00:13:11 · David Senra
Have you seen any downsides to this decision?
00:13:15 · Kenn Ricci
[00:13:15] S1: Not one. Not one. In fact, I've seen many things I didn't really... I didn't think would happen. So for instance, I asked them... Go... Now remember, this is going back. When they're young, I started talking to them about money. Now at five years old, six years old, now we're we're not talking about tax effective or compounding interest. But what I taught them early on was giving. So our early family meetings were all about who should we give money to and why. My daughter loved animals. My son loved Catholicism. And my youngest son, I remember the first time we were giving, was maybe six years old, he always wanted to give it to Disney. And I was like, well, Austin Disney's not really a non for profit like They're doing okay. They have their own methodology. So I taught them first to give. Then before we started really diving into the estate, and I really went into that when the youngest one was around 16, where we really started going through, like every year we go through a spreadsheet, where's the money, how does it transfer? Who has control of it? Where's the bank? Like all the stuff you need to know, everything. But before we did that, we did a personality test and everybody reported on their personality because kids are different. Who thinks left brain? Who thinks right brain? So I wanted the kids to understand how they could get along. So I started with that. So then we started talking about money, how it transfers, like what we would do with it. Two surprising things. Number one is that it creates this trust. And I this amazingly trusting group. Now the kids in the group of five, my wife and I and the three children, they report, they show us their estate and what they spent money on. And we share this. How old are the kids now? So 37, 31, and 25.
00:15:01 · David Senra, Kenn Ricci
[00:15:01] S0: Okay. [00:15:02] S1: Yeah. Okay. So it's been going on But for a the other thing, like I, you know, mentioned I'm accidentally wealthy. You have to realize that even when we were talking about this, we weren't talking about it, that the volume we're talking about. Say, I mean, my personal net worth has accelerated in the last six years, along with Flexjet, which is the asset I own and, you know, one of largest assets I own and protect. [00:15:25] S0: One of, it's gotta be the largest asset [00:15:27] S1: you Well, it's the largest one. Okay. [00:15:29] S0: Else you got that I don't know about? [00:15:30] S1: Well, I mean, always say I'm an inch wide and a mile deep. I've made a lot of investments only in aviation. I probably know more about the area of aviation. I've invested in, I own SimCom, which I sold to CAE. I own what is today Atlantic Aviation. [00:15:45] S0: Hold on, go. This is exactly, so I wanna start talking about the business, because I think I understand what you did on, with your kids and why you did it. And I think, again, anybody who's wealthy has to think through these things. Think discussing them openly is a service to other people. [00:15:57] S1: Oh, I'm sorry. Let me finish what I learned. Go for Okay. So number one, this amazing trust that they got amongst themselves, right? They started investigating and reading about biographies and families that blew it. And they came to realize that the third transfer of wealth, the third generation's a tough one. So they've started to talk
00:15:57 · Kenn Ricci, David Senra
[00:15:57] S1: Oh, I'm sorry. Let me finish what I learned. Go for Okay. So number one, this amazing trust that they got amongst themselves, right? They started investigating and reading about biographies and families that blew it. And they came to realize that the third transfer of wealth, the third generation's a tough one. So they've started to talk [00:16:14] S0: Shared sleeves to shared sleeves in three generations. This is something very durable throughout human history. [00:16:19] S1: They've come together to talk about the next passing of wealth and generational. And two things that they've come up in the last year. One is they decided not to include spouses in these meetings. They decided that each one of them, two of them have spouses, one doesn't. They decided in these meetings that each one of them will decide how to share financial information in their own family. That this isn't a group share. This is us five, and we've been doing this for ten years, twelve years. And it's not something, we're not just not going to toss people into [00:16:48] S0: the middle of it because we don't
00:16:48 · David Senra, Kenn Ricci
[00:16:48] S0: the middle of it because we don't [00:16:49] S1: know their personalities. We didn't have ten, twelve years of grooming to get them to this point. So that was number one. Number two was when they look at generational wealth transfer and why families come apart. One of the things that happens other than they all feel like they weren't treated equal, they're mad at the patriarch for not treating them all equal, which we've gotten over. But the other thing that happens is one of them does really well, takes the money and makes a great investment. And the other ones do less. And then there becomes a little jealousy amongst them. So they decided, they came to the idea that any investments they all make, they're gonna share. And the person who has the investment- [00:17:27] S0: The three kids. [00:17:28] S1: The three kids. Wow. [00:17:29] S0: The person [00:17:29] S1: that has the investment can put 60% of it in, but has to offer, but not required, 20% to each of the other siblings. And they can participate or not, thereby alleviating the opportunity for them to be jealous. Look, I gave you the opportunity to come in, you came in and you didn't, or we share the upside. That was their idea, not my idea. [00:17:49] S0: That's really interesting. Okay. So let's go to the source of the wealth. You were a pilot. Okay. Take me back to like, first of all, how old were you even learning how to fly planes?
00:17:57 · Kenn Ricci
[00:17:57] S1: You talked about my upbringing with my parents a little bit. My dad was a government employee and I went to a Jesuit high school, St. Ignatius, and they sent, at the time in the 70s, they sent 30 people to Notre Dame. They moved them right from there to Notre Dame. And I loved it. I wanted to go there. And I was, I got admitted and then I'm going up for a visit. And I grew up in a, you know, houses have two by fours, our heads one by twos. So I could hear my parents, I'm an only child, and I could hear my parents talking the night before I'm going to Notre Dame and they say, you have to tell him we shouldn't let him go. Because what if he goes up there and he likes it and then he wants to go and we tell him we can't afford to send him. My mom was saying, I wouldn't let him go. And my dad would go, Let him go. Maybe he doesn't like it. And then he comes back and says, I don't want to go anyhow. And then we don't have to have the subject. But I knew going up for that class visit that didn't matter how much I liked it. I knew it was coming when I came home and said whether I wanted to go or not. So I was inclined not to go and put my parents in a bad position. When I get there, I ask them on campus, is there a, is there financial aid available? Like, well, missed the deadline. This is March, but the Vietnam war, this is 1974. The Vietnam war was still very ripe, very raw. And people did not like the military. And so they said, if you're willing to go into ROTC, they're always short of the candidates. They never fulfilling their quota. So for some reason, don't ask me why, I decided I wanted to be a Navy pilot. Maybe I like the double breasted suits, whatever. So I go down to the ROTC Building and there's no cell phones. And I'm looking through the glass window. I'm trying to read upside down on the phone what number to call on Monday morning to tell them they had a new naval aviator.