Noob School - Thom Young: Building Success through Networking & Problem-Solving

Episode Date: April 26, 2024

In this episode of the Noob School podcast, we sit down with Thom Young, president of FARCapital LLC, to explore his remarkable journey in the world of finance. From his early career and educational background to mastering the art of sales, Thom shares invaluable lessons learned along the way. Discover the power of networking and how cultivating strong relationships has been instrumental in Thom's success. Learn why prioritizing client needs and solving their problems is key to building trust and long-term partnerships. Whether you're a seasoned professional or just starting out, Thom's insights will inspire and empower you to take your career to new heights. Tune in and learn from a true industry leader! Get your sales in rhythm with The Sterling Method: https://SterlingSales.co I'm going to be sharing my secrets on all my social channels, but if you want them all at your fingertips, start with my book, Sales for Noobs: https://amzn.to/3tiaxsL Subscribe to our newsletter today: https://bit.ly/3Ned5kL #SalesTraining #B2BSales #SalesExcellence #SalesStrategy #BusinessGrowth #SalesLeadership #SalesSuccess #SalesCoaching #SalesSkills #SalesInnovation #SalesTips #SalesPerformance #SalesTransformation #SalesTeamDevelopment #SalesMotivation #SalesEnablement #SalesGoals #SalesExpertise #SalesInsights #SalesTrends

New School All right, well, welcome back to the Noob School podcast. Today I've got one of my very special old friends, been trying to get Tom on the podcast for a while, Tom Young. Tom and I met, I guess, shortly after he went to Davidson and was a good friend with my friend Sam Alton, and we became, I was kind of a friend steeler, I think, that stole you from Sam.

But we became friends going all the way. way back, probably 30 years, and it remained so, even though we've both moved around a little bit. And I wanted him have him on the podcast, because he was one of the, he's been very successful since right out of, I guess, Virginia Business School in the investment banking world, working in Atlanta, working in New York, and now out of Charlotte and like Talks Away sometimes. And it just has a very unique selling approach. I think it's a very caring, curious approach to sales. Certainly not hard-hitting or pushy.

It's more like trying to understand what people need and giving it to them, which is kind of what I preach. So I'm delighted that Tom was able to come down or come down from Charlotte today and join us. So thank you, Tom. Yeah, you're great, John Sterling. It's good to be here. All right.

Well, let's start at the beginning. I want to hear a little bit more about your history. Like, where did you grow up? Wilson, North Carolina. Wilson. Is that near Charlotte? East of Raleigh. Raleigh.

On the way to the beach. Okay, okay. And what kind of high school was it? Was it big or small? I went to Wilson through the 10th grade and then went off to Darlington School in Rome, Georgia. Is that a military school? No, Darlington School was just a men's school until our senior year. And in 1974, that's when it was all the craigsiness.

for all the prep schools to merge with a girls school. We dealt with Thornwood and Rome, Georgia. So my senior year, we had men and women. Did they continue to use both campuses? They used one for like elementary and then the other for high school. Okay, okay. Because it was largely a day school for Romans, but they did have a boarding school.

And were you okay with the mixing? Yeah, I was all for. That was a trick question. That was a trick question. That's cool. And so you were in school there. What were you into in high school? What did you like?

Well, it was back then, of course, it was football and tennis for me. And then senior year, the women that came over back then, girls, we were boys, were fabulous. So we were distracted by that as well. Good for you. That's good. I did have, I'll say this, I had to develop some wonderful friends that opened my eyes to. I've heard you speak wisely about choose who you associate with. And I was lucky enough to have as my core group of friends, the first young black fellow to come to Darlington School in the early 70s.

And Elson Floyd from Henderson, North Carolina. And we graduated together. He was head of the Honor Council. played football with, I got to play football with him probably more likely. Yeah. And he went on to Chapel Hill and then ultimately became the president of several universities. Wow. And passed away early of cancer. But he was one of my close circle of friends amongst several others. But it was great schools. So he was actively thinking about what he was going to do next and his life and planning and that kind of thing? Yeah. Yeah. Yeah. He always wanted to be an educator. And so when

he went to Chapel Hill, he got involved with, I forget which of the schools there, but ultimately went on to the University of Arkansas, and then ultimately became the president of Washington State University. Wow. Wow, that's a long way. It was an amazing story of successes. Ultimately, I think, and I'm pretty sure the medical school there is named after him now. God, that's so cool.

From Wilson. Yeah. So how did you decide to go to Davidson? My uncles had gone there. From Wilson, if you're from Eastern North Carolina, you always go to Chapel Hill, which is a fantastic school. My uncle's a dean of medical school there, all kind of things, reasons to go. But I also knew that I probably would have veered, speaking of how you choose your friends, I would have been tempted to enjoy my Eastern North Carolina lifestyle, which was just a lot of fun.

And you need to buckle down every now and then and go ahead and take things a little more seriously. And Davidson definitely forced that on that. Yeah. I see these talking to people all the time. It's a choice. Am I going to take the fun route, which I'm not sure what's going to happen, or the harder route, and this is the decision toward my future, you know, getting squared away, living a better, longer-term life.

And, you know, just making the decision. decision takes you a long way towards your goal. Yeah. Now, I too, I did that. That was lucky, but also at Darlington, back to the subject of picking the friends with whom you associate. I had five classmates out of 100 people go to Davidson. And they were the smartest people in my class. And so I just lowered the average.

But I was lucky enough to follow them. Any folks that went to Ivy League schools from there? We had Frank went to Williams, which I consider Ivy. But I don't remember anyone going to any of the true Ivy's, no. I think Davidson considered the Ivy League School in the South kind of deal. Yeah. I always was very proud of the southern nature of the school too, though. And so whereas, you know, I wouldn't bristle if someone said it was.

Abby. I am prouder of the gentlemanness and the respectfulness and the studiousness that came with the school. Yeah, it's a good school. That's a great school. And there's tons of great schools. There are, yeah. The Citadel's another

one, of course. Exactly. Yeah, my exposure to the Davidson people has just been, just one after another interesting people that I'd want to hang out with. I'll tell you what, and I'm sure this happens to you at your reunions, at the age where you start to go back to reunions.

Yeah. And every time I go back, I get to know someone that I wish I had known better in school. You know, I made the bad choice that young people do going, I'm in this fraternity and these are my buddies. Yeah. And I didn't make, you know, I was gifted with a broad swath of friends. I mean, just a small school, but didn't get to know the people as deeply as I did. In my attorney all of whom are great. But I go back now, meet people and go, holy moly, I wish I had known that person then. Right, right. And people, we talk about some on the new school.

People talk about going to a certain place because of the network. Well, just because I went to the citadel, doesn't mean I can call some guy who graduated in 1958 that I've never spoken to and just be in with him. He might take my call, you know, if I say we both went to the citadel. But, you know, you have a chance when you're in school, or let's just say you're both working at a first job somewhere to meet these people and decide who you want to stay in touch with the rest of your life like you and I did. Yes.

You know, that could have gone away, but it was like, no, no. Tom's not getting away from me, you know. So, yeah, I mean, I think it's definitely up to the person to make those connections to stay in touch for sure. So I agree with you. And also remember another one of your Davidson pals Burton saying that, Or maybe it was Sam saying that he had really good grades when he was there. And I'm like, why? Why? And he's like, well, because you'd be looked down upon in the fraternity if you didn't keep a certain average.

Well, I heard that, and that was Sam. And this, I'm giving my age away. Okay. When I was there, thank goodness we didn't look down on someone that had less than stellar grades because I got into the fraternity and they allowed me to stay. That's good. That's good. you did. What was you major in? Yeah. So I majored in pre-med, believe it or not.

My father was a doctor in Wilson, North Carolina. And so I took all the chemistry and the courses like that. And I'll never forget, between my sophomore junior year, it was our most serious father-son talk, but I listened to it. He told me that the government was getting into medicine, and you'll never get to practice the way I did. And, of course, when he was practicing, if someone had... appendicitis, he could put them in the hospital, they could stay a week. He kept them there

till they were better. And now they, you know, they were just beginning diagnostic-related groups and physicians were being told how to practice rather than being able to practice. And it has gotten probably even a little more bureaucratic. So I went to Chapel Hill for a summer, took two economics courses sold right out of Davidson College. What a great privilege to be a salesman selling financial printing. That taught me so much applied to business school. One of the few people applying to business school that actually had a real sales experience in my class. And then from there was lucky enough to be hired in New York as a salesman. And so you changed courses. midway through college approximately.

Did you change your major? No, I kept the major because I already had all the hard credits underneath it. But I started taking business-related courses. Now, at Davidson, at my time anyway, they didn't have accounting. They didn't have any of the really critical courses for a business or, you know, business degree. And so that ultimately was, I sold for three years, got such good experience. And then that's why I went to Darden to get. to round out, you know, academics that weren't too helpful.

Sure. This company, you worked for, financial printing, where was it based? Charlotte. It was Washburn graphics at the time. So you moved to Charlotte? Well, from Davidson, it was a 20-minute drive down the street. Yeah. So you're operating out of Charlotte.

And who buys financial printing? So this is annual reports, quarterly statements, all that kind of stuff. So I can remember we'd be printing all night, a quarterly statement. Yeah. And they'd give me, because I was the junior guy, they'd give me this box, fly me to Washington, D.C., make the filings. Now, remember, this is fax machine. Yeah, yeah. And make the filings on a certain timestamp and all that, that these companies, whether there's Bank of America, Wachovia, all the banks, any public company.

So we would do their printing. Not any, we would do it for the few that selected us to print for them. Did that help you in the investment banking world, that you had that exposure? You would think so. And maybe it did in that, you know, if somebody started talking about a 10-Q, at least I knew what it was. Yeah, yeah, yeah. But not in the extent that once I went to Darden and then once I got on to Wall Street, it was all new to me. And my experience was much like Burton's.

I had to learn stock valuations and how you're, you know, how, you know, how, you're, you know, how the market and getting registered and all that kind of thing. So you got the sales right out of Davidson, which I would say wasn't a super normal thing to do. Very abnormal. Right. Most people, they're going to law school or business school maybe or medical school. Actually, medical law and preachers. Preachers.

Yeah, they go to Divinity School. We put a lot of wonderfully. wonderfully solid people out in helping others. Yeah. Did you have a second choice other than sales? Not really. Yeah, me either. Not really.

I mean, it sounds like in some of your other podcasts, which are spectacular. Thank you. You know, you do that self-critique and you realize what you enjoy the most and what you get energy out of it. It's the ability to sit and have a conversation with someone, get to know them and get. And so I always I was going to be an outside person. I was always outside meaning outside sales. I'm an outside person too, but outside sales. I just, I love the art of conversation.

I love the art of debate too. I for years went to Reed Buckley's Public Speaking School, art of debate and got an awful lot out of that as well. Now where was that in Darlington or where was that? No, that was in Columbia, South Carolina. Well, outside of Columbia. be in Camden. Camden, okay, yeah.

So you went to a debate, was it like a week-long school? Exactly, very intense for a week. You would train, train, train for a debate, the subject of which they would give you when you got there. And in the interim during the five days while you're preparing for this debate, which I debated William F. Buckley himself probably four or five times. Wow.

I was on the debate, you know, there would be six of us on the team. And he was, for some reason, Reed always opposed me. to William F, which doesn't say anything about other than he liked to see me beat up. But you would have subsets of learning around camera work about being interviewed on TV, you know, play, role playing. Art of debate, you know, word selection, logic, those kinds of things that would get you ultimately to, they'd invite townspeople in and one afternoon there'd be a debate on you know whether the 60s were a better decade than the 50s or whatever it was yeah wow and you had to be prepared to take either side of course right right well you didn't know until you got there yeah so you know at night

while you know you'd have dinner yeah and then you'd go home and read oh you could about well wait well why were the 60s so either good or bad yeah yeah so we talked about that later it'll be interesting So, well, that's cool. So you, you, you, great school, changed your mind about medical thing, sales, and then you said, I suppose, when you could have stayed right in that same job and just kept making more money and doing better, but you said you want to, did you know you want to be investment banker at that time or did you just want to improve your business skills?

No, well, it was about going to business school because I didn't have any skills other than financial printing and I knew that there were, I mean, you're sitting there watching these businesses, you know, and I'm printing their annual report, and I'm going, wow, you know, what is that? Why are, and so I wanted to, you know, I describe it as raising my periscope trying to see further. And it was a great decision. Lucky enough to get on Wall Street with First Boston back in the day, which was just terrific. And they had a training program that was all of more about being social. than it was.

But they assumed your business, all of my classmates there at the time grads from really fine business schools. So they gave you, they assumed that. They probably shouldn't have with me, but they assumed you had some knowledge. And then they taught us the art of selling Wall Street style,

which was very much entertaining and pulling, trying to understand your clients. That was really it. I remember been so impressed with your early success. I was still struggling sales guy or maybe a beginning sales manager. I don't know, but I came down and you let me shadow you one day in your office and started early. I remember that, that you said the people you talked to started their day very early. And I guess you had a couple of hours of frantic communication with your buyers before 9 o'clock, before the bell rang.

Exactly. And then after that it was more sporadic. But those key hours right before nine were very important. It's when you had to distill everything you've heard from your research people, 40 or 50 analysts in New York, distill it down to what? You believe you're investing client-based needs. And then you're just pounding the phone. You know, that business has gotten disintermediated by the Internet.

So when we first got it, we were given our, Our best analyst's best thoughts, right? And it was done verbally. We would write notes. We would call people and say, hey, my analyst, John Sterling that covers IBM, really thinks IBM's earnings are going to do this, because margins do that, because sales are doing this.

And then all of a sudden the fax machine comes out, and so you could just fax it, and then all of a sudden the Internet's out. And so that whole art of how it was done in the 80s and 90s, changed in the 2000s. And now the job is as much about knowing the company management's the way Burton does, knowing the investors the way Burton does, but it's very little phone work. It's probably be more rewarding now because Burton does, as I understand, a lot more face-to-face.

I was doing weekly visits to Charlotte, Nashville, Orlando, where my clients were. So I got plenty of face-to-face. but they also needed me on the phone those first two hours when it was information that it was precious. It had a shelf life of two hours. Yeah, yeah. Well, I remember it was nice you'd let me see it, but it's a couple things.

One is you chose out of business school. You went to Virginia Business School, Darden, which is one of the, I would say, a top ten business school again in the south, almost maybe wrong the line, but it's right there, right? Right. And during business school, is that where you decided, like, investment banking is what you wanted to do? You know, back to a theme, if I looked at my most wonderful classmates that I respected the most, they were, that was their goal back then.

That was the job to have. And I didn't even know what it was. I didn't even know what it was. But they had a job at the investment bank called Sales and Trading, which was that whole interaction with the investing client, rather than trying to do project management, which is what investment banking is. You're going to take a company public. It's a process. A project. Sales and trading is snap. Here's the information.

Talk about it and move on. And once I found out there was that job. And this is an interesting learning story, if you don't mind me sharing it. It was Solomon Brothers, which back then. then was one of the good, was in to interview at Darden and I had signed up and you bid to get the right to interview with them. And I think I came in right below bidding enough points to have an interview with them. And so at the end of the day, it was 4.30 in the afternoon. And I walked by and the two interviewers are sitting in there. And the guys, not five years older than I am,

but they'd come down from New York and they had their Hermes ties. They look, they look great. And I knocked on the door and I said, can I just poke my head in here? And they said, sure. And I said, y'all sit down. Let me entertain you. I know you're really tired. And I went up to the blackboard. And I did Solomon Brothers, me, and then why you have to hire me.

And I just wrote down what I had heard about Solomon Brothers, which I had no idea. It was true. Not me. And I said, I'm outgone and all this is why you have to hire me because there aren't many people with sales experience. said, you know, do it. Yeah. And damn if I didn't get interviews with all the other houses and was lucky enough to find a job. Nice.

Nice. But part of it was going for the ring, right? And then taking advantage. And in Burton's conversation with you, his was all about timing. And mine might have been, if I think about, of all things, mine might have been timing, walking into that room and just taking charge. Yeah, I mean, we could say it. But a lot of people would have walked right past that room.

Because they said, well, I didn't bid enough, so I'll just go look elsewhere. Yeah, well, they were nice enough to let me in, too. That's true. That's true. Well, I mean, for the new schoolers out there, you know, a couple of things that jump out at me is one. I would think with your background and your three years of selling the financial printed products, it's been easy just to stay where you were and become a sales manager one day, regional sale, you know, whatever. And to say, nope, I want to be, I want to do more than that.

I want to really understand business and then go to a really good business school. And it just elevates you in terms of, even if you'd gone back to the same company, you'd been able to talk to an owner. Which I would, yeah. Yeah. Yeah. The owner of these companies in a different way, because you would have understood their business versus just, will you buy my product. And that's a huge jump for people when they can get beyond that transactional phase.

and get to the owner-to-owner conversation, what is it you need, this is what I need, you know, let's swap. So I think that was a really good decision you made to do that. And then while you were there to decide, it's probably the same now to some degree, but, I mean, if you want to have the, if you want to work really hard and make a lot of money, investment banking is still the place to go.

Yeah, there's not the leverage that, you know, if you go into technology and take a company public, If not that kind of leverage, they're not Elon Musk leverage. But you're right. But it is, that's also a periscope razor because you're up, you're dealing with a lot of companies and your perspective changes. And so that's pretty good. Because you see how people are doing it? Like this company did it this way, this is what they did to get there.

I mean, you know, Bezos tells, you know, if you, I guess he tells the story, but he took a job as an investment banker at a small firm because they let him be the the internet guy. Uh-huh. He wanted to be the guy who kind of looks around and finds opportunities on the internet. And sure enough, he found one, obviously, and left the company and did his own thing. I mean, that's so important about keeping your eyes up. Yeah.

And then just, you know, keeping your eyes open, being aware that opportunities may be out there. There's all kind of things about what you know, pair it with something else, and all of a sudden you've got the opportunity to create something unique. So, yeah, I hear Bezos. I think Jobs says a lot of the same things. I always amazes me. I wonder what your perspective is. But when you think about Jobs or Bezos even,

the jobs didn't finish college, he hardly started. Zuckerberg, you know, one year, Gates a year. And Bezos had a, he graduated, but didn't have any business training. And all four of the, those guys had wonderful ideas obviously and successful. How does someone like that without going to

Virginia Business School become such great business people? Well, it may be because here's an anecdote. I want to answer it with an anecdote. So I had a, when we were at in college, I was a hall counselor, which meant I was a junior on a freshman hall. Okay. And I had this young man who the hall phone, but way back then was in my room because I was the hall counselor. And the phone would ring during the day. And it would be men on the phone asking for this young man that just happened to live across the hall for me. And I'd give him the phone and he would start talking to him.

He's a freshman in college. And he would say, no, you want to buy the convertible. You don't want to buy the common stock. And I'm like, holy cow. And this went on for a year. And so that summer, he moved to Chicago. He became a runner on the Merck, and he quit Davidson. Quit.

And he subsequently became a multi-gozillionaire. And we're still friends, still very good friends. And I asked him after leaving Davidson, what in the world did you do? He said, education makes you risk averse. I would have never taken the risks. If I'd have sat there and read history and read literature and all. all the things, it makes you risk a burst. And that might be some insight into, you know, Kim Griffin or Zuckerberg or any of these guys. He on Musk. I mean, Musk went on and, you know,

I mean, he basically self-educated too. I mean, he did all his coding in South Africa and then Pennsylvania and then Canada and now the West Coast. But he, most of these guys, those people are self-taught and very, very passionate. And, you know, I've heard you speak to how many hours you can work in a day and how many days you can work in a year. These guys blow all those graphics out, but that's, they got the reward or the return of that. I'm sure for every one of them, there's people that have blown it out and didn't get any reward, right, because they didn't get to go public or they didn't get to get the multiplier. Yeah. Plus, I mean, the other factor would be just incredibly high IQ. Yeah.

able to understand things so quickly. Yes. And you can't do much about that. But they do work hard to, I think they're on some special, like, microdose of, like, mushrooms and stuff. I've read a little bit about this. I haven't tried it, but they kind of juiced up on the mushrooms. For a common, just me, a common dude, you know, maybe the guys in Noob School,

what I try to do, because I've heard you, and I think it was Burton talking about it. You never should criticize. You never can be critical. You never can complain, criticize, that kind of thing. And y'all were making such a good point in that video. And so I was thinking about it. And I think thinking critically is a must. Communicating, you know, constructively is the flip side of it.

Communicating critical things critically is probably doesn't go, speaking of sales, that's probably a bad way to say. cell versus thinking critically, communicating something that's critical, but constructively is really the way to do it. And I don't know that's master of the obvious. Well, no, no. I think what you're, it reminds me of something. Someone explained it to me one time, like in a sales call, generally it's good if like, oh,

okay, you went to Davidson. I know this guy went there and so on so. and we're talking long and tell me about your business and everything's like friendly, you need about eight seconds of courage in a sales call. At some point, I'm going to say, well, Tom, I do need to ask you, what would it be worth to your company to fix this problem? That took about eight seconds. That was my only hard question.

And now I'm back to great, you know, but you don't have to be a John Wayne the whole call. Right, right. Just but every now and then you've got to insert eight to ten seconds of a hard, hard but constructive question to find out what's going on. But I agree with you. And if you walk on eggshells too much with business people or just in your life, just things don't get any better. Yeah, I mean, and I'm going to love what you said and try to take it a step further

because I think when you go through those eight seconds, what you might consider doing is that's when you think critical. You listen to that answer to those eight seconds. And then whatever you hear from that, that's when you've got to be constructive to me. That's how I would handle it in a way. Because what I hear is, you know, what is it going to make your company better? What is it? However you handle those eight seconds.

I better be listening really good. I better be thinking really critically. But I better come back. with something that's really constructive, you know, a solution or an idea or a next step. Yeah. So I hear you. I agree. They say, I don't know, I don't know what we can, what we can afford or whatever.

I think I might say something like, what are we going to, what are you going to do about the problem? You know, just curious. And we've been talking about this the whole time. How are we going to fix this? Another one I love that someone taught me was when we get right down to the end, And they say, so Tom, you're telling me, if you use my product, it's going to save you a million dollars a year. And Tom says, yeah. So instead of going for the clothes, I say, so what do you think we ought to do?

And whenever someone says that, it's been used on me. I'm like, what are you kidding? We need to get this thing. Exactly. It kind of gets some, you know, a little emotional. But the guy used it on me, and that's how I learned. it. Yeah. But if you had said, well, John, I think what you need to go ahead and sign then if it's going to help you and I'll be like, well, there might be someone else you can help me,

you know, you kind of put you on the defensive. Yeah. No, that's so, yeah, what a good lesson. I wish I'd learned that lesson. Well, I'm still learning. We're all learning. We're all learning. New stuff, chat GPT, that kind of stuff. Is that affecting you at all? Not yet and not in what I'm selling now. But I have a thought about it. Okay. and that is I am reading about it. I'm trying to learn about it. I'm curious about it, and that's what we all should be. But I'm not impressed by it.

I'm excited by it, but I'm not impressed by it. I think what I think will make it something I would get passionate about is when it can be personalized. So right now, my understanding of it is, write me a paragraph about, you know, the noob school, use a pentameter and whatever. And it'll do it. And it'll be very descriptive.

What I want one day is to have my iPhone in my hand and go, hey, I'm going to see John Sterling. What were the last three things we talked about? And it can personalize to me, you know, to my experience, to what I'm about to experience. So I can ask it what our path, your and I pass has been. What was the best question John Sterling asked me? today, you know. And so I can go in and say, John, gosh, last time you asked me about where I went to prep school, I can't believe you knew that. But that's where, if it gets to where we can be personal like that, then I think we really have something exciting because it becomes,

it can become our memory. I've read, you probably have too, but I've read that that's absolutely where it's going. With your permission, it would have, you know, every email, text, voice, it would literally record, if you let it, everything you said ever from this point forward, and if we were going to meet a year from now, you would just say, what are the top couple things John and I talked about? It would just say, just give them to you. Yeah. Crazy. And you say, put them in a text, send him to John, remind him, you know what? It's going to be wild. It's just, it's fun to be alive. I don't think that takes, do you think that takes our creativity away at all? No, no. Just another tool that we can use to be creative.

I don't think so. Yeah. I like it. We can talk about it tonight more, but I enjoy using it for a variety of things. So I like it. Yeah. I'm excited. That excites me.

Yeah. Getting it to write a paragraph on the Chattahoochee River, I could not too interested. Yeah. Yeah. That's pretty cool. Now, you've done a lot of sales training and homework over the years. Is there anyone in particular you still follow? Do you still listen to people or study any sales mentors?

That's such a, that's an interesting question because it's not, I look at things for sales ideas, like I just learned something from you just now. But I'm following, everything I read, or not everything, short of novels, books and all that, but I am reading more about things in my industry. So, you know, the hedge fund trade press. all that kind of stuff, not as much about selling. I probably am shorting myself on that, but I'm overwhelmed trying to stay on top of all the things going on in the markets that present opportunities to me because I've got a world of hedge fund managers out there that I

could be selling to them, I'm always trying to increase that network. So let's take this on. This is not an easy subject because I hardly understand it, but you had a long career successful career in investment banking in New York and other places, but you have your own company now called Far Capital. I'm going to try to describe it, but it's not going to be, I don't think it's going to be correct. But you help people who, like hedge fund people, defer income over time, so it saves on taxes. So, okay. So is it my, on the ball board? Capital, I am a shareholder in.

Don't own is not my company. But I am the outside face of the company. And what Far Capital does is I'm passionate about a couple things. One is the underfunded pension liabilities in the world and people working hard and expecting to have a pension if they teach in South Carolina and South Carolina retirement system owes them a pension. One of the interesting things about hedge funds is they take their incentive compensation, the 20% of the performance every year. And one of the things that means then

that the manager, hedge fund manager himself, is getting a preferred return. He gets his return first. The South Carolina retirement systems invest with the manager for five years. They may not get their return for five years. What if it goes down? Exactly.

So the manager made his money. Yeah. So they pull it out. And that's the tax law. The tax law says to the manager, you have to take your fee every year and pay tax on it. Okay. Because it's a fee.

Because it's a fee. It can't be a contingent fee, contingent on being liquid or anything? Nope. No. How do they get the money if it's not liquid? Well, no. So they have to sell the underlying asset. Even if it's private?

Well, no, because in the hedge fund world, there could be some credit hedge funds and all that kind of stuff. They still have to come up with the assets to be able to pay the tax. Okay. So they're getting capital out of the fund. Okay. And that has a couple of, now you're, I love your question, but you're getting your noobs, your good audience, the eyes are going to roll back in their head. So what happens is the hedge fund managers sells the assets in the fund to get his fee out so he can pay the tax he owes.

Well, he's selling the very assets, the South Carolina retirement system owns going into the next year. I'm like, well, that doesn't seem right. Yeah. And so when Congress passed the law that says you asset managers have to pay the tax every year, they put a copy. in the law and said, unless you take a fair market value option for your incentive fee, in which case, the fair market value options on the shares and the fund that the investor owns. So as those shares go up in value, the option goes up in value. At the end of the year, since it's an option and can go down in value, you don't owe tax

until you manage your exercise. So we created fund alignment rights FARS to answer that question of the manager being able to keep his money, in the fund to participate in the long-term performance of the fund. That's what the manager gets today. But the investor gets the comfort that the manager's money side-by-side with them. So it sounds like the analogy, and forgive me, I didn't mean it. But the analogy is shareholders at Apple say to Tim Cook, we're going to pay you your salary of a million bucks a year.

That's the management fee to the hedge fund manager. But Tim, we want you to make long-term decisions that add value to Apple shares. So we're going to give you options in Apple stock. And so Tim gets options, and every year, as long as he doesn't exercise them, they perform with it. He owes no tax. So that's why he'll make a headline five years from now. He exercised $200 million worth of stock.

Right. Well, he's been compounding pre-tax tax deferred. Right. So that's the benefit to the manager, compound pre-tax tax deferred. The investor gets the alignment and the manager's interested in the long term rather than every year. Well, I get it now. So it's an instrument you've created to allow, let's just say, a hedge fund manager not to have to sell off some of the investment to take his 20% and pay taxes. So unless he's worried about it going down, he'd rather do that, right?

Correct. If I were an investor, I'd say, why do you want to take your money out anyway? Aren't you confident in your, you know, and so the manager gets to be like Bray Rabbit. Yeah. Oh, I'll leave my money. Yeah. So what is the pushback of why people wouldn't do this? It's an amazing question. The original pushback was Congress passed the law, but the IRS didn't speak to the law.

And so the lawyers in New York appropriately said, we're not going to let our managers do this until the IRS speaks. So we organized, literally, a call with the head of pension tax at the U.S. Treasury, and a couple of big hedge fund managers, a couple of big attorneys, and a couple of big investors, San Francisco Public Employees and a couple of others, all on a conference call, and the head of pension tax at the IRS said, the law is the law. We'll give you a general revenue ruling. And so with that, I got a general revenue ruling. So now tax isn't the issue.

The issue is nobody's done it. Or now I've got four funds as of May 1st doing it. I just was in Charlotte last night, meeting with a big institutional investor that's dying to ask managers to do it. So once this gets out and the lawyers get familiar with it, and the reason the lawyers have to get familiar with it, the hedge fund industry, just like the legal industry, hedge funds are 12 or 15 people sitting around in a room. It's a LLC, a tax pass-through entity. And it's partnership accounting. So everybody there has a partnership account and it goes up, the capital account goes up and down.

And options are gap accounting and from corporate America. And so all the lawyers for the hedge fund world don't understand options or the accounting of it, the accounting firms understand it. Their corporate side does, but the hedge fund side doesn't. So it has been one college MBA course educating lawyers, accountants, the managers themselves, and the investors. Yeah. And we've got the tender, and we're now got a couple of sparks.

Good. And so we'll see. Good. But it has been a labor of love. I suppose, you know, I know some of these private equity folks, even though it doesn't make sense to take it out and pay the tax and all that stuff, they're used to it, and they're killing it. So it's like that would be one reason they'd be like, I don't know if I'm going to rock change

it, you know. Well, private equity, there's an interesting thing too, and Mr. Biden rocked their boat yesterday. Yeah. So private equity threaded the needle. The tax law around long-term capital gains taxes is such that if you're the asset manager, you have to pay ordinary income tax if the holding of the asset you're advising for your South Carolina pension plan is less than three years. So hedge fund managers don't hold anything for a week, a month, a year, but never three years.

So hedge fund guys are turning their portfolio, so they always have ordinary income tax. So they're paying 50% tax in New York City. Private equity guys raise a fund from South Carolina, invested in companies. They don't have a monetizing event for more than, longer than three years. So their underlying asset, they get to get long-term capital gains, 23% tax rather than ordinary income tax at 30. nine. So private equity is not interested in my deal, except Mr. Biden shook the bridges yesterday when he said, we're going to raise long-term capital gains from 23 to 44. And that's higher than ordinary, in which case every private equity guy is going to come running to me, saying we want

to do FARS. Yeah. Well, I'm sure you'll figure it out. To everyone's benefit, to everyone's benefit, right? I think it was all you've been through and all you've learned, this is perfect for you, solve this problem, and there's a whole lot of people out there that could use it. It's funny you say that. One, to change the way a $3 trillion business pays itself is to think you can do it's arrogant. I don't mean to be that, but I'm passionate about getting it right for the state pension plan as well as for the manager. So it's a big, it's a huge thing, but it's an aspiration on my part and I'm lucky enough to be able to attack it. If I were a newbie thinking about things, I was thinking about this too.

Think about what you could sell. And I remember your video, you had a video with an interview with someone that's, I think, sold cars. And he went upstream and he sold more and more expensive cars. Thacker, yeah, Mike Thacker, yeah. Yeah, and that was really neat. And so if I were, the more I thought about it, I think if you look at different industries, one, pick industries with the highest margins maybe, two, pick industries where either you're selling a boatload of something, like for me I was selling millions of shares of stock,

but getting paid a penny. Or you're selling something big that you got a lot of margin in, go sell Boeing jets or these ultra-high price cars. And so as my periscope got higher and higher. hires. I've lived my life. I've thought a lot about, you know, the guys that really toned. If you don't actually own a company that you can take public and multiply yourself, then it's selling things that you can sell a lot of and make that margin or sell a few. But for a, I know that's very obvious, but it's just struck me not to piddle around in something that doesn't have a lot of

margin and a lot of turnover. Well, I mean, I think it's a great subject. Can I talk? about it a lot because I see so many people get out of school and stumble into a sales job and never leave that industry and they might have stumbled into not a good spot yes or it might be a spot they hate yes like if they were just like something they don't have like if I'd have gotten my first job like selling yarn or something you know I'd be like oh what a waste of life for me but not interested in that kind of thing You, you know, went to a business school, which was, in fact, a feeder of investment banking-type jobs.

They liked people that school. And you've been in it for your whole career. So, and I tell them all the time, over time, your compound interest of your knowledge and your network just gets stronger and stronger. So by the time you're our age, you know, you've got a lot of levers to pull. But, and Burton and I've talked about this, is I started my age. because Burton and our roommates, right, you know, when I first started. And every five years, you'd do an inventory. Am I still learning things?

Am I still having fun? You know, am I challenged? Does my job still have integrity? Am I respected? And am I respecting others? And every five years, my answer is always, I just kept at it. Now I grew. My responsibilities grew, which is sort of why as well.

Yeah, yeah. Well, it's an important subject for sure. It's important. And in my case, I've told the story before, but I picked technology simply because it was a burgeoning high-margined industry. There you go. Did not know how to use a computer. So, you know, it worked out, but it was very difficult going from the idea to actually getting into the business. And it would have been easier for me with all of my basketball experience to say, well, I'm going to stay around here.

I'm going to get a job working for Nike, selling basketball. ball stuff to the Southern Conference, work my way up. You know, maybe I start an apparel company one day. Who knows? Yeah. But that would have been so much easier than like, I'm going to drive to California and get a sales job selling something I don't know how to use. But anyway.

John Sterling, you're amazing. I mean, that's amazing. It was crazy. That's amazing. It was crazy. Crazy. Well, let me switch gears a little bit because I know we talked about books a lot. You and I over the years.

You read a lot more than I do. But it's one of the signs of successful people. almost every one of them reads a lot. So let's go over some of your favorite books. I'd like to share four with obviously the biggest and most important being the Bible. But let me say this. Most recently put down Musk having read it three times. Musk.

Musk. Wow. It's unbelievable. To think what he went through as a young man getting a shit beat out of him by his high school classmates in South Africa to what he is today. I mean, he's amazing. You read it three times. That's amazing.

Yeah. Now, two of them are going up and back and forth to the mountains. But still, every time I've listened to it, I've picked up something else. Who wrote it? Isaacson. Okay. So he wrote all the great biographies, okay. And while his personal bias comes out in some of the interviews with Elon, you know,

Because Elon has gone, having bought X, has gone very much into, you know, First Amendment, freedom of speech, freedom of association, assembly, all that. So Elon's probably a little too conservative for the author today. But still, it's a fabulous book, and there are a lot of life lessons about relationships that have soured, yet he stayed friends with a number of his different mothers to his however many children he has. He makes an interesting point, and this is going to take me to my second book. And this is the one that I hope every noob would read, is Atlas Rugged. And Atlas Rugged is a book written in 1957, but it's about man's mind and the ownership of your mind.

You take the ownership of your mind, and you don't let anyone else, you don't serve anyone else, and no one else serves you, ask no one else to serve you. Um, Musk has a lot of that. Mm-hmm. And him. Now, he's a demanding boss and all this other stuff, but he won't, he doesn't, uh, he, he, he, he, he won't work for, I mean, he is his own, listen to his own drum. Yeah. But the, but the point on Atlas Rugged is about the economy that we live in, how fragile it can be when we let bureaucrats take over.

parts of the economy until they've run it down. And while it's a very timely book about railroads and things in the 50s and 60s, it's fiction. Dagnny Taggart. Dagnet Taggart. You've got it. That's one of my favorite books too. It's really good. And then one I would read that is written in 1997 is the fourth turning.

Okay. And the fourth turning is a phenomenally predictive book. by two historians that went back to the 1500s and did an analysis of the generational movement through time, the theme being that there are certain consistencies in humanity and humans as people. And every 20 to 25 years is a generation. And if you go back and look, every 20 to 25 years, there's a different behavior in society that is normalized for that 25 years.

And every 80 to 100 years, there's an epic war or some event, the Civil War, World War II, what may be getting into now. And those are the cycles of generations that are like. So every generation raises their children differently, but like the fourth generation raised their children. So now through time, since the war of the rest,

every 80 or 100 years, the French Revolution. And so they had forecast that in the 2020s, we were going to be in an upheaval because it's the fourth turning. So something about the fourth generation from the previous big war, eventually they're ready to fight again? Yes. We raise their kids to be fighters. And it's just amazing.

It's a very interesting read. and you there's um you know it's alluded to in a lot of the current press as a matter of fact now i've heard it i just hadn't read the book uh-huh it's it's it's it's it's thoughtful book you've got a you know you know they've got um tables in it so you know you know 1720s 1860s 1860 you've got to go back to the table sometimes because you don't remember which generation was doing which during each of those wars or whatever period of time. But it's eye-opening. Well, I'm going to read Musk and Fourth Turning.

I've read the other one, Atlas Shrugged, and The Fountainhead, another one of my favorites. Yeah, yes. But what about the fourth book? Was there a fourth book? Did I do Musk? I did Fourth Turning. I did... Atlas Shrugged?

Maybe the fourth book was the Bible. I am... Oh, the Bible. You're right. The Bible was the first one. Okay, I forgot about that one. All right. Well, those are great.

I highly recommend all four of them. That would be great. What about favorite word? It would be something with some energy to it, so it's probably spectacular. Spectacular. I use spectacular in emails a lot. That's great. And also, I've taken to A-plus. A-plus. So I sign off on emails, A-plus. So my wife and I have a running joke that if I get up and I make the coffee, I get an A-plus. If she makes the bed, she gets an A plus. So we give each other A pluses. And we recently renovated our house, and we would be sitting with our architect, and we'd give him an A plus. And he just burst out laughing.

And so A plus is normal. That's the exact opposite of nagging at somebody. It's the exact opposite. It's like A plus, honey. A plus. That's wonderful. Yeah, we go for A plus. That's one of the reasons I liked you immediately, way back when was that just complete positive attitude.

with the occasional adult conversation. You know, I mean, you've got to have an adult conversation every now and then. And then favorite band. Well, how can I be in South Carolina not like Hooty? Hooty, yeah. I love his voice. Yeah, he's great. He's great.

And then they got a big tour this summer. Uh-huh. And I've thought about going in June to Fenway. I think that's going to be the mecca. Wow. of the tour. Yeah. And Edwin's going, you know, touring with him.

Is that right? Yeah. Yeah, I should have said him too. Yeah. Being in South Carolina. Yeah. So maybe we could meet up there. That would be pretty cool.

Your old stomper grounds or one of them. Well, last thing, Tom, this has just been awesome. This has been everything I'd hoped it would be. But do you have anything you want to promote or talk about before we close out? Anything you want to promote in your world? Right. That's such a broad. question.

Really don't be kind. Be kind. I hear you say that all the day. That's good. Be generous of thought. Warren Buffett loves people generous of thought. I think that's great. I'm lucky enough.

We're both lucky enough to have so many good friends that remain curious. So, and then I know, I bet you've had a thousand webinars or podcasts on personal integrity, and how precious that is. But how can I promote all that? That's just good stuff. Well, be kind. That's a good one to close on. So you are a kind person and enthusiastic.

You're spectacular, is what you are. But thanks to being here. You're absolutely the best. Appreciate it. All right. All right. Thank you. John Starling.

Thank you.