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?
00:08:56 · David Senra, Kenn Ricci
[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? [00:09:00] S1: Well, yes, pretty much so because we gifted shares of a family limited partnership when they were very young. Did you get [00:09:08] S0: this idea from Sam Walton? No. Uh-uh. You know, that's how Sam Walton avoided a lot of... He didn't do it to avoid estate tax. Yeah. He'd wind up... He's like, well, if you want to avoid estate tax, you give It your kids the asset it [00:09:19] S1: appreciates. It's so logical. The crazy thing is he did this, [00:09:23] S0: His father-in-law gave him the idea. I've read every single book on Sam Walton. And his father-in-law gave him the idea. They did this when the value of Sam Walton's company was like, I think the shares that he gave to his four kids were $5,000 each. Ditto.
00:09:36 · Kenn Ricci
[00:09:36] S1: Okay. I started the family limited partnership in 1990. I had my first child in 1995. So I have the vision of what it's gonna do five years before it happens. Right? And as soon as I could, as soon as I could, I gifted chairs. When they were born, I gifted. It's a family limited partnership. So the general partner, which is me, still can, you know, I have all the flexibility in the world to make distributions. It's a phenomenal vehicle. So Walton had it right. It's a great vehicle. So they're not created equal. I want to watch them happy. I want to watch them use them. But also I want to guide them. I want to be here alive. And they're making stupid decisions with their money or making good decisions with their money. Made stupid and I've made bad decisions with money too. But so why can't I be the one to guide them? Otherwise, they still love me when I'm dead, they tend to love you more when you're dead. But in any case, assuming they still love me, well, they're going to go, well, what would dad have done? Well, isn't it better to like be here alive when they ask you, what should I do, dad? You know, that's the foundation of it. So I think sometimes we want to rule from the grave. You have this trust environment that's there. And then if this is going to spoil your kids, then you really weren't that good of a parent. If that was the one thing that did it, they couldn't handle this. Or maybe the alternative is it's all the more reason to give it to them when they're alive so you can guide them through it, Right? As opposed to when they're dead and you can't do anything... When you're dead and you can't do anything about it.