By 2053 median Black household wealth could hit zero if we fail to correct negative trends like annual savings. How can we reverse this course? And what does it take to build wealth in a rebalancing world.
Kneeland Youngblood, Founding Partner, Chairman & CEO, Pharos Capital Group Interviewer: Randall Lane, Chief Content Officer, Forbes
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Kneeland Youngblood, Founding Partner, Chairman & CEO, Pharos Capital Group Interviewer: Randall Lane, Chief Content Officer, Forbes
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LifestyleTranscript
00:00Now for our first conversation
00:02Please welcome to the stage Randall Lane chief content officer Forbes and Neal and Youngblood
00:09founding partner chairman and CEO
00:12Pharaoh's Capital Group
00:19This is a
00:21This is a smart good-looking group here, and we got a we got a lot of young bloods here
00:27And we thought for the young bloods
00:29We've got dr. Youngblood to start off
00:33We've got an OG we thought
00:36We have so many amazing names and stars across today
00:41But what a what better way to start with somebody who you know Jabari talked last night
00:48about the need to create more black billionaires and
00:52you know
00:54Dr.. Youngblood in you you've got somebody that you're in the process of doing it Nealon. Thank you. Yes well
01:00Respect here in Atlanta. We like to show respect with Nealon
01:02It's a real pleasure to have you Nealon came in just so you know from Iceland this morning
01:08So that is that's dedication. We really appreciate it
01:11so maybe
01:13Maybe Neal you could tell us. Maybe you could tell it till the group
01:16I mean you've got I call you you know I said dr. Youngblood because he's a medical doctor
01:21But you know as Jabari mentioned and Jabari was you know being modest
01:25He's got you've got several billion dollars under management as a private equity investor
01:29So maybe give us your background on how just kind of a quick a quick catch-up on how you've had you know multiple
01:37Careers, but you know maybe just you know give everyone a sense of where you come from where you are
01:42Well first off. It's a pleasure to be here, and thank you all for having me
01:46I grew up as
01:47Many of you all did I was very very blessed that great parents for brothers to such as big family
01:53but of course we were always broke, but but my parents gave me the most important thing was love and
02:00The idea that I could do anything and so look I had lots of interesting experiences
02:0414 got to work in the Texas legislature 16 was an exchange student to Greece believe it or not even being from a small town
02:12in Texas and
02:14That experience really transformed my worldview
02:18My friends were anarchist communists left right hated the United States, and I thought everybody you know loved America
02:26But we've come to find out of the CIA had overthrown the government of Greece supposedly
02:31My friends all were protesting against America, but we're all trying to get a green card to get to America
02:37and so that gave me insight into the immigrant mentality and that
02:42If you're coming over on boat from Vietnam potato famine in Ireland
02:47Programs in Russia you get to the u.s. Things are challenging tough
02:50But you have a frame of reference to say yeah
02:52But could be so much worse and for many black folks because of his slavery we don't have that frame of reference
02:59That motivated me. I came back finished high school went to Princeton
03:04Studying international systems of health care in Sweden and England as part of my undergraduate degree
03:08After that came back took over the administration building around the anti-apartheid movement
03:13But post that arrest went to medical school, and I thought I was gonna be a heart surgeon
03:18I know this is a long-winded answer, but I want to make this quick
03:21I thought I was gonna be a heart surgeon and called one of the Princeton alums said hey look you know
03:28I want to be a heart surgeon like you
03:31He said look you can come by and see me anytime, but you should go see my roommate first
03:35Okay, that was odd so I went down to Houston to see his roommate who was black
03:40And he was the most extraordinary man. I'd ever met he'd gone to Howard at 15 transferred to Harvard
03:451950 finish summa cum laude turn down the road scholarship went to Harvard med school and where he room with this guy and and I met
03:52him
03:53He trained in surgery Columbia fellowship in the UK on the faculty at Harvard
03:58Came back to Texas first director of research at the Texas Heart Institute doing more heart surgery place in the world I
04:05Met this guy, and I realized I was not that good. I was like drop the mic
04:11I can't do you know he was a wonderful man. He
04:16Challenged me in ways that other people had not because everybody always patted me on the back
04:20And he was like no your games week
04:22You got it. You got to raise your game, and so I said I can't do heart surgery
04:27If I can't be as good if not better than this man. I need to do something else so I came back
04:31to medical school theater wrote a
04:35proposal went to Egypt
04:37apartment on the now pyramids in the background and that I was there for a few months during surgery and infectious disease and
04:42At the you know I would go out to the Sahara Desert
04:45And I'd say look at the end of my life when I'm dying and taking my last breath
04:48What is it?
04:49I want to define me who is I want to be and maybe I can reverse engineer to get to that point I
04:54Then trained in surgery in New York and my residents here at Grady Emory Hospital emergency medicine
05:02Came back. I'll come back to the ATL. Yeah. Yeah, I'll come back today till practice medicine for 12 years and back home in
05:10Texas, but
05:12Again, I wanted to give back and as a 14 year old
05:16I recognized that money was the driver of politics, and that's where I could give back so I organized my friends
05:22We started raising money for candidates started with a guy named Bill Bradley who's running for the Senate, New Jersey
05:27He became senator and Richards, Texas came governor Carol Mosey brought in, Illinois
05:33Ron Brown asked me to help a guy named Bill Clinton raise money for him and that really
05:39Exposed me the world of politics Bill Bradley said something very simple very profound the president United States walks in the room. What's your ask?
05:47So, what do you mean?
05:48He said don't get distracted with the lights cameras all that if you're in a room with the president
05:52You're there for a reason they know what they want out of you. You should know what you want out of them
05:57Wow, and Richards calls him. He says hey, look, I want to put you on the board of medical examiners
06:02I said no, I'm gonna be on the Tax Policy Committee. She said what are you talking about?
06:06I said, yeah, I'm gonna be on the Tax Policy Committee
06:08She said why I said because the Tax Policy Committee is composed of CEOs from around the state of Texas
06:13It's important enough. It's important enough if it's important enough for them. It's important enough for me
06:17I want to be in that room. There's no one like me in that room. She said fine. I get a call
06:23from
06:24In the emergency department someone saying hey look this guy was talking about this tax thing. I said look
06:30Can I help you? You know, I'm really busy here in the ER said look, you don't know me
06:34I'm CEO of a company called travel crow. I live in Dallas. You live in Dallas
06:38I'm on the Tax Policy Committee. The meetings are in Austin. Let's go together
06:42I said sure what American Airlines Southwest Airlines flight. He's like I got my own jet. So just come fly with me
06:50Excuse me, damn
06:53I'm in the wrong business
06:54So I got on the jet and I said I'm quick. I'm out. I'm done. I quit medicine. I'm quick
07:01But you know, I'm married. I got six kids. I got private schools
07:04I got I couldn't afford to go back get an MBA all you know
07:08So I said let me get next to money and the government put me on the board of the pension fund
07:12She thought I was crazy then too, but she realized later. I was right the pension fund exposed me the money
07:17I looked at public equities fixed income real estate private equity, and that's what I decided to do
07:23I said I need great mentors great team credibility mentorship side
07:27I got some great mentors and
07:28Then I said credibility serving on corporate boards if I could be on one board the best board would be an airline
07:34Because they let you fly for free
07:37Connected with Americans free first-class travel anywhere in the world American flew
07:41Then starwood hotels. I need a place to stay. I was on board there. I was a board of the gap
07:46I had six kids. I'll go to Burger King food
07:49And I I started the firm and we've raised a couple billion dollars and you know, we invest in health care
07:56Best in health care. Sorry that was long way
07:58That's it
08:01Now that that's what I call side hustling that is
08:04Impressive you mentioned
08:07You mentioned mentors you you have had some amazing ones like like I believe when you were starting with private equity
08:12You went, you know, if we talk about becoming billionaires, you went to billion Richard Rainwater
08:18I think was a who people probably don't know who he is. He's one of the most important investors
08:22He's passed but he's was one of the most important investors in Texas other recall
08:26I think he I think he made a lot of his money because he started buying land
08:31In a swamp in Florida that eventually came Walt Disney World you got it from 20 million to 12 bill
08:37But anyway, I had three very important mentors
08:40one a guy named Richard Rainwater look I
08:44started reading about finance and
08:47Again, I happen to be at a big event in Dallas and thousand people in there and I saw this guy and I was like
08:52Oh, wow, that's Richard Rainwater. So I ran up to him said mr. Rainwater
08:55I'm gonna be like you and I grow up. He said well come by and see me
08:58So I would buy some and he just kind of opened the world up and what it did, but how did it say you you just
09:05Random complete random. No connection
09:09You should not
09:11Let people status statute title stop you from asking for the order and so that's really really important
09:19so Richard became a
09:21Great mentor great friend and he gave me confidence because I felt like if this man who is successful as he is
09:27from 20 million to 12 bill
09:30Took the time to meet with me and help me then
09:34He must see something in me that I didn't see in myself
09:36Next was then a guy named David Bonderman who you again you wouldn't have necessarily known but founded a firm called TPG
09:43David
09:44another billionaire
09:46Multibillionaire billionaire great friend great mentor, but rich I mean, but David said look, you know what I'll invest with you
09:52I'll give you some money. I'll give you a few million bucks
09:54Let's get started like whoa, and then
09:58Another guy by the name of Mike Milken became a great mentor great friend
10:02Michael's like look, I'm I'm in and look you don't know these names. But for instance Mike Milken's bonus in
10:091986 was five hundred fifty million dollars
10:13Thirteen people who work for Mike Milken own either an NFL NBA or major league baseball team
10:20So he invented an entire class of
10:23Investors, so so so in choosing your mentors, you know again maybe for this group
10:29That's great. Um, how do you have the fortitude to go up to a rainwater to a bonderman to a to a milk in and just
10:37say
10:38Hey
10:40Again
10:42Look, what can someone say other than no, I mean they can say yes or no. I mean, they're not gonna
10:47Hit you
10:50You know, I it's you should
10:55Yeah, there are a couple of things I would say is
10:59No price is too high to pay for the privilege of owning yourself
11:05And that's Frederick Nietzsche
11:07No price is too high for the privilege of owning yourself. So that that's that's one thing and then another quote that I go by is
11:17He who has found his why in life can tolerate almost any how
11:22and so
11:24understanding finding your purpose finding your
11:27Your drive your ambition
11:30You can you can sustain yourself. They're gonna be a lot of no's in life
11:35They're continue to be a lot of no's in my life and everyone's life
11:38But you have to be willing to be to persevere to adjust to you know, no means not yet
11:46Yeah, no means not yet that that is that is terrific advice the
11:52For you you've raised
11:54Hundreds of millions even how do you you know, whether or not you're raising money for a fund or for a startup?
11:59What what's the key to raising money? I think the key to raising money a
12:05couple things first off my parents were instrumental in
12:10helping me
12:12to understand that
12:15What they would say is never let money get in the way of your success
12:21Never let money get in the way you assess I said look we have seven kids here in this household
12:25We can't really afford for all y'all to go to college, but you know what you you do you well in school?
12:32We're gonna make it happen all seven of my myself all all of us went to college
12:38Most of us went to grad school. They got it done. And so
12:42look, it's
12:45Again it's it's it's the why you can tolerate anyhow that that's what I would say. I mean if you have
12:55Belief
12:56Well, first off what I would say is make sure that you're the best
13:00Version of yourself make sure that there's integrity in what you do
13:04Make sure that you show up on time that you do your homework
13:09That you understand what it is
13:11you're trying to do and what your vision is for how you can make it better and
13:17That enthusiasm that passion. I think really is what?
13:23People are looking for when they are, you know looking to make some investments money is not the problem money
13:29Believe it or not money money is the easy part
13:32Money is the easy part. It is what are the most compelling ideas?
13:37Who are the
13:40People who are driven to make things happen who understand how to manage folks
13:47Let's stick with that because right
13:49You're sitting on a pile of money that you give to entrepreneurs and business leaders and and you talked about the idea
13:56But like you said, there are a lot of great ideas. There's a lot of money out there and a lot of great ideas
14:01What is it about the person if any of these people walk in, you know, and they're pitching you
14:05What are you looking for when you say I'm looking for the person who can manage who can take ideas and execute them
14:10What is what is that spark you're looking for?
14:12What I would say is a couple things first off you need to be talking to the right people because different people
14:18What I invest in I only invest in health care and I invest in you know
14:23My my equity checks the checks I write are for 50 plus million dollars
14:28That's what I do. If you're got a startup that that's I'm not your guy
14:32It's just not well, but there are plenty of other
14:36Women and men in the venture space who are in that space
14:40And so one of the things we did here actually, it's Belmond and Morehouse created a Center for Black Entrepreneurship
14:46The Black Economic Alliance, which I'm on the board of we've raised about 50 plus million for that
14:52So there's a course there for entrepreneurs. You can take it online, you know, etc
14:57But then we also raised another
14:5930 so far
15:00but we'll raise another 50 million because the lack of friends and family within the black community to be able to be the first risk
15:07dollars, and so it's
15:09$500,000 check or $100,000 check
15:12Yeah, we got about we got about a minute left
15:16The idea again again, you're what I love about everything you're saying is you know, it's it's you're you're
15:24showing as much as telling
15:27But I do want to ask for it for as for a tell one piece of advice
15:30We're looking at kind of the macroeconomic trends and it's not you know, if you look at black wealth
15:35You know, it should be skyrocketing, but it's not if you look at medium black wealth, you know, it's it's not
15:42You know, the tide is not automatically going up. What is it?
15:46You know again going back to Jabari's mantra that you know, I mean you're a billion
15:50Oh private equity like you said venture seeds the money that private equity grows it
15:54You're a billionaire maker if we want more black billionaires out there
15:57What is the one piece of advice you give to this room because in this room I guarantee you I guarantee this
16:02We come back to this event 20 years. There are multiple black billionaires in this room. I don't know who it is
16:07That's why it's important to network
16:09Because you know who it is, but they're out there
16:12So talk to the there's some future billionaires out there. What is the one one piece of advice about how to get there?
16:18The one piece of advice I would say is
16:24Be the very best at whatever it is you're trying to achieve
16:30Be the very best whether that's in
16:33artificial intelligence whether that's in
16:36Quantum computing whether that's in retail whether that whatever that would be one piece of advice
16:42But but but not only be the best
16:45But but not only be the best. I think you also have to think bigger not smaller
16:51You have to surround yourself with the very best and brightest people who can challenge you and who you can challenge as a team
16:58I think
16:59That you know
17:01you
17:02have to
17:05Have integrity
17:07You have to be honest. You have to believe in yourself
17:12And you have to persevere
17:14You have to persevere. It's not one answer and let me clarify. I'm not a billionaire yet
17:20I'm working on it. But you know
17:23I would also say
17:26I've been fortunate that I have six extraordinary children
17:30I've been married to
17:32A black woman for almost 40 years who I met here in atlanta. I got married here in atlanta
17:40and
17:42You know in the midst of your careers in life
17:47Prioritize the things that are important
17:49Money is important, but it's just a tool. It's it's just a tool
17:54um the thing that i'm most proud of
17:57are my kids
17:59My wife my family
18:01Those are the things that
18:03for my legacy
18:06You know or really what?
18:09You know what it's all about and continue to try to make my parents proud who've passed many many years ago
18:15so
18:16Money's money's a tool
18:18It's also just a reflection if you're great at what you do the money will follow
18:21I think you've been a great, you know in multi many careers. You've been a great example that
18:26Neal and thank you very much for kicking off this day with very inspirational work. We appreciate it. Thank you
18:33Peace
18:38You