00:01:26 · Kenn Ricci, David Senra
[00:01:26] S1: He'd never flown commercial. And so I decided it's a bad way to raise a child. So I decided, his name's Austin. So I said to Austin, we're to go commercial. We were going to Tokyo and we go to the airport, never done this before. We wait in line, check our baggage, you know, wait for our seat to be called, know, sit down, don't take your shoes off. But all the things you do, right? Security and so on. We sit down and finally we're getting ready to take off. And I look over at Austin, I go, Austin, what do you think? He goes, Hey dad, there's people on this plane I don't know. So what he didn't get was like the commercial, the public part of commercial transport. [00:02:06] S0: It's funny that you, we were talking about this right before we started recording. Was like, we gotta hit play because I'm so interested in, like you started talking about, a lot of people that build successful companies like you do. There's this huge doubt in their mind. Like, I'm hugely driven. I have a goal in my life, but like there has to be things that are sacrificed for that goal. Obviously, time with the children is one thing that people do. But one of the things you didn't even know I was going to ask you first was I heard you talk about something that's interesting to me. That is you decided to share your wealth with your kids, not when you die, not when they're older, but right now. You have a very interesting perspective on this. Can you explain what you're doing?
00:02:45 · Kenn Ricci
[00:02:45] S1: I became to believe that we have the wrong perspective on raising children. We seem to think it's about this time we spend with them. So therefore we kind of raise this helicopter mentality, right? We go everywhere with the kids. We don't let them out of our sight anymore. When I was growing up, I left at nine in the morning on my bike and I just had to be home for dinner. Mom didn't chase me around Those Cleveland, Ohio, days are gone. We tend to think that we put time into them, that's the essential. When what we really need to put with them is we need to show them that we trust them and they can trust us. Think about wealth transfer. And if you don't tell your kids about their financial arrangement, you're saying you don't trust them. And I told my wife, you know, when the kids were young, I go, You know, we're thought as parents to talk more about sex than we are about money. And the reality is money will get you in a lot more trouble than sex will. So I had three observations about wealth transfer. One is that there's a whole cottage industry around trust and the management of generational wealth transfer. And there's big money in it. The system wants you to think you have to control wealth because that brings in the trustees, that brings in the law firms and the banking firms and all those necessary professionals to kind of skim away your wealth. Second of all, the Chinese have a saying, son of a lion is a lamb. And so I think people that create a lot of wealth, particularly if it's entrepreneurial wealth, tend to have, they're lions. And lions control things. And so why not buy into the system where you control your children? And so this is why these trusts are set up at 25, they get this, at 35, they get that, at 45, they get this, right? And this is kind of a way to control from the grave or for the patriarch or matriarch or the wealth to still be influential even when they're not around because
00:04:43 · David Senra, Kenn Ricci
[00:04:43] S0: used to being used neutral. [00:04:44] S1: Don't want to be in charge. They want to be important. They don't want to lose their relevancy. And then finally there's the most bizarre one to me is if we tell our kids, if we give our kids wealth and we tell them about wealth and they know about this, they'll become lazy. Well, does that say you were must have been an awful parent. If that was the one thing that flips the switch, you couldn't parent through that. So I decided, A, pass number one, most importantly, I love my children and I love watching them be happy. I want to watch them spend their money. I wanna watch them be wealthy. But most importantly, I wanna help them. I know a little bit about wealth. I knew a little bit about now I'm accidentally wealthy. I didn't get here with some strategic, you know, some monetary plan, financial plan. [00:05:28] S0: Hold on. We're gonna dive deeper on that. But give me some background. Did you grow up middle class, poor? Like what was your childhood like?
00:05:28 · David Senra, Kenn Ricci
[00:05:28] S0: Hold on. We're gonna dive deeper on that. But give me some background. Did you grow up middle class, poor? Like what was your childhood like? [00:05:34] S1: Oh, my father was a grade 12, worked for the US government. He's actually a spy. He had a fascinating background. He came out of World War II, worked in the OSS, worked in naval intelligence, and then had a... In the sixties, early sixties, Bobby Kennedy set up the OCD, the organized crime drive through the Treasury Department, and my dad was a part of that a part of that that group, and that investigated investigated domestic, mostly mafia, mostly organized crime in that era. His undercover name was Richard Dill. Don't get... He was investigating in a lot of cases Italian. He was Italian. They changed his name to Dill. Think of that's the government at work. I remember one time he, by the way, he only, in seventeen years of undercover work, he only worked on three cases. So shows you the time it takes, right? To be in, to work. [00:06:23] S0: So his undercover name was Dick Dill. Richard Dill. [00:06:26] S1: Hey, Dick Dill. Richard's always short of his Yeah, yeah. He was investigating the police chief of Lincoln, Nebraska. [00:06:34] S0: Ties to the mall, we're [00:06:35] S1: gonna I'm seven years old at this He can't I don't know much about it, but I knew that we had to go live in Nebraska for two months because he was there undercover as a family. This was the greatest time of my life. We stayed at a Holiday Inn and had a pool. I'd never been any place where they had like a pool outside
00:06:50 · David Senra, Kenn Ricci
[00:06:50] S0: So your that hits on it. It's like middle class, somewhere around there didn't The have a reason I wanted to start on this, and I'm going to still pull on this thread if you don't mind, is because I have this other podcast called Founders. I read biographies of history, greatest entrepreneurs. People struggle with this all the time. It's in these books for going back two hundred years. They're like, was essentially the the problem is I was the son of a poor man. My kids are the son of a rich man. What do I do here? And so I had the luck of a lifetime to be able to go and have dinner at Charlie Munger's house right before he died, probably six months before he died. And one of the questions I asked him was, because me and him had run, he read, you know, hundreds of biographies. I was doing the same. That was my craft and the main, before I started the show, like all of his books on. And I was just like, what's your answer to that? Like you read the same books I do. What's your answer? You know, he grew up, he wasn't poor, they were in a home all. It was like a normal life. And he goes, You give them the money. And, you know, because mongers are just no bullshit. Straight to everything. And I go, Why? He goes, because what? He goes, They'll hate you if you don't. And he goes, And what's the point of building a relationship and making all this money and then at the end of your life, your kids hate you? And that was his very simple way of looking at this. [00:07:54] S1: Fantastic, fantastic insight, right? Like I said, I want to watch them enjoy their wealth.
00:07:54 · Kenn Ricci, David Senra
[00:07:54] S1: Fantastic, fantastic insight, right? Like I said, I want to watch them enjoy their wealth. [00:07:59] S0: He did say one funny thing though, because somebody, I think I may have asked him a follow-up, either me or somebody asked a follow-up and I go, Yeah, but won't that make them a little less ambitious? He goes, Yes. And in his case, I think he gave a couple 100,000,000 to, I think, nine kids or something like that. And he's like, Yeah, some of them have $250,000,000 and they're not as ambitious. Like, so what? They're different. Every kid is different. [00:08:20] S1: In fact, one of the things we have these family meetings once a year where we talk about wealth. And one of the things I start out with each project, because when I look at why families rip apart over wealth, right? It's really in two areas. One of them is that they feel somehow they're entitled to be equal, but they're not. I have a child that started inheriting wealth twelve years before the youngest one. You don't think his estate, you don't think what he has appreciated at different rates than the youngest one. So I start every meeting, I go, look guys, you're not equal. It doesn't mean I don't love you. It doesn't mean it's just how things are. And the sooner you get over that fact, the happier you'll be. It just what, it wasn't set out that way. [00:08:56] S0: So are you already given all the wealth you're going to give to them or that you keep, how do you, like how do how does work?