Family Councils: Building Multi-Generational Prosperity – Episode 622

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[00:01] Welcome to the Prosperity Podcast. Prosperity thinkers today on the podcast. We’re going to be talking about family councils and how this is the glue to building multi-generational prosperity. Kim, you’re an expert in this space. I’m not just saying that, but you actually wrote the book on it. So our perpetual wealth book of which we also have, in case anybody is watching the YouTube version of this, we have a game, right? Cause some people need to get their hands on things to learn and we have a workbook and of course there’s numerous videos. This perpetual wealth space necessitates having a family council and you can call it whatever it is that you want if the term doesn’t work for you. And essentially what it means is that there’s good communication about

[01:05] personal finance going from one generation to the next, ideally the next, and maybe even the next. I mean, it’s not going to be unusual as we progress as a society when people start to live to 110, 120, 130 years old all the time for us to be dealing with five generations. You know, right now it’s maybe three or four, but it’s going to be very common and it’s such an interesting space in America because in America, we don’t want to talk about money. We don’t want to talk about it with our friends. We don’t want to talk about it with our families. We don’t want to talk about it even with professionals. Sometimes it always interests me. Sometimes people are more than willing to share information with me

[01:51] because I’m a disconnected party that they would never share with their family and yet frankly they should be sharing with their family. So I have a fun space around this because yes, a lot of experience helping a lot of generational wealth move from one to the next, but also the other aspect that goes with the money and that is the learnings. So I really want to make sure that the families that are listening, that may not feel like they have a legacy or an inheritance or anything to pass on, push that thought out of their minds immediately because you have a legacy and it is your learnings. There is so much valuable information and wisdom and experiences. Let’s just call it learnings, stacks and stacks of learnings, plural.

[02:51] It is a real word that you can hand down to the next generation and the next generation and that is what perpetual wealth is about and if you can formalize the handing down of the learnings, thinking about heritage being something that you leave in your family, not necessarily to them, then you have a family council. Oh, I like that. I like that. So I have a question for you and this question is based off of conversations I’ve had with other friends reading books and it’s about the pendulum swinging. So I’m going to position the question from this. I listened to a podcast recently with Naval Ravicon and Chris Williamson from the Modern Wisdom podcast and Chris asked Naval this question. He goes, so you didn’t grow up with money.

[03:58] Do you find that to have been an advantage or a disadvantage? Naval gave an answer and he saw it, what am I going to call advantage or disadvantage, but it’s from the way he worked in his life and built his character. They said one thing that was interesting. He goes, however, I don’t see the need to take the wealth away from my kids because it won’t give them the disadvantage or advantage. He simply spoke about what he’s teaching them. So here’s the question. As the pendulum shifts, so many parents, they’ll do the thing where they say, I never want my kids to suffer. I never want my kids to have to go through the hard things that I did, but the hard things are the things that made us stronger.

[04:47] So how do you help families navigate that so they don’t screw up the next generation? It’s such an important question and it’s imperative that we pay attention to how we did learn as we were growing up. And I don’t mean how like, did we watch videos or read or listen to audio? Not that kind of, how do you learn? But the lessons that we learned growing up, how did we learn those lessons? Were they because of a healthy struggle or were they because of a loss or were they because of a win? And frankly, the answer is they were from all of it. Yet I love what you’ve brought up because the concept of a healthy struggle has absolutely in many cases of parents been removed and it’s not good. Our children need and our grandchildren, you know, whatever generation you’re in

[05:53] need must have the ability to have losses, learnings, winnings, good things, bad things. It’s that thinking that we talk about all the time on our podcast. It’s why our company’s called Prosperity Thinkers. We need to know how to think about these things. I mean, we all saw what happened to the trophy generation, right? The kids that went through that era, I don’t know how this ever got started, but the era of everybody on both teams all the way down to the person that sat on the bench gets a trophy and the detriment that it caused them because they didn’t learn how to lose. And when we don’t learn how to lose, we don’t get the learnings from the loss and then we keep losing in all aspects of life.

[06:46] And so this concept of a healthy struggle is so, so important. And I have a question that I love to propose that I encourage families all over this country to work with, no matter the age of their children, because frankly, there are a lot of families that have adult children in their early twenties that are still either literally or at least financially living under their parents’ roofs. And the question is, would you like more freedom and responsibility? Because we as adults know that with responsibility comes freedom, but as a younger child, we have to learn that trade off. And so that is a fabulous question to start the financial discussion that the family council needs to guide around money and that’s

[07:43] and that is, would you like more freedom and responsibility? Oh, I love that. That is so good. You know, I think of these perilous times, you mentioned the generation of trophy kids and they’re on the flip side of that. They’re stripped of the opportunity to know what it feels like to win. Yeah. They, they lose that’s meaning. It does. Absolutely. It’s really sad. So we have both sides to this. So you grew up milking cows early in the morning, doing hard work. You grew up saving your money for university and paying for it. I grew up with an early morning paper route and all these difficult things that, you know, we all have our stories. So when you think of families and we think about helping that next generation

[08:45] and having those family councils and doing those things, let’s plant a couple of seeds. What are a couple of seeds that you could plant today that will help the families to be more prosperous in the future? Absolutely. So there’s two things I’ll share. The first is called the quarter system as in like 25 cents, right? And you can do this with very young children. I was just in our own family with kids that are under three and you have three jars, save spend and share, and you put a few quarters out on the table and you give them an opportunity. Think about this freedom and responsibility question to earn quarters by doing extra things around the house, not the basic things that you want them to do, but the extra things.

[09:36] And then there is the opposite side of that where they need to learn taxes, for example. So, you know, if you give them an ice cream cone, you take a bite of their ice cream because there’s an ice cream tax. Well, you can do the same thing with quarters. You know, they can start to understand. Maybe you give them five nickels and you start to help them. It’s age appropriate, right? But then more importantly, when they don’t do something that they should be doing, they have to give you a quarter. And so some parents will even create a fourth jar, the parents jar, right, so that the kid can see the ebb and flow of that as well. So the quarter system is a very valuable tool, works great for young

[10:22] children, and if anybody wants information on that, all they have to do is email us hello at prosperity thinkers dot com and I will send you a little two page PDF on the quarter system. It’s part of our larger prosperity parents community. And then the second thing are gigs. So gigs is a word that I’m going to encourage people to use instead of chores. All right. Chores is, you know, the whole chores and allowance thing, both of which are socialism, have been in the lexicon for many, many years. And I’m going to encourage you to lose them both because with gigs, the child gets to earn money. Now, again, I’m not talking about for their basic things, their expectations that they’re supposed to be doing around the house.

[11:09] These are for extra things. There can be brain gigs that the child is doing, like read a book, write a quick report or do a video. There can be physical gigs, like maybe sweeping the yard with a rake is a expectation, but getting in there again, age appropriate, right. And edging the yard is an extra gig that we will pay for. Or like with a younger set, maybe emptying the dishwasher is an expectation that you do not get paid for. But if you do the hand dishes that are always on the counter because they can’t go in the dishwasher, that’s extra. So you get paid for that. So that’s what gigs are. They are the extra things that a child does over and above their expectations that they are supposed to do because they live in the home.

[12:01] And this space, if you’re interested in this again, use the special email hello at prosperity thinkers.com and let me know that you’re interested in learning about gigs because we’ve got a nice long list and a lot of guidance on how to pay and what to pay. And this is a space that can be transformative for families, all starting with that question of, would you like more responsibility and freedom? I love it. That is so good. So the topic that I’m coming from of this is we went through the family councils, if we’re thinking about giving opportunities for that freedom and we think about what we’re doing here, years ago on the podcast, you had a realization when you were doing work around your property, I recall

[12:57] you were fixing fences and you started the day wanting to fix all the fences and what happened after you got to work, what did you realize? I’m so glad I remember that story. I’m shocked that you remember it. I realized that this was a multi-generational property. It has been where Todd and I are the fourth generation on it. And it will continue to be. And that helped me realize that the fences did not have to all get fixed that day and it let me enjoy the process and it let me have a much better perspective on the work to be done that was going to be an ongoing environment. And this is really how we want to think about our children, because first of all, we use the term raising children. We’re not raising children.

[13:50] We’re raising financially competent adults and they pay way more attention to what we do than what we say. So we want to be very conscious of that. And for those of us, including me that have adult children, that’s what’s so cool about that family council environment, because you can get learnings going both directions. It’s not always parent to adult child. It can be adult child to parent or grandparents even. And so, yeah, thank you for helping me remember the long-term perspective of raising children is just as prevalent as the long-term perspective of fixing fences on a generational property. Yes, work to be done. I love it, Kim. That was wisdom. Thank you for sharing all of you listeners.

[14:49] Thank you for being subscribed to the podcast and following. Share it with friends. If you find this beneficial, we appreciate you being one of the loyalists. Thank you for listening to the Prosperity Podcast to take control of your money and have it work for you, visit ProsperityThinkers.