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.
00:11:02 · David Senra
[00:11:02] S0: I wanna tell you about the presenting sponsor of this podcast, Ramp. I have been reading a lot about SpaceX lately. SpaceX is one of the most valuable businesses in the world. And one of the main themes in the history of SpaceX is constantly attacking and questioning your cost. Ramp helps many of the most innovative businesses in the world do exactly that. The median company running on Ramp cuts their expenses by 5%. And one thing SpaceX has demonstrated is that a religious dedication to controlling costs can help actually increase revenue because you can pursue opportunities you couldn't otherwise. And we see that in the ramp data too. The median company running on ramp also grows their revenue by 16%. So when you're running your business on Ramp and your competitors are not, you have a massive competitive advantage that compounds over time. Ramp is the only platform designed to make your finance team faster and happier. Many of the top founders and CEOs I know run their business on Ramp. I run my business on Ramp and you should too. Go to ramp.com to learn how they can help your business save time, save money, and grow revenue. That is ramp.com. I found one of my all time favorite quotes when I was reading the book Zero to One. The quote says, the single most powerful pattern I have noticed is that successful people find value in unexpected places. And they do this by thinking about business from first principles instead of formulas. That is exactly what AppLovin has done with their advertising platform. Applovin connects you with over a billion potential new customers in mobile games. Applovin allows you to capture undivided attention. Applovin ads are full screen videos that are watched for an average of thirty five seconds. That is retention that blows other ad platforms out of the water. And you can launch on Applovin in minutes. You set the goal and Applovin achieves it. No complex setup, no expertise needed. And Applovin scales quickly. They can put your ads in front of over a billion potential customers. Other businesses have seen immediate results scaled to hundreds of thousands of dollars of spend per day and increase their revenue by millions. So you want to get started quickly before all of your competitors are on Applovin. And you can do that by going to applovin.com. That's applovin.com.
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