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A bite sized discussion on timely financial news and investment topics, to help you maximize your net worth and wealth for the next generation with Justin Dyer and Mena Hanna of AWM Capital.
Roger Ferguson Jr: The other thing
that's really important is to recognize
at the end of the day, having more
money doesn't make you better.
it just makes you richer.
So it's also having a really
healthy attitude around money.
Knowing what it means
and what it doesn't mean.
It means you got lucky in
some way that society values.
I've never really tried to,
quote, "keep up with the Joneses."
Keeping a distance from money while
still succeeding and having it
is an important mental discipline
I think a real danger of people
having money is not the first
generation that earned it.
It's the second or third generation
that didn't earn it, but think
that they are entitled to it.
That's when things become potentially,
pretty dangerous and potentially
even corrosive around money.
Justin Dyer: We are incredibly
pleased to welcome Roger Ferguson Jr.,
uh, we'll, we'll probably go, go with that
or, or some iteration of that throughout
this conversation, uh, to the podcast.
Mina and I have been giving a little bit
of a, of a, um, red carpet rollout over
the last few episodes to introduce you,
introduce the Fed, the importance of this
conversation, and really our excitement
around having this conversation.
But, um, without getting too much
into that, just a little bit of
background on, on who we have the
pleasure of speaking with today.
So Roger was the former vice cha-chair of
the Federal Reserve, as we've highlighted,
president and CEO of TIAA, where he
almost or more than doubled assets under
management under, uh, his tenure there.
And just, um, an overall incredible
background, um, and re-really meaningful
background for many of our listeners,
uh, today, where I would say you have,
uh, you, you are certainly on the journey
of building and, and, uh, continuing
to support your own 100-year family.
That is something we talk about quite
a lot internally and what we're trying
to help our, our clients accomplish.
And, uh, we're, we're just really
looking forward to the conversation
and extracting wisdom from you from,
uh, your journey so far to date along
that, that 100-year, uh, family, um,
endeavor, which i-is no small feat.
So, um, without further ado, we're
just gonna get right into it.
And, and really, I guess, uh, Roger,
starting from the, the youngest, uh,
or, or from the earliest years of your
life, it would be just really helpful,
give us a flyover of your upbringing.
Um, you know, how did y- how did
your early career path or early
trajectory, uh, take, take hold?
Were you, you know, always committed
to going to an Ivy League institution,
then law, uh, et cetera, et cetera?
How did that all come to fruition?
Roger Ferguson Jr: So like, um,
well first, a pleasure to be here.
I'm really looking forward
to the conversation.
Um, we'll, we'll sort out the
Roger names as we go along.
y- my story begins just as everybody
else's did, with, with family.
was really, really lucky, um, in both
my mother and my father instilled
really important values in me that, that
ultimately resulted in the career I had.
Um, my mother was a schoolteacher.
Um, uh, and she firmly believed that
education was, you know, uh, something
that no one could ever take away from you.
Um, she said, "Stay in school for as,
as long as you possibly can," because,
you know, she didn't use the words
building human capital is irreplaceable,
but that was sort of her mindset.
my father, um, while also interested
in education, um, was a child of
the Depression, and the Depression
was a scarring experience for
everyone who went through it.
In his case, became fascinated with banks.
You know, why do-- how do banks work?
If they fail, why do we go
into this massive depression?
Why is there so much unemployment?
and you know, we-- he'd sit around
the table talking about interest
rates the way other dads, I would
guess, talk about box scores or,
Justin Dyer: Mm-hmm.
Roger Ferguson Jr: and and
football games and, and, and,
and baseball games, et cetera.
You know, it wasn't until I was in my
teenage years that I realized that most
dads did not actually talk about interest
rates and CDs and things of that sort.
Um, and so, you know, that's,
that was my upbringing.
It was very helpful that, you know,
it was a nuclear family and, and
indeed, you know, grandfather was
around, aunts, uncles, et cetera.
But at the end of the day, you know,
values and intellectual interests
were really, honed around the,
um, the, the dining room table.
Um, you know, that's,
that's how it all began.
There was a pivotal moment in my
life, which was when I was fifteen,
sixteen, Lyndon Johnson nominated
Andrew Bremmer to be the first
governor of the Federal Reserve.
And all of a
sudden, it all came together
and, and it wasn't, you know,
primarily the race thing, though
that was an important part of it.
It was also, all of a sudden,
this thing that my father was so
fascinated with called interest rates,
and here this institution is sets
interest rates and that regulates
banks and, you know, was incredibly
powerful, but not particularly well-known.
so I, I won't-- I didn't start at
the age of fifteen wanting to be
a Federal Reserve governor, but I
Roger Ferguson III: But I want
it at college because that's what
Roger Ferguson Jr: to be an economist
because that was the group of people that
seemed to be sitting around that table.
So that, that's really the origin
story, and the rest of it is, you
know, moving back and forth, but
that's sort of the through line.
Justin Dyer: I, I'm curious,
uh, in those early years around
the, the dining room table,
aside from interest rates, CDs, and
more, let's call it the technical things,
is there anything your, your parents
spoke about just with money in general?
The, the kind of, "Hey, live within
your means," you know, those great
old little nuggets and adages.
Was, was that part of it as well?
Roger Ferguson Jr: It
was actually part of it.
First, um, though my parents had
solid jobs, I would describe us
as sort of lower middle class.
So, you know, uh, smart management
money was always at the table.
Um, you know, back in the day when,
you know, on Thursday coupons would
come out at, for the sales at the
grocery store, that's when we shopped.
You know, get home early,
get the coupons, go.
Um, a, a strong sense of living
within budget was always there.
I mean, both good and bad.
If you have very little money, you
really focus on living within budget.
I also have this vivid memory, uh,
and, and it's good and bad, of my
mother once sort of crying because
she couldn't afford to buy a new pair
of nylon stockings for two weeks.
There, there was a budget, you
know, and money wasn't there.
You know, in my house, you only got a
gift on, or new clothes for the start
of Chris- for the start of the school
year, your birthday, and Christmas.
was it.
Um, unfortunately, my birthday was
October, so September, October,
and December I got gifts, and the
rest of the year I had to wait.
Um, but my father did something
else around financial literacy,
uh, which was he also had me
balancing the, the checkbook
when I was in junior high school.
Um, you know, there wasn'tâ¦
Money was not the secret thing
that we never talked about.
It was
always in the room.
Um, sometimes because it'd be nice
to have more, but also just thinking
about how you manage it really well.
So, you know, all those adages.
know, he didn't say things like, "A
penny saved is a penny earned," or any
of that kind of stuff, but he lived
that way, and my mother lived that way.
so, you know, we had
day-to-day financial literacy.
I would describe it week-to-week
financial literacy in the house as well
Mena Hannah: Roger, extremely
loaded question here, but how
has your relationship with money
and thought process when it comes
to saving money, spending money
changed sort of as your career has
progressed and as you've transitioned
and, and built 100-Year Family?
Roger Ferguson Jr: Well, in some
fundamental way it hasn't, right?
As in, you know, I'm still a
penny saved is a penny earned,
Roger Ferguson III: I can attest to that
Roger Ferguson Jr: that kind of activity.
Um, when I got married to my wife, one
of our friends said, "You know, you two
are well suited because R- Roger scream-
holds the penny, and Annette, uh, screams
to make sure it doesn't go anywhere."
I mean, so, know, it's, it's there.
The other thing that's really important
as we beco- I and we have become more
financially secure, is to recognize at the
end of the day, having more money doesn't
make you better and, or different, it just
makes you richer, which is, a good thing.
So it's also having a really healthy
attitude around money knowing, what
it means and what it doesn't mean.
It, doesn't mean that
you're morally superior.
doesn't necessarily mean
that you're smarter.
it, means you got lucky, in
some way that society values.
And so, you know, keepingâ¦
While being thoughtful, while being
aware of and focused on money, and I've
been in the business of making money and
investing money my entire life or
managing it, also keeping it in its place
So that it doesn't of overwhelm you.
Um, and also it's really important
not to def- be defined by.
The fact that you have more money than
somebody else does not mean that you are
morally better, doesn't mean that you're
right, and it doesn't mean that they are
sort of, uh, a morally lesser person.
It just means they don't
have as much money as you do.
Roger Ferguson III: So we talk about
money being a tool, and I think that's
a perfect anecdote right there.
Just how I like, I like
that soundbite you.
just said.
is though you have more,
it doesn't make you better.
right?
you used it in
different ways, and I laugh at
Mina's question 'cause how has
it changed I have-- You know, we
could talk about anecdotal stories
of no matter how much money we have,
we you know, we traveled in the winter
instead of my dad would-- you
know, I can call you out now.
We're on a
podcast a recorded line, but this is a
good story where we would travel to go
on a ski trip and
instead
of getting the, you know, uh, the ski
up, putting the skis above our head, my
dad would say, "Let's save some money.
Let's roll the windows down in the
back," have me and my sister
fully decked out in our
ski gear, and the skis are going
across the middle of the aisle.
'cause he didn't wanna spend the extra
handful of pennies to put the skis
On the ski
Roger Ferguson Jr: yeah.
That
Roger Ferguson III: rack above the car.
Roger Ferguson Jr: I wasn't
I wasn't gonna get the larger
Justin Dyer: Meanwhile,
it's 20
degrees outside and the windows
Roger Ferguson III: Yeah.
literally.
We're freezing.
They have the heat
blasting in the front, and
we're freezing in the back, so
Roger Ferguson Jr: we were freezing
in the front too, to be fair
Roger Ferguson III: Yeah.
Roger Ferguson Jr: the,
the, so, you know, my son Roger
got to be 16, the car he got was
the car that we had bought when he
was born.
So he drove, you know, a lot of people
in our situation, 16, new car, forget it.
He got a car.
I bought that car for you, and, and
when he was 16, he got that car.
And so, you know, being,
being, being mindful about
money is a tool, but it, it's
no more and no less than that
Justin Dyer: Yeah.
I, I'd love-- You know, we talk a
lot about the mental side of, of,
of being a human really, right?
There's, there's so much of
mental performance involved in
sports and, and just performing
at, at, you know, at a .001%
of what- whatever it is, um, you do.
And, uh, so much of that takes discipline.
And, and Roger Jr.,
I'm, I'm curious, as you, if you can speak
to, as, as, as success took hold, and
I'm sure the, the circle of people that
you spent time with was, was changing.
I'm sure you d- I'm guessing just
knowing your, your son, like the
core of your family and friends
were still there and very important.
But
as success took hold, is there any,
any tips or tricks or disciplines you
really, um, uh, reminded yourself or
revisited to, to keep you grounded
and to, you know, tell yourself, "Hey,
I-- oh, no, I can afford the, the
car with the rack on it for the skis,
but I really just don't need it."
Or was it, was it really
as simple as that?
Like, th- it's just who you were and
just how you acted, or as, you know,
is it like keeping up with the Joneses?
Did that ever get in the way or,
or really draw you forward at all?
Roger Ferguson Jr: So it's sort of
a complicated answer, as in, you
know, we live in a society in which
one of the scorecards is money.
You know, it's, it's, y-y-y
it, it, it's the way we keep
track in a capitalist society.
And to be honest, it's, it's, you
know, some would say I've been,
I've been poor and I've been rich.
It's much better to be rich.
Um, and it, and it, it, it
does signal you figured out the
system, you know how it works.
You, you, you can, you
know, maneuver through it.
And so in that sense, you know,
it's-- I wouldn't describe it as
keeping up with the Joneses, but it is
certainly, you know, a sense that you
have arrived in a capitalist society.
Having said that, and I said this to my
kids, I don't know, five times a year
Never be envious of, of money or never
desire to keep up with the Joneses
because there's always someone richer.
know, unless you're Elon Musk, you
know, you'll be really unhappy if
you're not, you know, if you're
not keeping up with the Joneses.
And what you discover as you rise
socioeconomically you know, the,
the, the lifestyle of the top
one tenth of 1% or one one-hundredth
of 1% is really interesting.
But in some sense, it's also pretty, uh,
pretty transitory.
So I've never really tried to,
quote, "keep up with the Joneses."
I've tried to be really
successful and comfortable.
and, you know, somebody else has, you
know, a 15-room house and, and we've
got an eight-bedroom house, you know,
good for them and also good for us.
uh, and, and so, you know, again, just
keeping a distance from money while
still succeeding and having it is an
important, an important mental discipline.
it's
important discipline particularly in,
in a gen-- uh, in a generational sense.
because I think a real danger of people
having money is not the first generation
that earned it, it's the second or third
generation that didn't earn it, uh,
but think that they are entitled to it.
Um, and and that's when things, I
think, become potentially, pretty
dangerous and, and, and, and
potentially even corrosive around money
Justin Dyer: Yeah, and I mean, we can
even have a, a whole podcast conversation
around that exact, uh, dynamic.
Um, and I'm sure it'll come up more
and more throughout this conversation.
Just so we, we don't astray
too far from, uh, your career
progression or just life progression.
So we've talked a little bit about,
you know, early years, high school
years, kind of those formative,
um, uh, role models, et cetera, that
at least, um, got you interested
in, in, um, and fascinated
with the world of, of finance.
I'd love to just hear h-
uh, h- the college journey.
How did that transpire?
I mean, it, it, I imagine it was a
continuation of, of what we've talked
about a little bit, but I'd love, I'd
love to hear more details on, on that
Roger Ferguson Jr: Sure.
So I, I went to college, as I
said, knowing I wanted to be an
economist, um, full stop, which is
sort of, you know, fairly unusual.
It is in some sense, uh, freeing to have
a little sense of focus, and at the same
time, you know, one has to be careful
not to, you know, become single-minded.
And I was really, really lucky
because it turned out that my
skill set equipped me to do the
thing that my heart wanted to do.
You know, um, thank goodness I
didn't want to be a football player
because I have skills in that space.
Um-
And so then it just sort of
progressed that, that by the end
of college there was a realâ¦
I had to make a serious decision of did
my love for economics take me to the
place of getting a PhD in economics?
Um, and I was conflicted.
And so in fact, what I ended up
doing, which sounds funny now given
the way things worked out, I decided
I was gonna go to law school and
try to get a PhD in economics.
Um, and that was to give-- It sounds very
given, you know, what it takes to do both
those things, but I saw that as creating
a lot of optionality just in case I wasn't
as good as I thought I was in economics.
I still need to have, you know, uh,
make a living and be a professional.
Um, and fortunately, you know, uh, I got
into Harvard for both of those things
and, and, and it, and it all worked out.
Um, then my journey became a little
more complicated because as much as
I loved economics and investing, it
wasn't quite clear how to get started
when I was getting, getting out.
Wall Street had not really
started to take off.
It was a much more complicated thing.
So I started off as a lawyer,
ping-ponged into consulting for very
good professional reasons, and then
only sort of mid-career got back into
my real passion, which was, you know,
economics, investing, et cetera, et
cetera.
Um, and so my career describe as
being a bit more of a career, a
climbing wall than a career ladder.
You know, I
I moved laterally here and
there, moved back, moved forward.
Still with certain sets of passions,
but also building a, a broader range
of, of skills that came from being a
lawyer and a consultant, as well as
being, as well as being an economist.
Roger Ferguson III: Question
just--
Oh,
I
was gonna just
maybe, maybe build on
maybe a, a college story.
and This is something, you know,
I have the benefit of knowing some
of these stories, but, you know,
we have a handful of athletes
who,
you know, you you see people at the
end and you think, "Oh, look at that
success they had."
But can you take us through,
you know,
how you paid for college, getting
through Harvard, kind of the the
added value that obviously has clearly
stuck with you even today with success
Roger Ferguson Jr: Oh, sure.
So look, uh, as you heard, I
came from pretty modest means,
and so I had a scholarship.
I had a work study job, and the first two
years I was, uh, a scrubby, which is a
phrase used around Harvard for cleaning
other kids, other students' bathrooms.
Um, and, you know, it was
not exactly a glamorous job.
Um, but one of the things I truly
believe in is whatever your job is,
you do it to the best of your ability.
and I'm really proud, though I can't
find it, that I actually got a letter
from my freshman roommate, one of my
freshman classmates, about how well I
had cleaned their bathroom on a, after,
after, uh, uh, a wild weekend, which
is sort of a gross thing if you can
imagine what a, what a freshman college
bathroom looks like after a weekend.
But it's what I did.
And, you know, I have a bunch of friends
who were mortified to be seen walking
through Harvard Yard carrying, carrying
a mop and a, and a pail and a broom.
And, you know, I was, I
was totally proud to do it.
It was do it to the best of your ability.
Um, and, and, you know, it, I got a
nice letter from the current generation
of scrubbies when I tell this story
because it brings glory to all of
scrubbydom in Harvard's history do it.
And so it was working
every day, and, and a job
that was, for the first two
years, fairly distasteful.
After that, I got of a sitting
in the library kind of job,
which is much more my specialty.
Um, and, and it was, and it was good.
I also spent a lot of time, um,
being the treasurer at, at my dorm.
And, you know, a fitting job for a person
who's all for economics, that you have
to take care of the students' money.
and it was, it was just
a wonderful experience.
Justin Dyer: That, that
is sweeping the shed.
That's one of our internal values and,
uh, yeah, you c- could use that if
you ever speak back to the Harvard,
Harvard sanitation crew nowadays.
Sweeping the shed, it's what the,
the New Zealand rugby team, the
New Zealand All Blacks say aboutâ¦
They, they call locker rooms sheds
and, uh, it's something we, we take
pride in quite a bit internally.
Roger Ferguson Jr: Can I, tell you
a story about, about Roger's sister?
I
don't--
Justin Dyer: Yeah, please
Roger Ferguson Jr: if we keep it.
I-- we our kids with a, a clear sense
of modesty you know, earn your own keep.
So our daughter wanted to take a,
uh, a yoga class in Washington, DC.
She didn't have the money to pay for it.
She didn't want to ask me to pay for it.
So to your sweeping the shed, she
asked them if she cleaned the yoga
studio before and after, would she--
would they let her take free classes?
Um, and, you know, she, she
was Roger Ferguson's daughter.
It's not like she really had to do that,
but it's the way you do things, right?
You don't come to mom and
dad and ask for a penny.
You go, "Okay, I'm gonna s-
to use that sweep the shed
in order to get the right to
take the class that I want."
you know, that's just,
that's the way it works
Justin Dyer: I- I'd love to actually
pull on that a little bit and, and really
get, get your commentary,
get your mindset as a parent.
Um, many of our clients who are on
the journey of, of building their
100-year family have young children or
are thinking about that and definitely
want that at some point in their life.
Um, and this kind of goes back to the
conversation around keeping up with
the Joneses, et cetera, but right, the,
you, you have the means to do something
like that, to pay for that yoga class
for your, your daughter, and it, in a
way, it's the easy path to take, right?
Oh, she wants to be physically active.
Great.
She's interested in something.
I wanna support that.
How did you as a parent differentiate
or distinguish or, or did you have any
rules or rubrics in your head where,
okay, I'm gonna support this and not
that, or I, um, you know, anything around
education, I'm gonna s- uh, you know,
blank check essentially or whatnot.
You know, I'm justâ¦
I'd love to hear, and this is
personally for me as well as a
parent, I'd love to hear your, your
thought process and mindset there.
Roger Ferguson Jr: first
it was around language.
So if, you know, versus need,
they'd come, "Well, we, we,
we, we, we really need this."
Well, wait, wait, do you
want it or do you need it?
Right?
And so really it's just hammering
home that distinction that, you
know, everything is not a must-have.
And in fact, you know, for things
that you want and they're not that
important, you gotta pay for it yourself.
So everything on education, absolutely.
because, you know, our son
Roger was a superb athlete.
You know, you tell me what it takes to
help a young man with at- athletic skill
to achieve the height that he can achieve.
Absolutely willing to pay for that.
You know, um, our daughter
music and, and absolutely.
So skills that are life skills, skills
that would allow you to be successful
in life, um, skills that are really
your passion and, you know, they're
positive image activities, sure.
know, nice to have, you know,
that other pair of shoes.
No, you don't need that
fourth pair of Nikes.
So if you, you know, if you need it,
figure out how to pay for it yourself.
Um, the other thing as a parent,
it's a little bit outside of money,
but it's related to money, which
is Kids also have to learn how to
solve some of their own problems.
Um, I have to work now with a very
high net worth family, one of the
young men said to somebody, "Well,
you know, my father would never let
that kind of thing happen to me."
And you know what?
The parents have to let some bad things
happen to their kids and, and let them
figure out how to, how to fix them.
Um, you know, uh, it upsets my
Roger Ferguson III: My wife
particularly.
Roger Ferguson Jr: but, you know, we
Roger Ferguson III: we
Roger Ferguson Jr: our daughter's, um-
college counselor meeting.
We're both very busy, we didn't show up.
Uh, y- the college counselor
was appalled that, you know,
the parents didn't show up.
And my view is, as with
my son, bright, smart kid,
th- they're gonna get
themselves into college.
I'm not gonna do it.
Um, and so, you know, a very important
decision, happy to be there, but
it's also okay if the kid has to
take leadership, on these things.
And, and that's a little bit related
to money, obviously, uh, because people
can spend money to solve problems
for, for their children, and I would
be strongly opposed to doing that.
Yeah.
Justin Dyer: Yeah.
Roger Ferguson Jr: and so it's, you
know, the modern, in my day it was
called being a helicopter parent.
I would say, uh, my wife and
I were probably, you know,
just the opposite of that.
You know, I never read a paper
that had to be turned in.
Uh, you know, I, I wasn't
getting those grades.
Our kids were getting
those grades themselves.
And, you know, we did not, though
I could have, call the admissions
office at any college and say, "You
know, look at my offspring here.
What do you think?"
You know, what they got, they earned.
And I think it's really important because
if you don't help your kids figure out
how to fend for themselves and come
back from the adversities of,
of, of life, they'll never
actually know what they're worth.
You know, and there'll always be
question mark, "Well, did I get
this because mom and dad, you know,
threw a dollar bill someplace?"
And we've seen how that works
in, in sports to some degree.
Justin Dyer: Mm-hmm.
Roger Ferguson Jr: Or
did I get it on my own?
Uh, and I think it's really important
to not throw dollar bills in your
kids' path so that, you know, they
never have to worry about anything.
Justin Dyer: Yeah.
Su-
Roger Ferguson III: and I would
I would, actually, I was, I
was only gonna add, maybe again
anecdotally something, Dad, you
always used to ask me
is it wasn't what do you
wanna be when you grow up?
It was what makes you curious?
And I thought that was always I, I
take that with me everywhere
when someone asks me, you
know, what did your
dad do and what are things
he said, I would always say,
"You know, you
only
ever
asked me what makes me
curious."
And,
you know, I'd like to-- I'dâ¦
You know, you were born
to be an economist.
Like, I mean, look at you.
Like, this is, this is your passion.
and You knew it, as you said,
from a young age.
You
let me explore sports
and history
and all these other,
you know, passions, uh, to your
point around need versus want.
You let me go down a path
of deciding if I really
needed something or if I
wanted something, What
made me
curious?
What kept that passion going?
What kept the flame going?
And, uh, you know, ultimately, you
navigate on your own and gave
me
the, gave me
the ability to decide
really, you know, stand
on my own two feet.
What, What, makes
me
excited about something?
Not
just turning around and
saying, "Dad, can you help?"
But
what do
I want out of this?
What's the
end goal for me?
And how do Iâ¦
to the point of,
you
know, creating
generational
wealth and, you
know, a
hundred-year family
It was,
you
know, and, and people listening in, right,
Let's say we have athletes, you want your
kid to maybe follow in your footsteps, but
if it, if
that's not the calling,
you know, sup-support, right?
And I canâ¦
I mean, I played professional lacrosse,
and I can tell you there are books in
our libraries that are
Lacrosse for Dummies, right?
Lacrosse 101 because,
my, you know, you and mom did not
fully understand the sport when
I was getting into it at a young
age.
And,
and
here we are.
to your point, supporting it because I
realized on my own it was something that
I wanted to do and pursue
uh, as I continued to
get older
Justin Dyer: Yeah.
Yeah.
I love that.
Uh, it's a, it's, that's a
j- uh, just great back and
forth between the two of you.
I'd love to go back just to life
progression, um, graduating Harvard, and
I guess, um, just so I'm clear too, so you
did a PhD and JD at the exact same time?
Roger Ferguson Jr: Yes.
Yeah.
So I, it, it
took me seven years.
Uh, I was alternating back and forth, but
yeah, that's what I ended up doing, and
I applied wanting to have both of them.
Being very honest, I'd sort of lost
a little confidence about how good an
economist I was gonna be, and I still knew
I had to be a professional, so, you know,
Justin Dyer: Okay.
Roger Ferguson Jr: was the backup
Justin Dyer: And so early professional
career, you're, you're done with school.
You, let's call it hedged the,
the economist route, the good old
dismal science, uh, if you will.
You were working in a big consultant,
uh, consultant at the time.
Um, w- just, uh, walk us through your,
your, your, framing at that point in time.
You know, where were you both on
the personal and professional side?
"Hey, I wanna have a family."
How did you meet Annette?
All of that.
Roger Ferguson Jr: Right.
All right, so look, um, what happens,
at least what happened to me when you
have a law degree is you're not really a
lawyer, you're a person with a law degree.
So decided, well, I've gotta go
practice law for a year or two,
really know what this is all
about, if I'm gonna potentially
have this as, as my career path.
And that was the best decision
I ever made, not because I ended
up loving law, but because I
ended up loving another lawyer.
my wife, Annette Nazareth,
on the very first day.
she family lore, um, she had
no idea who I was for a year.
And the reason is that I first moved to
New York, I borrowed money from my father
and our next-door neighbor, a little
bit of my own savings to buy a, a co-op.
Um, but I promised to pay
my parents and my next-door
neighbor back within one year.
every-- literally, other than about
five dollars a week, every, every
dollar I had either went to pay
taxes or went to pay off my mortgage
my parents and to my neighbor.
know, just, just the--
it's, it's just who I am.
It's the way I'm built.
but it, it really, you know,
dampened my social life, to put
it mildly.
But after one year, I had this
really great, uh, co-op in, in a
up-and-coming neighborhood in New York.
And as Annette tells the story,
I was then ready to get married.
So I-- sadly for her, but
it worked out fine overall.
I pursued her relentlessly for a
year or so, um, before she finally
decided to go out on a date with me.
I mean, it's just, it's such
a classic, you know, s- story.
Mena Hannah: Roger,
what,
what made you wanna pursue in that?
You know, we talk about the 100-year
family and establishing that with someone
with like a true co-CEO is so important,
where there is values alignment, where
there is the ability to communicate those
values to your kids in an aligned fashion.
What,
what led
you to make that decision, which has,
you know, been an extremely positive
decision for, for I believe 45 years?
You guys have known each other for
close to 45 years now.
Roger Ferguson Jr: Yeah
So you use an interesting
phrase, which is co-CEO.
I mean, uh, frankly, I'd be blunt,
I don't know, a lot of guys, know,
want a wife who looks good on the
arm, but who will sort of, you know,
uh, be a little bit more deferential.
know, I really wanted a co-CEO.
You know, I, I really wanted someone
who was at least as smart as I am,
at least as, as, professionally
ambitious, but frankly, at least as
sort of, you know, uh, modest and,
and, and, and balanced, you know.
Because I actually you know, that's
a great set of skills and talents
and traits, and if I'm lucky, our
kids will inherit, know, all these
wonderful traits that my wife brings.
uh, and, you know, co-CEO
is really important.
I also wanted someone who wanted to
work, um, and also had similar values.
My wife comes from, know, a better
off family than my family, but still
relatively modest, you know, uh, you
know, never had an excess of money.
They were never poor, but, you
know, she also has, has values.
you know, I told you the story about, you
know, one of us grabs and holds a penny,
the other one squeezes it till it screams.
I mean, we, we share
that in common as well.
And so I really wanted a life partner
and a peer, um, and a person who
shares the values that I, that I share.
you know, it, it worked out.
I mean, fortunately,
you know, there she was.
And, you know, she had, uh, it's very
interesting, her view about a spouse
Somebody who was very respectful,
someone who knew that she was gonna work.
Um, and was not gonna
be a stay-at-home mom.
And not everybody was
comfortable with that.
So, you know, we were in some
sense of made for each other.
and fortunately, it's, you
know, it's obviously worked out.
It worked out really well.
The other great thing
is, you know, super IQ.
And so,
you know, when great things happen
in my career, great things are
also happening in her career.
Um, and that made for a great partnership
on every dimension, uh, in terms of,
of being, you know, true, true equals.
And when we moved to Washington,
um, know, uh, she was as
influential and important as I was.
ended up being a commissioner
of the SEC when I was the,
the vice chairman of the Fed.
Justin Dyer: Hmm.
How, Roger, j-
just so we're, we're tracking along
trajectory here, how did that move to
Washington come about and, and where
did you to make inroads into the upper
echelons of DC, um, institutions?
Roger Ferguson Jr: So
Roger Ferguson III: So just, just the
fact that you have to, to be this way
Roger Ferguson Jr: this is a classic, uh,
to, to mean as phrase, you know, co-CEO.
So I told you that I, I started
out as a lawyer, met Annette there.
You know, we, everything worked
out after I paid off my, my,
my, my, uh, co-op mortgage.
Um,
and you could sort of sense my
interest in economics and my
career weren't exactly converging.
Justin Dyer: What, and what, what
type of law were you practicing?
Roger Ferguson Jr: I was practicing,
um, what's called corporate law.
So what I was doing, uh, you're,
you guys would know this.
I was doing, uh, initial public
offerings and underwritings, you know,
helping companies go public or issue
equity or debt in the public markets,
some, some M&A activity as well.
So very business-oriented.
Um, it turns out that wasn't really,
as I knew I wouldn't be, really cut to
be a lawyer, um, for lots of reasons.
Very detail-oriented, know, not
the big picture, not the strategy.
It's much more about the, the, the
dotting the i's and crossing the t's.
So I moved from that
to being a consultant.
staying in the world of finance,
but not really being an economist.
yeah, and then there was a, a, I
had a great chance at, at something
called the Renaissance Weekend, which
we can, well, need to talk about.
But I was in this, uh, had been invited
to this event, and this was 1996.
Uh, and Bill Clinton had been
elected president, um, and a
friend, a, a, a, a graduate student
colleague or of mine turned out to
be this guy named Larry Summers.
So this is where my,
the wife comes in play.
So she says, "You know, Roger, you
know there are two openings on the Fed.
You've always been interested in that.
Here's Larry Summers here.
Don't you think you
ought to go and tell him?
'Cause he's-- he, he sort of knows
who you are and, and, and he's
gonna be big in the administration."
And I go, "No, no, no.
He won't remember me.
It's just not gonna work,"
et cetera, et cetera.
And this is when you really
need your wife to say,
Roger Ferguson III: So
Roger Ferguson Jr: buddy, Stop
Roger Ferguson III: I think it's that
Roger Ferguson Jr: this.
Roger Ferguson III: part that got me
Roger Ferguson Jr: telling
me you're an economist.
Now's your moment.
Go and do it."
And I would not have done it in spite
of all my love for economics had my
wife not been there to really push it.
I go to tell Larry, you know,
"Nice to see you again."
"Oh, Roger, how are you doing?"
Et cetera, et cetera.
And he says, "Well, you know,
we're just thinking about putting
together the administration.
I'd love for you to come to work
in the Treasury Department."
And I said, "No, no, I wanna
be, uh, governor of the Fed."
I almost said, "My wife made me tell
you I wanna be a governor of the Fed."
And he said, "No, no, no.
know, we got a bunch
of academic economists.
There are two seats open.
We're all filled."
And I said, "You know, call me when you
wanna talk to me about one of those jobs."
So long story short, after two or
three times where he's tried to get
me to work for him at the Treasury,
uh, he finally says, "Okay, we'll let
you interview, but it's gonna be a
long shot, um, to be a Fed governor."
And you know, I studied, I prepared for
that interview like it was life and death.
You know, I, I went back and read
Fed minutes.
I, I at regulatory things.
I mean, it was justâ¦
I don't know how-- There's nothing--
I, I can't imagine what it's like inâ¦
It's, it's like you have one shot at, at
getting into the, into, uh, the Olympics,
you train for, you know, years to do it.
That was-- This was my Olympics.
I didn't have years to train
for it, but I trained months to do this.
And you know, your client base
knows what it is to be prepared
Justin Dyer: Yeah
Roger Ferguson Jr: that
lifetime goal occurs.
So this was the nerdy
academic version doing that.
And you know, uh, were rather-- a lot of
them were rather surprised at who didn't--
those who didn't know me, how well I did,
and they end up advising the president
that he should nominate me to, to be the
next governor, a governor of the Fed.
Justin Dyer: I, I, I'd love
to ask a question here.
I mean, you talk about-- Y-
you use that Olympic analogy.
How did you think about
leveling up your, your intellect, right?
So, so many of our clients are,
are the best of the best in
the professional sports world.
We even have founders and, um,
entrepreneurs that have, uh,
they're j- they're intelligent
and ca- incredibly capable humans.
But in order to get that 1% better
and continue to push yourself, did
you have any mentors or coaches or
just your own mindset to keep, keep
you on that trajectory to push you to
eke more out of Roger Ferguson Jr.?
Roger Ferguson Jr: Yeah.
So, you know, you heard my son talk
about the question that I asked
him, what is he interested in, what
is he curious about, et cetera.
My parents always asked me the end of
every day, "What did you learn today?"
And when you're a little kid, I learned
how to read, I learned to add, et cetera.
know, by the time you go to junior s-
junior high school, you learn nothing.
My parents must have think, you know,
uh, obviously, they knew that I f-
but you can't come home every day and
say, "I didn't learn anything today."
But, you know, like everybody else,
I did that for a period of time.
But to your question, I
always internalized, what
did I learn to do today?
What can I do better at the end of
the day than I did at the beginning?
And it's either something intellectual,
it's interpersonal skills.
It teaches you to be very self-critical,
but in a very positive way.
Um, you know, and when this podcast is
over, I'm gonna think through what answers
did I give that were really good, which
ones were really crappy, how can I fix it?
And that's the-- to me, that's the
mindset the kind of thing that I do
that may be the equivalent of, you
know, I wanna go from being the silver
medalist to, you know, the gold.
Um, and it's all about sort of
internal discipline and, and
drive and beating yourself.
Um, I'm a terrible athlete.
I, I can't, I can't hit a ball
sitting still coming at me, full stop.
I can't catch a ball.
The only sports I can play are
endurance sports, long distance running.
You know, I'm, I'm great at, at
the, uh, not Olympic level, but
for old guy, I'm awfully good at
the Concept2 rowing machine, it's
all, it's all about you versus you.
It's all about getting better
than you were yesterday.
It's all about fixing that technique,
um, or in my case, you know,
reading those next sets of articles.
And that's, that's the
internal discipline that itâ¦
that, you know, I, I hope all of us have.
But if you ask the question of, you know,
how do you get ready, or
how do I get ready, it's by
knowing that there's always a way to
improve just a little bit and figuring,
figuring out, and at the end of every day,
I'm a little better at something than I
was at the, at the beginning of the day.
that came from my parents asking
this, "What did you learn today?"
And I still, you know, think
through every day with, you
know, what did I learn today?
Justin Dyer: Yeah
Roger Ferguson Jr: you know, where could
I have improved is, is really important.
Justin Dyer: Yeah, it's super
helpful.
Go for it, Roger
Roger Ferguson III: I was, I
was just gonna kind of build on that.
So now, I
mean, again, continue kind
of chronologically,
you're the, rookie, right?
You get hired by the Fed, you have
this, vet Alan Greenspan, right?
rest in
peace, obviously.
But,
you know, how
do you
stand out, right?
And it's-- you're, you're put--
you're
vice chairman with,
you know,
everyone, you know, the cards
stacked against you in some ways.
No one believed you'd get this job."
And now
you're
sitting
here in DC,
one of
the
more
powerful people,
right, in
DC
influencing
all of these
decisions around the world at this point.
How do you make an impact?
How do you get your voice
heard?
You know, how do you, how do you
stand out amongst the crowd here?
Roger Ferguson Jr: Well, so, uh,
y-y-you, you, you, you should
remember this, you may not, but for
the first year, I commuted from a
house in New York to Washington.
I was basically a bachelor Monday
morning through Thursday afternoon
And, you know, it's all about
on your butt and being prepared.
So, you know, a lot of my colleagues,
great economists, they scanned
every-- I, I studied, you know,
everything that came across my desk.
The Fed does a large number of
things beyond monetary policy.
I'm probably the only governor who went
to see the process of, of money, the
process of clearing checks, which none
of your listeners know anything about.
But it's the way that we used to actually
pay each other before we had Venmo and
before electronic, uh, banking wasâ¦
There were these little pieces of
paper called checks that you'd sign
and give to somebody, you'd have to--
they'd have to be processed overnight.
Fred did that.
I went to watch that.
you know, I went to one of the
Federal Reserve Bank districts and
gave speeches and got to know people.
So, you know, I, I was the rookie, and
I was the guy who worked his butt off
because I didn't have a family at home,
you know, Monday, Tuesday and Wednesday.
I was there early and stayed there
late, uh, and mastered everything.
And what was very interesting, umâ¦
And this is all public knowledge.
Greenspan was not enthusiastic
about having me join the Fed.
Um, he called the president and said,
"Well, you know, I'm sure there's some
reasons that you've chosen this Ferguson,
but, know, there are a bunch of other
folks who might have been better."
And the president said, "Well,
just, you know, wait and see."
And I'm really proud of this.
Two or three months, maybe four
months later, he called back to
the White House and said, "You
know, this Ferguson guy is not half
bad," because I had spent all this
time, you know, mastering,
you know, everything that the
Fed did.
And I didn't go in as vice chairman.
I went in just as a governor.
I was the most junior
governor, to your point.
I was the rookie.
after two years, the then vice chair,
a woman named Alice Rivlin, left.
And Greenspan, I'm so proud of this,
went to the president and said, you know,
"I'd like you to nominate this Ferguson
to be vice chair, to be the vice chair."
And that went from
Roger Ferguson III: Like from
Roger Ferguson Jr: Roger who,
Roger Ferguson III: to
Blue, are you kidding?
Roger Ferguson Jr: him?"
Roger Ferguson III: Like how to
make it to
Roger Ferguson Jr: "This guy's
not half bad" to, you know,
make him the number two.
Um, and, you know, it's been
reported in the newspaper when
it's time for Alan to leave,
encouraged the White House to, to, you
know, nominate me to be the next chair.
Didn't happen for very, very good reasons.
But a little bit of a trajectory
from, you know, who is this guy to,
you know, to, you know, I, I want
him to sit next to me in the most
important meetings in, in the world.
Justin Dyer: Yeah, that's really
Roger Ferguson Jr: it's-- But
the story is one, it's just about
preparation and, and never feeling
like you have mastered anything
Mena Hannah: Roger, when
did, when did that click?
It sounds so straightforward and so
logical that being obsessed with the
details and outworking other people
is
how you can guarantee success.
I know we're not, we're not ever allowed
to say guaranteed in, our industry,
But as much as you possibly can,
when did that click and when didâ¦
Yeah, when did that
train start rolling for
you
Roger Ferguson Jr: Look, in some sense it
rolled at a very, very early age, right?
There's this, I don't know, the, this
famous psychological test that you
can give a three-year-old basically
says, you know, "Here's this donut.
If you sit
Justin Dyer: The marshmallow test.
yeah, Yeah
Roger Ferguson Jr: yeah, the marshmallow
test, "don't eat it, you get another one."
I would've been that kid
who was just sitting there.
You know, you, you tell me I
wait and I get another donut.
I, you know, I was, I, I was sort
of born with deferred gratification.
You know, that story about not dating
for an entire year because I had
to pay off my condo or my co-op.
Um, but it was also, you know,
this is really important.
I'm notâ¦
This may be true of
superb athletes as well.
It's not necessarily in my case about the
competition between me and somebody else.
It's the point I made earlier.
It's about the competition between me and
me, and you gotta get better every day.
Um,
and I still believe it,
Justin Dyer: Yeah.
Our, our good friend Brian Cain,
who's a mental performance coach,
always says, "Compete, don't compare."
Right?
And it, it's exactly
what, what you're saying.
I, I, uh, or go for it.
Yeah,
please, please.
Roger Ferguson Jr: it's it's also
your attitude towards failure, right?
you can say either, "I failed
at that," or, "I'm a failure."
Those two things are very different.
Justin Dyer: Mm-hmm.
Roger Ferguson Jr: My attitude
has always been, "All right, I'm
not so good at that," but that
doesn't mean I'm, I'm a failure.
I'm just not, I failed at that.
I will either get better at it or
I won't, but it says nothing say
about my, my moral worth or my values
Justin Dyer: Yeah,
that's, that's powerful.
Um, a-along the, the mental performance
lines of, of bringing that up a, a
decent amount just 'cause it is so
relevant to our audience, and even
I think a lot of how you, you think
about managing money over such a
long horizon of 100 years, right?
Discipline, discipline.
Um, but it's also good to celebrate
wins, little wins here and there.
We try to do that a lot internally
with AWM and just make acknowledgments.
We're not great at, we're not great at it,
but you, uh, the question I have for you
is you've, you made it to the Fed, right?
You've, you've hit the absolute
pinnacle of, uh, of the profession
of economics, I would, I would argue.
Um, and going back to your, you know,
childhood dream and, and the path that
you, you kind of, quote-unquote, "were
destined to be on," how did that feel?
How-- Did you-- Did it make
you motivated to keep going?
Were you, were, were you-- It didn't
sound like you rested on your laurels
and said, "Okay, I make, m- I made it.
I'm gonna hang it up."
But yeah, I just would love to hear
your, your mindset once you got there.
Roger Ferguson Jr: mind, the, the
mindset is, I at least, and I think
all of us, you know, there's no
such thing as, as finishing, right?
There, there's a, um, a quote
falsely attributed to, to Winston
Churchill, you know, "Failure is never
fatal, su-success is never final."
Um, but I really do believe that.
I mean, thisâ¦
Look, there's so many great and
important things to do, and, you
know, uh, my view is you just
keep, keep chipping away at it.
Um, and so yeah, your
success, it's, it's wonderful.
It's, it's great.
You know, I've, I've achieved this
sort of, I wouldn't describe it
as a lifelong dream, but you know,
something I was always interested in.
Yeah, but then there are also other
exciting things to do, and one
of the great things about success
is it just gives you a higher
platform to achieve the next thing.
Um, and you know, one of the great things,
when I was a Fed governor, what I
didn't like was former Fed governors
coming and telling me, "Well, in the
old days we did this, in the old days
we did that," and they never got out of
being defined as a former Fed governor.
And you know, you introduced
me as former Fed Vice Chairman.
Iâ¦
Not that's a great, wonderful name and,
and title to have, but there's still a
lot of other great things to do a-as well.
And so, you know, I look at, you know,
the success and quotes that we've
had, that I've had thus far as just an
opportunity to keep doing, you know,
the next thing.
Um, and you know, I really aspire
to be not known only as former
Fed Vice Chairman Ferguson,
because that was ironically
twenty years ago.
But there's a next thing to do, which
is to be the CEO for this big asset
management company, with all due respect
to your introduction, we almost tripled
the number of assets under management.
Justin Dyer: fair enough
Roger Ferguson Jr: there's a thing
to do, which is to, you know,
in-invest in startups, um, and
continue to have impact there.
Justin Dyer: A- and so go, go through.
I, we, we definitely want to talk a little
bit about the, quote-unquote, and pun
intended, inside baseball of the Fed,
but I want to make sure we get through
the, your, your entire career path.
So served on the Fed, like you just
said, then you became CEO of this,
what was, when you started, a fairly
sizable asset manager, and then to your
point, you, you nearly tripled assets.
How did, how did that
transition come about?
How come you wanted to, or maybe you
didn't, but did you want to leave,
quote-un, uh, Washington, get out
of the policymaking side of things?
Yeah, how did that all come about?
Roger Ferguson Jr: So look, um, now, uh,
a little bit answers the questions that
already come up.
The Fed is a wonderful place.
Um, it changes almost every day,
and there's a new challenge.
You know, the, theâ¦
On the other hand, you know, I thought
after 10 years, almost 10 years,
you know, I've, I've done a lot.
I've contributed a massive amount.
let somebody else have a chance, and let
me then, you know, uh, try the new thing.
You know, what did I learn today?
What can I learn to
Justin Dyer: Right
Roger Ferguson Jr: at?
so I went off for a, a short sojourn,
which was painful on my family, of
commuting back and forth to Zurich,
uh, for a year or so, managing money
for a big S- the Swiss Re, the big,
Justin Dyer: Hmm
Roger Ferguson Jr: company.
Um, I, I-- while I hated commuting
to Zurich, I loved managing money.
Uh, that, that brings together everything
I'd ever done, I was very fortunate.
I got a call from a headhunter
to be the next CEO of TIAA
Cref, as it was then called.
Um, and it was exactly the same thing.
Uh, it's-- You seem like
sort of a long shot.
You've never managed anything before.
Um, you know, you're a consultant,
you're a lawyer, you're a government
bureaucrat or Fed governor, you've
never, you've never done this.
And, know, what did I do?
Studied up on TIAA, looked at all
of its products, what was on the
website, what were people saying
that they liked and didn't like.
I wasn't-- When the opportunity came
to get that job, I was not gonna lose
that job for lack of preparation.
I might have lost it because somebody
else was better, but there would
be nobody who was more prepared.
And, you know, wash, rinse,
repeat, go in, long shot.
Who are you?
You know, we thought we'd get somebody
who'd been on Wall Street forever,
who'd come from mutual funds or
insurance and, you know, here you are.
know, it looks sort of
impressive in general on paper,
but not specific for the job.
by the end of it, they knew that I
understood that business really well,
um, by the end of the interview process.
They knew that I had some thoughts
about what they needed to do that
happened to mesh with their thoughts
about what they wanted to do.
Um, and, you know, as I said with the
Fed, I feel like I really earned that job
because, you know, I had studied whatever
was to know about them and their company
and their concerns and presented it to
the, to the committee, um, through, you
know, sort of multiple, multiple meetings.
The other thing that
happened there, I've gotta, I've
gotta share this one little story.
So I'm not the most personable guy, right?
When I go to interview,
it's like all business.
Um, the headhunter after the first
meeting pulled me aside and said, "You
know, they, they were sort of impressed
by your knowledge of the business,
but you are such a cold, distant fish.
If you wanna get this job, And no,
Roger Ferguson III: Yeah.
So
Roger Ferguson Jr: take coaching, okay?"
"Get out of being, you know,
the academic and get into
being the, the guy that people
want to spend some time with."
So back to, you know, what
your, what your listeners do.
If you're gonna be a great
whatever, you gotta take coaching.
Um, and so, you know, by the second
meeting, I was shaking hands and,
and chuckling as well as being deeply
substantive, so they could see that,
you know, I was gonna be a, a warm and
fuzzy human being as well as being, you
know, the intellectual, you know, machine
Justin Dyer: Mm.
I love it
Mena Hannah: you're way,
too hard on yourself.
You are very personable.
There has to be some form of
athletic also gene in there
because- Sixth generation ⦠you
know, your offspring's a professional
athlete, so- Sixth, sixth generation
you are, uh, yeah, you're being,
you're being way too harsh.
Um,
I wanna, I wanna ask you a quick question.
Both your time at the Fed, or I
should say the start, and the start
of your new journey with TIAA, you
stepped in, you stepped to, to bat
at critical times.
TIAA, you became the CEO in April of
2008.
We know what happened
around that time period.
At the Federal Reserve, you
took that seat as vice chairman
in 1999 right before the
dot-com bubble popped.
So all of that preparation, all
of the hard work that you've done,
it's like Roger III said, it isâ¦
both of these seats are like being
drafted and stepping up into that new
major league position as a rookie.
How did you handle the challenges that
came environmentally from being in,
call it very, very tough rooms, and
how did that, how did that motivate
you to be the best you can be?
Roger Ferguson Jr: Well, look, um,
let's start with the second question.
so much at stake that you can only
be the best you can be, right?
If, if you get one of these powerful
positions, you know, one, you don't
want to let everybody else down.
And be very honest, you don't wanna
be the laughing stock of history
or, you know, just You gotta
have a certain amount of pride.
Like, I, I'm just not gonna screw this up.
I don't care what it takes,
we're gonna get this right.
Um, you know, so there's, there's, you
know, there's a certain amount of pride
in being, as you say, the best you can be.
Um-
The other thing that you learn when you
get into one of these moments is you
gotta really simplify the decisions.
What are the critical few things that
you have to do to achieve the mission?
And let everybody know what those things
are and stay really focused on them.
Um, you know, and, and that's,
that comes from having a certain
amount of expertise, et cetera.
The other thing that you learn when
you get in these moments is you're
working with a whole team of people.
You know, never use the,
the first person singular.
It's unlike, you know,
an individual sport.
This is a team sport.
Um, and so communicating and motivating
and being empathetic to the entire
team is really, know, also important.
so when you get in these moments,
you wanna succeed, and you know for
a while that it's better to share
credit for success with a thousand
other people than take, you know,
blame for failure all by yourself.
And so it's a very interesting challenge,
Mina, between being highly confident-
Of what has to be done and also being
humble enough to listen to everybody
else and bring them all along with you.
Um, but it also starts with expertise.
You really have to understand what are the
critical few decisions you have to make,
and you have to make the right ones based
on, on, you know, years of experience.
Um, and the final thing that's
really important when you get into
one of these crisis moments, and
it, it's, it's so obvious to say,
and it's maybe like professional
sports, I've never done it.
There's also sort of what I think
of as calming down and, and sort of
getting into, you know, the zone.
Don't be distracted by all the excitement
and, and all the stuff that's going on.
You know, calm yourself down, focus on the
critical few, make the right decisions.
Those are some of the things
that, that are really important.
And the other thing I point out, you guys,
you described me as the rookie, which is,
which is fair to some degree, you know.
But I hope you heard the
process that it took to get
there, the training, the study.
So at, at no point did I ever feel like,
you know, you know, you know, I, I'm
the green-- I, can't figure this out.
You know, the, the, I mean,
once
you step into the seats,
you own the problem.
they don't care if you've been
there for ten years or ten weeks
or ten minutes.
If you're the CEO of the
company, you own the problem.
Um, and, and you gotta really think
like that as opposed to, "Gee, I'm
not so sure and I'm brand new and,
you know, other, other folks, uh,
you know, may be better at it."
Um, so I don't know if that's helpful,
but that's some of the, some of the
different, you know, thoughts, ideas
we have-- I have around those topics.
Justin Dyer: I- I'd lo- I'd love to
go down this path a little further too,
but even try to bring it to the individual
investor and specifically your tenure at
TIAA.
I mean, y- everything you just
shared is super helpful for
any, any human going through
a crisis.
It's been a while since we've
had one, but we will have another
one at some point in time.
But TIAA in particular, you-- the c-
the customer base there was very, very,
very focused on individuals, right?
I mean, the TIAA is, what is it?
Teachers Investment, um,
Insurance
Annuity Associate.
Right.
So
Roger Ferguson Jr: it's,
for individual investors,
Justin Dyer: individual investors,
um, what, what did you see at, during
the, that, those crisis periods,
specifically the GFC, that people did
well or that was incredibly harmful
to the, the individual investor?
Roger Ferguson Jr: Yeah.
so like, uh, this is something
that was really important is w- the
individual investor tends to panic.
You know, they tend to run.
They sell at, at the low.
Um, you know, because they sell
at the low, they're afraid to get
back in, so they miss the bounce.
You know, theâ¦
And what we really coached our
advisors to tell their individual
customers and consumers is,
this company, TIAA, had been around
roughly ninety-five years at that point.
We had been through theâ¦
theâ¦
We had started in nineteen eighteen,
so we had been through the Depression,
we had been through world wars.
We- a world war.
We had been through great inflation.
We had been through a number of
things, and they had to stick with us.
Don't sell.
Hold on.
For those who have liquidity, would
be an opportunity perhaps to buy.
Justin Dyer: Mm-hmm.
Roger Ferguson Jr: And so it was
communicating, communicating,
communicating to the individual not to
do what your natural instinct is, which
is to sell and panic, but to hold on.
But the reason we can convince them
to hold on is that we ourselves
had been through, you know,
so many of these experiences.
We had learned a lot, and we are
institutionally sharing all that wisdom
with you as individual investors.
Um, and you know, fortunately, not
all, but most of our participants that.
Now we also, TIAA has the advantage
of having, as you can tell by the name
Teachers Insurance, it's, it's notâ¦
It's these are, you know,
highly educated individuals.
They aren't all, they aren't all high
net worth, but they are teachers, they
are librarians, they are people who
have a slightly higher education
than the average person.
And so we could also speak to them, you
know, intellectually, uh, about, you know,
what all the models show and how peopleâ¦
what, what the studies have shown.
Um, and our population have to be
quite attuned to the intellectualizing
of things 'cause that's what they do.
and so you had both the regular
retail emotional moment, but we
also had the opportunity to take
this as a teaching moment for a
group of people who were, speaking,
in the research, cultural, medical,
educational part of society.
And you know, part of this, the message
of this is if you're running a business
that deals with individuals, you
really have to know your customer base.
And because of our customer
base, we could speak to
them in a certain way that I think really
helped break through the emotion of what
they're, what many of them were feeling.
Justin Dyer: Um, okay.
So let, uh, back to career progression.
So post-TIAA, what, I guess w-walk
us through how you decided it was
time to end TIAA and then move on
to the next thing, like level up
even further from there, in a way
Roger Ferguson Jr: so
look, I had been at TI for roughly 12
years when I decided it was time to leave.
But, you know,
it had been particularly
the last few 12 tough years.
I mean, we started the, with the
GFC, as Mia points out, get everybody
through that, get the company through
it, you know, do what we have to do.
We then really had to develop a
growth plan, um, because TI is a
retirement-oriented company at an age
when many people starting to retire.
have to pay out, you know, all
these annuities, et cetera.
So we had to figure out how to grow.
and that's when we decided to, to become
a, a major asset management business
and through acquisitions, et cetera.
so during my tenure there, we acquired
or started 12 or 13 different businesses.
The, the company had acquired one
business in its entire 95-year
history before I got there.
And so we had been on quite a growth
spurt that fortunately was working out.
And then, you know, we hit George
Floyd, we hit, uh, the first
Trump election, we hit COVID.
Um, and I gotta tell you, after it
had already been 12 years and then,
or 10, 11 years of, you know, GFC,
rapid growth, acquisitions, moving
and shaking And, and then it was,
you know, one crisis after another.
and I went to my board
and said, "You know what?
Thirteen years is a long run anyway.
The last year and a
half, it felt like five.
Um, you know, it's, it's really
time to find somebody else."
And it's, you know, it's a
really important thing to learn.
I think it's-- I don't
know what it's like inâ¦
Well, you can see what it's
like in, in athletes, right?
You know, knowing when to retire is
a really important skill to have.
You know, you know, you wanna go out
sort of on the top, and if you're not at
the top, you gotta know when, you know,
you don't have much left in the tank.
And having run a big financial
services firm for 11 years, pretty
smooth up, then confronting, you know,
all of that, you know, four or five
different curve balls at the end.
Yeah,
I, I, told the board I actually think
it's just time for me to go move on.
You know, I am not gonna be able to
do this at the right level, having
gotten through these last several, you
know, quarters, last years of everybody
safe during COVID, calming people down
during George Floyd, dealing with
the excitements, tensions, anxieties
of Trump one.
Um, you know, Me Too, a
variety of things happening.
Justin Dyer: Mm-hmm.
Roger Ferguson Jr: And,
you know, that'sâ¦
And, you know, there are obvious
analogies to, to athletes, right?
Who, of whom know to retire when they're
out, and some of whom you sort of look
at the last three years and you wonder,
you know, what was so and so thinking?
Mena Hannah: Roger, one interesting
thing is, you know, you're using,
you're using this word retire, but
you never, you never really retired.
It is a path of excellence, and it's a
path of excellence in that seat as CEO
or, or
in, in anotherâ¦
on the multiple seats
that you've taken after.
Kind of want to just read a couple
of your accomplishments throughout
your time at TIAA to, uh, to brag for
you because I know you won't, uh, do
it yourself.
Managed roughly one point three trillion
dollars in twenty twenty-one when you
guys, uh, or when you decided to step
away.
Throughout the, GFC and throughout
COVID, you maintained TIAA's st-streak of
uner-uninterrupted payments to retirees.
That was started in nineteen eighteen,
and you preserved that through two
extremely difficult periods of time.
And then you were also on various
lists for being a very ethical company.
Um, yeah, one of the most prominent
lists had you as one of the most ethical
companies for seven straight years, and
that's hard to do as a Fortune one hundred
company.
Thinking about your transition,
what you were going to do after,
how how did you make that decision,
and what really caught your eye
about the next step, the next
chapter, the next challenge that
you wanted
to take?
Roger Ferguson Jr: So
look, great, questions.
Um, I'm gonna have to send you a long
list of all the other accomplishments
at TI 'cause you only did three.
So much for being modest.
Um
Justin Dyer: We'll make sure we
get them all in the intro we record
Roger Ferguson Jr: no, no, don't do that.
Um, actually, one that I am very
excited about was that we won Lipper
Award for the best mutual fund
family, I think eight years in a row.
And you have to understand that T.
Rowe mutual funds was sort of sleepy,
and when I got there, we said, "We've
gotta give you guys more tracking error.
We gotta see what you can actually do."
And, and it paid off.
I mean, and so I'm reallyâ¦
I was actually really proud of
the fact that we to the top of
the league table in terms of, of,
uh, being a mutual fund family.
So to answer your question, Mina,
um, so after all this, the next thing
has gotta be what's gonna contribute?
What's exciting?
W- you know, as an in- as an,
as an investor, where are the
outsized returns likely to be?
And, you know, I've decided it
was in a, uh, in a number of
areas that are really important.
We are living in a phenomenal
time of, you know, new technology,
big data, AI, cetera, et cetera.
Um, you know, the startup culture in
America right now, you know, mirrors
what it was in Thomas Edison's e- era.
I just had to be part of it, Um, I
developed this mantra, now I'm spending
half my time with people half my age.
Um, and frankly, when you reach my
age, you also wanna just think about
how are you gonna be relevant, how
are you gonna learn what's going
on, how are you gonna stay involved?
And so I've decided to do, you
know, a bunch of fintechâ¦
not fintech, financial
services activities.
So running venture firms.
Um, I'm also involved in,
in a private credit firm.
I've got a relationship with a
real estate investment activity.
Um, I'm on an advisory board
for a, a company that does,
uh, PE in the emerging markets.
I this is such a f- why time to
be involved in asset management
at, at all these levels.
I'm really lucky be able to, you know,
get engaged in all of these things.
And, you know, I promised all
of them I'll give them enough
time for them to be successful.
Um, and you
know, to
date, that's been the
case.
Mainly what I do is sit on the
investment committees and help think
through allocation, um, and where to
put capital, and then I'm involved
in some capital raising as well.
Um, and so that's, that's what I'm doing.
And all of it is just really
about, you know, continuing
to, to learn and continuing to
be, know, challenged and
refreshed, you know, every day.
Roger Ferguson III: and
to--
Roger Ferguson Jr: absolutely great
Roger Ferguson III: I was
gonna just, bui-building on
the kind of the through line
that we talked about earlier.
How are you writing checks or
spending your time that it aligns
with your
values, right?
You, you're you're putting money, not
only money where your mouth is, but things
that you actively align with, you wa--
are willing to spend your time because
it brings
you
back to kind of the
day one core principles
Mena Hannah: of the day
one core principles.
Roger Ferguson Jr: Part of what I'm
talking about right now is, is to
your point, Roger, using the tools
of capitalism, investing for profit
in particular, to solve, you know,
some of the problems of capitalism.
Uh, and so if you think about some
of the challenges that we confront,
you know, around healthcare, um,
this is a great time to invest
in healthcare kinds of solutions.
Um, we have, you know, serious problems
around housing and housing affordability.
I've got a couple of things
that are invested in that space.
You know, like it or not, we sort of hoped
we'd have a defense, uh, peace dividend
while the world is a dangerous place.
So one of my companies is very much
about, bringing, you know, Silicon Valley
technology to the, the defense apparatus,
uh, which is incredibly important.
a, a bunch of my companies are involved
with, with the green transition.
Um, and so, you know, right now it is
very much around investing in, in new
ideas in, in large part, um, to solve
some of these long-standing problems.
The other thing that I'm doing is
in this middle market lending space.
You know, the vast majority of jobs in
America are created in middle market
companies, and they have a lack of
access to capital because banks haven't
been very interested in doing that.
So one of the companies I've-- I'm
executive chair of does lending
to middle market companies,
which I look at as, you know, an extension
of what I was trying to do at the Fed,
right?
Which is creating full employment.
Um, and so you're,
you're absolutely right.
I lookâ¦
Not, not everything, but almost
everything has a values angle to it.
and the things that I really believe
are gonna, you know, make a difference
in the world is also, frankly,
making money in the world 'cause,
you know, those two things I think
actually can and should go hand in
Roger Ferguson III: Yeah.
You can do, do well and do
good
at the same time
Roger Ferguson Jr: And do well
and do good at the same time.
Justin Dyer: Yeah
Roger Ferguson Jr: there's a guy named
Robert Schuller who wrote a book,
I think it's called The, The Financial
Services for the Greater Good.
I'm getting the name off a little bit,
but that mindset that, skills that we
all practice together around investing
should be able to get really good
returns, and if we're lucky, also have,
you know, a very, very positive, uh,
uh, footprint in the world, so to speak.