Latest / Real Money with Lisa Chastain / Are You Making This ONE MISTAKE That Ruins Your Child's Financial Future? | REAL MONEY

Transcript

Are You Making This ONE MISTAKE That Ruins Your Child's Financial Future? | REAL MONEY · Real Money with Lisa Chastain

• 0:00
  Why shouldn't we be spoiling our kids?
• 0:01
  What is it doing to our kids? If we don't let our kids
• 0:05
  struggle, have that mental fortitude of oh, I can figure
• 0:08
  this out, then where else are they going to learn that you
• 0:11
  have to give them opportunities and that includes opportunities
• 0:15
  to struggle. Welcome to the Real Money
• 0:16
  Podcast. I'm Lisa Chastain, your host,
• 0:18
  and today's a great conversation about how to not spoil your kids
• 0:23
  in the world of wealth. This is a hot topic and today my
• 0:26
  guest Blake Johnson and I dig deep into what it means to 1
• 0:29
  have of a family bank, why that's important, what
• 0:32
  generational mindset is, and how to make sure that you're
• 0:36
  teaching your kids the fundamentals about money.
• 0:39
  I get this question all the time and I'm excited for you to join
• 0:42
  me and Blake in this really fun conversation.
• 0:44
  My guest, Blake Johnson knows this first hand.
• 0:47
  He's not only a partner at Trusted Estate Planning
• 0:50
  Attorneys here in Vegas and in Utah, he's helping families and
• 0:53
  business owners protect what they're building, but he's also
• 0:56
  a dad with two boys and one on the way who is doing some things
• 0:59
  differently, from creating a family bank to raising kids who
• 1:03
  run their own businesses. He talks openly about that to
• 1:06
  early investing. He is disrupting an old
• 1:08
  conversation about money and entitlement.
• 1:11
  And we're excited for you to join us today.
• 1:13
  So let's get started. Welcome to the show.
• 1:22
  What I really want to share with the audience today and for those
• 1:24
  of you who are high income earners and you are on the path
• 1:28
  to wealth or you're here because you want wealth, you've got to
• 1:31
  stick with us because this is a great conversation about
• 1:34
  parenting. This is a great conversation
• 1:36
  about not spoiling your kids. Why we do that, why we why we
• 1:40
  shouldn't do that. So me on the mindset side and
• 1:43
  then Blake from his perspective. And then also we're going to
• 1:45
  talk about family values and the family banking system.
• 1:50
  Are you ready for it, Blake? I'm ready.
• 1:52
  Let's do it. We're going to talk about some
• 1:54
  touchy subjects. And when it comes to money,
• 1:57
  money is one of the most triggering conversations, which
• 2:00
  is why I love it because I love to get in there and poke around
• 2:02
  and, and I'm on the side of the industry, the money industry on
• 2:06
  the mindset side of why do we do what we do?
• 2:08
  And where do these beliefs come from and what, what is
• 2:11
  disrupting in the industry right now?
• 2:13
  And we're having a lot of conversations where we've got
• 2:15
  this old paradigm and money. So the Dave Ramsey camp that is
• 2:20
  older, more boomer mindset and those of us that are younger
• 2:23
  saying, hey, you know what, I don't like this very much.
• 2:25
  I don't want to beat up on people.
• 2:27
  And also, let's get really curious about why we do the
• 2:30
  things that we do versus just taking this advice because some
• 2:34
  old guy lot, for lack of a better term, tells us that we
• 2:36
  have to do it this way. And so I grew up.
• 2:39
  I'm a blue collar girl, Blake. I grew up in Las Vegas, in the
• 2:41
  northwest side of town. And I didn't grow up around
• 2:44
  money. Money was very triggering in my
• 2:46
  family. And the way that wealthy people
• 2:49
  were perceived was also very triggering.
• 2:50
  And the way that wealthy people were talked about was very
• 2:52
  triggering for people. I've had to bust through those
• 2:55
  conversations to be able to attract and generate my own
• 2:58
  wealth because it wasn't always perceived as a good thing.
• 3:01
  And so when I hear you say the word spoiled, I'd love to dig
• 3:04
  into that because before we jumped on, there's this book out
• 3:08
  there, if you haven't read it, it's about life insurance.
• 3:10
  But we're not going to talk about life insurance.
• 3:11
  I want to talk about the mindset that goes behind it between the
• 3:14
  Rockefellers and the Vanderbilt's.
• 3:16
  And this book called What Would the Rockefellers Do?
• 3:18
  Is speaking into exactly what you're talking about Is that
• 3:21
  these spoiled kids aren't becoming the best kind of kids
• 3:26
  or people on the planet, and you're saying, hey, we've got to
• 3:29
  stop spoiling our kids. Why?
• 3:31
  Yeah, there's there's a lot to unpack there.
• 3:33
  I know, let's. Do it so I have my own podcast
• 3:37
  as well and one of my guests on there he talked about how our
• 3:40
  traumas actually carry in our DNA.
• 3:43
  And so we have, you know, from just my grandfather, you know,
• 3:47
  lived through the Great Depression.
• 3:49
  And so there's a lot of scarcity and other stuff that comes from
• 3:53
  that. And so you're right, it's, we
• 3:55
  have to do some work and think through that and, and make sure
• 3:59
  that, you know, we're intentional with what we're
• 4:01
  doing. And we're not just reacting to
• 4:03
  whatever, you know, our, our history was or what we were
• 4:07
  taught about money if it's the wrong thing.
• 4:10
  But I think that's the, the first step.
• 4:12
  And you know, with the Rockefellers, we have the
• 4:18
  Rockefellers and the Vanderbilts, 2 very prominent
• 4:21
  families. And at one time in history, each
• 4:23
  of those individuals were the wealthiest people in the world.
• 4:27
  And still by today's standards, if you made it modern, they
• 4:31
  still would have been the two wealthiest people in the world.
• 4:33
  Maybe Elon's close to to catching up to that.
• 4:36
  But like massive amounts of wealth.
• 4:39
  Well, then how did they handle it?
• 4:41
  You have Vanderbilt who just like, let his kids have money,
• 4:45
  let them throw all these expensive parties, kind of got
• 4:49
  one son in the business and he took over when when Vanderbilt
• 4:53
  died suddenly. But within 3 generations, 3 to 4
• 4:57
  generations, all of his wealth was gone, completely gone.
• 5:01
  And we're talking about the equivalent of hundreds of
• 5:04
  billions of dollars today gone in three generations.
• 5:07
  That's where that term shoe strings to shoe strings in three
• 5:10
  generations come from. Pivot that to the Rockefellers.
• 5:13
  He comes in right after Vanderbilt.
• 5:15
  There's some history there with, you know, them competing against
• 5:18
  each other. But you know, what he did is
• 5:21
  he's like, I don't want this to be gone.
• 5:23
  I want this to be a lasting legacy.
• 5:25
  And so he thought about that. He one got his kids involved in
• 5:29
  his business very early on and he did a lot of estate planning
• 5:32
  and structuring of his entities and trusts and everything else.
• 5:36
  So that way it wasn't ever all just going to one generation.
• 5:40
  And then they were responsible to set up.
• 5:42
  It was set up in a way that they could profit from it if they did
• 5:46
  certain things. But they also could borrow from
• 5:50
  the assets and then go build their own wealth.
• 5:53
  And there was training involved, lots of education around here's
• 5:57
  what we believe is a family, lots of family value talks.
• 6:00
  And they were a very close knit family.
• 6:02
  And so you still had that wealth preserved and and still is
• 6:06
  around to this day. I think what people who come
• 6:09
  from nothing and become successful do is they, they're
• 6:13
  super generous. They're so excited, like, hey, I
• 6:15
  have all this. I want to give my kids
• 6:17
  everything, everything that I didn't have.
• 6:21
  The problem is if you do that, how did you make your wealth?
• 6:24
  How were you successful? It was the struggle.
• 6:28
  It was going through the, the, the times where things were, you
• 6:31
  know, were meager. That's what created you and
• 6:34
  helped you to be successful, to be creative, find, find avenues
• 6:39
  and get around different things. If we don't let our kids have
• 6:43
  those same opportunities, they're never going to develop
• 6:46
  those skills. It's just like being in the
• 6:49
  weight room. If you don't ever lift weights,
• 6:51
  you're not going to get stronger.
• 6:52
  You have to use them. You have to have those
• 6:55
  experiences, that slight breakdown in your muscles for it
• 6:58
  to grow. It's the same thing with
• 7:00
  anything else in our life. If we don't let our kids
• 7:03
  struggle and have that mental fortitude of, oh, I can figure
• 7:07
  this out, then where else are they going to learn that they're
• 7:11
  going to come into something and have no idea what to do because
• 7:14
  they haven't learned along the way.
• 7:16
  They haven't built those muscles.
• 7:17
  And what I was hearing you say when I picture it in my mind,
• 7:20
  talking about the Vanderbilts is Schitt's Creek.
• 7:23
  Yes. They were just lavish and they
• 7:25
  went for it and they had unnecessary things and then they
• 7:29
  lost it all. And then we have the
• 7:30
  Rockefellers who and. The kids attitude about it too
• 7:33
  is exactly the same. Like you know, I think of the
• 7:37
  episode with the write off people.
• 7:39
  You can just write it off. No knowledge of how things
• 7:42
  actually work. Just write it off.
• 7:44
  And yeah, that's true. It's basically free.
• 7:46
  I remember that episode. And so we all get a laugh on it.
• 7:50
  But also, can't we say that quote UN quote, rich people have
• 7:54
  been have that stigma? I remember watching Paris
• 7:58
  Hilton. Paris Hilton and Nikki, I think
• 8:00
  her best friend or whatever. There was a whole show about
• 8:02
  their privileged way of being and how they just had no clue
• 8:06
  how money actually worked. And that's not everybody that
• 8:11
  has money. To your point, you and your
• 8:14
  family are doing it differently. You should check out Blake's
• 8:16
  LinkedIn page. There's a lot of great content
• 8:19
  there about how you're raising your kids and teaching your boys
• 8:21
  and how they do. They still have their apple
• 8:23
  caramel apple business. Yeah, caramel apples are coming
• 8:26
  up soon. We're gearing up for it.
• 8:30
  And so the Rockefellers, to your point, didn't just pass on
• 8:33
  knowledge which that was important to them, but one, they
• 8:35
  made their kids work for it. They could borrow money, but
• 8:38
  they had to pay it back. So nothing was handed to them as
• 8:41
  it would be perceived that some rich families do to their kids
• 8:44
  is they just hand it to them and then they don't appreciate it.
• 8:47
  But that culture is changing. That culture of money is
• 8:49
  changing. And you're having that active
• 8:51
  conversation about why we, we should not be spoiling our kids.
• 8:55
  So let's talk about that. Why shouldn't we be spoiling our
• 8:58
  kids? What is it doing to our kids?
• 9:00
  There is a misconception that, you know, the rich just spoil
• 9:03
  their kids. They're, you know, they hit the
• 9:05
  lottery from being in that family.
• 9:07
  The the reality is there is some truth to that because they're
• 9:11
  exposed to more information, they're exposed to more
• 9:14
  opportunities. And why not?
• 9:17
  Why should we not help our kids? I don't think there's anything
• 9:19
  wrong with that, but it's in the way that we help them.
• 9:22
  If it's just give them everything, that's the wrong
• 9:26
  way. But like, for instance, in in my
• 9:28
  situation, I couldn't have afforded a law firm.
• 9:30
  I couldn't have gone out on my own.
• 9:32
  I couldn't get a loan from a bank.
• 9:34
  So yeah, it was a huge opportunity that someone else
• 9:37
  wouldn't have had if they hadn't been, you know, my dad's son.
• 9:42
  So yes, it's a huge opportunity and there's nothing wrong with
• 9:45
  giving them opportunities. But I still had to work for it.
• 9:49
  I still had to pay them back. I still had to make sure the
• 9:51
  business survived, but it was definitely a big step up than
• 9:55
  than coming in from nothing. And I recognize that.
• 9:59
  So I think that's where we need to, you know, shift our mindset
• 10:03
  of you are still helping your kids immensely by giving them
• 10:07
  opportunities, but we don't want to spoil them.
• 10:10
  My big thing is entitlement that and we, I'm developing a program
• 10:15
  hopefully be out by the time this podcast comes gets
• 10:18
  published, but it's called the entitlement elimination program.
• 10:21
  And it's where I go through and talk about the things I'm doing
• 10:24
  with my kids about how do you teach your kids about money?
• 10:29
  How do you teach your kids about business?
• 10:31
  Making sure they have chores to do.
• 10:34
  Those chores do not get paid for because that's their rent for
• 10:36
  living in my house. They need to do those things.
• 10:39
  And there's all these stats that back it up about how much more
• 10:42
  successful your kids will be if you may do those things with
• 10:46
  them. So it just still comes back to
• 10:48
  that. You have to give them
• 10:49
  opportunities. That includes opportunities to
• 10:52
  struggle, and that's the hardest part because we never want to
• 10:55
  see our kids struggle. We never want to see them hurt,
• 10:58
  but we have to let them be in those situations if we want them
• 11:02
  to actually grow and learn. I agree.
• 11:04
  I totally agree. And coming from a different
• 11:06
  background than you where we knew, we just knew as kids that
• 11:09
  if we wanted anything, no one was giving us anything.
• 11:12
  My, my parents, thankfully for each one of us, we moved out, we
• 11:15
  got a couple $1000, which came from my great aunt.
• 11:18
  So thank you. You know, there was a little leg
• 11:20
  up, but we pretty much knew, Hey, our family, there's not a
• 11:23
  whole lot here other than a lot of love.
• 11:25
  And I'm grateful for that, right.
• 11:26
  So that's one of our, that's one of our generational things that
• 11:29
  my dad is passing down to us is love and connection.
• 11:31
  OK, I digress. So then there there's I talk
• 11:34
  about this in my book, it's called a financial set point.
• 11:38
  We all have our own financial set point.
• 11:41
  What I'm hearing you say is that your financial set point was
• 11:44
  that you didn't struggle, like your family wasn't struggling.
• 11:47
  I don't know your whole family history, but your dad was able
• 11:50
  to say like, hey, I'm going to support you here, but it's not a
• 11:54
  just a, I'm going to give it to you, Blake.
• 11:56
  You have to do certain things in order to earn it.
• 11:58
  And one of those things is you're going to buy me out and
• 12:01
  you're going to make a successful business happen.
• 12:03
  But your financial set point is different than some other
• 12:06
  people's financial set point, right?
• 12:08
  What I see a lot that happens is when someone's financial set
• 12:12
  point is from struggle or poverty and they come into
• 12:16
  money, they have a propensity to reverse model that with their
• 12:20
  kids and give them everything because they didn't have it.
• 12:24
  But that's not necessarily helping your kids either because
• 12:27
  they're not getting that that that patterning, that history of
• 12:31
  you need to work for it. And then all of a sudden they
• 12:33
  wake up at 2223 years old and they're like, what the fuck?
• 12:37
  What? I didn't have to work for this.
• 12:38
  And these are the people that I'm seeing in my office when it
• 12:41
  comes to money mindset, trying to make sense of all of this.
• 12:46
  And what I love about the work that you're doing is you're
• 12:49
  bringing your kids up through being intentional with this is
• 12:52
  how you invest. This is how you read a profit
• 12:55
  and loss statement. So first of all, parents, you
• 12:57
  need to know how to do that yourself.
• 12:59
  But the best thing that you can do is now transfer this into
• 13:02
  your kids worlds. How are you doing this real time
• 13:05
  with your kids? There's a lot that we're doing
• 13:09
  and it takes time. I think the biggest thing is
• 13:11
  starting somewhere with there's so much around.
• 13:14
  We don't talk about money. We money is a taboo topic.
• 13:18
  Why? Why is it such a taboo topic?
• 13:21
  We use it every single day. It's a big part of our life from
• 13:25
  planning. It's what it helps determine
• 13:26
  whether we're going to have a successful marriage or not.
• 13:29
  And so why are we not talking about it?
• 13:32
  And what I found is that the the most successful families that
• 13:35
  have things continue. They talk about money and they
• 13:37
  talk about it a lot. Not in the sense of we have so
• 13:40
  much, we have this, but it's here's how you can utilize money
• 13:44
  correctly. Here's how we're being
• 13:46
  charitable with what we're doing.
• 13:48
  Like you said, a profit and loss statement works.
• 13:51
  My favorite thing is when clients come in and they're
• 13:53
  like, I just don't want my kids to know how how wealthy we are.
• 13:56
  You live in a 20,000 square foot house.
• 13:58
  I'm pretty sure they know. You don't think they?
• 14:02
  Know, are you kidding me? Like, yeah, they probably don't
• 14:04
  know the extent, but they know they know that you're well off
• 14:08
  and instead of you when you hide it, that's where the problems
• 14:13
  create because they're guessing they're creating things in their
• 14:15
  heads about where where things are.
• 14:17
  Whereas if you give them clarity, like, Hey, here's you
• 14:19
  don't have to tell them everything, but here's how I
• 14:23
  make an investment decision. I pulled my kids in on
• 14:25
  investment decisions. One of my my youngest son saved
• 14:28
  me a ton of money because he's like, he asked some questions
• 14:30
  that I was like, that's a good question.
• 14:32
  Went and asked him like, yeah, that does that does sound too
• 14:35
  good to be true. And we didn't invest and it went
• 14:36
  under. So it's like, you know, those
• 14:39
  are the conversations. It's involving them along the
• 14:41
  way. And obviously as their maturity
• 14:43
  level grows, that's when you give them more information.
• 14:46
  I don't tell. I wouldn't tell a 5 year old
• 14:47
  exactly how much money you make and how your investments are.
• 14:51
  It'll be over their head. But then they're going to go to
• 14:53
  their friends and be like friends, so much dollars or
• 14:56
  whatever. But with everything on the
• 14:58
  Internet, people know what your house is worth.
• 14:59
  They'll go look it up on Zillow. The kids do that in class
• 15:02
  because they want to know. So I think it's, you need to
• 15:06
  start sharing and having those open conversations and, you
• 15:09
  know, share what you know and share what you don't know.
• 15:12
  Hey, I don't know the answer to this.
• 15:13
  I'm unsure about this. I, I'm going to meet with my
• 15:16
  financial advisor because he'll know and I can ask those
• 15:18
  questions. Would you like to come along
• 15:20
  and, and be part of that conversation and then make sure
• 15:24
  you're continuously learning as well so that you can pass that
• 15:28
  on? The easiest thing is do you have
• 15:30
  a dinner? Do you guys actually sit down
• 15:32
  for dinner with your family and take the time to have that 30
• 15:35
  minutes together? And then what I do is we, we
• 15:39
  have what's called our high low learned what's our high for the
• 15:41
  day, best moment, What's the low for the day?
• 15:44
  And what did we learn that day? And it can be anything.
• 15:46
  It doesn't have to be what you learned in school.
• 15:48
  It's usually not because they don't remember anything they
• 15:51
  learned in school like, you know, ironically.
• 15:54
  And so I'll use that to be like, particularly like, Hey, I, I
• 15:58
  learned about this investment strategy or this thing because
• 16:01
  I, you know, go to lunch with a lot of financial advisors.
• 16:03
  And so those are the kinds of things I can bring up.
• 16:06
  And then they ask questions about it.
• 16:07
  So it's creating that open communication so they can feel
• 16:10
  comfortable with you, because if they don't get that now, it's
• 16:14
  going to be a lot harder to establish that when they're out
• 16:16
  of the house and they have bigger questions about those
• 16:19
  things. That's right.
• 16:21
  When I'm starting on is like the coaching aspect of it, you're
• 16:25
  really, you're coaching them. You're not giving them a black
• 16:28
  or white. Do this.
• 16:29
  Don't do this. I mean, there's obviously some
• 16:31
  things that that would be with, but yeah, it's more of giving
• 16:35
  them the guidance. Here's my thoughts on it, but
• 16:37
  here's what you can do. So for instance, my son wanted
• 16:41
  an E bike and my wife and I refused to buy anything electric
• 16:45
  for mode of transportation because they have pedal bikes
• 16:50
  and and a push scooter. But he came with a plan for his
• 16:53
  business because he does a lawn mowing business.
• 16:56
  And so he's like, hey, if I get an E bike, I can pull my own
• 16:58
  gear. You guys don't have to drive me
• 16:59
  around to all the gigs. That's a win for me.
• 17:02
  Yeah, I'll finance the bike for that.
• 17:04
  And so we negotiated on that and I was gone the next night after
• 17:10
  he did that was on a word trip. And I guess the crushing weight
• 17:13
  of debt was just on his mind. The very first day he's like, I
• 17:17
  got to send the bike back. I don't know that I'm going to
• 17:19
  be able to make these payments. Just wow.
• 17:22
  And my wife is sitting there like trying to comfort him, but
• 17:24
  inside she's just like, yes, like, because now I know that
• 17:28
  when he turns 18 and can get a credit card, he's not going to
• 17:31
  go blow it on something crazy because he's going to remember
• 17:33
  this. And so, you know, it's, it takes
• 17:37
  time. It's really hard to see him
• 17:39
  struggle or to not get involved or to not make all the
• 17:43
  decisions. But when you have a moment like
• 17:45
  that, the payoff is like, OK, it's working.
• 17:48
  He's learning. He's learning.
• 17:50
  Yeah. I get asked this all the time
• 17:52
  about why we don't teach financials in school.
• 17:55
  And I'm in my own conversation about why I feel like it would
• 17:59
  be more important to do it at home.
• 18:01
  And one of those is that our kids mirror what they see, not
• 18:04
  what they're told. And they can go to school and
• 18:06
  learn whatever. But if it's not being modeled at
• 18:08
  home, they more than likely won't model it themselves, even
• 18:13
  conceptually, right? It's not the school's job to
• 18:16
  teach financial literacy. And you know, maybe some concept
• 18:20
  concepts, but it's really our job as parents.
• 18:22
  So there are there are people who have wealth and you're
• 18:25
  working with people who are wealthy in the estate planning
• 18:29
  realm and wealth management realm.
• 18:31
  And you're having these conversations at a high level.
• 18:33
  But let's talk about the middle class or upper middle class for
• 18:37
  people who maybe weren't necessarily raised around
• 18:40
  wealth, but have money now and they want to start having these
• 18:43
  conversations. Where do they start?
• 18:45
  Because maybe for a lot of people, people aren't talking
• 18:48
  about money because they don't know how.
• 18:50
  And so as a parent, if I wasn't around it for me, I've had my, I
• 18:54
  stepped into the industry to figure this stuff out for
• 18:56
  myself. But where do people, where do
• 18:58
  they go? Who are you following?
• 19:00
  Who should they listen to? First of all, Shameless plug,
• 19:02
  listen to Blake and follow Blake and learn from Blake.
• 19:05
  There's some really cool stuff coming out.
• 19:07
  But where else can they go to increase their own financial
• 19:09
  intelligence and emotional intelligence to then be able to
• 19:13
  model this stuff with their kids?
• 19:14
  There's a lot of resources out there, but it's trying to sift
• 19:17
  through a lot of it. I think the biggest thing is, is
• 19:20
  exposing yourself to a lot of it so that you figure out what
• 19:24
  works for you. Because not everything that I do
• 19:29
  is necessarily going to be right for you and your family.
• 19:32
  You know, yes, there's core principles about having
• 19:35
  emergency savings and, you know, living within your means and
• 19:40
  those kind of things. But outside of that, what
• 19:42
  investments work for, what your personality is.
• 19:46
  It may be real estate, it may be private equity, it may be just
• 19:48
  be stocks and bonds. That's the stuff you have to
• 19:51
  figure out. So I think you got to read, I
• 19:54
  think you talk to multiple financial advisors, talk to if
• 19:59
  you have more successful people in your, you know, circle of
• 20:03
  friends, circle of influence, you know, you do that.
• 20:07
  I don't know that there's necessarily A1 place to start,
• 20:10
  but I think good exposure and then it's kind of a trial and
• 20:14
  error thing. What resonates with you, you
• 20:17
  know, like personally, one of the things I know most people
• 20:19
  just won't agree with me is I don't like retirement accounts.
• 20:22
  It's just something that for some reason that just has never
• 20:25
  stuck with me. And so I don't do that.
• 20:28
  But it doesn't mean it's not bad for somebody else or that it is
• 20:31
  bad for someone else. It's you got to figure out your
• 20:34
  what your financial path looks like.
• 20:36
  I think one of my favorite thing for kids, for teaching kids
• 20:42
  about some of these concepts is there's a show called The Tuttle
• 20:45
  Twins, and it started as a book series and now they have ATV
• 20:48
  series. It's on Angel Guild.
• 20:50
  But they talk a lot about like what is the Federal Reserve and
• 20:54
  what is basic economics and those kind of things so they can
• 20:58
  get a broader picture and then you can watch together, have a
• 21:01
  conversation. So that's.
• 21:03
  One resource that comes to mind. That's great.
• 21:05
  I love that. I've never heard of them before,
• 21:07
  so we'll definitely check them out and put them in the show
• 21:09
  notes. Thanks for that.
• 21:10
  And I agree with you. Just join them where you are,
• 21:13
  watch the show together, have curious conversations together
• 21:18
  and when money can be a place of open, honest conversation versus
• 21:22
  control and fear, because a lot of parents parents you're you're
• 21:25
  parenting out of fear, shift the shift the conversation into open
• 21:29
  honest. I know for my son, I used to not
• 21:33
  so much anymore because he's 17 and doesn't care what I'm doing.
• 21:35
  But when he was younger, I'd be on my laptop, I'd be in my
• 21:38
  spreadsheet, I'd be tracking my money, I'd be paying bills, I'd
• 21:42
  be in my bank account. He's like, we have that much
• 21:44
  money. I'm like, yeah, we do.
• 21:46
  Because I was intentional about not wanting to embed the
• 21:49
  scarcity conversation into him. Like, let's just open it up.
• 21:52
  Let's be honest, let's talk about what it means.
• 21:54
  And I think that's some of the best parenting that we can do.
• 21:57
  I think you got to teach the the value of a dollar.
• 22:00
  If they don't have to work for something, they're not going to
• 22:02
  understand that. But also, if they don't have any
• 22:05
  idea of what you make versus what you know, bills actually
• 22:08
  cost, they go to the grocery store.
• 22:10
  Especially now because it's just swipe a card.
• 22:12
  You don't think about it. You figure out how to pay it
• 22:15
  when you go to here at the end of the month or whatever.
• 22:17
  Versus when I was growing up, my parents got me a checking
• 22:20
  account with a checkbook and my mom would help me balance it at
• 22:23
  the end of every month even though I was just spending on
• 22:25
  dumb fun stuff. Yeah.
• 22:27
  But like that exercise is like, oh, OK, like I've got to put it
• 22:31
  in every time, make sure I have enough in there before I buy
• 22:34
  something. I feel like that was a lot
• 22:36
  easier to for me to learn than just swipe swipe.
• 22:39
  Totally, totally. Yeah.
• 22:40
  Both of our boys have bank accounts.
• 22:42
  My 17 year old bought his own truck, he bought his own car and
• 22:45
  now he's selling his truck and he's getting a new truck and it
• 22:48
  you're right, it's not fun. My husband and I will be sitting
• 22:50
  on the couch at night. My 17 year old would come in
• 22:53
  after work and he's in it. He's in it emotionally, he's
• 22:58
  resisting us and he wants to throw a 17 year old tantrum.
• 23:01
  And we just hold firm. We're like, no, these are
• 23:03
  principles that you must learn now, that we want you to learn
• 23:06
  now. And we're sorry it's hard, but
• 23:09
  this is the time to teach them. So parents, if you get nothing
• 23:11
  else out of this conversation, teach your kids now.
• 23:14
  Join the conversation now. Because of what I know with
• 23:17
  neurolinguistic programming in printing years is before 7
• 23:21
  modeling years is 7 to 14. Now is the time.
• 23:24
  Can we switch? Here's Blake.
• 23:26
  Let's do it. Can you explain to us what a
• 23:29
  family bank really is and how it works?
• 23:32
  So my version of family bank is instead of gifting stuff to your
• 23:38
  kids for what they need, it's you lend them, you know, the
• 23:43
  money to make it happen. So really there's there's three
• 23:46
  different types of ways that you can buy something, you can save
• 23:50
  up for it and pay cash for it. You can finance it or you can
• 23:58
  get a gift to do it right. That's really it.
• 24:01
  Or you get it from someone else. That's how you get things.
• 24:03
  So it's one of those three things which any type of
• 24:06
  scenario you can think of, or I guess maybe the it's gift slash
• 24:10
  rent. Maybe you do that on, you know,
• 24:13
  every interaction with money. That's what you what you do.
• 24:16
  So sometimes the answer may be, hey, work for it.
• 24:18
  I want you to get delayed gratification and pay for it
• 24:21
  upfront. But a situation like this with
• 24:23
  my son where he's trying to make more money for his lawn mowing
• 24:28
  business because he's growing that and also he's trying to
• 24:30
  save up for buying his first car.
• 24:33
  OK, Well, if I make him save up the $600.00 for his E bike,
• 24:37
  that's going to take forever for him to get there and he's not
• 24:39
  going to be able to do as many jobs and, and all that stuff.
• 24:42
  So it makes sense to have it leveraged on top of the fact
• 24:46
  that I want him to learn that concept.
• 24:48
  And so the family bank is nothing more than instead of
• 24:52
  going to a bank, an actual financial institution to lend,
• 24:56
  then you become the bank and you lend it to your kids or your
• 25:01
  nieces and nephews or whoever else that you you want to have
• 25:04
  an impact on. And so it can be as simple as
• 25:07
  that, just like you do it with your kids, direct paperwork.
• 25:11
  That's what it is. What we do is we take that
• 25:13
  concept and we grow it a little bit more with our wealthier
• 25:16
  clients. Now you have just from an estate
• 25:19
  planning breakdown, if you have like super, super high wealth,
• 25:22
  most of the families that are over $100 million in net worth,
• 25:25
  they have what's called their own private family office and
• 25:28
  they do this all the time. They have someone who manages
• 25:32
  all their investments, they lend to their kids, They do all that
• 25:34
  stuff. Most people are not going to get
• 25:36
  to the point where they can afford it.
• 25:38
  And So what we do is we take those concepts and we bring it
• 25:40
  into something where more people can can afford and do some of
• 25:45
  those things. And so we use the trusts and the
• 25:47
  different tools that they have and we bring it into more of a,
• 25:50
  a middle class affordability and create these, these permanent
• 25:54
  structures that allow for the same concept to be perpetuated.
• 25:58
  Now, I don't want to be misunderstood.
• 26:00
  Gifting is still OK. That doesn't mean you can't give
• 26:02
  your kids gifts ever. It's just saying be intentional
• 26:06
  about which things you are doing with that and so you're not just
• 26:10
  gifting everything. You know, as soon as your kid
• 26:12
  turns 16, don't just give them a car, make them earn it.
• 26:17
  Maybe it's OK, I'll buy it, but you're going to make me monthly
• 26:19
  payments over time to help do that.
• 26:22
  Great, that works too. We have a hybrid method where
• 26:26
  we're helping our kids setting up businesses and stuff so they
• 26:28
  can save up now and we'll match whatever they pay, they have
• 26:32
  money saved up for it. So once again comes back to
• 26:34
  what's what works for your family.
• 26:36
  But the basic concept is I'm the bank now instead of an actual
• 26:40
  bank. Love it.
• 26:41
  Which is less. It's cheaper money, you know you
• 26:46
  can borrow it. Quicker access to money, it
• 26:48
  doesn't go in your credit report.
• 26:50
  It, you know, helps. Yeah, you can set the interest
• 26:53
  rates lower than probably what normal are.
• 26:56
  So all those things then. And then like for instance, with
• 26:59
  my dad, he loved being the bank because now he deferred his
• 27:02
  capital gains over that five year period that I paid him
• 27:05
  instead of recognizing it all in one year.
• 27:07
  So it was still to his advantage as well.
• 27:10
  Yeah, and you're helping. You're helping families figure
• 27:13
  out the intricacies of those things.
• 27:16
  What do you do when a kid can't pay you back?
• 27:19
  What happens? Well, so that's, that's the
• 27:21
  beauty of having it be in the family.
• 27:22
  You can, you can be a little bit more merciful.
• 27:25
  You can, you can spread things out.
• 27:27
  You can, you know, delay some of the payments, whatever, but I'd
• 27:32
  still make them figure out a way to do it.
• 27:35
  It might just be okay. I won't charge you interest for
• 27:37
  the next 6 months while you get your stuff figured out or while
• 27:42
  during let's say it's basketball season they're competitive and
• 27:45
  there's no way they can have a job.
• 27:46
  Okay, well we won't have required payments during that
• 27:48
  three month window cuz we still want you to do that, but they
• 27:51
  resume when you can start working again.
• 27:54
  But you do need to hold firm. Now what we do on the trust side
• 27:58
  when we get a little bit bigger loans and what not you, we have
• 28:02
  a third party trustee who's kind of that facilitator.
• 28:04
  So they're the bad guy. Not necessarily mom and dad, but
• 28:08
  there does need to be accountability otherwise it
• 28:10
  won't work. That's right.
• 28:11
  I agree. Yeah.
• 28:12
  If they just know in the back of their head, listen, our
• 28:14
  unconscious mind is not stupid, it's strategic.
• 28:16
  And so they just know in the back of their head that they're
• 28:18
  never going to have to pay it back.
• 28:20
  They're going to behave differently than if they know
• 28:22
  somehow they're going to be held accountable.
• 28:25
  I love that. What are some, what are some of
• 28:27
  the ways that you're teaching your kids to invest?
• 28:29
  So they have their own, they have their own apple, caramel
• 28:33
  apple business. One of your sons it sounds like
• 28:36
  has his own delivery business. What about investing?
• 28:40
  Where can parents go to help their kids?
• 28:41
  One of my favorites is Green Light because it has different
• 28:44
  buckets and helps them different and helps them with cash flow.
• 28:47
  Where are you sending your kids to invest and learn how to
• 28:50
  invest? So another one is tricrew.com.
• 28:55
  They're similar to Green Light. So I just happen to know the
• 28:57
  guys who started it. So I like them.
• 28:59
  It's a very similar platform, OK.
• 29:03
  But I think with investments, it's, you know, starting to have
• 29:07
  them be part of the conversation when you are doing stuff.
• 29:11
  And so like, hey, here's what I'm looking at for investing, or
• 29:14
  here's my financial advisor, have them explain some of the
• 29:17
  stuff. We just actually set up the
• 29:19
  first investment account for my older son because he's just
• 29:22
  looking at he's like, you know, yeah, when I get to be 14 or 15,
• 29:25
  I can get a real consistent job. I can earn more money.
• 29:28
  But he's like, I don't know that I'm going to have enough for the
• 29:30
  car that I want. So how do I grow my money
• 29:32
  faster? And so he's looking at doing
• 29:35
  some index funds, but it initially was just, hey, open it
• 29:38
  up. You get the sign up bonus for
• 29:39
  what you put in there. And it's in a higher interest
• 29:42
  rate than than the checking account he had it in before.
• 29:46
  And so, yeah, I think it's, it's hard.
• 29:49
  Like there's not a, hey, here's how you do it.
• 29:52
  I have some basics in that the program we're coming out with,
• 29:55
  but it's really exposure about what you're doing and then
• 29:59
  letting them make that decision. A great one.
• 30:01
  I know like a lot of financial platforms will have paper
• 30:04
  trading courses where so they can have an account, they're not
• 30:09
  actually trading money, but they can pretend like they're
• 30:11
  investing money. So they get the hang of what
• 30:13
  they're doing and what, what those costs would be for every
• 30:16
  transaction that's traded and, and what the market does.
• 30:19
  And so I'd say do that before they actually invest their
• 30:22
  money. Yeah, that's a great idea.
• 30:24
  They do that in some schools where they have those programs
• 30:26
  and in college and and trading schools actually will have you
• 30:29
  do some of that work before you actually put your money in the
• 30:32
  market. So I love that as a fundamental,
• 30:35
  Very cool. I love what you're doing, Blake.
• 30:38
  I think that this conversation is so important and disruptive
• 30:41
  in the world of money. Why not just open it up?
• 30:44
  Why not just talk about it? Why not address our fears and
• 30:48
  our emotions? I know I'm more on the emotional
• 30:50
  side of money and helping people identify those things.
• 30:52
  But you're you're doing both like you're teaching your kids.
• 30:55
  You've got some very strategic ways that you're doing that.
• 30:58
  I agree with you that spoiling anyone doesn't work over time.
• 31:02
  I know it's a triggering conversation when it comes to
• 31:04
  money, but it's so, so important.
• 31:06
  So thank you for being here today on REAL MONEY.
• 31:08
  Yeah, No, thank you for having me.
• 31:09
  I, I love this topic. I think it's, it's vitally
• 31:12
  important. I think the reason people, you
• 31:15
  know, especially the professionals, is it's easy to
• 31:18
  talk about with the, you know, how much money we can make for
• 31:21
  this person or in my world, how much estate taxes we can save,
• 31:24
  how much money can we pass on the next generation without
• 31:27
  having that taxed or taken away? Because that's a calculable
• 31:30
  100%. This is if we do this, this,
• 31:32
  these conversations don't guarantee anything.
• 31:35
  Even if you do everything that I've talked about with my kids,
• 31:38
  I still don't know if they're going to turn out good.
• 31:40
  You know, they have their agency, they're going to be able
• 31:42
  to make those decisions, you know, so it, it's really hard
• 31:45
  from that perspective because you don't have a guaranteed
• 31:47
  outcome. And it is a lot more work, but I
• 31:51
  think it'd be, it's a lot more worth it to give them that leg
• 31:54
  up and give them that chance to succeed because I'm not always
• 31:57
  going to be there for. I agree.
• 31:59
  And to your point, to the book of, you know, to the point of
• 32:02
  the what would the Rockefellers do?
• 32:04
  And what we're discovering with money is that mindset is
• 32:06
  generational and let's, let's do our best.
• 32:10
  Money may or may not be there. Most legacies are gone within 3
• 32:14
  generations. But if we can couple it with
• 32:16
  mindset, then hopefully what you're teaching them will pass
• 32:20
  down to your grandkids and your great grandkids.
• 32:22
  And how cool would that be? Yeah.
• 32:24
  And that's one of the beauties of the family bank because we
• 32:26
  can set it up so it is multi generational trust can go on for
• 32:30
  hundreds and hundreds of years. Yeah, so cool.
• 32:33
  All right, so I end the show with something more fun so our
• 32:36
  listeners can get to know you more personally.
• 32:39
  Again, check him out on LinkedIn.
• 32:40
  We'll put this all in the show notes that you can get a really
• 32:42
  good feel for the family and the family dynamic.
• 32:44
  And Blake is expecting a baby boy here.
• 32:47
  When is he due? April.
• 32:50
  In April, so one more boy added to the family.
• 32:53
  But we my favorite game to play with kids is this or that or on
• 32:57
  road trips. So we're gonna play this or
• 32:58
  that. Are you ready?
• 32:59
  All right, I like it. All right, pizza night or
• 33:02
  popcorn in a movie? Oh, pizza, I need something more
• 33:07
  filling, okay. Beach house or family farm?
• 33:11
  Beach House. Board games or video games?
• 33:14
  Card games, not board games. Card games.
• 33:17
  We play trash. That's our favorite card game.
• 33:20
  As a family, we can pay it for hours and hours and hours.
• 33:22
  Road trip or airplane adventure? Airplane I hate driving.
• 33:26
  We have a rule that if it's over six hours, we fly no matter
• 33:28
  what. Right on camping or hotel
• 33:31
  resort. I'm kind of a 5050 but if it's a
• 33:35
  family thing is definitely a hotel.
• 33:36
  My wife doesn't camp unless there's a shower and a working
• 33:39
  toilet. Yeah, my husband's the same way.
• 33:42
  Ice cream or cookies? Ice cream.
• 33:44
  Chocolate. Chocolate ice cream.
• 33:45
  I love it. Baseball or football?
• 33:48
  Football, yeah. Theme park or National Park?
• 33:52
  National, Well, normally I would say National Park because
• 33:55
  there's less crowds, but lately they've been so crowded it's
• 33:58
  about the same. So I don't know do.
• 34:00
  You have a favorite theme park? We loved Universal in Florida
• 34:05
  because we're big Harry Potter fans and we have a deal with our
• 34:07
  kids that if they've read all the books, then they get a
• 34:10
  one-on-one trip with mom and dad to go to Harry Potter World.
• 34:14
  So my, my younger one just finished not too long ago.
• 34:18
  So we got to we got to find a time to go to the new epic world
• 34:21
  they just opened up. Amazing.
• 34:23
  I love that. All right, so we're going to
• 34:25
  split the camps here. Dogs or cats?
• 34:28
  Neither. I'm not a pet, no.
• 34:30
  Do your boys want a dog or a cat?
• 34:32
  They want dog, they want a dog, but they've.
• 34:36
  My wife's sister lives within a mile of us, my sister lives
• 34:39
  within 10 minutes of us, and they both have dogs so they get
• 34:42
  plenty of that way. The only way they get a dog, my
• 34:46
  wife has said is if I die then they'll get a dog to replace.
• 34:50
  Well, that's good to know. Blake Yeah.
• 34:53
  So if I'm off, that's probably why.
• 34:55
  And they get a dog. They're.
• 34:57
  Gonna get a dog. I love it.
• 34:58
  Our last question. Big family reunion or quiet
• 35:02
  weekend getaway? Depends which side of the
• 35:04
  family, but usually I'd rather stay at home and just be us.
• 35:07
  I love it, I love it, I love it. In addition to your LinkedIn
• 35:11
  page, where would you like listeners to go to find more
• 35:14
  about you and your work? Yeah, our website is your FB as
• 35:18
  in your family bank.com. So that's probably the best one.
• 35:22
  And then, yeah, we've got I am on Instagram.
• 35:25
  I think it's Blake Johnson, Esquire.
• 35:27
  Blake B Johnson, Esquire. Linkedin's probably the best.
• 35:29
  That's where I'm the most active.
• 35:31
  All right, and that's in the show notes.
• 35:33
  And here's our call to action today.
• 35:34
  You guys, if you don't want to raise spoiled kids, you cannot
• 35:37
  leave it by chance. Get in tune with your mindset
• 35:41
  and the reason that you're making the decisions in the 1st
• 35:43
  place. Build your family bank.
• 35:45
  Disrupt the cycle of entitlement for the next generation.
• 35:48
  Blake, thank you so much for being here.
• 35:50
  This was a real fun conversation.
• 35:52
  Thanks, Lisa. I know it's been we've been
• 35:53
  trying to do this for a while, so it's good to finally have
• 35:55
  that conversation. Yeah, let us know.
• 35:57
  So let us know what you're learning about the family bank
• 36:00
  system. Let us know what questions you
• 36:01
  have, and we'll see you next time on REAL MONEY.
• 36:03
  Thanks for joining us.