Money Talk

Episode 50

Zero Wealth to Substantial Wealth with Joseph B. Anderson, Jr.

Welcome to our listener-supported podcast, Money Talk, unpromised absolute financial truths behind financial perceptions with hosts Ed Sutkowski and Chuck LeFebvre. Let’s listen in.

Ed: Welcome. I’m Ed. Chuck is on vacation or otherwise occupied. I think he’s hunting somewhere. My special guest today is Joseph B. Anderson Jr. We’ll be discussing Joe’s journey from zero, I’ll call it money, to I’ll call it fairly substantial wealth over a long period of time. But more specifically, we’ll discuss Joe’s beginning at Topeka, Kansas, and then at West Point, and then Vietnam, and then the White House fellowship, then General Motors, and then Tag Holdings, LLC. Joe, are you with me?

Joseph: I am with you. I’m glad to be here. Good afternoon.

Ed:  Yes, it’s my pleasure. looking at all the information, I must tell you the most impressive part of your CV, I’ll call it, is these medals: two silver medals, this is Vietnam, two Silver Stars, five Bronze Stars, three Army Coordination medals, eleven Air medals. Were you doing anything other than fighting and getting medals, Joe?

Joseph: Yes, there was a little break for R&R in between. It wasn’t overly aggressive, but I did get into a few conflicts.

Ed:  Yes, We’ll discuss that. What it’s like to almost be the subject of someone trying to kill you, or conversely, you trying to kill someone else. This idea of having served two tours in Vietnam, we’ll address that. Let’s go back to the beginning of Joe in Topeka, Kansas. February 12, 1943. Your father was a widower with one son, your mother two daughters from a prior marriage. You were an Eagle Scout, I believe, and more specifically, you graduated with honors from high school. Joe, the Brown v the Board, tell me about your relationship with the plaintiff in that case.

Joseph: Brown versus the Board of Education of Topeka, Kansas, which included several other states by the way, was a Supreme Court decision that desegregated schools across the United States, so that segregated schools are no longer could be considered separate but equal. I grew up in Topeka, Kansas and started grade school in the fifth grade, kindergarten. From kindergarten through 6th grade, my grade school was fully segregated. So, there were nothing but African American teachers and African American students during that period of time. That was my experience in grade school in Topeka, Kansas.

Ed:  Then middle school, that was not segregated, is that correct?

Joseph: That is correct. When I left grade school, the law, the Supreme Court decision had desegregated the school. Even before that, the Supreme Court decision during my 2nd, 3rd, and 4th grade, the junior highs in Topeka and the high school in Topeka were all desegregated. There was no segregation there. What I recently found out, because I’d always wondered why, is somebody said they thought the primary explanation is that the city, the community did not have the financial resources to create segregated junior highs and segregated high schools. They stopped with the four segregated Black grade schools in Topeka, Kansas.

Ed:  How did you feel about that? Being a Black, a gentleman with brains in a system that first was segregated and then not segregated? How did you make the transition intellectually?

Joseph: The reality, first of all, is that’s just the way it was, and that’s what I knew, et cetera, and the entire environment and community reflected that. It was not only the grade schools, but the Boy Scout troop that I belonged to was all Black. The YMCA that I went to was all Black, the swimming pool that I went to, et cetera. It was truly segregated in the community, even beyond the schools.

That’s what I was born into, that’s what I knew, and it was just the way it was. My parents were working parents in that environment, and they did what they needed to do. The church I went to, of course, was all Black. So I didn’t know anything different. So there were no issues. When I transitioned to junior high school, again, the junior highs had been used to having Hispanics, and African Americans, and Whites together, so there was no big deal there. It just was making the move to the next level in an integrated environment.

Ed:  One of your favorite sayings is, “It is what it is.” It seems to me that whatever the circumstances were, you were flexible enough intellectually to accommodate to those different environments. Is that fair, or what am I missing here?

Joseph: What you’re missing is I didn’t know anything different. So I wasn’t flexible enough to accommodate it. To your point, it was what it was, it is what it is. If you grew up in another community, whether it’s another religion or another race and so forth, and that’s the way things are in that community, that’s all you know. I wasn’t looking at television or interacting with others to say, “Well, that’s the way it is where you are, but that’s not the way it is wherever I was to go.” I didn’t know anything different. It wasn’t an intellectual exercise. It was the life I was born into. Segregated environment was a segregated environment.

Ed:  Kind of “so what”. IN looking at it through the eyes of a youth, so what? I mean, I’m doing what I’m doing, and next topic. But that may be an understatement of what some people would really feel, but the bottom line, your beginning was such that it is what it is. Your grandparents were ministers, is that correct?

Joseph: Yes, both of my grandfathers were ministers.  And so, I was raised in the church. And it was a Baptist church in Topeka Kansas, and again a Black Baptist church and so forth, and the movie theaters were segregated. Again, there was no difference about one sector of the environment versus another. It was truly segregated to include the grade school.

Ed:  Grade school, you’re an outstanding student, straight A student. There was one instance where you got a B. Do you recall that discussion with your teachers?

Joseph: I do, and it speaks to the strength and capability of the teachers. In the third grade, I got a B in one class. And I asked the teacher, why did I get a B because I was aware of my other student classmates and so forth, and I was doing as well as not better than them. I thought I earned an A. I asked her, why did I get a B when my performance was deserving of an A? She said, “Well, you got a B because you didn’t work up to your potential. When you do, then you’ll earn an A, and I will give you an A.” That speaks to the strength and commitment on the part of those teachers to get the best out of us as young African American Black students in those schools.

Ed:  Your mother did graduate from high school, not your father. Your father was a welder with the Santa Fe Railroad. This idea coming from your mother and your father was, “Education, education.” Is that fair?

Joseph: There was just no debate or discussion about me doing anything other than getting a good education. I was a good student in grade school and through junior high and high school. I had every expectation of going to college. I had the intentions of going to the University of Kansas in Lawrence before the military academy rose as an option or opportunity. My mother and father made sure I was involved in a number of things. I took piano lessons from grade school all the way into high school, along with sports in schools. Mother took me to the library a lot. So, they did all the right things to get me on the right track, to get an education, perform, and succeed.

Ed:  Football, basketball, you were co-captain senior year in football, is that right, Joe?

Joseph: Yes, I was the co-captain of the football team in high school at Topeka High.

Ed:  So, it seems at the inception of the life of Joe, this quality of leadership seems to have started to nurture. Is it– that’s where it was going? Did you feel that some commitment to lead or how did you happen to get involved in that?

Joseph: That is true. When I was in junior high school Grade 7, 8, 9, I was the president of the student body in the ninth grade. The principal there, who was White, knew me, worked with me personally to make sure that I achieved and performed up to my potential. Had good grades in high school, was a co-captain of the football team. Upon graduation was one of the eight honored students of the graduating class.

The reason I got to West Point is I went to Boys State and out of the couple of hundred boys that were Boys State, I was one of the two that was selected to go to Boys Nation in Washington, DC. So, my peers in that experience saw something in me that said, we think Joe Anderson will represent the State of Kansas well at Boys Nation. Then of course, West Point is all about leadership development and training. So, I couldn’t have had a better education to that end.

Ed:  You got this postcard suggesting that you consider West Point. Do you recall that?

Joseph: Sure, when I went home from Boys Nation to finish my senior year in high school to attend and do my senior year in high school, I got a postcard from West Point saying, “Congratulations, you 100 young men, two from each state, at Boys Nation are the kind of young men we would like to have come to the military academy at West Point and if you’re interested fill out this postcard and we’ll send you information.”

I didn’t know much about West Point. I’d seen the West Point story on TV. And I knew there was an Army-Navy football game but that’s all I knew and appreciated. I filled out the postcard, sent it in, they sent me information. I began to go through the process for application with my senator in Kansas. He selected me as one of his three candidates. In the interview and selection process, the other two didn’t make it for whatever reason. So, I was on my way to West Point a few weeks out of high school.

Ed:  900 first-years, 600 made it. Six African Americans in the freshman class, four graduated. You got your degree in math and engineering and given the competition you ended up right in the middle of the class. Is that right, Joe?

Joseph: That’s correct. I made good grades. But, when you go to another level of performance and achievement with the best and the brightest from all over the United States, you’re gonna shake out somewhere. Of course, there were those who were star men meaning they were in the top 5% of the class but I was right in the middle and never had any academic problems. Had some leadership opportunities to agree there but all in all I had a good experience. Good education, a lot of training on engineering with math and engineering which was my degree as far as the education, and then a lot of leadership training. So, just a great experience in hindsight.

Ed:  I’ve had occasion to visit with some individuals who well not at West Point but served in various positions in the Armed Forces. They’ve suggested it to me that the lessons learned on leadership and herding a bunch of kittens, those that you’re in charge of, that was given to them during their tenure with the Armed Services, Armed Forces, made them a success in business. Was there a correlation in retrospect thinking what you learned at West Point was applicable at GM and then with Tag Holdings, the various business ventures or was there no relationship?

Joseph: Those experiences that I had at the academy with some leadership responsibilities at the academy and then of course graduating and going off to Vietnam leading a platoon in combat and several other assignments and responsibilities, each one of those activities was about leadership. When I graduated from the academy, the branch I chose was the infantry because I like people and I like leading people. When I made to the decision to go into corporate America, I went into manufacturing because manufacturing is about leading people, making products or providing services, and so forth. If you ask what I do, it’s about leading people in business.

Ed:  Now, I would suggest to you that you didn’t need West Point to enjoy the success you’ve earned, that you had it. Your color of your eyes were green, blue or whatever and that color was the leadership in you that you couldn’t change or you couldn’t improve upon. Challenge me on that.

Joseph: I will challenge you and disagree. Yes, I may have had leadership characteristics and attributes in junior high, as early as junior high and in high school, but the military academy honed and improved my understanding of what that is and how to apply it to the point where I’m a much better leader for having gone to the military academy than if I’d gone to the University of Kansas in my opinion.

Ed:  Good. Vietnam, two tours. Why two tours? Didn’t you have enough with one tour nearly being killed? I mean, what is it that prompted you to do a second tour, Joe?

Joseph: What prompted me was a set of orders from the Army saying you are now going back to Vietnam for a second tour. I did not volunteer. I received the orders for the first tour less than a year after graduating from West Point. Did that, went to Fort Dix, New Jersey to train soldiers and went to another school in the Army and so my three years between tours between 1967 and 1970 was longer than many of my classmates and peers who would go back to Vietnam after 18 months or two years. It was three years, but again, I didn’t volunteer those orders came. I was a career soldier. It was not optional, I went.

Ed:  It is what it is.

Joseph: It is what it is.

Ed:  Now, the first tour, how many individuals did you command that you were responsible for?

Joseph: I was platoon leader and in the table of organizations for a platoon there are 44 people, 4 squads, et cetera. I never had 44 people between R&R and injuries and people coming and going and so forth. I would say on average I had between 30 and 35 people with me in the field as a platoon leader most of the time.

Ed:  The second tour, same question.

Joseph: Second tour I was a company commander, went into Cambodia with President Johnson. Making that decision about going into Cambodia to try to take away their supplies and capability which we did, and which was very successful. But as a company commander, where I had four squads as a platoon leader, as a company commander I had four companies– Excuse me, I had four platoons as a company commander. So,  a company command was four times as big as a platoon command.

Ed:  Did you ever lose any of the individuals you commanded?

Joseph: I did in my first year as a platoon leader where they did the documentary and so forth. In my entire tour there, I lost one person, and it was due to an accident that occurred among the soldiers in the platoon. During my second tour as the platoon leader in Cambodia where we were in a really huge fight as they were trying to protect their caches of weapons and ammunition and food, I lost three people there.

Ed:  How did you handle that, intellectually?

Joseph: It’s very, very difficult and physically having to retrieve those young men and get them back to their families at home was a difficult situation. On the other hand, as late as last year, I had the sisters of one of those young men reach out to me and say, “My brother back in 1970 was killed. You made sure his body was retrieved and sent home. I will always appreciate that on your behalf. Thank you, thank you, thank you.”

Ed:  It seems to me, that you’re conferring creating some qualitative benefits. We’ll get into the money side, the quantitative, but the qualitative benefits, the character, the building of character. What you did up until then was encapsulated in the documentary, The Anderson Platoon, which has been shown in 20 countries, received an Oscar in the best documentary film of 1967. You had this group following you for, what, six weeks? Tell me more about that.

Joseph: I arrived in Vietnam in July of 1966, again, a year after graduation. I had been in my first big action where I won my first Silver Star. A French crew from Paris came to Vietnam to see what the American soldiers were about, and that the French had been in Vietnam in the ’50s. They traveled around, visited the marines, visited the demilitarized zone, and others. Finally settled on my organization, the 1st Cavalry division, and settled on the 1st Brigade of the 1st cavalry division because we had helicopters and the air mobile concept, which was new in combat with helicopter air assault. And that’s where those 11 Air medals came from.

I had taken French at the academy. I was probably the only African American around. I had just been in this high visible, high-profile combat action. For whatever the reason, the command assigned them to me. I wasn’t happy about it. I didn’t know who they were, didn’t know if they were going to make mistakes and get me and my people hurt. As it turns out, they were absolutely very, very qualified and capable, had done other kinds of challenging tasks and responsibilities in their careers, and actually became a morale component for the organization, et cetera.

To wrap it all up, we became lifetime friends, particularly the producer, Pierre Schoendoerffer. He came back to America 20 years later, rounded up as many of the platoon members as he could find, brought them to Detroit to do a reunion with me, and did another documentary called Reminiscent. Some of the platoon and myself visited him in Paris. We have become lifetime friends. He just died three or four years ago.

Ed:  They followed you for six weeks. I’ve seen the documentary.  And all I can tell you is; I can’t imagine having to walk three feet with the machete cutting down the growth in front of me and the wetness and the– What was it like? You slept on a hammock, not on the ground course, but what was it like on a day-to-day basis? What did you eat? Amazing. Could you live that for me?

Joseph: Sure. Again, one of the advantages that we had was the helicopters. With the helicopters, we were provided changes of clothing, a hot meal occasionally. Mail was delivered to us in the field from our families. When we were out on search missions and so forth, we were walking through the jungle, making sure that we didn’t get ambushed looking forward to engage with the Viet Cong, and so forth.

The terrain was very thick on occasion. Certainly, hilly up and down. Sometimes when it rained, you got totally soaked, went to bed in your hammock, dried out overnight. If it still raining next morning, you got out of your hammock and moved on and was soaked again. The meals on occasion when a helicopter would come in, might be a hot meal, but often than not, you’d build a little fire and heat up your C-rations that were in your can that you were carrying on your back.

Ed:  How long did this last?

Joseph: I was a platoon leader. I was in that role for about seven months, et cetera. We would go out in the field for two, three, sometimes four weeks at a time, come back into base camp, get a shower, maybe get to the store to pick up some treats and snacks, and so forth, then you’d go back out for another two, three weeks. That would go on for the seven months that I was a platoon leader. For those individual soldiers, it would go on for their entire year until they went home.

Ed:  Getting back to the video, the movie, there was a major combat or fight scene where you were engaged and took on a battalion, and that’s where you won your first silver star. You had to go in and rescue and attack platoon that had been ambushed and had to fight off the enemy and rescue them. There were four out of 26 that prevailed. Is those numbers correct or not sure?

Joseph: Yes. We were contacted and told that their platoon had been ambushed, landing in helicopters, and for us to go reach them and rescue them. We were about 1,000 kilometers. That’s the measurement they use over there, which is more than yards, 1,000 kilometers away from them. We marched toward their direction. I thought I was supposed to stop at night, which I always did, and called and told the headquarters where I was for the night, and they said, “Oh, no, you’ve got to keep moving all night,” which we never did and was extremely dangerous.

We moved the rest of the night, got to the spot. Of course, there’s no GPS out there. You’re navigating by land characteristics and a compass. When you get to a stream and you find that on your map and you’ll know where you are, et cetera, et cetera. We got to the location of the ambush, and it was still dark, and we surprised them and they surprised us, and the fight began.

I put my platoon in a perimeter and we fought on the rest of the night and into the next day. I was keeping flare ships overhead to keep the area lighted. I was calling it our artillery and other gunfire, and we ran the battalion off. The next morning when daylight broke, and we began to look around. We found of the 24 people that landed, four were still alive, and we helped them to their base camp.

Ed:  Joe, what went on in your mind then? You’re near death. I’m told that there’s no such thing as an atheist in a foxhole. You’re near death and you’re thinking, “Wait a minute, did I bargain for this? How did I happen to get into this? What am I doing?” Any reservations about where you were and how you got there?

Joseph: This is where West Point comes in. That’s what I’m trained to do. When that fight started, I didn’t think about me. I thought about what I was going to do to keep this platoon alive. I did. I never experienced fear because I didn’t have time to think about what was going on. I was keeping that flare ship overhead. I was keeping my troops safe. I was calling in artillery. All of those things are what I was trained to do, and we did it well.

Ed:  I think it’s a little different than when you were at West Point, you were also quite a singer. You headed up the choir in the Glee Club. Is that fair? Joe, I hear you were this artist who played the sax a little bit in your prior life but all of a sudden, you’re this vocalist and now you’re in the middle of hell if you will. Yet it was just a job. You got to do it.

Joseph: It is what it is.

Ed:  That’s right. This is what I bargained for and trained for. Do you ever think where’s this going? What’s going to happen to me next? I’m going to live. I’m going to die. Am I going to go into business? I’m going to go retire. Do you ever think of the future or just the past or just the present?

Joseph: At that moment it was all about the present. It was all about making sure my troops were doing what they were doing. We fought a long time. We were just about out of ammunition. I had them fixed bayonets in case we were going to get in a hand to hand fight. They chose to run rather than attack us. We came out of it just fine with one individual having a slight injury to his buttocks with a bullet grazing his buttock. None of the rest of my platoon was hurt. We retrieved those 20 bodies and four live soldiers that had landed there and got ambushed.

Ed:  13 years, and then after your second tour, graduate school, UCLA in Southern California, back to West Point, taught political science and comparative government. You became an academic. How did you address that change and the absence of stress and pressure?

Joseph: It’s a different kind of pressure. You have a classroom full of students who you have the responsibility to teach, and you have to have a good academic program prepared for them every day. That’s my responsibility and job and that’s what I did. I liked the experience of teaching at West Point. The two years that I spent at UCLA, getting a couple of master’s degrees. All of that was part of my personal growth and development beyond being a combat leader.

That’s what you want to be is a well-rounded individual. Whatever responsibility you take on and teaching was that responsibility at the Academy. A special characteristic of that experience when I was at the Academy there were no African American members of the staff. There were no minorities or African American. Going back in teaching some 10 years later that was a change that I was part of.

That’s kind of been the pattern of my life, whether it’s at the military academy, at corporate America, at business ownership, serving on boards, et cetera. That was a good experience from that perspective. Also being there to be a mentor and role model to those African American cadets different than my experience where there was no such thing.

Ed:  Joe, I’m told Man likes to somehow achieve immortality. It seems to me that teaching is a form of immortality. Vietnam with your leadership skills is a form of immortality. In other words, your vision lives on through the lives of those that you taught or that you fought with and to their descendants. Did you ever think of the greater picture that you’re part of is you may be living a very long time after your death? Did it ever occur to you?

Joseph: Not to the degree that you’re talking about in those circumstances and so forth. It certainly has been the case in my current experience in responsibility as a business owner and entrepreneur and creating wealth in the Black community. We can talk about that when you’re ready.

Ed:  I will. But I want to focus on this because I think you are understating your achievements. We’ll get into the money that you made or are making with TAG Holdings, but I’m thinking about the greater gift. I’m not sure that you appreciate that part of your experiences, the teaching. You’re leaving a little of you in each of your students and their descendants and likewise and the battlefield. You’re leaving a little of you in each of the individuals you commanded and their descendants, but yet it doesn’t seem to be important to you. Am I missing something?

Joseph: Again, the point I pointed out to you that was important to me is that those minority cadets and even the White cadets who had not ever had a Black teacher or professor raised in America is a never-ending challenge. The contribution that I could make as a professor at the academy where those Black cadets could say now, I understand what it means to be an officer in the Army. I did not have that opportunity when I was a cadet. That’s the kind of contribution and legacy that was of significance to me more than teaching a class on political science.

Ed:  That view changed now, or do you feel the same way?

Joseph: Raised in America, there is a never-ending challenge. That kind of overlays everything I’ve done and everything that I will experience.

Ed:  Let’s turn to the White House. Your experience first the selection process. It was pretty difficult. Many were called but few were chosen, it seems like. Is that fair? You served two years with the–

Joseph: It’s a one-year selection process. What it’s about is a fellow named John Gardner back in the mid-’60s wanted to create an opportunity for individuals in mid-career to come into Washington and had that experience at the highest level. So, that when they were thinking about when they were at lunch or some discussion or having a beer and they said what the heck’s going on with those dummies in Washington? They will have been there and could answer the question.

He started this program called the White House Fellows with President Johnson. They select 10, 12, 14 men or women from all walks of life except the civil service of the government. The military could participate which I did. Academicians, people from corporate or late life, ministers, whatever the case come into Washington, spend the year reporting directly to a cabinet officer.

I reported to the Secretary of Commerce. You will have that experience, learn what’s going on in the government and then go back to the environment from which you came and share that experience with those around you. That’s what the White House Fellow program was designed to do. I did that for a year after one of my military schools, the Command & General Staff College at Fort Leavenworth, Kansas.

Ed:  You were there. You applied for and you won a second year from what I understand, but maybe I’m incorrect.

Joseph: You’re correct. I stayed a second year in the second of commerce and in the projects that we’re working on in terms of international trades. She and I went to Saudi Arabia together. I was also working on some of the activities in the Office of Minority Business Enterprise, et cetera. She asked me to stay on another year.

As I was looking at my career and the future, I had been recruited by General Motors and Ford and I made the decision to stay on for her with another year as I made my transition to corporate America. That’s how I happened to stay a second year. She wanted me to continue helping her with some of the projects she was working on.

Ed:  Any other African Americans serving in that capacity?

Joseph: Other 10 or 12 or 14. It’s quite normal to have three or four in each class, two or three in each class. It depends on the particular class. The class that I just looked at this coming week, that’s just been elected. I think there were three African Americans in that class of probably 13 or 14 people.

Ed:  I understand that one of the functions was to meet with US Supreme Court justices, congress persons, leaders, union leaders, et cetera. In other words, people who have made a difference in the community and in their lives. Is that what went on there? This was an opportunity to meet interesting people and hopefully, some of it would rub off. Is that fair?

Joseph: More than anything else, it was designed to help a mid-level executive at General Motors, or mid-level executive at Cummins Engine, or mid-level executive in Caterpillar, for example, areas that’s around your world to go into the White House Fellow program, spend a year in the Department of Defense, the Department of Commerce, Department of Transportation, department of whatever. During that years’ experience,  have the experience of working with a cabinet officer but also have the experience of having breakfast or lunch with Supreme Court justices, the President or Vice President, corporate executives, civil rights leaders, and so forth.

One of my experiences, was having lunch with Henry Ford. When he was a guest speaker, I sat next to him. I didn’t know anything about the auto industry. I was a major in the Army. Having that exposure to somebody like that is what the White House Fellow experience is all about. You also take foreign trips. I our group went to Panama to take a review of the issues around the Panama Canal. It’s an absolutely fabulous experience.

Ed:  Joe, meeting these people that have attained superior status, if you will, or accomplished human beings, any common denominator?

Joseph: I want to say leadership in their fields of endeavor but some of them are more about particular talents and/or skills. They may or may not have the leadership, but they put good people around them. That’s an act of leadership, et cetera. A bigger vision, I think, would be a common denominator of all of those people.

Ed:  What about humility? Was there something constant about these? They didn’t have to prove anything to anyone. Was this trait of humility? “I’m okay, you’re okay. Let’s have lunch,” or is it something, “Hey, I’m special. You’re not.”?

Joseph: I would absolutely not say that there was never anybody that had an ego or thought he or she was special, but I think, to your point, more often than not, they’re there to serve. They’re there to make a difference. Part of that is appreciating that they can get things done through people for the betterment of the country.

Ed:  I understand that. They’re driven but I’m addressing it in a little different fashion. While I’ve not had the experiences that you’ve enjoyed, and I think enjoyed is a fair characterization, in retrospect, dangerous but you’ve enjoyed them, some dangerous, is that I found that people that have achieved success, whether it’s making money, whether it’s teaching, whether it’s writing books, they all seem to be very ordinary people. You could talk to them in a way that was very engaging but maybe that isn’t the case with some of those that you met.

Joseph: No, I would say that that’s the case with many of them. I just don’t dare say that was the case with all of them.

Ed:  100% is interesting, mathematically, but I don’t think it works other than that in math.

Joseph: Exactly.

Ed:  Let’s turn to General Motors. You were there, seems to me, for 13 years. We’ve got 13 years in the service. 13 years with General Motors. Is there something about the number of years of 13 that was your guidepost? You were with GM for 13 years, is that right?

Joseph: That is correct. What I would say is I am always on a learning curve and personal growth and development. The 13 years that I’d spent at General Motors in that timeframe from 1979, 1980, until 1992, and so forth, was beginning to experience its challenges as an organization in competition with the Japanese companies. As I was working there and ever-broadening experiences and responsibilities, what I’ve come to know about myself is when the personal growth development challenge is not to my expectations, desires, or needs, then I’m open to other opportunities.

About that time in General Motors with reorganization after reorganization, et cetera, I found myself open to other opportunities. They presented themselves and I took them and moved on from General Motors.

Ed:  I’m taking the transition from virtually no economic benefit but merely, that’s an understatement, serving your country to all of a sudden in a corporate environment with us, I’d say a relatively significant W2 bonuses, stock options, et cetera. How did you handle that transition from essentially no money to a fair amount of money?

Joseph: Quite literally, I wasn’t high enough in the organization to get the big bucks and just to be relatively transparent, the money that I was making in the Army, including benefits, healthcare, commissary, PX, and so forth, and the money that I hired into General Motors for as an executive in training and development and so forth, it wasn’t like I was making two or three times the more money. It was not that lucrative.

As I stayed and continued to grow in the organization, those things began to come. I could buy the nice cars because I was getting them through General Motors on the corporate executive plan and so forth and so on. Wealth was not in place at that level. I would characterize it as lifestyle. My dad had a job. He went to work every day and came home, and he fed his family and so forth and so on. I was getting to the point where I had lifestyle to take the nice vacations, have the extra car. I hadn’t bought a second home or anything like that yet, but those things were coming with the increased level of income and compensation and benefits as a corporate executive in General Motors.

Ed:  You were plant manager in ’81 to ’84 and then you went off to Harvard Business School and came back.

Joseph: Yes.

Ed:  General Motors, I take it, assisted with tuition, maybe perhaps paid it.

Joseph: They paid for it. It was part of their executive development program just like I had a number of schools for development in the Army, General Motors sent me to the Advanced Management Program at Harvard for more executive development as a corporate executive in General Motors.

Ed:  It seems to me that with your math background, and that’s the significant part of your CV, that I think has taught you to think and to work with numbers. That basic attribute made it easy for you in going to Harvard. It’s an intense MBA program but you could think and reason with the best of them. Is that fair?

Joseph: Yes. I think Harvard was much more about executive development, strategy development, teaching you how to think at that level, and in that way as opposed to how do you get a product out the door? What’s your vision? What’s the marketing strategy? How do you make a business successful? That’s what Harvard was more about than product engineering or manufacturing.

Ed:  I come away with a math, finance, numbers background. You can attack any problem. You break it down and you can solve it whether it’s what you’ve just suggested or whether it’s operating a Dairy Queen, or whether it’s balancing your checkbook, the math background permits, when coupled with your leadership skills, suggest that your next tour of duty, I’ll call it, is in private equity with TAG Holdings. That transition from being an employee, although a significant executive, to all of a sudden being the boss in a private equity setting. The difference. Joe?

Joseph: I think it’s a mischaracterization to call it private equity. I would call it entrepreneurship. Private equity suggests a finance vehicle of funds to buy companies, grow them, develop them and sell them. That’s what private equity is about. My scenario was more akin to owning and operating these businesses and creating opportunities for me and my employees, particularly my management team to be successful, if possible, create wealth, et cetera. Private equity is a different ball game than entrepreneurship and business ownership.

Ed:  No, I understand that. It seems to me that is there an ultimate strategy to keep these businesses or to dispose of them? I’m not in the three to five-year turnaround sense that the private equity that I’m familiar with uses. Not a hedge fund, which is a whole different characterization, but the private equity typically is the three to five years, as you suggest. This group TAG Holdings was designed to grow their businesses, to provide the opportunities but is there an exit strategy or do you have to wait till you die? What goes on? How do you recapture this wealth?

Joseph: Well, and you’ve nailed it. I’m about owning and operating these businesses, and I’ve kept some of them six years, one of them 10 years, and so forth. The exit strategy that I have created. I think is unique to me is that I put management in place that can operate these businesses and ultimately acquire them from me and create wealth for themselves. Most of my companies have been certified as minority-owned businesses or veteran-owned businesses, which is a goal and objective of the automobile industry in particular.

Which has led more than others, but other industries do this also is that to create opportunities for diverse individuals, meaning Hispanics, African Americans, Native Americans, women, veterans et cetera. All to own businesses, to try to have them come up to and be on a level with the average White male that owns businesses and creates wealth in our country.

I’ve owned and operated some 15 companies since 1994. In many of those instances those companies have been operated by minorities, African Americans primarily. When they have the motivation, wherewithal financial and personal to buy those companies. They can acquire those companies from me, at market value from me and my investors because I’ve had investors in most of the companies. Then they can take those companies and operate them for themselves and create wealth themselves. That’s the exit strategy that I have used, creating wealth and opportunity for other minorities.

Ed:  I understand that. There is a strategy in place. The idea is surround yourself with people that are skillful. I can recall my father saying to me, “Eddie, the secret of any success enjoyed by any human beings is the key is surrounding yourself with people that are brighter. While I love you, Eddie, for you, that’s not going to be difficult.”

Joseph: Yes.

Ed:  The idea is for you to identify these people that are going to succeed. You have to have some attributes that you must recognize on the group of individuals that you have given this opportunity to own the business and grow it and buy it from you. There’s got to be something that you see in them, color of eyes, passion, what? How do you identify these successors that are going to return value to you?

Joseph: It’s about their capacity to learn and grow. I hire people that were typically looking for the opportunity to run something like I already was doing. They would run it for me day to day, learn, grow and develop it in that mode, and then ultimately own it for themselves, et cetera. There’s seven individuals that have come through TAG Holdings that are now owning and operating their own companies. The smallest being about $500,000 in revenue, the largest being a billion, $200,000 in revenue.

Ed:  You found seven Joe’s? Is that fair?

Joseph: I found seven individuals that were of a mind to grow and develop in TAG Holdings under Joe’s leadership and could create the financial wherewithal to acquire these businesses to pay me and the investors, as they went on their way.

Ed:  They had to have the passion; they already had the skill.

Joseph: All of that is absolutely there. Some of that skill is learned, that passion is what they’ve–and some of them come in not knowing what it’s all about, but seeing it and then gaining the passion to do it for themselves is not unusual. I didn’t know what it was about to run a manufacturing operation. I didn’t know what it was like to be an entrepreneur.

Coming out of General Motors where I had 7,000 employees and all the resources that General Motors had, I had no clue what it was like to be an entrepreneur where because I never had banking relationships in General Motors. All of those things are learned. What I’m saying to you as I learned them, I created the opportunity for individuals to learn many of those same things in TAG Holdings that they did not learn in General Motors like I did.

Ed:  Is it fair to say that these individuals had the passion somehow buried within them and you helped unearth it and develop it?

Joseph: Buried is maybe the proper word, and that they didn’t come work for me with the passion to become a business owner, but seeing it, being exposed to it, feeling it, willing to take the risk and that’s a big thing. Entrepreneurship is not for everybody because the risks are profound in terms of the well-being of your family, your personal lifestyle, and so forth. That passion then drives them to be willing to do that, et cetera. Their passion may have been awakened in them.

Ed:  Well, that’s my view. It seems to me that from what I understand, those that I’ve known that have enjoyed similar success as has occurred with you seem to be able to identify individuals that have some desire, some passion to overcome adversity and to assume risk. I’m not talking about stock market investments where you have virtually no control over what’s going on, but the ability to leverage to not only make a payroll but to borrow money to make a payroll is what perhaps it’s all about. I can be all wet and certainly, I’m not doing what you’re doing, nor could I. Joe, any question I haven’t asked you that you think I should have asked you?

Joseph: You’ve done very well. I appreciate it and hope I’ve answered the questions and shared insights with people that are going to listen to your podcast. Knowing you probably will have another one down the road, and that’s fine.

Ed:  Yes. I’d like to ask other questions. I just haven’t thought of them because there’s so much to cover. The bottom line is you’ve been around a long time, you’ve had a lot of life experiences.

You journeyed from Topeka, Kansas to discrimination, to all of a sudden being on the opposite end of the spectrum where you don’t have to worry about food on the table. You don’t have to worry about certain things that you did concern yourself with early on and let alone worry about not being shot at is something that not too many people experience. That had to make you– That has had in large part made you what you are. That’s Ed’s view but then again, I must tell you, the only time I’ve ever been wrong is when I thought I was.

Joseph: I hear that and understand that, and I think you’ve got a pretty good perspective on things too. Thanks for letting me be part of this effort.

Ed:  It’s my privilege. Joe, talk to you again. Best regards.

Joseph: All right, take care now.

Ed:  Bye.

Joseph: Bye-bye.

Thank you for listening to Money Talk. Please join us again and do check out our previous Money Talk topics.

 

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