Transcription
I'm at a Family Founders event at Goldman Sachs three weeks ago, and I'm at a Solomon Partners uh event last night in Miami Beach.
Okay, both of them, they had Dallas had Ross Perot Jr. there, and the owners of the, the NASCAR family, as well as EMTT Smith and others. And they're talking about G2, G3, G4, and how do you pass the wealth on to the next. And then last night, they had the, the founder of 1800 Flowers, the Perry Ellis family, and all these other guys that are in the room, similar type of a conversation on how you pass it on. The guy that was running Perry Ellis is the son of the founder of Perry Ellis. So it was kind of like, you got four kids and you're a G1. You made the money, and you made a lot of money. So, how are you setting up the estate planning and the living trust and the expectation of which one of your kids comes into the business? If one does not, then how do you [clears throat] set it up with the grandkids? Then, if they marry somebody else, like, "Oh my god, I'm marrying a Morgan, so I'm going to get the money." And how do you protect your sons from who they marry to make sure they're doing it for the right reasons? How do you process the entire legacy planning with your wealth?
All right. First, all my children are married. All my children have prenups. In my, in my estate, it works like this: If you don't have a prenup, you don't take under the will. Bingo.
So, I become the bad guy.
And every time I tell people this, I don't know how old your kids are. You, you will remember this, believe me.
So, you don't want your kid to have to be the bad guy. You're the bad guy. So my kids could say, "Hey, my dad, [laughter] my dad's my dad." Now, if you don't want to sign it,
Yeah.
we're not getting...
That's right.
And so, so, so that's the first thing. The prenups are fairly tough.
Okay.
Like, you know, one of them, one of the, one of one lawyer said, "This is the most egregious document I've ever read."
Egregious.
Egregious.
I'm sure you took it as a compliment.
I said, "By design."
By design. Yeah. And so, uh, but listen, all of my, the daughter-in-laws, the son-in-law, I love these folks, but I'm not going to have a situation where somebody can come in and, you know, uh, my one son Matt said, because he was the first one, he's like, "Well, Daddy, maybe I put a clause in there that if I cheat on my wife, that that is a null and void." I go, "No, no, no, no, no, 'cause we don't need to have any litigation." He goes, "I'm he-" He goes, "I'm not going to cheat." I said, "I know you're not, you know, his mother."
It's a good question to ask though.
But he asked that. I said, "We, let's just get the document signed."
So, I did that years ago in 2008. I, I had when the, when everything crashed, I had everything appraised and I gave the big gift to them where you could give up to like 24, 25 million. So, I did that.
I built a company called Litify, which was a software company. And what I did with that, I took Litify and I just put it all, I put 20% each one of my children, 20% for me. We sold it to Besie at a $600 million valuation at. We took 60%. But when we sold it, all my kids got the money, and then I used my 20% to toggle off and pay the taxes. So they took it tax-free. So I've done a lot of things. You got to do a lot of things denovo early on where there's no basis. And then the lucky thing for me is because my lawyers, my sons are lawyers, then they get to take shares inside this firm, and we build new cities. Like we're going to open in Chicago. So they get to come in their denovo. So my children make a lot of money inside the law. And but I have been very, that question has been in my mind, you know, even when I didn't have it.
Go one more. So what, what is then, what, what, what are you allowing leaving to them to decide what to do with the grandkids? Because, you know, you hear like the Vanderbilt story, the money only lasted one generation and it was gone. Where Anderson Cooper's mom's like, "I may be a Vanderbilt, but don't expect Vanderbilt money, it's gone." Right? And then you hear some of the Medici family and the Rockefeller family, how they're able to bring it down to six, seven generations. How are you processing it for your G3, for your grandkids?
Okay, so the way I'm doing it is this. Uh, in our will, when we die, if our kids have $100 million, they get nothing. Because now, remember, they're going to have, they're, I'm transferring shares of the firm to them. So they're going to have that.
They're going to get, if they have, they're going to get $100 million, they get nothing. We have an estate, I mean, a foundation that we hope to have, you know, you know, a billion-dollar foundation, and all of my money is going into the foundation. And so, uh, but some of my kids are already past the hundred million. I mean, some of them are already, they're done, and, and they're going to make a lot of money. My kids are 42, 40, 38, 36.
Two years apart.
Two years apart. I'm Catholic.
You only stopped at four.
Well, let me tell you.
Traditionalists get like six, eight, nine. Let me tell you the problem. Uh, first of all, my wife's a devout Catholic. Uh, the rhythm method does not work. Especially when you're, especially, especially when you're drinking Jack Daniels on the weekend, you know. So, I mean, listen, man. Every time I had sex, I had a child. If I would piss on a rock, there'd be potatoes growing in the morning. So, uh, you know, I'm very potent. I had to finally get fixed because it just, I just, I never missed.
But, uh...
That's respect. Respect. But I had a hot wife, too.
There. [laughter] You go.
That's good. That helps. And, um, so, but, you know, enough's enough. I mean, we, we're doing things for our grandchildren. We got, uh, the generational trust. A guy down here that we recommend, a guy named Andy Comet is our tax guy. And, uh, but, you know, but when they were little, you know, I never wanted, I want them to work. They always had to work. They never got to, you know, sit home. They never got, when, you know, a lot of people go to high school and they buy their kids Mercedes. No, mine were driving eight-year-old Navigators, and they worked on the weekend. And you got to keep them hungry.
What are you going to do with your grandkids?
I'm not going to, you know who you, I worry about it because the grandkids, the generation three is when it all goes to hell in a hand basket.
And what I worry about is that they have live, you know, we flew down today in our G500. My, my grandchildren, they don't, and that's what I worry about because they lead my, when I go to, I live in Maui in the winter time. When I go, Dan just got married in Maui, you know, my grandkids get to lead our life. So, I worry about that. But, you know, what I think about, I was like, you know what? I'll be dead. I'm gonna let you guys worry about. Hand you all handle it. You all give me enough stress as it is.
Is one of the kids richer than the other kid? Is there, is there situations where one's done better? And then how do you manage the competitiveness, the ego, the envy, or the jealousy if there's any of that?
If, if there is, I don't know it. There, I know they, they're all different tiers in age because, you know, Dan, who you just met, he got out later, you know, and Mike started first. So, there is that. But at the end of the day, they all do different things in the business, and some do better than the others. And, but, you know, some deserve more than the others. I mean...
But is that, do you talk about it? Do you say like...
I don't really talk about it. I talk about this. I just say this about that. Comparison is the thief of joy. You've heard that. That's not my, that's not my line. I'm stealing it. But I tell them, look, once you get a certain number, it, it's the same. I mean, a guy who's got a hundred million is leading basically the same life as the guy that's got a billion, except for maybe a yacht, you know? I mean, or some astronomical house. And so, it's not, I don't worry about that. What I worried about when I was starting out was that they would never have to struggle after leading the life they lived with me. You know, I didn't make a million dollars until 1997.
28 years ago.
Yeah. I mean, that's, that's the first year I made a million dollars.
Stop it.
No, but let me tell you why. And this is a secret I'm going to give to everybody listening. Because I kept taking all of my profits and pouring it into new cities. To, I mean, I was making a lot. I mean, I, but I was making...
So, you were paper rich, but you were, you were not cash rich.
No. But, but look, all that pouring in...
You know, last, this year we'll do, you know, uh, two and a half billion dollars in fees. [laughter] Once you catch up, once you catch up, the waterfall, it's, you know. So when I tell people I made a million, how you were 41, I go, "Listen, because I was doing Jacksonville and Tampa and Atlanta, and some of them were tough, some of them didn't make it, you know, didn't make it, took time." So I was really building. So now, you know, we got 7,000 employees in all 50 states. And, and I still got some cities that have not, that are still in the red. Like, you know, New York City is still in the red. But when I look at what it's going to be, when I look at my inventory, when, when I look at LA, it's going to be bigger than the core. All those, that 200, that 2.5 billion, the expansion is going to be bigger than the core in my opinion. So. And the great thing about that's when you, when you invest in those startups, you get to write off 40%. So if I put...
If I put, you know, 20 million in a city, I only have to put in 12 because, you know, it's a loss. So what happens in these businesses, you come in, advertise, red advertising, but, you know, then you kind of flatten out. You're not feeding the beast. And then all of a sudden, you start getting your money back, and then you cross the Rubicon, I call it. You cross the Rubicon, and that's 'cause I burn the boats. When I go in, I'm burning the boats. That's the river. When you cross the Rubicon, you go from red to black, and then it's just like, it's like a hockey stick.
When, when was that? When, when was the moment for you where you're like, "We're about to make a lot of money." And I'm talking exponential. I'm not talking millions. I'm talking we're about to...
Our private company's almost like a Fortune 100 company now. I mean, when you see, I don't want to talk about my net, but, uh, it was, you know, the last, uh, nine years just started, you know, and when it came, it poured. Thank God. Thank God.
That's the great thing about business. The FLB shoes. By the way, I am officially on, let me see this. I'm on day 57 out of 58 that I've worn these shoes. Love wearing these shoes every single day. I, I think Vinnie's got it on. The other night, we went to dinner. Vinnie was wearing this, this, uh, uh, black pants, white shirt with the FLB shoes.
We walk into the restaurant, seven girls lined up waiting to meet with Vinnie.
One girl was crying. She was crying. She was shaking.
She was [clears throat] she was shaking. [laughter]
The shoes. I was like, "I can't. Are you Ringo Starr?"
So, for those of you guys that are asking about getting the shoes before Christmas for your husband or your sons or your friend, this is what you want to be thinking about. Size black and brown. Uh, uh, uh, size black and brown. Let me see this thing here from what's available. So, size black and brown if you want to get them. Size 9, 10, and 11 are available to get before Christmas. White, all sizes are available except for 7, 7 1/2, and 8 1/2. Navy, 8, 9, 9 1/2, 10, and 11 are available before Christmas. Of course, after Christmas shipment is coming that'll be here New Year's. These things, we can't even keep these on the shelves, to be honest with you, with the shoes. Once you put them on, just go read the reviews with people writing reviews when they bought them. Once you put them on, you'll realize why this has become as hot of an item for us, uh, as we expected. It took us two years to do this. Rob, if you want to play the clip on that, and we'll get into the stories. Here's the FLB shoes. Go for it.
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Uh, folks, if you haven't yet ordered one, we had two guys yesterday that ordered four, uh, of all colors. Uh, and one of them was from the UK. The other one was from Belgium or something like that, ordering these shoes. If you want to find out how it matches against everybody else, go to vtmerch.com. On the homepage, you'll see the shoes. Click on the link to go learn more about the shoes and place an order for your husband, for your spouse, for your son, for somebody maybe that works for your company as a recognition. And, uh, go to vtmerch.com to place your order. If you enjoy this video, you want to watch more videos like this, click here. And if you want to watch the entire podcast, click here.