Prof. Howard Stevenson - Wealth and Families

Want to get rich and to pass money to your kids? Listen closely to Howard Stevenson. Here’s condensed wisdom from the heart of the investing world delivered with dry humor and charm. Professor Stevenson was a co-founder of storied Baupost Group and helped hire its legendary manager Seth Klarman. He began the study of entrepreneurship at Harvard Business School and eventually became HBS’ biggest fundraiser.

His book “Wealth & Families” gives invaluable advice on how to make money and keep enough of it to hand down to the generations. My personal favorite is illustrated by this quote from the interview:

“Whereas, some of my colleagues were going off consulting ... They were making a lot of money every day, and they go their XKE [Jaguar XKE, a coveted sports car of the era] quite quickly. I went off to places like Lima, Ohio, and I was paid $300 a day, but I got 1% of the company.”

Howard Stevenson was forgoing high current income, and consumption, for the ability to own promising assets that would build his wealth in the long term. This approach contributed to Professor Stevenson becoming rich enough to need a family office to manage his money.

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The topics covered in this dynamic conversation include:

• Howard Stevenson Bio
• How Howard Stevenson Started His Career
• Fear of the “Velvet Rut” Causes Howard Stevenson to Leave a Tenured Position at Harvard Business School
• Howard Stevenson: “A lot of people are fairly miserable in their job, but they fear change more than they look for the optionality that comes in change.”
• After a Sojourn in Entrepreneurship & Real Estate, Howard Stevenson Was Lured back to HBS
• Sal Daher: “There are not a lot of people that would turn down tenured positions at The Harvard Business School…” Howard Stevenson replies: “That's sad. I'm a trustee at Olin College, and they have no tenure. It's amazing what that does, because people are there voluntarily.”
• Howard Stevenson on Building Wealth: “I've always been experimental, because I don't believe I understand and can predict the future. By the way, when you look that the facts, very few people can.”
• Howard Stevenson’s 400x Investment in a Company with a “Stupid Business Plan”
• Howard Stevenson’s Four Criteria for Investing
• Howard Stevenson’s Portfolio Returns; Warren Buffett-Like
• Howard Stevenson on whether Entrepreneurship Can Be Taught
• Howard Stevenson’s Definition of Entrepreneurship
• The Best Due Diligence Is Time
• How Baupost Got Started and How Investing Wizard Seth Klarman Was Hired
• How Howard Stevenson Shops for Cars
• Howard Stevenson’s Advice for How Young People Can Build Wealth
• Mitt Romney & a Young Colleague on Spending
• Why You Should Review this Podcast on iTunes – It Really Helps Us iTunes Page for the Podcast Where You Can Review and Subscribe
• "Most of the wealthy people I know, are better at making money than managing it."
• Howard Stevenson’s Journey in Investing Began by Reading Graham, Dodd & Cottle in 1961
• "I was smart that I recognized the quality of the people. But, whether it was coming out at 2X or 400X, wasn't in my control."
• Talking to Your Kids About Money