Learning Money Skills and Value Creation for Children with Scott Donnell – Bonus Episode 522    

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[00:01] Welcome to the Prosperity Podcast. Hello, I’m Kim Butler, and I am so excited to have with me today for you, Scott Donald, who has created the most amazing app book game for your families. And I am so grateful that we get to hear directly from him. And there will be some show notes to the links on the book at Amazon, the gamification space called an app for your children. And Scott, I’m so honored to have you with us today. Our community is going to love your message. I can’t wait to talk about it. Thanks for having me. Yes, absolutely. So you and I both know Dan Sullivan and you were sharing with me that he was the impetus for this next step in your long career of value providing. That’s right.

[00:57] Yeah. So I care a lot about the next generation. That’s been my career so far. Financial literacy, or we call it financial competency, is one of the biggest skills missed in the public education system. And trust me, I’ve served six million kids and families now in the public school system, outside of the system, and it’s the biggest hole. And so we need to try to figure out how to solve this problem and teach good money skills to the next generation or else we got a big old problem. And I don’t know if your audience doesn’t know the stats. I mean, it’s, it’s pretty crazy right now. Gen Z is like the least invested generation in history. Average family has less than $500 in savings. The average family kids, um, less than one in four kids are financially

[01:43] independent by the age of 22. And then at 25, they fail a basic financial literacy test. So we’ve got something going in the wrong direction and you have to figure out what’s going on before you can create a solution. And so that’s what we’ve been diving into for the last several years. And I think we’ve got a pretty good solution for families to pass on good money skills. Well, and it’s such a challenge because we have 30, 40, 50 year olds that don’t have good money skills. That’s right. You’d be surprised. Most of these parents, you know, we interviewed a thousand parents when we started gravy stack, which is our banking game for families. And we found out that the parents said, we don’t know what to teach

[02:20] our kids at all, like they’re like, we don’t have a roadmap. And even the successful parents were like, I don’t know what to teach them when, and I don’t even know if they’re going to listen to me half the time. And so, and they know that schools don’t teach it. You know, you can’t expect teachers that to even know this information, much less pass it on and banks don’t care about kids because they don’t have deposits and parents need our help. So how do we create a simple system and a fun system that makes life easier for parents and ensures their kids success. And that’s really what gravy stack and our book and everything’s about. So here’s a fun question. You know, we often seek credibility of the speaker.

[02:59] Like what are you doing? But my question is not, what are you doing? Business-wise, how many kids do you have? Yes. Uh, yeah, we’re part of it. We’re, we’re practicing what we preach. We got four kiddos ages seven and under. And I, uh, a lot of people are like, don’t you, aren’t you supposed to go through all the mistakes first and then you build something for other people? I’m like, no, man, I’m going the other way. I want to prepare. I’m building this for my kids. You know, I’ve already worked with 6 million families. I’ve already seen how it goes wrong. I’d rather fix it for my kids. And so that’s why we built it. And I will say this. We have about 30 employees at gravy stack, engineers and

[03:37] executive team, marketing, finance, legal, everybody, all family members, all kids, all parents, this whole thing was built by parents. Most of our 80 investors all, all have kids and they’re like, we need to solve this problem. Let’s go. So, yeah, we’re all in it. Ah, that’s fabulous. And I love one of your sayings about children and the idea of leaving what is in them rather than what is to them. You want to elaborate on that a little bit? Yeah. So when we started this journey, um, let me go, I’ll just rewind a second. So I started the largest school fundraising franchise in America called Apex. So I helped my, my wife was a first grade teacher. Um, I helped her school raise money by doing this new fun run model where

[04:22] we teach leadership and fitness and, you know, issues about money and how to solve them and it exploded. So it ended up going nationwide. We’re now in 45 States. We got about 600 employees. It’s incredible business. And then we started doing these children’s business fairs where we would teach kids like business skills and they’d bring products and sell them at the fair. And they learned all these business skills. And what we saw was, okay, there’s a huge issue that, that nobody’s learning. And so I made it my mission to go find a hundred legacy wealth families. Okay. I said, okay, 90% of generational wealth is gone by the grandkids. Why is that? You know, why is it, how come people are, have a difficult time

[05:08] passing on good money skills, investing, saving, spending, sharing, earning, why is it that it’s shirt sleeves, a shirt sleeves in three generations and that’s 90% of the time. Rice patties to rice patties in three generations. Like that saying is evident in every country in this world. Yes, it’s so true. And it’s like, okay, something happens when if a, you know, first generation wealth, they get all this wealth and they go, uh, I just want to make sure my kids have all the opportunities I never had. I want to make sure they have all the things I never had. I want to make sure that they don’t have to deal with the problems and struggles I had. And what we’re saying is, wait a minute. No, what made you, you is going through healthy struggles and not

[05:53] trauma, you know, not addiction and abuse and neglect. That’s not what we’re saying to pass on to your children. But what we’re saying is they need to learn to go through healthy struggles so that they can build capabilities and build confidence to create value in the world. And so we interviewed these hundred families and it took us a long time. It went through thousands and thousands of people. How did you collect that information? Like, I’m, I’m curious of behind the scenes, what format, what system did you use to collect all those gems of wisdom? Well, we, uh, this, this turned into the book value creation kid. So that’s the book that’s on Amazon or audible people can, can get, but it was a lot of it was our close circle that had

[06:36] incredible kids and grandkids. That were kind and generous and hardworking and successful and smart, driven, humble, amazing people. It’s like, okay, you did it. Right. Something happened. You had a lot of money and assets and net worth, and then your kids are just as great or if not better, you know, at impacting the world. And so we’ve had to go through a ton, like all the networks. We started getting the word out to everybody. It’s like, okay, who are your parents and who are they? And like just asking everyone we could find and really searching the globe. I mean, this isn’t just like our friends. We went to the green family, hobby lobby. We went to the Coors family and we’ve been interviewing people

[07:16] for many years and just saying, how did you do this? Um, and so that’s my question. How’d you collect? I know the results were the book, but I’m still curious. How’d you collect all that amazing information? I would sit with them and just pick their brain. So I had a checklist and I’m like, okay, what did you do when they were young, how did you set it up? What’s the legacy look like? What did you teach them? How did you communicate it? How did you build in the system for them to learn the money skills? Like, what did you do? And this, it was incredible to hear all these tips that all of these hundred families did and almost nobody else does them. That’s the crazy thing. And so the first one you mentioned is one of my favorite.

[07:54] I kind of give it, I give a talk about the 10 lessons learned from these families. One of my favorites, one favorites is they focus way more on passing on heritage instead of inheritance. It’s not about the dollar figure at the end of the day. In fact, a lot of these families did not pass on enough money to have people coast, right? They did not. They, they focused on generosity and charitable trust and giving. And so for them, it was all about what you leave in them. It’s more about what you leave in them than to them. And when you go deeper into that, it’s actually what you’re doing with your kids rather than for them. So many people, they say, I’m working hard for my kids. I’m working to provide for my family.

[08:39] I’m doing all this work for them. And I’m getting, I’m trying to get them into the best schools and the best, you know, youth groups and the best sports teams and camps for them. Well, these families said, you know, we’re going to focus way more on what we do with them because the lessons happen with them. The more way more is caught than taught. And so showing how you do your life, how you do your work, where your family invests, where your family gives, they have structured meetings and boot camps and interactions with their children and grandchildren to pass on the heritage of their family rather than the inheritance. It really isn’t about a dollar figure. So, uh, in fact, a lot of these families were anti dollar figure.

[09:25] They were said, you know, we’re going to help out with, this is one of the other lessons we’re going to pay to a point and then stop. Right. We’re going to help out with, you know, private school if they need, if they want to do that mission trips when they’re young, we’ll help with half your car. So we’ll match whatever you save for your car starting at age 10. We will give you opportunities to earn, which I’ll talk about in a minute, this home economy system, which is what everybody did, which is now in the app. They said, we’ll help with college to a point, but not just anywhere you want to go, it’s all on us. They say, no, no, we’re going to make you work for it. And we’ll have, we’re only going to pay it when you get the

[10:01] degree because 56% of kids go to college and get debt and they don’t graduate, they don’t get the degree. And so what they, they have these very kind of structured systems of how they help their kids understand how money works, but also that their kids aren’t rich because they are right. And then when they’re 25, 35 and 45 years old, most of these families would give a gift of love, not a gift of coast. Okay. Not a, an amount large, so large that they just chill and blow it and become spoiled and entitled. Um, that’s really what we saw. And so that’s what we put into the app and the book for everyone to see and how to raise. The main thing is how to prepare your kids for wealth. That’s the real goal.

[10:47] To understand what money is and what it isn’t, how to use it wisely, how to make it, how to earn it, how to invest it, how to save it and share it well. And I think it’s so important that wealth in your definition, if I’m understanding things after having read the book and looked at the app is about all types of wealth, being generous is a type of wealth, saving money and having your emergency fund is a type of wealth, which for some family could be $10,000 for another family, literally could have $10 million for their emergency fund. I love the very holistic approach to this space of finances and something I have said for years, money isn’t everything, but money affects everything that’s important.

[11:36] So as functioning adults, we have got to get this money game down. And I believe that starts at like age two or three at the grocery store. Yes, it does. These lessons are learned at home around the dinner table at the grocery store, before bed, on the weekends. That’s how it starts. You know, the biggest thing I saw with all these families is they do not outsource their parenting. Yeah. They said, we know that these kids aren’t going to learn exactly what we want them to learn in all these other things. And it’s fine to do school and sports and camps and church stuff. Like that’s great. But if it’s not modeled in the home, talked about in the home and set up in the home as a system, your kids are

[12:19] going to miss a bunch of stuff that you thought that they were going to learn somewhere else. And so it’s really about taking it in, bringing in the education to your kids yourself and making sure you have a system to prepare them in the way they should go. And wealth really is a much larger conversation than how much money is in your bank account. I mean, just your relationship to money in the first place is an issue in the first level of the game. So gravy stack, just everyone knows it’s, it’s the first banking and investing app for kids and teens that plays like a game because kids only learn in two ways, having fun and real world experience. That’s why the education system is broken in a

[12:59] lot of ways. It’s homework. It’s regurgitation of information. Like kids only make things deeply learned when it’s fun and real world, practical experience. And so gravy stack is all about fun games, fun things that families can do together, real life challenges inside of the world of windfall in the game, as well as all the banking sides that they can put every dollar they make that automatically flows into their invest and save and spend and share jars, real bank accounts that they can use to grow proper money skills. And so that is the point of gravy stack. And so what we say is you’ve got to practice it in the home. You got to start early. You got to make sure that your kids understand like the core principles of money.

[13:45] Money is not evil. Another thing that these families said, we train our kids, the proper view of money. Money is not the love of money is evil. If it’s all you think about all day, right? It’s your, it’s your idol, right? It’s the thing that blocks you actually in a lot of ways. And so when they teach their kids about money, they say, no, money is an opportunity to grow value, to, to bless other people, to invest for your future, to, to prepare for the future. If you, if you think of money that way as a tool, it’s a store of value. It’s an opportunity to help yourself, your family and everybody else. That’s the right way to view money. But when money is your only goal and to stock up the account with as much as you possibly can

[14:29] and to hoard it or spend it all because it might be gone tomorrow. Those are improper views of money. And that’s, you know, a lot of poverty mindset is thinking that money isn’t a necessary evil in the world. They think that they got to spend it as soon as they get it or else it’ll disappear. Someone’s going to take it from them. Or they think I got to hoard it and never actually enjoy it or use it or invest it. And so that those are like some of the poverty mindsets that these families really wanted to get away from to make sure that their kids understand money is unending. Value can be created in any situation. Absolutely. And it’s an abundance mindset, right? It’s, if you have a generous mindset, you

[15:10] believe that tomorrow will be better than today. If you’re generous, you have an open hand, right? You have a bigger pie mentality. You can create more wealth, right? And that’s what a lot of these families did is they showed how every investment they’d make as a family, whether it was real estate or ETFs or the stock market or new business, they would sit down with their kids as young as five and six and say, here’s what mom and dad are doing. Every time they’d give, they would sit down every month with the family. They’d say, here’s what we’re giving to. What do you guys think? Well, who else should we give to? Is there a better idea or a better nonprofit we could donate to to help? And they’d get their kids involved in the

[15:52] conversation. And that’s really how you prepare your kids. That in the home economy system. But yeah, there you go. Super cool. Talk to us a little bit about the dinner table conversation guidance that’s in the app. Yeah. So in the app, you know, a lot of this is your kids come home from school, you’re sitting around the dinner table. How is school today? Fine. Okay. I guess moving on parents, just, they really want to take advantage of that time. And so we want to, our whole goal with the app is to connect parents and kids in a deeper way. Right. To take pain off the parents plate, to reduce their stress, you know, no more of the nagging for chores and the conflict over behavior issues. Like we can remove all that when

[16:36] they use the systems in the app. But these dinner convos and the monthly convos are really like structured, simple questions you can ask your kids and just have a discussion together. And so we text families dinner conversation starters from the app based on the kids playing the games so you can have a great conversation about investing a great conversation about giving a great conversation about how to earn, you know, we have four stages of earning in the app for kids. We’ve kind of broken this down scientifically, how they earn. And so teaching them all these things and just asking simple questions is the key. Communication and education are how you pass on good, good legacy money skills to your

[17:15] kids. And picking back up on the two ways kids learn are the fun and the experience. And we all want to provide that education. But I am so grateful to have had educators as parents so that when I was raising my children who are now grown and out of the house and doing so well as adults, I saw what worked and what didn’t work in the school system and the parenting that was going on. And a lot of it was picked up subconsciously, but it enabled me to be a better parent for my own children. And not every adult gets that experience. And kids don’t come with a user’s manual. Yeah, they don’t. It’s hard. I mean, legacy is hard. Like passing it on to your kids is not a, it’s not an automatic, right?

[18:13] It’s a, it’s something you have to really set up. And so what we saw was there’s a few core rules and principles that if you as a, as parents can say, all right, we’re going to, from now on, we’re going to start doing this. We’re going to stop doing this. I actually, we have this anti-allowance campaign that’s going on that’s actually starting to take off big time. And, you know, the, the crazy thing was all hundred of these families, nobody did allowance. Right. It was like, what? Everyone does allowance. I mean, literally it’s like 80% of the country does allowance. And so when you give allowance to your kids, you think, oh, I’m giving them some money to pay for some things and they, you know, they can learn how to

[18:54] have good money skills. No, no, no, no. Giving your kids money for free never works. They will never spend it or save it or invest it, your money in any way close to how they would with their own hard earned money. And even if you say, well, they do a list of chores and then they get some money. Well, half those chores you should not pay for, right? You, those are things that are free. You like, you should not pay your kids to clean their room, make their bed, brush their teeth, get dressed, do well in school, and probably dishes and trash or the pet. Help around the house. Yeah, that is your job for the family. That’s your role in the family. It’s part of what it means to have our last name and

[19:35] the other things you should pay individually for. And so they can learn the value of their work and then they can cover their own expenses, right? And so that’s how we created the, the home economy system that’s in the app that all these families did in one way or another. They built this system. And so our goal was, okay, how do we take all this learning and make it a simple, repeatable, automatic print out for the fridge, home gig system. Parents set it once and let it run and they don’t have to worry about it again. And now their kids never ask them for money again. The kids know exactly how to earn it. They know how to cover their own expenses. They know what’s expected of them. And at all times they’ve got

[20:18] 30, 40 ways to make money in the home on top of the expected things for free. Right. That’s the real system. So the, the home gigs system we call it, um, you go in the app, you sign up, you create the kids’ bank accounts, and then you set up our three E’s. This is probably the most valuable information I can give your audience right now. Okay. Expectations, expenses, and extra pay. This is what these families did. They wanted to mimic the real world so that their kids are ready for it. Number one, expectations. Here’s the list of five, six, 10 things that you’re doing for free as part of your job in the home. These are the table stakes, right? Yep. The room, the bed, the clean, you know, getting dressed,

[21:03] brushing teeth, doing well in school, like this normal stuff. They’re not paying for that. Then the expenses are where everybody kind of gets it wrong. We have 12 categories of expenses that kids should start paying for, be in charge of and responsible for, starting at age is like six to eight. Absolutely. These are toys and trinkets and souvenirs and, you know, anything tech related that they want to get, social outings with their friends when they’re a little bit older, birthday presents, starting in kindergarten. They’re in charge of giving those birthday presents to their friends because then they learn generosity, right? And if you just, how many times did you get the present, wrap the present,

[21:42] get the card, the kid signs it and chucks it on the table and doesn’t even care. Every parent does that because it’s the easy button, right? I don’t want my kid to look bad. So I’m just going to go do this while they’re at school. If you have the kid take a little time, make the 15 bucks, get the present, wrap it, then they’re set. Like they will learn generosity for life. And then, you know, there’s a bunch, there’s 12 of those categories. You start passing them off to your kids instead of you paying for them, right? Because some parents go, I don’t pay my kids anything. They do all the chores like the good kids. They’re the best ones. They just do everything they’re told, but you got it. That’s the problem is you

[22:17] have to have those kids learn money skills, right? Earn money somehow. And so that’s a mistake as well. And so with this, when you pass off expenses to your kids, because these other parents are buying everything for their kids, if you pass off the expenses and it’s the kid’s responsibility now to plan and prepare and think ahead and buy them. Now you have hundreds of dollars a month, maybe thousands that you’ve got set aside that you can pay them for these extra pay. That’s the 30 extra pay is our home gigs. So 55 ways that the kids can make extra money around the house to save mom and dad time and stress and doing the work themselves. And by the way, your kids are becoming extremely capable by doing this.

[22:59] Right. Sweeping the garage, pumping up tires, washing windows, making a meal, cleaning the common rooms and mopping and sweeping and bathrooms and organizing closet. I mean, the list goes on anything in the yard, anything for packing for a trip, putting together furniture, whatever it would be. Right. The list is really endless. Having kids make a few extra dollars for each of those $2, $5, $10, $20 even. Now they have money that goes through their money machine. So part of it’s auto saved and invested, right. Part of it’s automatically in their share account to give to any nonprofit in North America. And then their spend jar with their debit card is where that those expenses get covered and anything

[23:40] leftover. They get whatever they want. Let them make decisions. Let them fail if they want to. They spend the rest of it on shoes. I mean, you’re going to have a great conversation from that better. You learn it at age 12 then when they’re 25 years old in debt. Yeah. Yeah. So that’s the home economy system. And the my favorite part about what we’re doing is we don’t just have action gigs where they’re doing like work with their hands and feet around the house or the neighborhood. We have brain gigs. Yeah. These are educational gigs that kids can make some money learning about. And so a TED talk, a PragerU video, an article, no sugar for a week, these challenges that are in there that the grandparents can

[24:25] give to the kids, the grandkids, aunts and uncles can give them. Parents can give them. They’re paying their kids to learn something powerful because we have to teach kids to use their brains to create value, right? If you can do that, you know, you and I make money using our brains, right? We create value for other people and pay for our what we need by using our brains more than our hands and feet. And so kids need to learn that early. And so that’s why we have the action, the gigs for action and brain in people. And that’s a critical thing that a lot of people miss. They miss those pieces. So you’re not paying your kids to do homework. They’re that’s part of their expectations. Right. And get good grades

[25:06] in school. But what we’re saying is there’s a lot of other stuff that people want their kids to learn that they have a hard time making them do. But if you can turn into a fun gig, now it’s fun. Now it’s exciting. Now it’s like auto excitement and auto compliance for the kids to learn the things you want to learn. So, yeah, that’s the system that all these families did. I love it. Well, I cannot encourage our listeners enough to go grab the app, get involved, get the book on Amazon, if that’s an easier way for you to internalize the information. I loved the book, by the way, Scott, really well done. Thank you. Yes. So the links are in the show notes. It’s Prosperity thinkers dot com forward

[25:49] slash gravy stack. I love the name. That was a great pairing together of two things that kids pick up on right away. And any other last words you’d like to share to our community? No, I think it’s all about the value that kids learn to create in the world. That’s it. I mean, if you get your kids thinking with that lens, they’re set up for life. That really is it. Don’t focus on money. Focus on creating value. And I think it was Einstein that said, yeah, I think it’s in our book. Strive to be not to be a success, but to be of value. And what all these families did is they raised kids to find ways to create value in the world, material value, emotional value, spiritual value. And when you do that,

[26:32] you’re not worried about likes on social media. You’re not worried about the cool club, the popularity contest, your identity, like with what other people think. You just look at the world with the lens of creating value and then everything is set from there. Love it. Well, the Gravy Stack app is doing lots of good in the world already. And I’m so excited for our community to get their hands on this and their kids hands on it and really just pick up on some unbelievable value that you have put together in a package that is so, so usable. So thank you so much. Yep. We’re excited to be included. Thank you. It’s awesome. Thank you for listening to the Prosperity Podcast. To take control of your money

[27:22] and have it work for you, visit ProsperityThinkers.com.