

Jason Pereira: Also, to my experience, I've seen that, especially when you're in the accumulation stage, and especially when you're an entrepreneur, as an entrepreneur, you are putting out so many fires. you have your finger on so many buttons. You are just constantly consumed by the benefit of your business. And then God willing, you get to the point where you have the privilege and the benefit of saying, "I've made it, and I've gotten to the point where I've delegated a lot of responsibility away, or I've sold the business, or I've gotten to a point where I'm easing into retirement, and now I have time to do things other than worry about making this thing go." 

Jason Pereira: They start looking at the rest of the world, and almost through the same kind of entrepreneurial lens of, "I was fixing problems through my business my entire career. I see a problem in the world, how do I fix that? Or how do I help fix that?" Now one question for you, I'm setting you up here because I've seen this happen. How much of this do you think is, in some cases, driven by the fact that... I've seen countless people get to the point where they have ... We show them what their kids are going to be left with, and they're just like, "I don't want to leave them that kind of money." Have you experienced that? And if you have, how much of the desire to give is also driven by the realization that, "Oh my God, I'm going to have that much as an old man? This doesn't make sense." 

Peter Merrick: I believe that answer is individual for every individual. And what I actually rely on is, you were mentioning earlier that people rely on giants. And the greatest giant in giving who's lived in North America in recent times was Andrew Carnegie. He would be worth close to $400 billion today if he'd lived. Now, he was not considered a very nice man while he was in business. However, three years before he sold his business, and it was shown that he was the richest man on the planet, he wrote an essay. And this is an essay that I believe that the pledge, which Bill Gates and a lot of billionaires are making when they're going to donate half their fortunes, have read. And this is on the internet, you can get it at a bookstore, you could order it online. 

Peter Merrick: And what the Gospel of Wealth is, and it's the essay that Andrew Carnegie wrote, 1898. He did not sell his business until 1901. And in it, he talks about what his next stages are, and the thought that he had actually put in. And what he actually did is, he broke it down into three ways that you can give your money away for those who are really successful. And the first way is, you can give it to family members. And what he had actually come to the understanding was, when you give to family members, what you're trying to do is you're focusing on family pride and the pride of the accumulator, because you want them to carry on your legacy. And he was fully against this. 

Peter Merrick: He felt that you should look at giving your clients enough, so giving your offspring, your family enough that they'll be comfortable, at the same time, not enough where they never have to be productive. And he used the example, or I'll use the example, you have two children. One happens to be a corporate lawyer in a very large firm, who's a partner. And the other child is developmentally disabled. You give to different children based on their means and their need. And that's how he looked at it. He said, "If you've accumulated vast amounts of money or a fortune, it's your responsibility to give because it's just hubris and it's arrogance and it's hoping that your progeny will go and outshine you." 

Peter Merrick: We've had countless cases where you and I have met children that came from very, very wealthy families, whose parents actually gave them the money. And these kids, unfortunately, they're good kids, but when you can go out and buy a Porsche or a Ferrari, and you don't have to work for, you have no appreciation for it. There's a term called the bread of shame. And what that is, you cannot keep what you have not rightfully earned. And one of the things that all the studies have shown that I've read is if you were to look at three generations, a generation makes it, maybe the generation that maintains it, and then the third generation, the money's usually gone, and they have to go back to work. So they call it shirt sleeves, they're shirts. 

Jason Pereira: Yep. It's a well known issue. I mean, lots to unpack there. I mean, first off, I think that one of the more prominent readers and people who've spoken out about the same thing that Carnegie did in his speech was Warren Buffett. He specifically wrote an article years ago, or it was an interview, I can't remember exactly, that actually got Bill Gates thinking and led to The Gates Foundation. And what he said there echoed what Carnegie said, specifically about two things. He said, "To reward your children with vast amounts of wealth, where they never have to work and do anything is basically... They've already won the lottery of the womb. Why are you reinforcing that?" 

Jason Pereira: And then the second point was, the advice was, give them enough that they can do anything, not so much that they don't have to do anything. He basically referred to it as essentially, in a lot of ways... And he poked at various dynastic fortunes where you get to the point of just sheer doing nothing. Let's call it the royal family. You basically, you're rich, you have to do nothing other than maybe attend galas. Do you really want to destine your family's future to basically become just preachers of leisure? Maybe that's appealing to some, but definitely not appealing to those who typically made the money. And then the second point is about the shirtsleeves or shirtsleeves phenomenon, which I totally have seen and believe in and get. I get it. 

Jason Pereira: The first generation suffers to make it. The second generation probably was around for part of that ride and respects it, and looks to build upon it, and the third one has known nothing but that life. So there's something about scarcity that makes us all hustle. And at least the knowledge of having lived in scarcity that makes us all hustle. And the last point I'll make on this is that I have been privileged enough to know individuals who are third generation of dynastic fortunes, if not fourth generations of dynastic fortunes. Well, let me take a step back. Anything that goes over multiple generations is dynastic. But basically, these people whose grandfathers or great-grandfathers were the first people who made the money and now it's down to them. And I often think about, I've even asked them, like, "I feel like you're probably under immense pressure to live up to that, or just not screw it up because of this known phenomenon." 

Jason Pereira: And at the end of the day, I ask, "How is it possible? Or how is your family focused on doing that?" And they said, one of the exact responses was, "I basically was not given anything." He said, "Yeah, all the basic vacations, food, shelter, education, all that. But if I wanted anything else, it was very clear that at a certain point, I have to go out and make my own way. And as for everything the family had done, that wasn't mine. That was for us to nurture for future generations to enable the same amounts, the same luxuries that we have now, but it's not my wealth. And I have to contribute to that wealth, otherwise, I'm never going to touch that wealth." 

Jason Pereira: And that sort of mentality is very different than a lot of the cases where I see it go wrong, where simple examples when I've seen it go wrong is the attitude of, "I grew up with nothing. It was terrible. I don't want my kids to go through that," and they just spoil them rotten. And then they get to a point, it's like, "Well, it's too late now because they're just going to spend every penny I leave them." And unfortunately, that's more common than not. 

Peter Merrick: Carnegie talks about the second way of giving wealth, and that's to give it after you're dead. And this is much of the planning that's actually happening today. He made and observation. He says, "The person who chooses to give after they're gone, this person wouldn't have given at all because they could have taken it, they would have, compared the wealthy, miser and the steer as only being a value to society when they're dead. And this is something which is a lot of people should think about. They should think about, "Do I want to see the fruits of my labor benefiting other people in the community, in society while I'm alive? And that goes back to what we were saying, which was purpose. 

Peter Merrick: And many people who do in their wills and say, "I want to give to the cancer society. I want a park named me. I want a hospital." These individuals, they're not doing it while they're alive. They say, "Take care of it when I'm gone." Well, I don't know anybody who's actually come back from the dead. So in essence, how are they actually going to see the product of their work, how it benefited the society as a whole? So number two for Carnegie is someone can actually give it away when they're gone. 

Jason Pereira: Before we get number three, let's just talk about number two as a dimension. I wonder how much of that... I totally get the endowment effect, they've got it, maybe they're on some level afraid to give it up, and I understand that. But I often wonder, how much of that is possibly due to poor communication through planning? And what I mean is, I'll give you a contrast, so in our process, we will basically not only do the financial plan with the normal projections, but we'll also do what we call a minimum rate of return analysis or they see what the minimum rate of return they need is, but we'll typically stop at zero, and say, "Okay. Can you retire and live the lifestyle you want and leave the estate you want and to do everything you want to do, even if you made no money for the rest of your life?" 

Jason Pereira: I deal with a number of very affluent families, and a lot of times the answer is yes. And even with that, there's times when we look at this and say, "Okay, if we just apply a 2% rate of return, you're basically going to leave behind this kind of money," and the response is sometimes, "I don't want to leave that kind of money behind." So I think sometimes it's just, has it been communicated, the scale of their wealth been communicated with them? And has the concept of saying, "Okay, you have to understand that we can now bump this into two categories. You have your core wealth that is required to get you what you want out of life. Then you have your excess wealth, which basically between now and then, you can do whatever you want. You want to go on 12 around the world cruises per year, per month, whatever it is?" 

Jason Pereira: "You want to blow it left right and center? That's all right. But if you talked about philanthropy in the past, why don't we bring some of that to the present, and bring that today, benefit from the tax reductions now and start doing, why wait until 20, 30 years to do it?" I've had several conversations in that regard, and it's a 50/50 split. Sometimes it's the first time that they've contemplated it, and they're just not ready. Other times. They're like, "Okay, let's start looking at this." So I just wonder how often it comes down to. they haven't really looked at the full scope of their wealth and fully come to understand the options set available to them. And unless you're well informed and you're well-planned for, you don't want to have that insight necessarily. 

Peter Merrick: I fully agree with you. And one of the concerns that a lot of people are having is this is in the last generation, maybe one generation before, really no one ever lived beyond 65. We've spoken about that. So the big fear that a lot of people have is like, "What's it like for 30 years not working?" 

Jason Pereira: Or longer, that's the reality of it. 

Peter Merrick: Or longer. And that's a reasonable fear that people actually have, it's very reasonable. But again, there's certain people that can give philanthropy in a number of ways, they can also give their time. Because what is money? It's a proxy for yourself. But the greatest philanthropy that people actually enjoy is actually seeing the benefits of their work. And that's number three of Carnegie's way of giving wealth, giving in a way that the benefactor, the person making the contribution to causes that count, that they see the benefit. And being mindful about it, not just writing a check, but actually really looking for causes and looking for something that's important to you and actually getting involved in it with both your time and your money. 

Peter Merrick: And many people, wealthy individuals who are constantly get up for money because when you're giving money, you're creating a relationship, and when you're taking a gift, you're also creating a relationship. So that being said, "Choose something that's really important. And I think it's a lot better for people, once they know, Jason, which charity is important to them, then they're able to let everyone know, "That's my charity. That's what I give to." Like I have a friend who's very wealthy. He is worth a few hundred million dollars, and his charity is Ronald McDonald's house. He thinks that is the key. 

Jason Pereira: It's a great cause. 

Peter Merrick: And I know someone, they came to Canada and they came here as a Hungarian refugee, and they received a gift from one of our former prime ministers, Brian Mulroney when he was a Hungarian refugee. And he got into Canada because he was a student. So their pet pash, both him and his wife, were giving two universities across Canada, across France and also in Eastern Europe, because that was something that he appreciated because that gave him freedom, that gave him opportunity, and that gave him life and it had complete meaning to them. And everybody knew that if it was a university, they would give money to, but other causes, they really weren't that involved in because everybody knew what their passion was. 

Peter Merrick: But they had identified something they were passionate about. They felt it was important to give to the next generation knowledge, and knowledge was freedom because that really gives people the ability in North America, knowledge and hard work gives people in North America the opportunity to become very successful. 

Jason Pereira: I want to come back to what you said specifically about retirement being pretty much a new concept. And you're absolutely right. I think a lot of this, the limitations around thinking on this simply have to do with, the boomers are really the first generation to look at a very high probability of making it to age 100. And their parents before them were the ones who really looked at the probability of making it far beyond 65. What people don't realize is that the concept of a retirement age can largely be accredited to Otto von Bismarck when he was chancellor of Germany, and he created the first state pension. 

Jason Pereira: But essentially, that pension was meant to give you money because at that age, because it was largely an agrarian or industrial society, your body was so broken, you couldn't work anymore, so you had no choice. It was either that or you were dead on the street. So that's basically where it was pegged. The thing that people don't realize about that is that at the time, very few people lived past 65. In fact, if you were to look at the gains and mortality we've had since then, if we had shifted the retirement age with those gains, we would basically have a retirement age of 95 now. 

Jason Pereira: So this weird change that happened through an anchoring of age 65, and then all the planning that's happened with our industry in the last 100 years around the concept of enjoying retirement, which was a foreign concept to most people, the reality is that, we're still very young into this frame of mind. And the thinking about what happens at the tail end of this, and what happens in terms of wealth transfers to people other than yourself and your family is still a very new concept. 

Jason Pereira: Carnegie himself, as you said, it's only a little over 100 years old. It takes a long time and multiple generations for ideas to take residence. The second piece I wanted to talk about was the identification of cause. I think that that is hugely valuable because usually in most people's lives, depending on whatever hardship they've seen, there's something that resonates with them. The one thing I do find as a challenge when talking to people about charitable giving is, how much do you think there's a concept of almost charitable fatigue in the marketplace right now? 

Jason Pereira: I mean, every charity has gotten really good at basically having these massive events to rise, to conquer whatever races for whatever. And I don't know about you, but I feel like I got a charitable contribution request every other week these days. And I've spoken to many clients about this, affluent and otherwise. And a lot of times, that almost wears them down. Have you seen any of that, the ones who don't identify the one cause feeling that they're doing a lot of small things and that's enough? Have you encountered that at all? 

Peter Merrick: I have. And that's getting back to the example of the Ronald McDonald's house, the individual who's very successful who chose one cause. And why he did it is that someone he knew who was very, very successful. He asked him, "How do you deal with this? How did he deal that people read about you in the paper? They discover you've given money to another charity." Because the only people actually reading who's giving in many cases happen to be other charities who are- 

Jason Pereira: Other charities. Yeah. 

Peter Merrick: And that's why it's very important in the planning process, and you know Jason, you're a special type of planner because you're willing to go deep and ask those questions. Unfortunately, many people who say that they're a financial advisor, they might just be a stock broker or an insurance agent, and they're not willing to do the comprehensive planning to say, "What is important to you. And after you're gone, what do you want the world to be like? And what do you want to be remembered for?" And most advisors haven't done that for themselves, so how can they expect to ask someone else that fundamental question? 

Peter Merrick: And I love writing because it's a lot of introspection. And bringing someone through that introspective process where they have to look at both the good and the bad in their life, is very difficult. And for someone to be brave enough, if you're an advisor, to work with an individual through this, you ought had to do this yourself. And unfortunately, many advisors haven't, and it's incumbent for both the client and the advisor to be introspective. And also responsibility for the client to look for an advisor, if they don't have that skillset, to help them. I have a joke that I often use, what do you call someone who finishes second last in medical school ten years ago? 

Jason Pereira: A doctor. 

Peter Merrick: And you don't know. You're right. You don't know if that's your doctor. And many people who say, "I have a financial advisor. I have an accountant. I have this." Other than the title that the person has, they don't know. Many of them just don't ask questions. I've gone into large companies, large financial firms where the brokers are told, "This is what you sell." I remember two weeks before [BREACS 00:22:54], that gold company- 

Jason Pereira: [inaudible 00:22:56]. 

Peter Merrick: I remember one of the largest bank in Canada, their brokerage firm handed down a buy list, and their brokers were selling it like crazy. And these people here didn't even question it, they just did it. So a lot of people are talking about philanthropy now, they're looking at it in a way to start a conversation, to make money. However, they really, other than those being talking points, they've never actually sat down and asked for themselves. So what I'm going to suggest to somebody who's thinking about philanthropy is, there are key people. And one thing that you and I have discovered in our city is probably about only 50 people who are really, really skilled, skilled at working with people who are really, really successful. 

Peter Merrick: And at the end, what usually happens is the talk people gravitate to those individuals. And within that group of people, there's a bunch of motives. And it's important for you to find someone who's done that introspection, who's actually lived a life who can help guide the advisor. Now, you and I we're working stiffs, we're advisors to kings. However, it's also incumbent on us and our responsibility thus to be clear about what our motives are, and for us to find greater purpose and greater meaning. And in essence, that means that we might not have the great means. 

Peter Merrick: Maybe we're also able to help people who've never asked those questions, to help guide them towards questioning what they want. Because I know planning is important, but the most important thing is asking questions, internal responses that come from within the individual, and then for us to bring our skillset and our learning of tax, planning, investment planning, foundations, to help them realize what came from within. Not being projected onto them, because when advisor says, "Oh, you should give to charity, you should do this," that's being imposed on them, help them actually find that spark. 

Jason Pereira: Yeah, I think we should identify and discuss one important variable, which is understanding the potential conflicts of interest when you're getting advice on this. The obvious ones are the insurance-based strategies, there's obviously commission. But the less obvious one and why I think a lot of advisors don't specifically talk to their clients about this, it's not just the fact that they maybe don't have experience in it, they haven't walked the path, they haven't done it before, they haven't explored it, it's also the fact that there is a conflict. And that conflict is that most investment advisors are basically compensated based on the assets you have invested with them. 

Jason Pereira: I've actually stopped behind people at conferences where someone will get up and talk about charitable giving. And you hear the responses, "Let me get this straight, you want me to tell my clients to pay me less by giving away their money? Not going to happen." And I've always had the very simple opinion that people aren't idiots, and if you start putting your values and needs ahead of theirs, they're going to figure it out. 

Jason Pereira: Not only are they going to figure it out, they're either going to figure it out or someone else is going to point it out, and you're going to basically be in a position where you can't defend it. And the second you do that, you're first off, not acting as a fiduciary, you're not acting in the best interest. And frankly, you're opening the door for someone else who's being ethical to actually take that client away. So the reality is that for a lot of people who are in a position to advise people about shareable giving, they may by choice not do so because of the inherent conflict. 

Jason Pereira: So I would also say that if you have an interest in this sort of thing, and the only solution the advisor has for you is to set up maybe a donor advise fund so they can hold on and may invest the assets, and then personal charitable distributions go, maybe they're not necessarily talking about the full gamut of options. And frankly, nothing wrong with donor advise funds, it's just the assets being retained by the advisors should be not be the priority of the conversation. 

Peter Merrick: Well, Stephen Covey said, "If all you have is a hammer, everything looks like a nail." 

Jason Pereira: Bingo. 

Peter Merrick: Many advisors will sell... It depends on where they're coming from. Jason, I've been in the business 29 years and you've been in the business over 20, and we know one thing, it's the long-term strategy, that is the only thing that works for the advisor to be successful, because any short term decisions that we make based on profit will come to haunt us. And I know that, so having really the fundamental questions is, you have to actually look at the long term. Now, I don't want to be discouraging about younger brokers, but they don't have that perspective, they don't have that maturity. They're looking at, "I have to go and get assets out of management, I have to sell." 

Peter Merrick: And they don't understand these short term, let's say, product pushes or these little craft little conversations like, "Let's talk... "You hear more assets, you'd sell more insurance when you start talking about philanthropy. And it's not something that they realize that maybe it's a shortcoming of themselves. And when I was young, I hated hearing... I would meet people and they say, "You know, you're too young. You really don't know. You really haven't lived life." And I didn't realize because I was arrogant, I'm thinking, "Hey, I studied all the stuff. I know all the stuff," but I hadn't actually seen all the stuff. I didn't see the resolution of what it was. And I just feel that it's the tools of the next generation is also for them to live life. 

Peter Merrick: And you brought up a very important point about that multi-generational families that you've worked with, that the younger people were told other than your basic needs, you got to go out there and make it. And what the parents are actually telling these people is, you got to go out there and find your own way. You have to figure out what works for you, what doesn't because each of us have unique abilities and the purpose of, I believe giving, and this is the way I give, to help people find those unique abilities and to enhance them. 

Peter Merrick: Some people feel like they want to help people who are very sick, mine are towards educating people and give them the opportunity to make a better life, because I hope that one day that they will pass it on. And that's my personal motivation, and this is why you teach, why you write and why you mentor, because you're hoping that people who have been helpful to you to get you to where you are because you and I were born with little babies who were just punches, and we were fortunate that there were people who took an interest in us. And that's something that I believe the responsibility of an older individual who is successful. 

Peter Merrick: And I'll just share with you, this has always stuck in my mind, Carl Jung studied the stages of life and he came up with two analogies. He says, there's the morning of light. And that is where you're accumulating, you're building your ego. And the second half to be healthy is the afternoon and evening of life, where you're deconstructing and you're giving it all back. But this time when you're accumulating it, much of it is unconscious, and as you get older and you're deconstructing and giving away, it should be conscious. And the drive, the selfish drive of someone giving money is when I go, I want to have a smile on my face to know that I did the best I could to leave it well. 

Peter Merrick: It's like, if you invite me to your house and I stay on one of your spare room, your guest room, I'm going to make the bed, I'm going to make sure there's no toothpaste in the sink and I'm going to leave it as well as I found it even better because there's going to be other people that are going to be using it. And it's a respect to the society when I give into the people in my life, when I consciously deconstruct and I share both my wisdom while I'm alive, and also if we're fortunate enough, our resources to help the next generation do the same thing. And it's also giving a good example by giving. 

Peter Merrick: The best example anybody can give their children to give the next generation is to be a genuine giver at the end of your life. That will go and have these people become conscious. And you talked about charity, I believe giving to charity during your life is if you have children, if you have other people in your life, it is the best example because you're showing recognition to the people, to the community, to the society, to the history of both your family and also to your society, by being someone who actively is in a really directed, but outwardly focused on the environment and wanting to make it better, or at least the same as they found. 

Jason Pereira: Yeah. And it's interesting how... We often tell clients that basically focusing on charity while they're alive is another wonderful way of making sure that those values are passed on to the next generation, specifically around things like share private foundations or donor advise funds. We talk about how something as simple as having an annual conversation about, "Oh, this the fund or the association has, or the fund or the foundation has X amount of dollars that has to distribute this year. We have discretion over causes we want to give it to, what's important to us? What do we want to do?" And circling the children into that conversation. 

Jason Pereira: I was reading a wonderful article on kidsus.com the other day, it was written by a psychologist, I forget her name at this moment, excuse me. But specifically talking about with very, very ultra-affluent families as using charity as a tool for educating and giving purpose to the next generation, because if these are people who've grown up, seemed privileged, never had to work before, early on, you could give them tasks such as research assignments to not only pick a charity, but look into it and make sure you understand the underlying workings of the charity. You ensure that the money could be appropriately used or that's where you want it to go. 

Jason Pereira: So it's a wonderful tool for not just teaching them charitable values, but also teaching them responsibility. And it's overlooked too often as a means of later stage parenting in my opinion. 

Peter Merrick: I fully agree with you. And by you speaking about that, it brought up a thought. I used to have a column and unfortunately, people don't read papers anymore, so the paper doesn't exist. The last column I wanted to write because I thought it was very interesting, there was a community foundation, the Toronto Foundation, they had just received 100 million dollar private foundation gallery. And the reason that money was going to the community foundation from this private family is the parents had set up the foundation just before they left, and they were hoping this was going to bring the family together. 

Peter Merrick: It's like someone's going to say, "I want the family cottages. 

Jason Pereira: Oh, you did it on purpose. You know the cottages are the single biggest point of conflict in the states. 

Peter Merrick: Right. I have a client who built this massive farm, it was his dream up in King City. It's massive, it's on 75 acres, it got horses, everything. He wants it to last for several generations so his family would get together. And I truly believe that if you do it towards the end of your life, showing charity to people like you don't help people who are going through difficulties and your kids see it. If you don't give to charity, if you don't attend, let's say, your religious institution and have part of the community, just thinking that I'm going to put a Band-Aid on it and we're just going to create a foundation that they're going to show up. 

Peter Merrick: I'll give you an example, I knew someone who was very, very wealthy and their kid was very spoiled. So they just bought them a big store in California, and they said, "Well, he comes and a nice car too," He comes from a good family, he's going to like show up. He never showed up before, but now for this, he's going to show up." So what happened with that huge, I guess foundation, it was like over $100 million, the family didn't work before the foundation was created, the parents thought, "Oh, this is a way to tie them together." And in essence, the only resolution is to find someone else to actually run it. 

Peter Merrick: So those conversation, yes, it's important that the advisor brings them up, however, nothing beats the client, bringing up to their family to actually do the work. And unfortunately, many people in the financial industry who call themselves planners want to do all the work too, "I'll set it up, I'll do this, I'll do that." And then you can give money away. The mature person knows, "This is going to be a disaster." And if the client's not really going to do the work, then don't do it. And I'm going to give you an example. There was an individual, he's worth several billion dollars, and he was against Bill Gates going to like Zuckerberg and all these young creators. 

Peter Merrick: He was against it because he says at this stage in life, yeah, they have all this money, but it's like they haven't gone into that process, because they're building. They're building and they're not reflecting. They're at a certain stage of their life because Bill Gates got to a point where... I remember before he started the Gate's Foundation, he built the biggest home around Seattle. 

Jason Pereira: [inaudible 00:36:37] 

Peter Merrick: He built this massive thing, he had private planes. I think if he wanted, he got to experience it. And then after he did it, he starts talking to all these young tech billionaires that like, "Jump that stage that I went." And the thing is, and you and I know that I can go and read things, I can tell people things, however, unless I actually experience it and it's in my muscles, I'm not going to fully get it or appreciate it. It might sound cool, and I want to share some many young entrepreneurs who do charity, to me, it's just a gimmick. Hey, every time that you buy something from me, I'm going to donate money. I'll give the first example. 

Jason Pereira: I don't know. I get what you're saying. I'm not as cynical about that, I think that there's a difference in generation. I do believe that the millennial generation has been raised with more social consciousness than others have and they want purpose. So that's like, "For everything done, we're going to do something else." That's what gives them purpose. Now, the other angle of this, which I do agree with you on is that there a certain amount of greenwash, greenwashing is a term used in social responsible investing when you just basically don't really care about it, but you just try to paint yourself that color. 

Jason Pereira: I'm fully willing to believe that there are more than a number of organizations that do it as lip service as opposed to actual driving focus of the people who are making those decisions. 

Peter Merrick: And this is where the skill set, for example, if I show up at a strawberry farm in July, I'm going to find strawberries, lots of them at the beginning of July, the end of June. And the thing is, discussions are important for financial advisors to have with their clients about this part of mind, that the client to make it enduring and something really positive, they also have to come that to themselves. Now, you're right, when you revisit that client every year, ask them that question, there's should be a bunch of questions that the client is asked, a successful person, what's happening? What's important? And readjust their planning. 

Peter Merrick: And at a certain stage, and I believe it's very age-centric, I find most people get really serious about the planning around 55. This is when they realize that there's more days behind them than ahead of them, they're probably the wealthiest they are going to be because they've got successful businesses, now, they're planning their exit strategy. And this is where it's a pattern interruption in their lives, and that's when those conversations mean the most, because if the person has a child die, they have a spouse die, they get divorced, they have bankruptcy, a whole variety of things, COVID, there's a pattern interruption in their lives. 

Peter Merrick: And many things that they wouldn't question for, or be willing to go down that rabbit hole to ask questions, at that point, then people are ready to make serious changes. And giving philanthropy because we're talking about really wealthy people, the person has to come to it. It's not like we may pull it because we find them. We find people who generally want to do it. And in our society right now, we've spoken about it, there's greenwashing, that there's a lot of people out there that says it's just cool, "Let me go and donate a policy for a million dollar policy, but I'm going to get on the board because of the donation, that's great." 

Peter Merrick: When you really dig deep into that, it's like, yeah, that's great, there's a benefit, maybe a 30-year-old person donated a million dollar policy, he's spending $5,000 a year for it, and they got on the board, that person there, the giving isn't genuine. And that comes down to finding something that comes from within, which is important. For example, my father died of a brain tumor 23 years ago, my family gives to brain cancer because that's something that means a lot to me and my family. Other people, it might be leukemia or it might be someone came from abusive home and they want to make sure that people have protection. It's something that has to come within. 

Peter Merrick: One of the things that I find really important, and this is where the conversation comes by having a financial advisor or a financial coach like yourself is I've met so many people who said, "I'd like to do it, but I don't feel successful enough or I don't feel I have the time." And I have to share with you a personal story, and it has to do with my father. My father was a chartered accountant and he worked sometimes 80, 90 hours a week during taxes. And I don't think I saw my father from January to June 15th. I didn't see him there. Well, my father had a brain tumor and he wasn't able to work anymore. And he was always giving money to charities because he grew up in a family where that was very important. 

Peter Merrick: And I asked him, I said, "Dad, what do you want to do right now?" And he told me that these charities he have been giving money to a lot during his life, he always felt that he wanted to donate his time and help them with their books and whatever, but he never felt he was successful enough and he never felt he had the time to do it. And now when he was no longer working, he didn't have the time nor did he have the faculty. And to me, that always stuck in my mind and it's affected me in so many ways because I realized, all those hours, my father was working, and this is something many people can relate to, and the charity he was giving, his donations and his donations to me too, by paying for school and trips, was a proxy for himself. 

Peter Merrick: And then by the time that he had the time, he wasn't able to do anything with it. So I think it's really important, and that's always struck me is that the person should come to the understanding that the most precious asset they have is not their money, it's their time. Money in a lot of case is a proxy to it, and if you can help people out and at the same time, give of yourself and see the benefit, I truly, truly believe it's the most wonderful thing. And I just want to share with you something that sticks in my mind because I was thinking about this yesterday, about our conversation today. I was very fortunate in my early days, probably back in the early 1990s, that there was a two-day workshop put on by Dan Richards. 

Peter Merrick: For those of who don't know who Dan Richards is, he helps advisors become better advisors. And he had this woman come up twice from Texas, and she had really incredible business. And one thing that she pointed out is, she said, when she would sit down with these tycoons who had oil wells and whatever, none of the advisors ever asked them, "Do you think about charity?" 

Jason Pereira: Dodee Frost Crockett? 

Peter Merrick: You are a very smart man, well-read and well-learned because yes. Dodee, I saw her speak twice in the early 1990s and she was genuine about it. And do you know how good she was? The fact that she's either the greatest con person in the world or the most genuine adviser I ever heard, they invited her back twice by popular demand. They flew her from Texas to Toronto speak. 

Jason Pereira: Yeah. She's one of my favorite speakers on the subject I've seen going way back. And honestly, it's interesting too because she's not the greatest con, she's possibly the greatest networker I've ever seen in my life. 

Peter Merrick: Yes. She runs these synergy groups. 

Jason Pereira: Yeah. She's fantastic. Anyway, I'll let you finish your point. 

Peter Merrick: Well, I think the most important thing is, we talked about this and we've named it that the ask those questions, we hire a financial advisor, a wealth manager or whatever, we're doing it really because we want to share the risks and have someone to share with. We are social beings and we like to discuss things and decisions and things that we actually put in place, they have to come from within. The advantage of working with a skilled individual like yourself, Jason, is the fact is, you have a set of skills. And one of those skills is, you know to ask those questions, you are not going to forget that on your checklist. 

Jason Pereira: No, Absolutely. 

Peter Merrick: By asking key questions, and someone who's ready to answer them. Again, some people are not ready to answer questions when you ask them, it's time. And then essence as time goes on and as life happens and as people rub against the world, they might become comfortable or being willing to walk down that doorway. And again, the skill sets that you bring through training is the ability to ask the important questions. And I think that, not I think, I believe, that is the key of an advisor is to be a coach, someone who is not so much invested in the answers of the individual. Of course, they might be because someone, if they're going to manage $100 million, of course, they're going to be invested in it. 

Peter Merrick: At the same time, they're not invested in the individual coming to that terms. If I'm managing $100 million of someone's money, it doesn't matter, I'm not invested that the person does charity or not, because I don't want to impose it upon, they have to come to it themselves. I might decide that I don't like this person because they're greedy individual and they're not a nice person that's closest to me. And that's a mature person speaking. When you and I were young, we'd deal with people we didn't like, who didn't share our values. And as we get older, we understand that it's corrosive for us, it's like selling ourselves short. 

Jason Pereira: Yeah. Luckily in business, you need to get to a point where you no longer have to deal with people you don't like, which is always a lovely luxury to get to. But before we wrap up here, because we're running out of time here, let's talk about from a business owner standpoint, let's just say that they've had an awakening due to our conversation, what's the first steps in engaging the right professionals or themselves and their family members in terms of getting started in this space? 

Peter Merrick: I'm going to suggest, and it's out of copyright that they read two people. One is Andrew Carnegie's Gospel of Wealth. And number two, Maimonides, he wrote the Eight Levels of Charity, and use that as a starting point because this is going to cause the individual to sit and introspect. And actually, people who are much better than me, spend a lot of time thinking about these things and it's a great place to start going. I want to share with you just a quick story. There's an individual, his name's Chuck Feeney. He created Duty Free, he is one of the partners. He gave away over a billion dollars secretly. And when he sold his 25% of... Sorry, I think it was more than that, of Duty Free to Yves Saint Laurent. Am I pronouncing it right? 

Jason Pereira: Yves Saint Laurent 

Peter Merrick: Yves Saint Laurent. When he sold his portion, he had to become public because he... There was a book that he wrote, which was called The Billionaire Who Wasn't. He was on the Forbes 500 List, and he was only worth about maybe two or $3 million because back in 1984, he put all his money into an offshore charitable trust, and the rule was, you couldn't ask who is giving the money. The issue was when he sold his company, the trust sold the company, it became public that he didn't actually own the company, he actually donated it all to a charitable trust. That was giving money away. And before it was the setback, he looked at people who were super wealthy, that he had been surrounded and they had no meaning in their lives. He saw them buy castles and things like that because he was rich enough to do that. 

Peter Merrick: What happened was, he went to his lawyer who is also very thoughtful person who was his most trusted advisor, and he said, "I want to find more meaning." And what the lawyer did is he gave him a Gospel of Wealth and he gave him Maimonides' Eight Levels of Charity. And he reflected on that, and he said, "I want to give." And the highest levels I just want to share with the highest levels of giving according to Maimonides, and this is something that we might want to end on, the highest level is to help another individual to start a business or to have a living by giving them a loan or going to partnerships so they can go and continue the chain. 

Peter Merrick: The second highest level of giving is that you don't know who you're giving to and they don't know who's giving to them. The third highest level of giving is, I know who I'm giving, but they don't know who's giving to them. You know what the lowest levels of charity are? That those who can give who don't. And the second lowest level of charity is those who can give but choose not to give of what they're capable of. 

Jason Pereira: Fair enough. Wise words, and I hopefully that this conversation basically helps lead to some more charitable giving for causes that matter out there. Also, I'll close on one story, it's a funny story that always sat in the back of my head, T. Boone Pickens. It's the old oil magnate. For people who want to read about a very interesting American oil man, you want to read that guy's story. But when he was approached about the giving strategy, about giving up 50% of his wealth at the end of his life, and he was already, I think in his 80s at the time, he started laughing on the phone and everybody on the other side was like, "What's going on?" He said some of the effect of... "Listen here, maybe you should catch up to my level first." 

Jason Pereira: And with his point was that he had already, while alive, given away more than 50% of everything he'd ever made. In fact, I think the way he said it was, "I've given away more than I have and I keep on doing it." So he was like, there was a man who was walking the walk, he wasn't waiting until the end of his life. My view was he was in his 80s, but he had basically given away more than he ever had. And to further that, simple other example, of last I'd heard, I believe J. K. Rowling's no longer qualifies as a billionaire due to her charity. So as far as she's concerned, being on the Forbes List is something she shouldn't be on. So that is a fantastic way to look at things. 

Jason Pereira: Peter, thank you again for a stimulating conversation, I hope this resonates with people and I hope that, like I said lead to some great donations. 

Peter Merrick: Well, thank you so much for having me, Jason. 

Jason Pereira: And that was this week's episode of Financial Planning for Canadian Business Owners. If you enjoyed this podcast, as always, please leave a review on iTunes, Stitcher, or wherever you get your podcasts. And until next time, take care. 

Speaker 1: This podcast was brought to you by Woodgate Financial, an award winning financial planning firm, catering to high net worth individuals, business owners, and their families. To learn more, go to woodgate.com. You can subscribe to this podcast on Apple Podcast, Stitcher, Google Play, and Spotify, or find more episodes at jasonpereira.ca. You can even ask Siri, Alexa or Google Home to subscribe for you.