In Search Of Excellence - David Rubenstein: How To Lead | E14

Episode Date: January 4, 2022

David Rubenstein grew up in a modest, blue-collar home in Northwest Baltimore.  He never considered himself a brilliant student or excellent athlete, but he did believe that hard work leads to success.  This drive and work ethic paid off, and today, David is a billionaire businessman and a member of the Forbes 400 list.  David’s journey has taken him from humble beginnings in Baltimore, MD, to Duke University, Chicago Law School, and a job as a white house staffer, to eventually co-founding one of the largest private equity firms in the world, the Carlyle Group. David and Randall talk about David’s career journey, his passion for philanthropy, the struggles he overcame when starting a business, three past investment mistakes, the skills necessary to become a leader, investment strategy, parenting, and much more.  Topics Include: - How to create your own luck- Education, the investment no one can take from you- The “biological clock” for entrepreneurs- The beginnings of the Carlyle group - Patriotic philanthropy- The American Dream- The challenges of parenting - Lessons from investment “mistakes”- Bitcoin, cryptocurrency, and NFTs- David’s three-part philosophy on life- And other topics…David Rubenstein is a Co-Founder and Co-Chairman of The Carlyle Group, one of the world’s largest and most successful private investment firms. He is the author of several books, including The American Story: Conversations with Master Historians (2019), How to Lead: Wisdom from the World's Greatest CEOs, Founders, and Game Changers (2020), and The American Experiment: Dialogues on a Dream (2021).  David is also the host of The David Rubenstein Show: Peer-to-Peer Conversations on Bloomberg TV and PBS.  David is an active philanthropist and serves on the board of many organizations, including the John F. Kennedy Center for the Performing Arts, the Council on Foreign Relations, The Brookings Institution, Lincoln Center of the Performing Arts, and more.  David graduated magna cum laude from Duke University, where he was elected Phi Beta Kappa.  David went on to graduate from the University of Chicago Law School, where he was an editor of the Law Review.Resources Mentioned:The American Story: Conversations with Master HistoriansHow to Lead: Wisdom from the World's Greatest CEOs, Founders, and Game ChangersThe American Experiment: Dialogues on a DreamSponsors:Sandee | Bliss: BeachesWant to Connect? Reach out to us online!Website | Instagram | LinkedIn

You rarely see somebody doing something great where they hated what they were doing. Occasionally, you might see that, but generally, people who accomplish something love what they're doing. I didn't really find what I loved until I was 37. Experiment with different career options, you'll find something you love, and when you love it and you know you love it, you're more likely to be successful in it. Welcome to In Search of Excellence, which is about our quest for greatness and our desire to be the very best we can be, to learn, educate, and motivate ourselves

to live up to our highest potential. It's about planning for excellence and how we achieve excellence through incredibly hard work, dedication, and perseverance. It's about believing in ourselves and the ability to overcome the many obstacles we all face on our way there. Achieving excellence is our goal, and it's never easy to do. We all have different backgrounds, personalities, and surroundings, and we all have different routes on how we hope and want to get there. My guest today is David Rubenstein. David is a co-founder and co-executive chairman of the Carlyle Group, which manages $275 billion in assets and is one of the most successful investment firms in the world.

He's the author of several books, The American Spirit, Dialogues on a Dream, The American Story, Conversations with Master Historians, and his recently released bestselling book, How to Lead Wisdom from the World's Greatest CEOs, Founders, and Game Changers. David is also the host of The David Rubenstein Show, which airs on Bloomberg Television and many PBS stations. He's a member of the Forbes 400 and has a reported net worth of $4.6 billion. David is also an active and incredibly generous philanthropist, serves on the boards of many organizations, including the Brookings Institution, Lincoln Center, University of Chicago, Duke University, the Council on Foreign Relations, and the Kennedy Center for the Performing Arts. David, it's an incredible pleasure to have you on my show. Welcome to In Search of Excellence. My pleasure. Thank you very much for having me. I always start with our family because from the moment we're born, our family helped shape our

personalities, our values, and the preparation for our future. You grew up as an only child in Northwest Baltimore in a very blue-collar and very segregated Jewish neighborhood. Your dad dropped out of high school to serve in World War II, and then he met your mother, who then dropped out of high school to marry your father. Your dad worked for the U.S. Postal Service his entire career, never made more than $7,000 in a year, and your mom was a homemaker. What were your parents like, and what kind of values did they instill in you, and what kind of influence did the neighborhood where you grew up have on you as an adult? Well, my parents were relatively simple people.

They didn't have great career aspirations for themselves. And they were not, as you point out, overly educated, but they were literate. They just didn't focus on intellectual pursuits as much as maybe I might. But in the end, as Warren Buffett has said to me and many others, the most important thing your parents can give you is unconditional love. And that's what my parents gave me. I was their only child, so they put a lot of their energies into me. And to the extent that I did well in life, they were proud of it. And I think one of the pleasures of life is making your parents proud. So my parents did live to see what I had achieved.

And my mother was more proud of my philanthropic things than my business accomplishments. And I understand that. And so in the end, the neighborhood I grew up in was a blue-collar neighborhood. Nobody had any money of any consequence. They were all basically blue-collar workers. When you grow up, whatever environment you grow up in, you accept it. If you grow up in a wealthy environment, middle class or blue-collar, you accept it. And you kind of do the best you can with what circumstance you find yourself in. So I got very lucky in my career in many ways.

And it worked out better than I probably deserved and better than I thought. So that's what happened. I want to talk about your early childhood. What were you like as a kid? Were you popular? Were you a leader? And what did you do for fun? Well, when I was very young, seven, eight or nine, I thought I was going to be a great professional baseball player. Then I realized when I stopped growing at 11, 12 and 13, compared to my peers, I realized I wasn't going to be a great athlete. I didn't think I was a superstar intellect. I did reasonably well in school, but I wasn't the number one person in any of my classes. So I was reasonably talented by the standards of my parents, but not by the standards that I applied to myself. I always saw people who were smarter

than me, better athletes than me, more personable than me. So I thought I would do okay in life, but not get the positions that I have managed to somehow get to. And in terms of fun, what were some of the things that you did to have fun? You mentioned you weren't going to be a professional athlete. Were you playing baseball as a kid? Well, as a young boy, I played baseball and the usual kind of things, football and other kinds of things that sports did. I was in a youth group when I was a teenager in Baltimore Boys Club, and they had a lot of sports teams. I wasn't good enough to play on any school team or anything like that. I went to a big public high school with 1,500 people in my class and about 3,000 people, and I had 4,000 people in the school. So to be a competitive

athlete there, it was unrealistic. I also had skipped a year of junior high school. So I was relatively young. So I graduated from high school when I was 16. And when I entered high school, I was only 14 and I was relatively modest in size. So I wasn't going to be a great athlete. What kinds of odd jobs did you have growing up? The usual things that people do. Let's see, I sold magazines door to door, not that successfully. Worked in an ice cream Carvel kind of place. I worked in a warehouse.

I had a job as a civil servant one summer. I had a job as a postman, which was my favorite job. I got to deliver the mail one summer in college. Those are the kind of jobs I had. Whatever I could get, I wasn't making that much money, but anything I could get was better than sitting around doing nothing. So I tried to work hard, but I didn't have the contacts where my father could open up a door and say, hire my son. He's very talented. So basically, I would use whatever network I could get or just from friends, hear of things, and I got some odd jobs here and there.

When many of us are young, we think we know what we want to do. Like you said, the odds of becoming a professional baseball player are very low, less than 1% of less than 1% of less than 1%. And that wasn't one of your dreams. And it wasn't what your mom wanted for you either. She wanted you to become a dentist. Can you tell us what you saw when you were 12 years old and how it influenced your future? Well, when I was at 12, I was basically thinking, okay, I was interested in politics. I had been impressed by President

Kennedy and hearing his speeches. So I thought politics was a good aspiration and government. I didn't think I was a candidate because I wasn't handsome, wealthy, charming, and all that. I thought I could be an advisor to a candidate or something like that, which meant becoming a lawyer and go to law school. I didn't aspire to make any real money because in those days, there weren't billionaires in the United States. So there was maybe one later on. Daniel Ludwig was maybe the first one, but there weren't people of staggering wealth. The wealth that existed came about from people that had inherited wealth from very old line families. So the Rockefeller families or people at Vanderbilt or people like that. But it wasn't on everybody's mind when I was 12 or 13 or

14 that you would grow up, start a company, become a financial success and make staggering sums of money. It just didn't exist on anybody's horizon. If you wanted to go into business in those days, you either went to work at a large company like IBM and work your way up if you could, or you went to your family's business if your family had a business. If your family didn't have a business, the idea of starting your own didn't really exist. It just wasn't anybody's concept when I was 12, 13, 14 in the 1950s and 60s. At some point in their lives, almost every successful person I've ever met has a desire to be the best they can be. Some are born with it and some learn it a little bit later in life. When did this happen for you? Well, I always wanted to be successful

so that I guess I can make my parents proud. And of course, you always want to look like in front of your classmates or friends that you're successful. But I recognized relatively early that I wasn't a great athlete, that I wasn't a super intellect, that I wasn't Mr. Charming, that I didn't have a great social flair. So I had limited skills and so forth that I thought if I worked hard, I could maybe get somewhere because I had bought into the American dream, that being the concept that if you work hard on merit, you can probably rise up in this country. Now, it turns out that the American dream is more believed in now by people who come to this country as immigrants and people actually grow up in the country. That's a change over the last couple of decades or so. But I believed in it. And I read everything about people who had started with modern circumstances and worked their way up.

And I believe that if I went to law school, I ultimately could get involved in government and politics, but no aspiration to make money. My parents didn't have any money. Nobody I knew had any money. And it just wasn't something that was on anybody's mind. Today, people seem money-obsessed, but it wasn't the case in the 1950s or 60s. Did your parents actually at some point say to you the words, I want you to be the best that you can be? A lot of parents will say that. They'll push their kids.

Some kids don't need to hear that from their parents. Were you just naturally wired that way? You were born motivated, right, when you came into life? I would say I was modestly motivated to do well, but I can't say my parents pushed me. They were just interested in having their only child be happy, which is what most parents want. And they didn't really push me to do certain things. I did join a youth group, as I mentioned, in Baltimore. And this is a youth group of teenagers, teenage boys at the time. And there were a lot of very talented people in that group. And I did aspire to kind of have the skill sets that they had become a better athlete or,

or better person in terms of intellect and so forth. But I recognize that I had more modest skills than I wanted to have, but I always dreamed that I could do better than I was probably for ordained to do, but, but I didn't think I was all of a sudden going to get very wealthy or become prominent or famous in any way. Let's switch to education, which I think is one of the most important ingredients to our future success. You were an excellent student. You graduated from the College of Prep High School, Baltimore City College, then All-Mail School, and then you went to Duke, where you graduated Phi Beta Kappa Magna Cum Laude, then went to the University of Chicago Law School on a scholarship. You were on the Law Review, which is very impressive. But for most people, it's very

hard to replicate. Did this performance come easy to you in the classroom, or did you really have to work at it? And what's your view on the importance of education? Well, on education, nothing is more important, I've always believed, than education. You carry around in your brain your education, and everything else can be taken away from you. But if you have a good education, you can always, I think, do something useful in life. And I've tried to reflect that in my own life. I probably spent more time on university boards than anybody in America.

I served 12 years on the Johns Hopkins board, 12 years on the Duke board. I served as chairman of the Duke board. I will be the next chairman of the board of the University of Chicago. I'm on that board now. And I also, I'm on the Harvard Corporation board. So I've spent an enormous amount of time on higher education boards. And I do feel that education is the key to people from the middle class and blue collar classes rising up. So it's very, very important to me. I wish I had been a better student. I wasn't first in my class anywhere. I wasn't a superstar. There was always better students, but I did do reasonably well by normal standards, but not the standards that I applied to myself. I wish I had been first in my class or editor-in-chief of the law review or

Supreme Court clerk or all the things that you as a graduate of Northwestern Law School familiar with, the best students often get. I wasn't that good. You did pretty well. Phi Beta Kappa is pretty good. Law Review is pretty good at top five law school in the country. So I think you're being very humble when you say those things. I really believe that. Look, I've always aspired. I look at the people who were the first in my class and say, how come I couldn't do better than I did? So yes, I did well by my parents' standards, but not as well as I wanted to do. But I had certain abilities, and I did the best I could with them. In hindsight, I wish I had worked harder or been more focused, but I did what I did. Do you know what the people who graduated number one in your class are doing right now?

Sure. The number one person at the University of Chicago Law School was a person who chose not to go on law review for whatever reason. He offered it, but he didn't want to go on it. And he practiced law in Florida for an entire career, never became famous. So in the modest circles of a litigator, he probably was well-known in Florida. Probably number two or three in the class was Frank Easterbrook, who became a famous judge in Chicago. And number two or three was probably Doug Ginsburg, also became a judge and also professor at Harvard Law School. They were very, very talented.

And there were a number of other talented people in my law school class. I wasn't a superstar. I was OK, but not great. The number one person in my class at Northwestern is a woman named Joan Larson, who's been on the Sixth Circuit Court of Appeals for a long time. She was on a list of the last Supreme Court justices when President Trump chose Justice Kavanaugh. One of my best friends, Ray Ketflitch, who was the summer clerk with me the summer before my third year of law school. He was actually the front runner going into that weekend before Judge Kavanaugh got it. But it's really the people who graduate number one in your class clearly have opportunities, at least on the judge side, that many people don't have. Sure. It's often said that the number one people become law professors, and then maybe the second

best become judges or something. The third best become partners in law firms. And then the fourth best do different things, maybe the kind of things I did or you did, which is go into business or something else. If I had been first in my class in law school and got a Supreme Court clerkship, I probably would have been a law professor, but I didn't have that opportunity. Well, we say it in Northwestern, if you want to become a professor, go to UFC. If you want to practice, go to Northwestern because you clearly have a more intellectual approach, I think.

Good little ribbing there. Let's talk about the start of your career. When you got out of law school, you practiced two years in New York at Paul Weiss and went to work in the government sector where you served as chief counsel to Senator Birch Bay on the U.S. Senate Judiciary Committee's Subcommittee on Constitutional Amendments. You spent two years in that role and then took a job working directly with President Carter as a domestic policy advisor, a job you said you were unqualified for but greatly enjoyed. Can you tell us more about this progression? Did you have a plan or did these positions come naturally to

you one by one because people you worked with or knew you said, David's a very talented guy? And did President Carter call you up on the phone one day? Hey, David, it's Jimmy. Come on over and let's have a talk. Hardly. What actually happened was this. I was interested in government and politics. I wasn't interested in making money. I really didn't care about money at all. I only cared about government and politics. So Ted Sorensen, who'd been John Kennedy's chief speechwriter and counsel, was at Paul Weiss. Paul Weiss had a number of other people who'd served in government. So that's what appealed to me about it. I went there and I worked on some government-related projects, the bankruptcy of New York City and so forth. But I really was not from New York. I didn't know that many people there. I really wanted to get back to the neighborhood of where I grew up. And while I didn't want to go to

Baltimore, I thought Washington was closer and it was also the center of government. So I eventually got a job working on the chief counsel for Senator Bayh from Indiana. He was running for president. He dropped out in 76. So there wasn't much to do. He was languishing around, not sure what his career was going to do. And then somebody offered me an interview with Jimmy Carter for the general election campaign where Carter was going to be the presumed nominee. I got it. I went to Atlanta and I worked for the man who became Carter's domestic advisor. So that was Stuart Eisenstadt.

And I was his deputy. So he took me to the White House. I had never met Carter, actually. Carter was in the campaign, campaigning all the time. He wasn't in Atlanta where the staff was. And so Stuart made me his deputy. He got the top job in the White House. I was in the White House for about three weeks before I ever met Carter. I got to know Carter later on, but I was still a junior staffer compared to Stuart Eisenstadt and the other senior staffers. I can't say that Jimmy Carter was deciding that I was the best person he could

have possibly hired. No. Many people who work on White House staff get there because they work in campaigns. And I was one of those people. You usually don't say who is the most qualified person in the country to get a White House job. There are qualified people working there, but very often these are people working campaigns. When you walked into the White House for the first time, to walk into the office there, did you think, gosh, this is really part of my dream? Here I am in the White House. I always wanted to work in the government sector. And there I am.

I'm talking and working with the president of the United States. Well, the first time I actually went in, it was during the transition. I was working on the transition to the White House. We went in to deal with the transition. And I went to meet with the guy who was the chief of staff. And his name was Dick Cheney, who was all of 34 years old. And he said, look, let me give you some advice after he gave us more significant advice. He said, make sure you have somebody here on day one, because if everybody's up there with a swearing in of President Carter between 12 and 2, there's a national emergency.

Nobody will be in the White House. We're going to leave at 12 o'clock. So I went back and told the people there at the Carter operation. They said, OK, you do it. We want to go to the o'clock. So I went back and told the people there and they, at the Carter operation, they said, okay, you do it. We want to go to the swearing in. So I was supposed to be the first person in. And then I forgot that you had to get cleared in. I didn't, it took me a while to actually get in that day, but I went in and walked around the White House and there was nobody there. Nobody was doing anything. So it was a little disappointing the first day, but nothing happened in terms of emergencies. When you work in the White House, it's a center of power in our government. And it's a great thrill

to work there. My parents, who were blue collar workers, as I mentioned, when they saw me work in the White House, they couldn't believe it. And maybe they would say, how could he possibly get there because he's not that good. Other friends of mine would probably say the same. But in the end, sometimes you have luck in life. And I got lucky to get that job. I was 27 years old and I really wasn't ready to be president, presidential advisor. I was only three years out of law school, but it was fun. And I made a lot of mistakes, but some things worked out okay. So you accepted a job with President Carter. You worked for him for a couple of years and then you went to work on his general reelection campaign. It's 1980 and he loses to Ronald Reagan. And suddenly you found yourself without a his general reelection campaign. It's 1980 and he loses to Ronald Reagan.

And suddenly you found yourself without a job. You're unemployed for six months and nobody's returning your calls. But eventually someone returned one of your calls. And then you went back to practicing law again in Washington, D.C. at Shaw Pittman, where you worked for six years. Many of us have lost jobs before. I think I mentioned this when I moved to L.A. in 1993. It was a bad legal climate.

I was laid off five and a half weeks after moving here. I had $3,000 in the bank. I knew no one here was petrified about my future. We're going to talk about the impetus of starting the Carlisle Group in a few minutes. But before we do, I want to ask you, what were you feeling when you lost your job and didn't have a job for six months before you went back to practicing law? How scared were you? Can you take us through that and tell us how did you regroup and pick yourself up on your path to excellence? Well, what happened was after we lost the election, I started calling all the people who told me how smart young man I was working in the White House. If I ever won a job, call them up.

Of course, that was when Carter was in an office. They were sucking up to me. And maybe they thought if I joined them while Carter was in office, I'd have special access to Carter. But they didn't want me when Reagan was going to be president. So I didn't get a lot of interviews. I didn't get all the calls back. And it was sort of embarrassing. One day, I met Paul Weiss. Another day, I'm at the White House. Next day, I'm unemployed. And the Carter White House had that problem because we didn't expect to lose. I mean, you don't expect to lose. You don't plan in advance. And when you're in the end of a second term, you know that term is going to over.

You don't really know at the end of a first term if you're going to win or not. So a lot of people have only had one term in the White House. They're not ready for what happens when cold reality hit. The cold reality was that I'd only practiced law two years. I didn't have any client that wanted me to practice for him. I didn't have any expertise. So in hindsight, I can see why nobody wanted to hire me. And in hindsight, I'm actually surprised anybody did hire me. But I got a job that was well below what I thought I was going to get. I went to a medium-sized firm that was not that well-known, And I was given a job as an associate. So probably hadn't

advanced all that much over the years as a result of working in the White House. I was probably in the same position I would have been had I continued practicing law. So after about a year or two, I did become a partner, but I had a very modest practice because who was going to hire somebody that really knew a lot about Jimmy Carter? So it was hard to get clients. And it was kind of one of those things where you eat what you kill, as they say. You basically get clients and then you service them. If you don't get clients, you don't service them and people don't give you clients. So I did that for a number of years. And I would say it was the worst part of my professional life because I really wasn't good at practicing law. I didn't have any area of

expertise. And the most important thing is I didn't like it. And you can't be successful in anything if you don't like it. I didn't want to be a political lawyer lobbying people. I didn't want to do fundraising. I didn't want to be a lobbyist. And so I didn't have a lot of corporate expertise. So it wasn't clear what I was really doing. And so as a result of all that, I kind of began to think maybe I should do something else. Friends of mine from the White House had gone to Wall Street. Some of them were prospering. And so when I read about Bill Simon, who had been Secretary of the Treasury, starting a buyout firm and doing a very successful buyout, I said, maybe I could get Bill Miller, who was Secretary of Treasury in the Carter years, and get him to replicate what Bill Simon had done. I did talk to Bill Miller. He started a firm maybe because of my prodding,

but it wasn't one that was really doing buyouts. And ultimately, I decided I would start my own buyout firm if I could find people who actually knew what a buyout was and how to do it. And I would just kind of maybe do the legal work or something. Right. Bill Simon had bought a company, Gibson Greeting Cars. He invested only $330,000 of his own money and made $70 million in 18 months. And I had read that you didn't even know what a leverage buyout was, but it was better than practicing law. By the way, I hated practicing law. I love Northwestern. I love Chicago, but I hated law school. For me, I always knew I wanted to go into business. Can you tell us more about starting the Carlisle Group and getting into a

business doing something you knew absolutely nothing about? I was practicing law, doing whatever I could get to practice law. I was a partner in a medium-sized firm. I wasn't famous. I wasn't really going to go back in the White House. I had an opportunity to maybe go work in the campaign for Mondale when he was running in 1984. But I said, geez, I don't know if I really want to do this again. And I just didn't think I wanted to go back in government and start this whole thing over again. And I just didn't think I wanted to go back in government and kind of start this whole thing over again. And Mondale wasn't sure he was likely to win anyway. So when 1986 and 87 came along, I read about Bill Simon.

I also read that an entrepreneur will start his or her first company between the age of 28 and 37. And after 37, like a woman's biological time clock goes down, your chance of reproducing goes down, your chance of reproducing goes down, your chance of starting a company after 37, I read, goes down, and I was then 37. So I talked to some friends of mine and said, maybe I should do something like Bill Simon had done. And first they said, well, you don't know anything about that. I said, yes, but I'll recruit some people. And eventually I interviewed a number of people who had finance backgrounds and said, we'll start the first buyout firm in Washington.

Some people were interested, but it didn't really click. And then all of a sudden, one of my clients, head of taxes at Marriott, said he decided he was going to start this firm, and he found the person to start it with. I said, great. Who is it? He said, you. I quit my job today, and I'm going to come, and you're going to start with me, and we'll do it together.

I said, but I don't know anything about finance, and I'm really a lawyer. He said, that's okay. So he kind of worked out of a conference room near my office. And then we recruited two other people, Bill Conway, who was at MCI and Dan Daniello, who was then at Marriott. And the four of us started. And then somebody who was a friend of mine, Ed Mathias from T. Rowe Price, helped us raise the initial $5 million in 1987. That's all we had, $5 million, $3 million to invest and $2 million to operate. And that was the beginning. Dan and Bill didn't want to raise any money. That was your job, which you did for 25 years. So T. Rowe Price, they helped you raise the $5 million. Where did it come from? Without a track record, wasn't it very hard to raise money?

It was, but Ed Mathias had a reputation at being a good spotter of talent. And so he went to four people and they put up the money. One was his firm, T. Rowe Price. They put up a million and a quarter. The Mellon family put up one and a quarter million. Then the Alex Brown of Baltimore put up one and a quarter million. And the first interstate bank in California put up one and a quarter million. These are all friends of Ed's. And so he had $5 million. Now, nobody really thought we were going to get much done, but people were willing to take a chance. Now, you have to remember, this was 1987. There weren't a lot of private equity firms in those days. There weren't any big behemoths like Blackstone or KKR or Carlyle or Apollo are today. But people were willing to take a venture kind of chance, and there wasn't that much money.

So ultimately, we began starting investing, and we did okay. And so one thing led to another. Let's talk about the beginning years of Carlyle when you first got going. You did have a tough start. You struggled in the first several years. You bought an airline food company called Cater Air, and you lost a bid to buy the restaurant chain Chi-Chi's. But after several years, things turned around. You hired former Defense Secretary Frank Carlucci as your vice chairman. And through his relationships, you bought a defense consultancy

company called BDM from Ford for $130 million, a company which Ford had purchased for $390 million only two years before. You later sold it for a huge profit. It's not uncommon to struggle when you start a new business. When you do, you have a lot of self-doubt and sometimes think, what on earth have I done here? As we think about our pursuit of excellence, we need to overcome our challenges. Can you tell us more about your struggles at the beginning and how you beat the struggles? You started with 5 million and now you've built one of the most successful investment firms in the world, which manages $275 billion in assets. Well, our deals, some in the early days weren't all that successful, but then we had, as you point

out, BDM, which was successful. And then we had former Secretary of Defense Frank Carlucci. And then he was a well-known figure. And so he could get his calls returned. And that was helpful in raising money. Four years later, Jim Baker was leaving government as former Secretary of State and former Secretary of Treasury. And we recruited him. And that began to give us some credibility.

We only had, when I was recruiting Jim Baker, we only had about $100 million under management. We were then going to try to raise a bigger fund. He gave us credibility because we didn't have that much then. In the end, our deals were modest in size, but they generally worked out reasonably well. They weren't spectacular, but reasonably well. The reason we grew, to be honest, and the reason we became successful, I think, was that we came up with an idea that doesn't sound very novel today, but it enabled us to transform the private equity world. The private equity world and the phrase private equity hadn't even been invented yet. We were called management buyouts or leverage buyouts. It was a business where if you were a venture

capital firm, that's all you did. You you generally invest in one narrow niche or so, or very narrow geographic area as well. I came up with the idea that after we raised one of our funds, that we would basically do what Fidelity and Vanguard and T. Rowe Price had done, have multiple funds in different areas of private equity, and then use our brand name to kind of sell the fund. So if we were good in buyouts, I would say to somebody, give us a chance in growth capital. If we did well for somebody in buyouts and growth capital, I'd say, give us a chance in venture capital. And that's how one thing led to another. And then I decided to globalize it, which is to say, raise funds in Europe and Asia, Japan,

around the world. So what we did is we institutionalized the business by making it more than just a mom and pop, one fun thing. We had multiple funds, and then we globalized it. And that led to really what others have done as well. Blackstone, KKR, Apollo, and a number of other firms have built these multidiscipline global firms. And that's what enabled us to do what we did. But my partners who did the investing, I wasn't doing the day-to-day investing. If the track record had been bad, my running around the world begging for money would not have worked.

You're a great investor. All investors make a lot of mistakes. And I want to talk about three of your mistakes. When your daughter was at Harvard, she met a classmate named Evan Racklin, who's now her husband, who wanted to introduce you to his classmate, a guy named Mark Zuckerberg. We all know the story. Mark dropped out of Harvard and started a company and he was looking for money. When Evan described it to you, he thought it sounded like a dating service for college students and told Evan that it would never get anywhere and you declined a meeting with Mark. I'm guessing you would have probably invested more than this, but had you invested $30,000 back then, it would have been worth around $20 billion today. That's one mistake. Then in the early years of Amazon, you passed on the opportunity, take a 20% stake in the company. You told Jeff Bezos

that if he got lucky and things worked out, he would at most be worth $300 million. You ultimately made a small investment, didn't have confidence in the company. You ultimately sold your stake for $80 million. Just to put a little bit of numbers on this, on June 30th, 1998, your stock closed at $16.62 per share, and it had a market cap of $834 million today. It's trading at around $3,700 a share and has a $1.82 trillion market cap. That's an increase of 2,064 times. If you had kept your stock there, it would now probably be worth over $10 billion. You also passed on investing in Netscape, which sold to America Online in November 1998 for $4.2 billion. These are $50 billion misses. Every investor in the world passes on companies that

in hindsight they should have invested in. I've been there more than a few times. It doesn't feel that great. It makes me sick at times. And we often talk about regret. What lessons did you learn from these and how did they help you become a better investor? Well, I learned I'm not as smart as I thought I was. In those days, the concept of getting a new company off the ground and becoming fabulously successful with it really wasn't that common. There had been venture capital on the West Coast, but there wasn't really a history then of companies becoming worth $1 or $2 trillion. So when I met Jeff Bezos, when he was in his ramshackle initial office building, I remember telling him that I didn't think he could beat Barnes & Noble. They were around a

lot longer. And he would explain to me why he had better knowledge of software and so forth. But I just rolled my eyes. I didn't really believe him. And the same went through when Marc Andreessen showed up at my office trying to explain to us how he was going to navigate the internet. And I said, well, why would anybody want to navigate the internet? And what is the internet? Today, I'm willing to take bigger chances.

I have stepped down as the co-CEO of Carlyle a few years ago, and now I'm the co-chairman and a large shareholder. But I also have my own family office. And in that family office, we do a lot of growth capital, venture capital. And there, I've made mistakes again. I keep making mistakes over and over again. Some deals have worked out well, but I had a chance to invest in Rivian. Rivian is this electric truck company. I had a chance to invest in Rivian. Rivian is this electric truck company. I had a chance to invest in it probably when it was worth maybe under a billion dollars. Now, I think it's worth $150 billion or something like that. I turned it down several times along the way. Look, you live and learn. The best thing you can do is just try to not take it too seriously and don't jump out of

a window because you didn't make an investment. Try to stay in the game and stay in the arena. The private equity world typically invests on historical cash flows, so you can generally determine some kind of historical financial performance. There's usually a lot there for you to make some kind of educated investment decision on. The venture capital world, which has been my world for a long time, is there's nothing there. It's a piece of paper. It's a business plan. If you're in the seed round, you're betting on the team. And no one really likes to talk about this, but typical fund, a good fund, this is true of ours, seven to nine out of every 10 deals go to zero,

where you look really stupid and you feel very stupid, but you need the one or two of 10 to really make up for the other losses that you have. It's a weighted average game. I feel your pain on some of these. Forget to put it in perspective. It's one thing not to make money on a deal. It's different than losing money. When you're losing money, it can be more painful than not making money. Secondly, much more important is your health. If I had done all those deals, but I had terrible health problems and I wasn't going to live that long, would I be better off? I don't know.

The most important thing is to live a happy and healthy life and have a happy and healthy family if you can. If you have children, then try to make them as successful as you can and make sure they're happy and healthy. I don't lose sleep over these investments. I obviously talk about them because I think they're somewhat interesting and humorous, but I don't lose sleep over it. I just wish I was smarter than I had been, had gone into some of these deals.

We've talked about Netscape, which started in April of 1994, 27 years ago. And Amazon, which started two months after that in July of 1994. And Facebook, which started 10 years after that in February 2004, 17 years ago. And then there's Bitcoin, which started five years after Facebook in January of 2009, 12 years ago. For the first 10 years, almost nobody cared about Bitcoin. And if you went on record to claim it had any value other than to launder money, you were ridiculed by the press, the general public, and some of the most prominent people in the financial world, people like Warren Buffett and Jamie Dimon. But the tide has shifted quite dramatically in the last two years, and nobody is saying that now. A little less than five years ago, Bitcoin hit a market cap

of $17 billion, and today has a market cap of $1.2 trillion. You don't invest in individual tokens like Bitcoin itself, but are making investments in companies like Paxos, which facilitates trades of cryptocurrencies. I have three questions here. First, why aren't you investing in Bitcoin itself? Second, should the tens of millions of regular retail investors, these are the people buying stocks and mutual funds, invest in Bitcoin and cryptocurrencies? And third, many experts think Bitcoin will replace fiat currencies by 2025. Are they right on this? Is Bitcoin going to replace national currencies?

Well, there are three different questions. So first, I don't invest in Bitcoin or other cryptocurrencies. I honestly don't understand them well enough to do that. I'm not a currency expert, and I realize there's a lot of speculation going on. So I've concluded through my family office that I'll be investing in companies that service this industry, which I think is going to grow and continue to grow. It's a somewhat safer way to play the industry. It may not produce the exponential returns of investing in Bitcoin at a low price or

another new cryptocurrency, but it's a little bit safer, I think, at least from what I'm interested in doing. I do think that if you want to invest in Bitcoin or cryptocurrencies, I don't think you're a terrible person for doing that. I just think you should recognize that it's going to fluctuate dramatically and you could lose a lot of money. You can make a lot of money. It's like I analogize it to going to Las Vegas. I'm not a gambler, but most people go to Las Vegas and gamble. They know they're

going to lose money intellectually. Now, if they win some money, all of a sudden they think they're a genius and they put their money back. If not on that trip, the next trip, they'll put it back. So in the end, I think people should go to Las Vegas and gamble if they enjoy it, but do it with money that they can afford to lose. The same is true in cryptocurrencies. Nobody really knows where they're going to go. And it's late to get in now, I think, and all of a sudden make these exponential returns. But if you like the game of watching every hour and the hour where it's going, and it's like gambling for you, and it's speculation, and it's fun, put in the amount of money they can afford to lose, and you'll maybe have an enjoyable time. I do think that these currencies are too now ingrained

in our global financial system to say they're gone. It's like prohibition. We decided we didn't really want to let people drink alcohol. It wasn't good, people thought. So we had prohibition. It didn't work. The same is true here. You're not going to be able to stop people who think that the dollar is going to be overly inflated. we won't be the reserve currency in the world in 25 years or so, and that there's other things they want to do analogous to what gold used to be. And that's what some people see these current currencies as. I don't think there's anything wrong with that. I just wouldn't put too much of one's money into it, unless you're really, really an expert. I am doing an interview of somebody that's got billions of dollars in Bitcoin. And he got there early and

made a big bet. And congratulations to him. Who knows whether it's going to be worth that in a year or two. I think the government is going to try to regulate this at some point, but I doubt if government will be successfully able to eliminate it. China is trying to eliminate it, but I think it's going to be just offshore and Chinese people interested in it will just invest offshore in these kinds of things. So it's an interesting concept that people can create out of whole currency and out of whole cloth, these currencies, but it seems to be meeting a need. Will it replace national currencies in many countries? I can't see it replacing the currency of the United States, but what about some of the other smaller, more third world countries or countries that have a very unstable economy with very high inflation?

Governments regulate currency and issue currency because it gives them some control over the economy and enables them to make decisions that theoretically are better for people. I suspect that most economies will continue to have their own currency, but they may all go in time, in your lifetime and maybe mine, to digital currencies. There's no reason why we need to have paper currency really much anymore. We can have it, but a lot of it's used for illicit purposes. The most common printed bill is the $100 bill, and it's often used. I think we ship more of those offshore than we actually use them in the United States. So I think that you'll always have governments with controlling currency, but I think it'll be in the future, a digital currency. The United States is working

on a digital currency now. And at some point, I suspect 10 years from now, we won't have paper currency. We'll just have everything will be digital. So it's not the same as a cryptocurrency, which is a little bit of an outlaw kind of thing compared to what a government does. But I do think that you're not likely to see cryptocurrencies replacing government issued currencies, in my view. We've talked about the beginning of the internet and social networks and Bitcoin. Now let's talk about non-fungible tokens or NFTs, as they're known. For our listeners and viewers who don't know what an NFT is, they're a blockchain-based tool that enables anyone to monetize digital content. You can create an NFT of a collectible such as a unique artwork. On May 11th of this

year, an NFT that is considered the Mona Lisa of the art world sold for $69 million in October of last year. The first pair of cyber sneakers sold for $90,000. In October of this year, somebody paid $1.5 million for nine plots of virtual real estate. And then there's a sports world. Last year, the NBA created something called Topshop. It's an NFT marketplace where fans can buy, sell, and trade NBA moments, which are packaged highlight clips that operate like trading cards. In April this year, a fan bought a LeBron James NFT dunk for nearly $400,000. Most people don't know this, but the first non-fungible token was created in 2012. Similar to Bitcoin, they took nearly a decade to gain a lot of steam. And at one point, they also seemed like a passing craze. But similar way, nobody's saying

that anymore. The emerging technology is growing. It's a major industry now. In the third quarter of this year alone, there are more than 10 billion non-fungible tokens traded, which is up more than 800% eight times from the previous quarter. What do you think about non-fungible tokens, and are you buying them? Again, I'm not an expert in it, but my family office has studied it and we will be making investments in that area. Probably not so much in the tokens themselves, but around companies that service the industry or that have some ability to kind of help different people that are trying to get into the industry.

But when you think about it, let's suppose you own a work of art that's a great work of art. Why do you have it? Well, it's beautiful. You can do that on a token as well. You can look at it and say it's still beautiful. You can show it off to your friends, but you can do that with a non-fungible token as well. And you can sell it. And presumably, you can do that with a non-fungible token. So when you buy a painting, what are you getting that you're not getting for the non-fungible token? Well, you can argue it's more permanent or something, and there's a longer history of those kind of things.

But I think it's a mistake to think that this is a passing fad. And I think 10, 20 years from now, people will say, who are the idiots that didn't think that non-fungible tokens were going to work? It's amazing the speed at which the market is growing. We're seeing a lot of deals in this space, and there's just a tremendous amount of money going into billions and billions of dollars on the investment front as well. It's going to be fun to see how this all shapes out. Another area, like take esports, for example.

You're familiar with that. I've invested in, for my family, obviously, a lot of esports-related things. I never even heard of it until someone called me a few years ago about it. And all of a sudden, it turns out that there are staggering numbers of people that are watching esports, playing esports, and making money investing in it. I wish I knew what the next concept was going to be, like the non-fungible token or the Bitcoin, so I could get there before everybody else gets in. I try to find these things, but you never know exactly what's going to take off. For me, the next big thing is Sandy,

which is a Yelp for Beaches, my company, but we can talk about that later. It's already happening. Let's talk about another form of collecting, which is also a form of philanthropy for you. In December 2007, you purchased the last privately owned copy of the Magna Carta for $21.3 million. For our listeners and viewers who don't know, the Magna Carta was issued by King John of England in June 12,015. It was the first document in history to put into writing the principle that the king and his government were not above the law. You have also purchased rare copies of the Declaration of Independence, the Emancipation Proclamation, the 13th Amendment, and the Constitution, and you've generously lent these to the State Department, National Archives, the Smithsonian,

and Mount Vernon. What is your motivation here? And what else is on your shopping list? And did you want the most recent copy of the Declaration of Independence that Ken Griffin just bought for $43.2 million? That was a constitution, not a declaration. But I know the document world better than I used to, and I didn't think it was worth quite as much as Ken paid. But Ken made the decision it was

worth it, so he's probably right and I was probably wrong. I know Ken quite well, and I think he's a very smart investor, probably much smarter than me. So if he thinks it's worth that, then it probably is. I own a lot of historic documents. And the reason I do it is mostly to put them on display so people can see them and then learn a little bit more about American history. The human brain has not yet evolved to the point where if you see something on a computer slide, it's the same as seeing the original. So if you see the original, you might be inspired to learn more about it while you're there or afterwards or before. And so it might help with the education of civics and

history that I think is important. I do buy these documents so it might help with the education of civics and history that I think is important. I do buy these documents, but that's really the purpose of it. I have a number of other documents I'm buying. I have a large historic book collection as well of famous American-related books in our history, and for the same purpose, basically to put them on display and have people think about American history and so forth. And I do the same in the art world. I ultimately have to figure out what to do with all these things. I will deal with that a little bit later. Let's talk about the value of work ethic, which I believe is the most important ingredient

of our success in your personal and professional life. When you worked in the White House for President Carter, one of your colleagues said you were the first person to arrive on the first day of the administration and the last one to leave on the last day. You were rumored to live in your West Wing office and you became semi-famous when a magazine described your daily routine, which included regularly eating dinner from the White House vending machines. You told the magazine that machine food is underrated. How important is work ethic on our path to excellence? And as part of this, can we go back and can you tell us what kind of time you put in a week when you first started your career and what you're spending per week now, even after

you're one of the most successful people in the world? Well, I always thought that I wasn't as smart as I wished I had been or would like to have been. Therefore, I thought I could compensate or would like to have been. Therefore, I thought I could compensate to some extent by working hard. And so by working hard, I thought I would make up for the fact that I wasn't brilliant. And so whenever I took a job, I would work very hard, hoping that it would lead to some success. And so when I got to the White House, I wanted to work there my entire young life. And you get there, you're in the West Wing of the White House. The President of the United States is calling you from time to time

for advice. You're flying around on Marine One and Air Force One. What could be greater than that? I wasn't married at the time, no children. I couldn't be happier. And so I just worked around the clock, literally 7 o'clock to 11 o'clock at night. Today, I still am a pretty hard worker. Certainly, I'm older now, but I generally try to get as much done as possible every day. The reason is, when you're 27, you have great potential. You want to work hard. You want to make a name for yourself. You want to do something useful. When I have the opposite age of 72, the reverse of 27, you realize that something is going to go wrong at some point. Part of your body is going

to fall apart. Your brain is going to slow down and not work, or some part of your body is going to check out. So what I'm doing now is what I call sprinting to the finish line. I'm trying to get as much stuff done every day as I can because I know at some point the body won't or the brain won't work. So I actually am not working much less than when I was 27, because now I have a business involvement at Carlyle. I've got my family office. I've got a lot of nonprofit boards I chair, and I've got TV shows and books and so forth. So I'm doing a lot, and I do make a lot of speeches and get involved in a lot of philanthropic things. So it takes time. This weekend, for example, I'll be chairing the Kennedy Center's events with the Kennedy Center honors we have every year.

And so that takes a lot of time. A lot of these projects take time. But I like what I'm doing. I just wish I was younger and I could do these things for more time. But I guess the bottom line is hard work, I don't think, is a vice. I think generally the people who are the most successful in the world, with some exceptions, are people that work very hard at their craft. Maybe they work hard as a young person, they perfected their skills as Tiger Woods did, or maybe they just were a scholar and they just really worked hard early on and they

got certain intellectual skills. But I don't think that people who are lazy are generally the people who are successful as people who work hard. When I give career advice to people who tell me they don't know what they want to do, I ask them to create a list of the five most important criteria and rank them. Money's usually ranked number one, and the others include location, team, opportunity to learn, opportunity to promotion, and the industry. Enjoyment is very low on the list. It's often last on the list. People say it's called work for a reason. You've touched upon it before,

but can we go back? What's your advice here? If you don't love something, can you be great at it? You can have luck in life, I guess. But the people that win Nobel Prizes or get on to great professional accomplishments are generally people who work hard. You rarely see somebody not working hard, and you rarely see somebody doing something great where they hated what they were doing. Occasionally, you might see that, but generally, people who accomplish something love what they're doing. Now, they recognize while they love what they're doing, there's always trials and tribulations. I love what I'm doing now, but every day I've got some challenges here, some things there I wish I'd done differently or I wish I'd have to deal with. But generally, you have to find something in life that you love. And my general advice to

students all the time is experiment with different career options. Find something you really love, and ultimately that will make it more likely you'll be successful. I didn't really find what I loved until I was 37. So I tell my own children, try different things, experiment. And I tell students when I speak to them, experiment, try different things. You'll find something you love. And when you love it and you know you love it, you're more likely to be successful in it. I want to talk about the ingredients of excellence. I saw a quote from you and you've mentioned a few times here. You say you're not brilliant. I've heard you say you're not very handsome. You've talked about you don't have great athletic skills. And people ask, well, how did you do it, David? And you said

your career was filled with more mistakes than successes. So tell us, what are the ingredients to success and how do we get there? Well, I think success comes about because you have some goals. You try to work hard towards those goals. You learn how to get along with other people and share the credit. You learn how to be a leader, not a follower. You learn how to improve your brain and your capabilities of doing things almost every day by just learning more and reading more. So I'd say success is a difficult thing to measure. But in the end, the most important thing for success in the end, and everybody should measure it, is personal happiness. As Thomas Jefferson wrote, to some extent, life is about the pursuit of happiness.

He never actually defined happiness. And it's not clear if anybody can really define happiness, but it's very elusive. But I think being happy is the greatest pleasure in life. Assuming it's not destroying anybody else, you're happy because you're doing something you enjoy and not hurting anybody else. But everybody wants their children to be happy. Everybody wants to have happiness themselves. It's elusive. I am generally a happy person. I wish I was, you know, different skill sets. I wish I'd accomplished more. I'd not made certain mistakes. But generally, I got lucky in life and I'm pretty happy with where I am. I just wish I can be around another 10 or 15 or 20 years to do more and enjoy life more.

On a related note, you've also talked about the keys to success in the financial world. A lot of the listeners and viewers are young professionals who are either in investment banking, they may be in college, they may be later in life, lawyers who would love to get into investment banking. They'd love to work at a firm like Carlisle. Where does it all start and what are the six attributes you look for in new hires? Well, when I'm hiring people, I like people who are reasonably intelligent. I don't want geniuses. I've hired geniuses that are hard to manage.

I'm looking for reasonable intelligence. I'm looking for a pretty good work ethic. I'm looking for people that know how to share the credit and get along with other people because you can't do anything by yourself. You've got to have a teamwork effort. I'm looking for people that have some intellectual curiosity, that are always looking for the next thing to kind of make themselves learn more. I'm looking for people that want to accomplish something with their life and want to make their life something that their parents and they would be proud of. I'm looking for people that don't care only about making money, though money is a measurement of success in the business world. But I'm looking for people that want more than that out of life. I'm looking for people that are willing to give back to society in some kind of philanthropic or illimitatory way. I'm looking for people that I want to spend time with who are not people that I don't like their personality. I want people that are people that I can talk to, enjoy being with, and who I think will benefit from some mentoring from time to

time. So I'm looking for different things. But in the end, there are always going to be some successful people who defy what I think is important. For example, as I've written, I think humility is a great virtue. And the people I most admire as great leaders are relatively humble. You hang around with Warren Buffett. He doesn't tell you how smart he is. There are a lot of great leaders that don't. Abraham Lincoln didn't ever, as far as I know, say, you know how smart I am. I got elected president of the United States, and I won the Civil War.

Let me take credit for that. He didn't do that. I realize that some great leaders are not humble. There's an exception, of course. Napoleon wasn't humble. I imagine Charlemagne wasn't humble. Alexander the Great, attaching the great to his name, probably wasn't humble. But as a general rule of thumb, the people I admire are people that have some humility to them. You've accomplished so much. I mean, I've heard you say, I think at least 10 times now, you got lucky. I think you create your own luck through hard work. I heard you say you're not that smart. I think most people would think you're brilliant, even though you may not see yourself that way. And I think it's one of

the reasons why you are a great leader, actually. And I think it's one of the reasons why people respect you so much. I mean, I've heard it over. I mean, I've read about it. I've heard you speak at Milking Conference and some other conferences too. And even in this 90 minutes we're going to spend together today, you keep saying it. I believe it. I mean, look, the people who are brilliant are people who got 800s on their SATs and perfect scores in their achievement tests and all the things I couldn't do or were valedictorians. They were the brilliant people. I'm not that. I got lucky in a couple of things. And one of the things I would say is I probably am smarter than I was when I took the SATs in many ways because I continued to read and learn. Many people don't continue to read when

they graduate from college. Something like 50% of Americans who graduate from college never read another book again in their life, people don't read. And so I'm always trying to absorb and learn more information. And I think that's a part of the growing process. But believe me, I'm not brilliant and I'm not as talented as I wish I were, but you take what you can get out of life. I respect humble people. We have a saying in my office, humble rules the day. Like I said, most things we do don't work out so well on the venture capital side. And when we have a big win every few years, as a football player, I just want to hand the ball back to the ref and go back again because we know things are not going

to look so good. There's no reason to pound your chest at that point because you know there's going to be some more pain coming at the end of the day. But it's great to have role models like you who lead that way. Let's talk about your book, How to Lead. It's a New York Times bestseller, a number one Wall Street Journal bestseller. It's been called The Essential Leadership Playbook. In it, you describe your interviews with some of the most successful people in the world, like Bill Gates, Jeff Bezos, Ruth Bader Ginsburg, Warren Buffett, Oprah Winfrey, among many others. It describes their principles and guiding philosophies and takes us through their remarkable lives and career. That's exactly what In Search of Excellence is about. I want my listeners and viewers

to learn from incredibly successful people like you with the hope your stories will inspire and motivate them to be the best that they can be and reach their highest potential. So tell us, how did you become a leader and what are the necessary skills and traits you need? And do you need to be a leader to achieve excellence? Well, generally, followers are not the ones that achieve excellence. So you can be a follower, but just generally the people that make a difference to what are leaders. They can be a leader of their neighborhood or a leader of their state or their community organization or government and so forth, but generally leaders are the ones who probably get more accomplished and probably do more for society than followers, though obviously it's not terrible to be a follower in certain areas

if you're more predisposed to do that. In my book, which consists of interviews of people who've been very successful, I distilled some of the attributes that. In my book, which consists of interviews of people who've been very successful, I distilled some of the attributes that I thought leadership has, and some of them we've talked about. But the ones I would say is luck is number one, and you make your own luck. Now, if you sit in your house all day and don't talk to anybody, don't do anything, you're probably not going to be that lucky. So you got to meet people, do things, have some contacts, take advantage of them, and have some luck. Beyond that, I would say hard work is number one. Persistence, when people tell you you can't achieve something, don't give up. Number three, I would say, is learning from your failures. You're going to

make mistakes, but learn from them. Learning how to get along with other people, as I mentioned, is very important. Learning how to be intellectually curious, continuously read and absorb more information is going to be important. Learning how to communicate. How do you communicate to your followers? Well, you do it either by writing very well or talking very well, or most importantly, leading by example. So if you can lead by example, you're probably going to have followers.

If you do good things, they're going to follow you. I think it's also important, as I mentioned earlier, to have some humility. Learning how to share the credit is very important as well, in my view. Being highly ethical is important. I think you can ruin your entire life and your career by being unethical and taking the path of least resistance. Those are things I think a lot of leaders have in common. I would say, in the end, being a good mentor to somebody is also important as being a leader, because you want to leave something behind. And if you're mentoring people, you can help them become good leaders as well. And I think all of us have a responsibility to most enjoyable things that I do. I give 10% to 15% of my day to mentoring and giving back and meeting with people. I never forgot where I came from. And people were very generous taking meetings with me. And I want to pay that forward myself. So did you grow up in modest circumstances yourself?

Very modest. Yep. Single mom, worked two jobs, very modest circumstances. And like you, I worked very, very hard to achieve some of the things that I've been able to do through a lot of hard work and through a lot of focus. But like you, I had some detours along the way that were very tough to get through. I understand. Well, there are always times in life when you'd say, how did I get into this mess? How am I going to get out of this mess? And is it really worth pursuing my career objectives anymore? Because I'm probably sidetracked so much so that I'm not going to get anywhere. And then you just have to pick yourself up and get off the ground and go back into the

arena, as they say, and do the best you can. And sometimes it works out for people. Sometimes it doesn't. I stuttered as a kid and I was made fun of. I was bullied my whole life. And I worked very hard to correct the speech impediment, years of therapy and speech therapy, but being made fun of from a young kid and having to give a speech in high school where you couldn't even go up in front of the room and everyone's laughing and pointing and make fun of you. I was motivated before that all happened, but it made me very motivated to improve myself and to be the best that I could be.

Yeah, look, stuttering is a real challenge. When I was growing up and when I was six, seven, eight, nine, my best friend next to her neighbor had a stutter, a young boy my age, and people made fun of him all the time. And I would always stay with him and try to calm him down and try to get him to not feel depressed about it and so forth. It was obviously challenging. Our current president of the United States was a stutterer as a young boy, and he overcame it.

Children are very cruel to each other. There's no doubt about it. And the most painful things in life can be when young children are making fun of other children because they don't have social sensibilities about things you shouldn't say. And obviously, stutter is something you can't control. And it's a very difficult thing to work your way through. So congratulations on doing that. Well, thank you. Let's talk about work-life balance. You're an incredibly busy guy. You now have three grown children. Many ultra successful people I know and that you know

are workaholics and are not around for their kids that much because they're always busy working. What was the right balance for you and what's your recommendation here for others? That's a complicated issue. I don't think anybody has solved that problem easily among the people that are very career oriented. There's no doubt that many people I meet who are very successful, basically their non-career thing is spending time with their family. And they're really, really good at it, maybe better than I was. I was traveling a lot.

So when I got back on weekends, I would try to spend time with my children. You could say that I succeeded in making my children think that what I did wasn't terrible because all of them are in private equity, as I like to say, the highest calling of mankind. So all three of them are now in one form or another of private equity. And I work with each of them every day in some investment-related things in private equity. So I mean, I've done okay in that regard, but I can't say I'm perfect for sure. And I'm sure there's a lot of people who are much, much better fathers than I am. In terms of work-life balance, I probably wasn't as good at staying in shape because

I should exercise every day. I don't do as much of that. I always think about it. I've got a lot of gym equipment in my houses, and I look at it a lot on the osmosis theory that maybe it'll rub off on me, but it usually doesn't work. Every year, I get my annual physical, and every year, the doctor says you should exercise more. And every year, I say, yes, I'm going to do that, and that lasts for about a day or two. I do try to do other things, but I do that through nonprofit organizations. So I'm involved in the performing arts or the art world or other kinds of things that help me get out and socially see other people.

But in the end, I suspect that I could do a better job of work-life balance. And you could argue, why at this age am I working at all? I enjoy it, but my mother and father retired when they were 55. They had a blue-collar mindset, which was you can retire at 55, then you retire. Why work one day longer? Because you don't enjoy work. But I love what I'm doing. But you could argue that at my age, I could go sit in Florida and just play shuffleboard or golf or something. But I just choose not to do that. But I'm happy with what I'm doing. When you do well financially, it can affect your kid in a lot of ways. You have three kids.

I have five kids. And you've said that growing up in affect your kid in a lot of ways. You have three kids. I have five kids. And you've said that growing up in a family where your father's pretty wealthy is a lot more complicated than growing up in a family where your father is not as wealthy. And the same is obviously true when your mother is incredibly successful. How did you manage this with your own kids? So this is one of the biggest challenges that wealthy people have. How do you deal with your children? How do you avoid spoiling them? As we all know, if you have a great deal of wealth and it's come relatively quickly in life, you can

spend it and spoil your children quickly thinking you're showing your love for them by spoiling them. And we've all seen children of wealthy families that have suffered through lots of challenges in life because they were spoiled. I can't say that I avoided that completely. If I have my own airplane and I'm flying on a vacation with my children, I can't say to them, realistically, go fly commercial so you'll know what commercial is like and don't fly with me. So there's differences that people have to make in terms of compromises. But in the end, I've tried to say to my children, and I made all my speeches saying, I'm giving away all my money. You get the point to my children. So get a good education. I've helped them get a good education. They've all gone to great schools, Duke and Harvard and Stanford and so forth. But they have to make it on their own to some extent. I'm going to help them as much as I can, but I'm not leaving them gigantic sums of money because I don't think that that would necessarily help them. Raising children is the hardest thing to do in life if you want to try to raise kids successfully. Raising children with a lot of money is really, really challenging. And it's just nobody has, I think, figured out perfectly. You rarely get kids who come out of very, very wealthy families that are so talented

that you can't tell that they came out of a wealthy family. And that happens from time to time. But generally, these kids have an advantage and it's a challenge. You're pretty successful financially. So I'm sure you recognize that raising five kids with a reasonable amount of money is not that easy because it's easy to spoil your kids. We have this conversation a lot. We've been having it a lot. I tell my kids when I was at Michigan, there was a woman named, her name is Wendy Weiss. If you're out there and you're listening, I'm going to tell the story. I wanted to take her on a date. It took me a year.

Asked her out. Took her to Little Caesar's Pizza. I think I had $15 for dinner. We sat at the counter. She was not super thrilled about that. And I didn't go out with her again. I didn't have that kind of money. I didn't have money to go to a nice restaurant during college. And my kids do. I have one at

Wisconsin. I have one at Cornell, a senior in high school and two young kids. And every time we took a family vacation on the way to the airport, I would say, as a reminder, I never took a vacation like this. I wasn't on a plane until I was a senior in high school. And this just isn't the way that we do. We're going to stay at a very nice place. This vacation is going to cost more than 99% of people in the world will make in a year and sometimes a lifetime when you're talking about very, very poor third world countries. I just want you to keep it real.

We live in Brentwood, California, one of the wealthiest communities in Los Angeles in the United States. And it is very hard to keep your kids grounded, but it's very important to me to do so. I think they do a very nice things. We don't have an airplane, they fly coach. I fly coach, I get upgraded most of the time,

but it's something that is very important to me to have very humble, hardworking kids. It's definitely a challenge. We talk about most of the time, but it's something that is very important to me to have very humble, hardworking kids. It's definitely a challenge. We talk about it all the time. Yeah, I agree. I mean, it's a very difficult thing to do. And in the end, children tend to learn from their parents by seeing what their parents do. They observe. And so if you are a kind of person that's a big spender and you're just unconscious of the cost of things and you don't seem to care about it, your children are going to pick that up. If you worry about the cost of things, you tell your children that this is too expensive, they'll pick up that signal as well. So I wouldn't say

I've done it perfectly, but I've tried to do a reasonable job. And I'm sure when I'm long gone, my children will say, well, he didn't do this good a job in this area, but I've done the best I could. You have a three-part philosophy of life. Can you describe that for us? My theory, and this may justify what happened to me, is that you basically divide life into three parts. The first is when you're getting educated and you're being formed as a young adult and so forth. The second is when your career is really in real form and you're really becoming a significant player in whatever career you might be. And the third is when you're getting the benefit of those things you've done in the second part. And the first part, as I say in my book on leadership, you know, we all know people who are student body presidents, Rhodes scholars, all American athletes, Supreme Court clerks, how many of them really have the drive in the second

part of life or the third part of life to do as well as they did in the first part? And very often I find in my case of people that I knew who were superstars when I was in high school or college or law school, they burned out or they just didn't want to work as hard or they didn't have as much luck as I got. And so my theory, maybe to rationalize my situation, was I was not a star in the first part, did okay, but I wasn't a Rhodes Scholar, Supreme Court clerk, anything like that. But by not thinking I could rest on my laurels, I worked hard in the second part. And then as a result of working hard and keep driving, the third part has been the most pleasurable part of my life because I'm now in a situation where I can buy anything I want to buy.

I can more or less make large philanthropic gifts. And then people think I'm doing a good job for what I'm doing or I'm giving back to the country. So I'm getting the laurels for having worked hard in the second part. My theory is that the hardest thing to do is to be really great in the first part and the second part and the third part. You rarely see that, where somebody's a superstar in the first part of life, and they work even harder in the second part, and they become very famous even in the third part and give back to

society. There's occasionally people I can cite. But as a general rule of thumb, you'll see many people who are really successful today, the people running the world today, were not necessarily the superstars when they were very young. And take our presence in the United States as a good example. Very few of our presence, I think only Bill Clinton in recent years, could be said to have been a superstar when they were very, very young. Barack Obama was president of the Harvard Law Review, but he wasn't a superstar in high school or in college. And I would think Ronald Reagan wasn't, and a lot of other people weren't superstars. They were talented in some areas. Jimmy Carter was a smart person, but he wasn't a Rhodes Scholar. He wasn't first in his class at the Naval Academy.

So I guess my point is, to be president of the United States, you have to have a lot of luck. And it isn't necessarily the people who become that are the people who was destined to get that job when they were younger. We've talked a little bit before about the American dream. Is it still alive? The American dream is a phrase that was invented, coined in 1936 to describe the belief that many Americans have that if you work hard and you, the society is one where meritocracy will enable hard work and talented people to rise up. It is a dream that many people have in this country, kind of made famous by Horatio Alger kind of stories where poor kids

worked hard and became famous later on. And now I think that the American dream is something that people around the rest of the world believe in, particularly immigrants who come here. We have 47 million people who are immigrants in this country living here now. And many of them came here because they believed that they could rise up and merit would will out. Many people born in this country today don't believe in it as much, particularly people of racial minorities and ethnic minorities. Many of them think that it's so stacked against them, they can't rise up. And that's a real problem. But I do believe in the American dream. I believed it when I was growing up. I do think it's challenging for somebody. If you've grown up with one parent in a household, the parent has no money,

you've got a lot of siblings, you've got drugs, you've got crime and other things, you're not probably going to be a big believer in the American dream. And so it's challenging for many of these people to think the American dream really exists for them. But for some people, I think it is a very important part. And we don't hear of the Mongolian dream, the French dream, the Iranian dream, the South African dream, because it's not part of the culture in other countries that people can rise up above the status in which they were born. Normally,

in most parts of society throughout most history, you kind of stay in the same social status you had when you were born. You're one of the greatest philanthropists of our time. It may be in your DNA because after your mom's death, you learned that she gave small amounts of money to hundreds of charities during her lifetime. You give away 50% of your income to charities and have given away nearly $700 million during your lifetime. You signed the Giving Pledge, which we talked about, which is a commitment to give away at least half your money to charity. You said that philanthropy doesn't have to be about money. Is philanthropy and giving back necessary to achieve excellence? And what's your strategy

here giving away money with both near-term and long-term goals? Well, what I've said is that philanthropy is derived from an ancient Greek word that means loving humanity. It doesn't mean rich people writing checks that we bastardize it, but that's what it means. So list the big philanthropists now and list the money you've given away. And my point is the most valuable thing you can give away is your time. You can't always get more money, but you can't get more time. So a lot of people who do volunteering work or giving other kinds of non-money things to organizations are doing a great job and should be considered philanthropists as well. I don't have the wealth of Bill Gates or

Jeff Bezos or Elon Musk. So I've got, by any normal human standard, a lot of money, but not that kind of money. So I've decided I can't take on the problems of global climate change. I don't have enough money to make an impact there. I'm not going to solve the problems of poverty or the problems of K-12 education. Those problems are so gigantic and beyond my age to now deal with them are my resources. So I'm looking for things where I can start something that wouldn't otherwise get started. I can finish something that wouldn't otherwise get finished, where I'm going to have an intellectual interest in it so that I'm likely to stay engaged. And also, I'm likely to see some benefit or progress during my lifetime. So I take the organizations that I've been involved with, and I try very hard to use that standard. And so I've been most focused on things in the Washington area.

So I'm very involved and been one of the largest donors to the Kennedy Center, the Smithsonian, the National Archives, Library of Congress, National Gallery of Art, things like that. It's in my backyard. And I've coined a phrase, patriotic philanthropy, which I mean, giving back to remind people of the history and heritage of the country, the good and the bad. So fix the Washington Monument, fix the Lincoln Memorial, the Jefferson Memorial, so forth, reminding people of the history and heritage of the country. So that's what I kind of do in philanthropy. I enjoy it. I would say that I've given money to my children to give away, but none of them have any interest in the things I'm interested in. So they do different things. I'm trying to teach them a little bit about philanthropy, but everybody does it their

own way. And I wouldn't say I've been perfect and I've made some mistakes, but generally, I'm pretty happy with what I've done and give away the money I have. Is philanthropy and giving back necessary to achieve excellence? I think it's necessary to be happy. In other words, if you acquire lots of money and you view your self-worth by your net worth, I think you're going to be a disappointed and unhappy person. If you just die with billions of dollars in your bank account, I'm not sure that you're going to feel a lot of happy about it during that period of time when you've accumulated this money. Maybe you'll feel happy to read your net worth is higher than your neighbors or something. But in the end, I think people that give away money or their time and give back to

society feel much happier. And I try to say to people, happier people live longer than unhappy people. So I say, if you want to live longer, try to do something to help society and you'll probably feel better about yourself. And that'll probably make you live longer. At least that's my theory. You've done a lot in your lifetime, a lot of amazing things, lots of accomplishments. What's on your bucket list that you haven't yet accomplished? Well, I'd like to finish some projects in the history and patriotic philanthropy area. I'd like to make sure my children are successfully engaged in what they're going to do. I would like to continue to be a leader of some of the organizations I've been involved with where I'm the chairman and I want to make sure I have a lasting impact on some of them. And then I'll find some new intellectual challenges, things I haven't really done quite yet.

And I hope to do some things that I haven't done yet. I hope to probably get in better shape, exercise a little bit more, develop skills. I wish I had a language skills. Should I learn how to do a language? Maybe. I don't know how to play a musical instrument. Maybe. Should I learn how to be better at certain skills I just don't have that I'd like to have? But I'm trying to do as many different things as I can right now. And I'm pretty engaged, but I can always do more. How do you want to be remembered? Well, the old joke is that as the longest living person in history, but I would say remember to somebody that came from modest circumstances and made his parents proud and his children proud and his country proud of what he

did with the resources that he had available and kind of created a concept, at least in philanthropy, of giving back to the country in a kind of patriotic way to remind people the history and heritage of our country. Most of the money I've given away has actually been for education and medical research, but the patriotic philanthropy aspect of my philanthropy is probably better known because it gets more attention. And probably my obituary, when it's written, assuming somebody writes one, will probably mention patriotic philanthropy and Carlisle more than it will mention

education or medical research. Before we finish today, I want to go ahead and ask some more open-ended question. I call this part of my podcast, fill in the blank to excellence. Are you ready to play? Well, I'll do the best I can. All right.

When I started my career, I wish I had known... That I wasn't as talented as a lawyer as I wanted to be, and I probably wouldn't have spent so much time practicing law. And I wish I had known that I was more interested in financial services than I was in the law. I probably would have started Carlisle earlier and maybe built an even better company. The biggest lesson I've learned in my life is? I would say prior preparation prevents poor performance. As Jim Baker liked to say, his father told him that. Be prepared.

And so I always try to be prepared for what I'm trying to do and prepare your speeches, prepare your free interviews, prepare for whatever meetings you're going to have. Just be prepared and actually try to do a good job of working with other people so you never embarrass other people. You're always trying to do something where you think that it might advance society in some way. My number one professional goal is? Today, it would be to make certain that people think that I helped to build a good financial service firm and a good family office that ultimately is investing money as well. And then that ultimately give them this money away in sound and intelligent ways, which I regard as a professional goal.

My number one personal goal is? To lose a few pounds, get in better shape, exercise more, and just try to tell people that when they come see me, I am not Brad Pitt. I am not Robert Redford. I have all this problem all the time. People always come up to me. They think I'm Robert Redford or Brad Pitt. And I have to tell them, no, it's not true. So I just have to learn how to be more modest about that.

The one person in the world that I admire the most is? People who've ever lived, I would say Abraham Lincoln, because he kept the country together in ways that I don't think that other people would have done and did it with humility. Of people that are living today, I would say I do admire Angela Merkel. She really came from East Germany, really held Germany together, became an incredible leader and a woman leading a country and becoming one of the most influential people and best leaders in our world. People in the United States, I admire greatly a partner of mine for many years, Jim Baker, who was Secretary of State, Secretary of Treasury,

was in our firm for about 15 years, a really incredible person and a person I've always admired. If you could be one person in the world right now, who would it be? Randall Kaplan. I love it. Best answer of the day. Everybody respects him. People like him. He's got his own podcast. He's got five kids. What more do you want? Love it. You made my day. You probably made my month. I'm going to tell my kids when we get off. They're going to say, Dad, that guy doesn't know what he's doing. But thank you. I appreciate that. If you could make one change in American politics today, what would it be?

Oh, to require more bipartisanship in some ways. Because when I worked on Capitol Hill in the 70s, there was bipartisanship to some extent. Bipartisan bills passed today, you're not allowed to really talk to, work with, socialize with people in the opposite party. It's really destructive. And I think it's really damaging to our democracy. A final question is, what's the one question you wish I'd asked you today, but didn't? Well, I guess the question would be, does it bother you that people think you look like Brad Pitt? Does it bother you that people come up to you and mistake you for Tom Cruise? It doesn't bother me. It doesn't really bother me. I'm getting used to it. Well, I want to just tell everyone how we met. We met at the SALT conference in New York. You

were walking down the hall. I made a list. I believe preparation is the key to our success, one of the big keys. So I made a list of all the people who were coming, who were going to speak there. And I made it my point and mission to go up and introduce myself. I'd heard you speak many, many times. I love the Milking Conference. And I always wanted to meet you. I stopped you in the hallway. You stopped. I think I asked you, maybe it took 60 seconds for me to get my pitch out, maybe less. I asked if you'd be a guest on my podcast. You didn't even hesitate. You said, sure, I'd love to. Email me.

And that was that. So you're incredibly busy. I'm very grateful to you. You've been someone I've admired since I first became interested. Oh, thank you very much. As I've read about you, I certainly admire what you've done, and you've done a great job of preparing for this interview. You reminded me of things that I'd forgotten about in my own background. So now I would say you're probably the best

prepared interviewer I've ever had. So congratulations. I'm very touched, very, very touched when you say that. I've admired you since I first became interested in business when I was a young teenager. You've been a phenomenal role model to me with your success. Your humility is just phenomenal and your philanthropy even more so. I'm grateful for your time today, David. Thank you very, very much for sharing your story. I enjoyed it. My pleasure.

Thanks a lot. you