- Teach your children how to fish
rather than just dumping fish in their lap.
In this educational episode,
I'm going to talk about why traditional estate planning
ruins most children. Get ready.
I'm gonna give you insights into how you may want to change
how you set up your trust,
so you do not ruin your children and grandchildren,
that you actually empower them instead of enable them,
how you can abolish entitlement mindsets.
(bright music)
So, I'm Doug Andrew.
I've been a financial strategist
and retirement planning specialist now,
for nearly five decades.
And I've helped many, many people,
wealthy people that have accumulated,
they've worked very hard
in their life accumulating millions,
even billions of dollars.
And many times they will share
with me how they built this empire
because I asked them,
"So how did you build this multimillion
or billion dollar empire?"
And they will usually say something like,
"Well, Doug you know, I was raised by parents who went
through the Great Depression and they taught me how to work.
Man, I have worked so hard.
My kids will never have to work as hard as I did."
And it seems like, you know, 20, 30, 40 years later
most of them would come in
during their golden years and they would be very distraught.
And I would say, "What's up?"
And they would say something like,
"Doug, I don't know what's wrong with my kids
and now my grandkids, they don't even know how to work."
And I would usually say,
"Well maybe you stole that from them.
Maybe in your attempt to make life easy,
you stole from them the same opportunities that you had.
You always told me what made a man out of you
because you always had these obstacles and struggles
and you grew, you got strong by overcoming these obstacles.
And you thought you were doing your children
and now your grandchildren a favor by making life easy,
bailing them out and giving them handouts.
And now you wonder why they're weak.
And they're sitting around, "When do I get my share?"
And so they said, "Yeah, they're so entitled.
I need to abolish that entitlement mindset."
So, I wrote a book summarizing some
of the ways that you can abolish entitlement mindset.
And I'm gonna gift you a copy of this book
at the end of this episode, if you're interested.
So, stay with me here, but let me use this metaphor.
Let's say you're gonna be playing in a golf tournament
and you had the choice of using a professional golfer
like Phil Mickleson's swing or you could use his clubs.
What would you choose?
Yeah, I'd rather have his swing, not his clubs.
Well, I've noticed
that most estate planning attorneys seem to focus
on dividing up the golf clubs
and the trophies among your kids and grandkids when you die.
And I just go, "Well, I'd rather leave behind, you know,
the swing, how to do that, rather than a bunch of clubs."
I'd rather leave behind how to fish
to my kids and grandkids,
than dumping a bunch of fish in their lap.
But the problem is most estate planning attorneys
focus on dividing up the C A S H, the cash,
and you go, "Well, so, what's wrong with that?"
Well, see if that's all you're doing,
you go to most estate planning attorneys
and once they, you know,
find out your net worth, what's the first question they ask?
Oh, how many kids have you got?
'Cause what are they gonna start doing? Dividing it up.
That's the number one rule
if you wanna destroy, divide, and conquer.
No united, we stand divided they fall.
But see, most estate planning attorneys are taught
to do it the easy way.
Oh, you wanna be fair, don't you?
You wanna divide all this up equally
among your children, don't you?
And if they can get you nodding up and down
they sort of go, "Hot diggity dog, I got another one."
They charge you a few thousand bucks.
They take your children's names
and plug it into a boiler plate trust document.
They take your assets and plug it
into the document and they push print.
And what happens when you and your spouse both pass away,
chunk, chunk, chunk, chunk, it's all divided up
and dumped in your children's lap
and it actually ruins half of the children,
the heirs in America.
And they sit around, "When do I get my share?"
And so this causes entitlement,
but it's called equal distribution.
Now, when I teach educational events, legacy planning,
legacy planning is far more than leaving behind money.
Okay? But I talk about K A S H, it's an acronym that stands
for Knowledge, Attitude, Skills and Habits.
See, that's the swing.
I'd rather leave behind the knowledge,
attitude, skills and habits of the swing.
How you go out and make money.
How do you become self-reliant?
How do you not blow it all and just consume?
How do you produce?
And how do you teach responsibility and accountability?
So, you want to capture the swing,
the knowledge, attitude, skills and habits.
And then you are leaving behind
to your posterity how to fish instead
of just dumping fish in their lap.
And you'll actually then feed 'em forever
and you will not see money dissipate and disappear
as it is wasted by just dumping it in their laps.
And I've seen it happen again and again and again.
I have have stories in the book of two families,
the Vanderbilt family versus the Rothschild family.
The Vanderbilt family, when Cornelius Vanderbilt died
in 1877, he was worth 105 million.
And he wasn't very philanthropic,
he only left behind less than 1% of that
to Central University,
a charity which became Vanderbilt University.
Well, it took 96 years until 1972
before 120 of his descendants gathered together
at Vanderbilt University for the first family reunion.
There wasn't a millionaire left into the bunch.
It was all gone.
In fact, his grandson
William K. Vanderbilt said,
"It has left me with nothing to hope for, nothing definite
to seek or strive for. Inherited wealth has been
a real handicapped to happiness."
Now I contrast that to the Rothchild's family.
Now, I don't endorse these families by any means, but see
mayor Amschel Rothchild who died in 1812,
built a banking dynasty in Europe.
And they had several children, among them five
sons that they assigned to European capitals.
And they would communicate back
and forth with homing pigeons, when to buy and when to sell.
The point is, is when he died,
he did not leave behind an inheritance, an entitlement.
He left behind a system. I call it a family bank.
It's not a chartered bank like down the street,
it's a conceptual bank.
But he left behind the knowledge, attitude
skills and habits.
K A S H, more than just C A S H.
In fact, there were three rules
in this family conceptual bank.
They loaned their heirs money
but the loans had to be repaid.
If you needed help with the college education
you had to get good grades or whatever you had to apply.
And if you got approved
you could borrow, get your education.
But when you graduated and started making money
you paid the loan back to the family bank.
So your kids and grandkids would've the same wherewithal.
It wasn't some entitlement.
"Oh, you owe me a college education, mom and dad."
No, when I went to college
I didn't expect my parents to pay for it.
I knew they couldn't afford it.
Same thing with my wife.
We both came from families of six.
I worked at Kentucky Fried Chicken 30 hours a week.
My wife worked at a bookstore about 30 hours a week.
We got scholarships and everything,
but we had way better study habits than most
of our friends whose parents were just shelling it out.
And so when we had our six children, we did not
lead them to believe we would just pay for their college.
We gave them equal opportunities, okay?
And this is where if they had some skin in the game,
if they got a scholarship or they saved,
we might match it or whatever.
But they had to sacrifice
they had to sell their motorcycle, save money,
then we might match or loan them money.
But they had to prove how they were gonna pay it back.
If they couldn't pay it back with money
they would mow lawns, shampoo carpets, paint.
They worked for their education
and they were way ahead of most of their peers.
They knew what the real world was all about.
So that's what the Rothchilds did.
And the Rothchilds also required
that their posterity had to share what they learned
both good and bad experiences
with the family, aunts, uncles, nieces, nephews.
If they did not share what they were learning
in the family archive, the record,
they were out of the loop.
The third rule is that you had to gather once a year
as a family to reaffirm your virtues and intentions.
What you stood for, what charities you're gonna give
to or you are out of the loop.
The point is, guess what happened to the Rothchild's wealth?
It grew and went up, it became worth billions.
The Vanderbilt fortune dissipated and disappeared.
And so it's more important
that you leave behind the swing instead of the clubs.
The knowledge, attitude, skills and habits.
How to fish instead of dumping fish in their lap.
See, I want my children and grandchildren to be self-reliant
to never be unemployed,
because unemployment is a mental condition,
not a physical condition.
Security is in the individual,
not in somebody giving you a job to do.
So at three-dimensional wealth,
we focus on three different dimensions.
The financial literacy, but also the foundational assets.
Your family, your beliefs, your health and so forth.
And also the intellectual assets, your education,
your experiences, what you learned, your alliances,
you capture all of that.
And so that's what you're leaving behind to your family.
Instead of this equal distribution,
which sometimes requires you kill the goose laying
the golden eggs.
So many trusts say, "Oh no, you gotta divide it up equally.
So you gotta sell it.
You gotta sell the real estate holdings or the
business and divide it up equally.
You gotta be fair."
So get ready.
This is what I say, there's nothing more unequal
than the equal distribution to unequals.
Did you hear that?
Okay, there's nothing more unequal
than the equal distribution to Unequals.
And people go, "What are you talking about?"
No, I do not believe our creator gives equal distribution,
let's say a blessings of health to all of us
regardless of how some of us, including myself
sometimes abuse our bodies.
Our creator does not give equal distribution of health.
I'm gonna give you the same health and vitality
as these people over here who are abusing their bodies
with habitual, harmful substances. But I want to be fair.
So I'm gonna give those people who are abusing
their bodies the same health as you people over here.
No, our creator does not give equal distribution
of blessings of health.
He gives us equal opportunities, but not equal distribution.
Does that make sense?
So I would recommend you rethink your thinking
if you have a trust, you may want to change the rules
of governance to equal opportunities
for those you care about, but not equal distribution.
Otherwise, you will ruin half of your posterity.
So if this is resonating with you and you wanna learn more,
I would love to gift you a copy
of this book, "Entitlement Abolition,"
how to Lead Your Family From Me To We.
The way that you can claim your free copy is simply go
to entitlementabolitionbook.com.
You contribute a nominal amount towards a shipping
and handling, this retails for 20 bucks on Amazon.
But I'll gift you a free copy.
You contribute a nominal amount
towards shipping and handling.
I'll cover the rest of that cost,
and then I will pay for the book and fire out a hard copy.
Now when you're in there,
you might want to check out my other book, "The Laser Fund"
'cause it talks about the financial dimension
and how you weave that into the family bank.
And check out
if you wanna listen and learn, watch and learn.
This is not about me, this is about you and your future.
And if you want to talk to a financial professional
on how to employ these strategies,
you can even schedule an appointment to do this.
But this is a powerful concept.
Remember, you don't wanna ruin your kids
and grandkids by dumping a bunch of fish in their lap.
Leave behind the swing or how to fish.
(bright music)