Taylor Adams Inherited Billions. Now He's Teaching Wealthy Parents to Raise Kids with Purpose.

We spoke to Taylor Adams in this week's episode of Moneywise.

Taylor Adams comes from a multigenerational billionaire family in Los Angeles whose wealth dates back to the 1890s. After some challenging years in his 20s, Taylor got sober and found purpose in helping other wealthy families navigate the complexities of passing on wealth in constructive ways.

Like all Moneywise episodes, Taylor breaks down their net worth, income, portfolio, and monthly expenses and then I, your humble host, pick it all apart.

We also went deep on: how to raise kids with healthy money mindsets, why finding purpose is more important than financial wealth, and the dangers of what Taylor calls "the Four Horsemen of Destruction in Wealthy Families."

Below you'll find my summary of the episode along with the entire transcript.

And by the way...this podcast, the concept of it came from Hampton, a community I founded where CEOs and business owners come together in small groups of 8 to help each other grow. Hampton members range from people with newish startups doing $3M in revenue all the way up to publicly traded companies with hundreds of millions in revenue and thousands of employees. Because of Hampton, I get to see these private conversations about business, money, success, and life. I figured some of these private conversations should be public, which is why I started this podcast. If you're a CEO, founder, or business owner, check this out. New Moneywise episodes come out weekly.

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Now, below are the notes and the full transcript.

The Numbers

• Taylor's family's assets under management: "over a billion" dollars
• Family wealth origin: Late 1890s when Taylor's great-great-grandfather pioneered the investment and bond business in Los Angeles
• Primary family business evolution: His great-grandfather started Mortgage Guaranty Corporation, which became the largest mortgage lender west of the Mississippi
• Current family focus: Apartments and industrial real estate
• Jane (another wealthy individual interviewed): Will inherit roughly $20 million
• Jane's current income: Base salary ~$150K, with bonuses close to $200K
• Jane's current net worth: Just over $800K, on track for about $1M

The Multigenerational Wealth Journey

Taylor's family wealth story isn't the typical one-time success followed by preservation. As he explains, "It's a compounding legacy. A lot of people think about generational legacies and building wealth as something significant was created, and then we have to preserve it. Our family story is a little different where in each subsequent generation, at least one person within that generation was able to figure out how to build their own value creation function."

This perspective challenges the common "shirtsleeves to shirtsleeves in three generations" phenomenon, where wealth is typically gone by the third generation. Taylor believes this common failure isn't about financial capital but human capital:

"I think what Andrew Carnegie was actually talking about is the human capital across three generations. You have a first generation that's an active value creator. The second generation transitions from value creation to value stewardship. So managing the wealth essentially, and then the third generation observes their parents being stewards of wealth rather than value creators, and they can have a tendency to become default value consumers."

This perspective has shaped Taylor's entire approach to wealth and how it should be managed across generations.

Finding Purpose Beyond Wealth

Taylor's journey wasn't without struggles. Despite growing up with enormous privilege, he faced significant personal challenges:

"Growing up in Los Angeles, I wasn't immune to the lure of pursuing property, power, and prestige. Any kid can get naively sucked into fast cars and fancy stuff. That was definitely the case for me. It was a thirst for significance, and that led me down a path that got pretty dark. I basically engineered my world around drinking and partying and chasing girls."

At 26, Taylor had a moment of clarity: "I realized that the trajectory that my life was on never intersected with the life that I wanted. And if nothing changed, then nothing would change."

After getting sober, he found Viktor Frankl's "Man's Search for Meaning," which transformed his perspective: "I was on a pathway of pursuing pleasure, instant gratification, and the impulsivity that comes with that, and then just had an awakening that I realized that fundamentally, life is about pursuing meaning and being of service to others and having purpose beyond yourself."

This realization led Taylor to found Belief Partners, where he helps wealthy families avoid the pitfalls he experienced by creating structures that support finding purpose rather than just preserving wealth.

Redefining Wealth as Value Creation

One of Taylor's most profound insights is his redefinition of what wealth actually means:

"I think it's important to recharacterize wealth as our ability to create value for others. If we use like a race car metaphor and I asked you what your net worth was, Sam, it's essentially like asking, 'Hey, Sam, how big's your gas tank?' And the reality is, like, I don't give two shits about how big your gas tank is. Show me what's under the hood. I want to see what your engine for creating value for others is. If that engine is awesome enough, then you can have other people put gas in your gas tank just because they want to see what it'll do."

This perspective shifts the focus from preserving financial assets to developing the capacity to create value, which Taylor believes is the true definition of wealth that should be passed between generations.

Parenting Strategies for Wealthy Families

When it comes to raising children in wealthy environments, Taylor offers several key insights:

1. Children Emulate Your Actions, Not Your Words: "My two year old and a three year old...they're just going to emulate whatever we do. I grew up with my dad going to the office at 7 a.m. and coming home at 7 p.m. and just grinding over his career. And I think a lot of my work ethic was a product of just emulating him."
2. Don't Bluff About Withholding Support: "There's a lot of families that I've spoken to where they're like, 'I've seen what wealth can do to poison future generations and rob them of meaning and purpose entirely. So I'm not giving them anything.' I don't care how much conviction you have as a parent...whether you realize it or not, it's a bluff."
3. Create Short Feedback Loops: Taylor's father encouraged him to try and fail at small projects, like making a radio commercial at age 13. "It was a really, really short feedback loop where I actually completed a project and where I was able to see it manifested in the real world."
4. Meet Kids Where They Are: "If your kid is super into watching YouTube videos or playing video games rather than be like, 'hey, I think you should go do something that's more meaningful and productive'...just meet them where they're at with respect to their interests and say 'yes and' and see if you can leverage assets to be an empowering force in pursuing the things that they're already interested in."

Taylor's approach emphasizes using wealth to accelerate a child's journey to finding meaning and purpose, rather than trying to preserve wealth at all costs or withholding support entirely.

The Four Horsemen of Destruction in Wealthy Families

Taylor identifies four common mindsets that destroy wealth across generations:

1. Preservation: "An entrepreneurial value creator grinds and experiments and takes risks until one day they look around and they're like, 'Holy shit, I've actually built something.' And then inevitably, an advisor will whisper in their ear, 'shirtsleeves to shirtsleeves in three generations'...So they switch from a strategy of entrepreneurial value creation to one of wealth preservation, which I think is crazy because it's in direct opposition to the strategy that created the wealth in the first place."
2. Protectionism: "If the number one priority is preservation of the wealth, then the number two priority is to protect family members from the wealth, because we've seen how wealth can rob future generations of meaning and purpose entirely. The problem with that thinking is...we should be teaching them how to fail while failing smaller and failing forward."
3. Stewardship: "In my experience, future generations only care about stewarding something that was created in the past when they can't access a vision for their future that's more meaningful than what already exists. And the subtext of stewardship is, 'hey, something really significant was created before you. And so we don't need you to create anything new.' So it disincentivizes future value creation."
4. Collectivism: "A first generation wealth creator can say, 'man, I've seen what wealth can do to tear families apart. I'm not going to let that happen. So I'm going to create really rigid, top down governance structures that prioritize family unity'...And the paradoxical outcome that creates is it just accelerates the likelihood that they all end up suing each other."

Other Key Quotes

"Fundamentally, life is about pursuing meaning and being of service to others and having purpose beyond yourself."

"The mandate that you want to provide future generations is you can't do nothing, so you have to do something, and that something should create value for others. And it's not a mandate to become independently wealthy in your own right. It fundamentally is just a mandate to pursue your own self-actualization."

"Money is a lot less important than I thought it was going to be. At least it doesn't make me always feel the way I thought it was going to make me feel."

"If your kid is super into watching YouTube videos or playing video games rather than be like, 'hey, I think you should go do something that's more meaningful and productive'...just meet them where they're at with respect to their interests."

"Wealth as he sees it, isn't just monetary, it's about adding value to the world."

"If we think deeply about it...we don't want more property, power, and prestige. What we really want more of is more moments where we feel like we matter, more moments where we feel seen, more moments where we feel like our contributions have value."

Links You Might Like

• Belief Partners - Taylor Adams' company
• Man's Search for Meaning by Viktor Frankl - The book that changed Taylor's perspective
• Hampton - Sam Parr's community for CEOs mentioned in the episode
• Lower Street - The podcast production company that produces Moneywise

Full Transcript

[00:00:02] Taylor Adams: I don't care how much conviction you have as a parent, and you're going to hold that line really hard, I promise you. Whether you realize it or not, it's a bluff.

[00:00:10] Sam Parr: One of my biggest concerns is how will my career success, my wealth, the money that I earn, how will that impact my child's life? I've done well for myself. I've gotten definitely a little bit lucky, a lot lucky, actually. And I have worked really hard though, and I understand the value of all the hard work that it took to get to where I am. My daughter, on the other hand, she's going to be born into a very fortunate, privileged, lucky situation. And so something I think about constantly is how do I make sure that she still has some type of motivation, that she can still find meaning and that she doesn't go down this aimless, reckless path? Do I not spend a lot of money on her to keep her from being spoiled? How do I make sure that my money and the things that I have in my life, don't rob her of any motivation in her life? Today's guest is Taylor Adams, and he might have the answer for me. I wanted to talk to someone who was raised in a wealthy family, someone who was born into wealth and has experienced it their entire life. And to figure out, well, how did they do it? How did they find motivation? Taylor is from a multigenerational billionaire family in LA. He's experienced the luxury and the pressure and burden of family wealth firsthand.

[00:01:15] Taylor Adams: Yeah, it was like kind of this ominous thing and, like, turned over the piece of paper and immediately went to, like, the bottom right and looked for bold numbers. I remember in that moment it was like I had this weird thought. One was like, whoa, that's a big number. And the second thought was, that's not enough.

[00:01:31] Sam Parr: And after a few rough years in his 20s, Taylor decided to get sober, and he dedicated his life and his career to helping families pass on wealth in constructive and mentally healthy ways with his new company called Belief Partners. In today's episode, he's going to get candid. He's going to share his own journey, his hardships, and he's going to share his advice on how to raise a wealthy kid and to make sure that your kid's ability to find meaning and purpose is there, and how you should invest in them, and how he was raised and all that good stuff.

[00:01:58] Speaker3: Haven't we made it, my love? Oh, honey, look how we made it this far.

[00:02:04] Sam Parr: I'm Sam Parr, and this is Moneywise. There's a ton of podcasts and resources out there that teach you how to make money and become wealthy, but none that really teach you how to handle all the life changes that wealth brings. I'm the co-founder of Hampton, a private community with CEOs who run businesses from 2 to $200 million. And I'm able to see a lot of behind the scenes conversations on this exact topic. So I know how much of a need there is for these types of conversations to happen in public, because they rarely do. And that community is what inspired this podcast and Moneywise. We provide advice by speaking to real people who have achieved some amazing things, but they're radically transparent about all their numbers, their monthly expenses, their portfolio, but also, and more importantly, all the issues and the problems and how they're solving those problems that come with being successful. All right. So let's hear a little bit about Taylor's background. Just how much is Taylor's family worth? I mentioned he's from a multi-generational family and that wealth goes back really far.

[00:03:00] Taylor Adams: The story goes back to like the late 1890s. My great great grandfather pioneered the investment and bond business in Los Angeles. His son, Commodore Morgan Adams senior, started working for him early on as a bond salesman, but ended up spinning out and starting Mortgage Guaranty Corporation, which became the largest mortgage lender west of the Mississippi.

[00:03:19] Speaker4: What a great name, Commodore Adams.

[00:03:21] Taylor Adams: Oh, dude, he was such a legit guy.

[00:03:24] Sam Parr: Is he the one who did it, or is he the son who kind of created the generational wealth?

[00:03:28] Taylor Adams: It's a compounding legacy. Like a lot of people think about generational legacies and building wealth as something significant was created, and then we have to preserve it. Our family story is a little different where it's in each subsequent generation. At least one person within that generation was able to figure out how to build their own value creation function. I like to say, while still leveraging kind of legacy knowledge, experience, resources, apartments and industrial real estate is our family's bread and butter at this point. Here's how much his family is roughly worth today.

[00:04:03] Taylor Adams: What the total AUM is at this point. It's, you could say over a billion.

[00:04:08] Sam Parr: But Taylor and the majority of his family, they don't actually know the exact number. And that's sort of by design.

[00:04:13] Taylor Adams: The net worth numbers or assets under management is not like a number we we typically share. What's more actionable is just understanding cash flow.

[00:04:23] Sam Parr: I guess when you have multiple generations in the family and the wealth is spread amongst everyone, it's pretty common not to know the exact number. Jane is someone we spoke to for this episode as well. She shared her story about growing up wealthy and very recently learning she is going to inherit roughly $20 million. She's in her late 30s now, and like Taylor, she doesn't know exactly what her parents are worth. They have never, and I do not anticipate, will ever share specifics of their finances because they are very private people, and I respect that. They've told me they have a guy and when they die, the guide will help me figure it all out.

[00:04:59] Sam Parr: All right, back to Taylor. I wanted to find out what it felt like having the success of his family, businesses weighing on him.

[00:05:11] Taylor Adams: Growing up in an environment where it's like you're in a business family, in an environment of extreme success, it has a lot of interesting implications. A lot of mandates that were not spoken but that I internalized, you know, on an emotional level. You think in order to be loved and respected by my family and specifically my father, I need to become as successful or more successful than he was?

[00:05:33] Sam Parr: That's a real burden because as you have kids, I have to imagine that everyone wants their kid to be better than they are in some capacity. Whether it's money, happiness, anything like that. You want your children to be better off than you were. But when you have generations of wealth and a lot of luck and a lot of hard work and all that stuff, but when you've been very successful for hundreds of years. That's a ton of pressure on you. If you want to achieve something greater than your family already has. On the other hand, money is money, and when you're young and it's at your disposal, it can be tempting to buy away that pressure.

[00:06:03] Taylor Adams: Growing up in Los Angeles, I wasn't immune to the lure of pursuing property, power, and prestige. Any kid can get naively sucked into fast cars and fancy stuff. That was definitely the case for me. It was a thirst for significance, and that led me down a path that got pretty dark. I basically engineered my world around drinking and partying and chasing girls.

[00:06:24] Sam Parr: Fortunately, Taylor recognized that his actions weren't providing him with a happy and sustainable life, and he decided to make a huge change.

[00:06:32] Taylor Adams: Driving home from work one day when I was 26, I just I had a moment of clarity where I realized that the trajectory that my life was on never intersected with the life that I wanted. And if nothing changed, then nothing would change. I had a realization that the most addressable thing in my life was my drinking. So I got sober at sober 26 right after getting sober, got a coach, and he had me read Viktor Frankl's Man's Search for meaning, and it totally changed my perspective. I was on a pathway of pursuing pleasure, instant gratification, and the impulsivity that comes with that, and then just had an awakening that I realized that fundamentally, life is about pursuing meaning and being of service to others and having purpose beyond yourself.

[00:07:12] Sam Parr: That purpose ended up being very helpful for other families with wealth. Set up the next generation so they don't feel lost, sort of like Taylor did. He does that with his company, Belief Partners. Oh, and that idea of finding purpose is paramount to everything Taylor's going to talk about today. Let's get into what we as parents can do to make sure that our wealth positively impacts our kids instead of holding them back. I once heard someone say, don't rob your kids of any struggle because that struggle is important towards building motivation, towards building grit, all these important things. And that's something that I'm very fearful of, is robbing my kids of that struggle. And this is a really common feeling among parents that Taylor works with.

[00:07:54] Taylor Adams: On a wealth creation journey. We might be motivated by the idea that I want to empower my children to have opportunities that I never had, so that they can live a meaningful and purposeful life. And then once wealth is actually created and realized, then it switches to now I'm worried about how my wealth can potentially poison future generations and rob them of meaning and purpose entirely. And when you think about that flip, it's like, man, what that tells me is that there's something wrong with how we view and manage generational wealth.

[00:08:28] Sam Parr: And as a new parent, one extreme that I've considered while raising my daughter is when she gets a little bit older, is basically not giving her anything other than education and healthcare the essentials. Of course, Taylor called me out, rightfully so, and he says that I'm bluffing.

[00:08:42] Taylor Adams: There's a lot of families that I've spoken to where they're like, I've seen what wealth can do to poison future generations and rob them of meaning and purpose entirely. So I'm not giving them anything. And once they finish college, they're going to be on their own, and I won't support them financially. I don't care how much conviction you have as a parent, and you're going to hold that line really hard, I promise you. Whether you realize it or not, it's a bluff, because what happens is once they finish college and they're like, all right, I'm ready to move back to the city I grew up in. Parents quickly realized there's no way for them to afford to live anywhere near where they grew up, and very quickly, they're subsidizing rent or justifying decision to purchase a home on their behalf.

[00:09:25] Sam Parr: But aside from just avoiding commitment on something that apparently you likely won't follow through on, Taylor actually makes the argument that passing your wealth onto your kids responsibly is one of the best things you can do with your money.

[00:09:36] Taylor Adams: We're talking about a capital allocation question at first, and so one, we have to acknowledge we're all mortal and we're going to die. And so whatever I've accumulated at that point is going to go somewhere. And I think it's really easy to come to the conclusion that we don't want to give it to the US government because they're the worst capital allocator out there. And so then the question becomes, all right, do I give it all to philanthropy or do I give it to my kids? Well, I could make arguments about the philanthropic sector being the second worst capital allocator out there, and a number of other challenges in philanthropy. People, if they think about it a lot and they explore the topic, they'll realize that capital allocation to future generations in the hopes that it will empower them to pursue their own. Self-actualization is a good strategy, but then they stop at that. They don't build the investment strategy to match that capital allocation strategy. If you and I were going to deciding to do venture and build a venture fund, and then we stopped there and didn't actually build a venture capital investment strategy. And I think that's the missing piece around this whole equation, is building strategies and systems that invest in the self-actualization of future generations.

[00:10:53] Sam Parr: And that's easier said than done. Obviously, you can't just hand your kids millions of dollars and say, hey, go do something with this. So what does that investment plan actually look like? If you're going to look at this financially, then you need to frame it that way. Taylor calls this human capital.

[00:11:12] Taylor Adams: There's this concept that I use of compounding human capital, which I frame as future generations should be enabled to do more and build more because they have access to knowledge, tools, resources that previous generations didn't have access to. It kind of is logical to believe that you should be able to do more, and that the compounding of human capital should happen the same as compounding of financial capital. The problem is that when you take that mindset and you believe you have this internal mandate that you need to be as successful or more successful than previous generations? Then you think that whatever I do, it has to be big. You're right. And the problem with that thinking is that nothing big ever started as big. But you tend to feel, naively that you can't do small things. And so what ends up happening is, is if you're entrepreneurially minded, you tend to dream up visions for what you want to create that are at similar scales to what was around you. And then you open up these huge feedback loops, and then you start building according to that feedback loop and that large vision, and you're like, shit, this is really hard and really painful. And it becomes really tempting to be like, you know what? That other shiny object, I'm going to open up this other shiny object over here and start going down that route. And so that's why so many young people that come from privileged backgrounds, but who are ambitious and motivated, we can fall into the category of becoming a dreamer.

[00:12:42] Sam Parr: All right. So there's two separate things to address based on that. The first, how can you parent your kid to have realistic expectations and experiences with building and growing something that they're passionate about, which we're going to get to shortly? The second thing is something I worry a ton about, and I think it's a critical piece to this entire conversation. I'll tell you what that is in a moment. But first we got to take a quick sponsor break. Okay, so as I was saying, the piece that is critical to all of this is the idea that just because I like to build businesses, just because I like to make money or I like to focus on career, that doesn't mean that that lifestyle is what's going to make my kids happy. And ultimately, I'm doing all of this to make them happy, to make sure they are happy. When Taylor talks about human capital, he doesn't mean just adding more to the bank account. Although wealth preservation is a huge part of what he focuses on with his work, wealth as he sees it, isn't just monetary, it's about adding value to the world.

[00:13:32] Taylor Adams: Fundamentally, as a father, I want to empower my children to live meaningful and purposeful lives. That takes a long time to figure out what that actually looks like. And it can be a very non-linear journey. But in my quest to empower them and accelerate that journey, it makes sense to want to give them access to financial resources where they aren't put in a position where they're forced to have a job or travel a career path that they don't find deeply meaningful, and they're actually miserable. And the hope is that if you can leverage resources to accelerate the journey to them, finding meaning and purpose in life, that that would be an advantage. The problem is, is that there's perverse incentives involved in that same wealth that can be leveraged to empower them on their journey, can also subsidize a journey of doing nothing. The mandate that you want to provide future generations is you can't do nothing, so you have to do something, and that something should create value for others. And it's not a mandate to become independently wealthy in your own right. It fundamentally is just a mandate to pursue your own self-actualization, whatever that means to you this idea that you were put on the planet for some kind of purpose, and that you have tremendous potential. Your first job is to do research and development on yourself, to understand what that purpose is, what the nature of your potential is, and then to pursue it in hopes of living a meaningful and purposeful life. If we think deeply about it, it's not. We don't want more property, power, and prestige. What we really want more of is more moments where we feel like we matter more moments where we feel seen, more moments where we feel like our contributions have value.

[00:15:10] Sam Parr: When you don't find purpose, that way of adding value to the world, that's when you could start to feel aimless.

[00:15:15] Taylor Adams: It's very, very common for multigenerational families and generations that have access to financial resources through their trusts to not continue on a life of being of service and creating value for others, and to get locked into kind of a do nothing lifestyle where their life is subsidized by their inherited wealth.

[00:15:37] Sam Parr: And this is something that he's seen a lot in his own family.

[00:15:40] Taylor Adams: There's four distinct family branches, and I'm in the branch that actively manages the office and is very entrepreneurial. So I'm the youngest of six kids, and all my siblings are very entrepreneurial and work really hard and are building their own thing. Other branches have had generations that were void of active value creators, and I would share that. It's like it's just emulation is very, very challenging to overcome. So I have a two year old and a three year old. However, whatever strategies me and my wife create on how to raise them, great, the reality is they're just going to emulate whatever we do. And so I grew up with my dad going to the office at 7 a.m. and coming home at 7 p.m. and just grinding over his career. And I think a lot of my work ethic was a product of just emulating him. Whereas if a family runs into a situation, let's say like the third generation, your grandkids, and they observed your kids being stewards of your wealth rather than active value creators. They're going to emulate somebody that isn't actively creating value. And so then the tendency is for them to become default value consumers. And so have you ever heard the expression shirt sleeves to shirt sleeves in three generations? It's really common in the which.

[00:16:52] Sam Parr: Is basically, you know, I read a ton about the Vanderbilts, the Carnegies, the Rockefellers, and basically by the third generation, most of the money is gone. Is that the idea?

[00:17:00] Taylor Adams: Yeah, that's the whole idea. I think we misinterpret the Andrew Carnegie quote and we focus on, like the accumulation, the preservation and the destruction of financial assets. I think what Andrew Carnegie was actually talking about is the human capital across three generations. You have a first generation that's an active value creator. The second generation transitions from value creation to value stewardship. So managing the wealth essentially, and then the third generation observes their parents being stewards of wealth rather than value creators, and they can have a tendency to become default value consumers. And so I think it's really important to reframe how we characterize and how we view wealth. Right now, we view wealth as the accumulation of financial capital as measured by AUM. And I think it's important to create a culture within your family that that's not how you characterize wealth. I think it's important to characterize wealth as our ability to create value for others. If we use like a race car metaphor. And I asked you what your net worth was, Sam. It's essentially like asking, hey, Sam, how big's your gas tank? And the reality is, like, I don't give two shits about how big your gas tank is. Show me what's under the hood. I want to see what your engine for creating value for others is. If that engine is like, awesome enough, then you can have other people put gas in your gas tank just because they want to see what it'll do. So I think recharacterizing what wealth actually is is super important.

[00:18:30] Sam Parr: Well, do you define value as like big scale? Like let me give you an example. So have you read the biography of Joseph Kennedy?

[00:18:36] Taylor Adams: I haven't, you should.

[00:18:37] Sam Parr: It's pretty cool because it deals with a lot of stuff you deal with. So basically a lot of people don't know this, but Joe Kennedy, JFK's father, he was the seventh richest man in America. By the time JFK was about to become president. Joe Kennedy was mostly a piece of crap guy. He wasn't a good guy, and there's not a lot that you'd want to copy with him, because he was a bad husband and his kids got into government, I think, because he cared about the power and he failed at becoming president, which is what he really wanted to become. But he said, my goal is to get super wealthy so my children can serve the country. There was a lot of other things, like he wanted power, but take that out of the equation. That's like an interesting goal. You know, his kids didn't become business people. They served others. And I love that. I really love that. And so when I'm thinking about it, I'm like, in one part of me, I'm like, I would love my children to be business people. So they could kind of be stewards of capital and carry this legacy on. On the other hand, I think that like if you think of who the most impactful people in my life is, it could have been like my fourth grade teacher. This woman probably has impacted 5000 or 2000 children over the course of 40 years. I find that to be very admirable or just a good mother, someone who raises 4 or 5 healthy kids. When you think of value, did your family ever look down on someone if they wanted to not pursue business, but instead, you know, serve others as a teacher, or just being a good mother, or being a good whatever it is that impacts people, but maybe on a smaller but more intimate scale?

[00:20:00] Taylor Adams: Yeah, 100%. There's no mandate to build wealth. The ideal is fundamentally rooted in service. And so that's why my father would always share things like, if you want to make $1 million, then find a way to help a million people. It's fundamentally about building your own capability where you can contribute to others and make their life more meaningful. And if you think about business fundamentally from a value creation and value capture standpoint, it's that value creation thing that makes it all work. And then hopefully you capture enough of the value that you can continue to create value for others. And there's plenty of family members within our family that that have become artists or teachers or done things that you wouldn't consider. Pathways to building wealth.

[00:20:45] Sam Parr: Okay, so what I'm about to say, I realized, makes me sound kind of douchey, maybe cringey, and it's easy for me to say is what a lot of people are going to be thinking. But as I've grown and I've been very lucky and privileged and fortunate in my career, and as I've grown sort of my wealth and some of my successes, I've realized that money is a lot less important than I thought it was going to be. At least it doesn't make me always feel the way I thought it was going to make me feel. And I'm a new parent, but it doesn't take a genius to think to myself, look, I don't think it's going to necessarily make my kid happy, but what will make them happy is something that my parents did. And you didn't have to have a lot of money to do this, which is they did a really good job of helping me discover the value of my effort of doing things, and it just so happened to be that I like to do business stuff. But whether it was sports, arts, becoming a teacher, as long as I had that encouragement from them to do that and I had a positive feedback loop from them, I think I would be equally happy and have a sense of purpose like I do now.

[00:21:44] Sam Parr: When you have some money, realistically your kids are going to know that there's always going to be some type of safety net for them. And so that motivation to make money to enhance their lives, it's not going to be the same motivator that there was for me or you if you didn't grow up with wealth, which I didn't. Instead, I think helping them discover the value of their efforts outside of making money is going to be crucial to helping them construct a life that brings them happiness and purpose. So let's get into what you, as a parent, could do to make sure your money is being used to help your kids find meaning and their own way to provide value to the world. We'll start at the beginning with trust, something that Taylor is incredibly in favor of.

[00:22:24] Taylor Adams: What you don't want to do is, is avoid estate planning, and then have inheritance happen just at your death without actually putting together strategies prior to that event.

[00:22:34] Sam Parr: But without proper consideration and planning, trust can quickly become a burden to your children.

[00:22:40] Taylor Adams: Like anything, wealth is a magnifier. It can be used for. It can magnify really positive, fruitful pursuits. But at the same time, if you're practicing destructive behaviors, it can magnify those as well. It can be like wings to fly or a rocket pack that can propel you into another dimension and give you opportunities that you didn't have previously. But it can also be a ball and chain to the extent that you're dependent on it, and that it's subsidizing your life.

[00:23:04] Sam Parr: So is that why you felt it felt like a burden? Is it like golden handcuffs when you like? For example, I know a lot of people who work at Google and they get paid $600,000 a year and they freaking hate their job, but they're spending almost as much as they make.

[00:23:16] Taylor Adams: Yeah, they become a wage slave. Kids are in private school and country club membership, and it's like you're making $2 million a year, but you can't quit your job because then you're.

[00:23:25] Sam Parr: Spending.

[00:23:25] Taylor Adams: One for your lifestyle. Yeah. Yeah. Totally. And so then you become a slave to it. And it can be a similar dynamic with trust assets if they are leveraged inappropriately and are just subsidizing a lifestyle.

[00:23:37] Sam Parr: And so the question becomes, how do you communicate with your kid that they have a trust and potentially an inheritance coming without turning it into a burden?

[00:23:45] Taylor Adams: There's two schools of thought. You make them aware from the jump. You always talk about it, have them know that it exists, and the other one is you never tell them about it. And I think there's a false dilemma in those two options. There's a middle ground of yes, you make them aware of it, but you create shared language around what it is and what it's designed to do. And then you create frameworks for how they can access that in a way that that reduces the chances that they're going to use those assets to subsidize a do nothing lifestyle and increases the chances that they can actually leverage those assets and resources as a way to invest in their own self-actualization.

[00:24:28] Sam Parr: Now, Jane, who we talked about earlier, she's in a different situation. She never had a trust, and instead her parents invested directly in her life at meaningful stages.

[00:24:37] Jane: My appearance absolutely helped me in places that made a huge impact in my life. Paying for my college so that I wasn't in student loan debt after college, paying for the down payment of my first home so that I could get into the housing market while it was still somewhat affordable. So they helped, but it wasn't a given in every aspect of my life.

[00:24:59] Sam Parr: And she said she's glad she didn't have more access to her parents wealth.

[00:25:03] Jane: I think I would have made a lot of dumb decisions with money in my 20s, because I certainly made a lot of dumb decisions with other aspects of my life. I'm really grateful that I didn't have access to the money in my 20s and 30s.

[00:25:15] Sam Parr: And here's the other thing. Jane says she only found out about her inheritance a couple months ago. Remember, she's in her late 30s now.

[00:25:22] Jane: I think that I benefited from not knowing that it was a given that I was going to get that money. Like my the fact that my parents separated it and they said that this is our wealth and you still need to work hard and we will support you if you need to. But ultimately, you are an individual and this is your life to live. And they didn't tell me when I was five that I'd be inheriting $20 million. They told me that if you work hard, hopefully you will have a better life than we did.

[00:25:51] Sam Parr: So Jane's experience is a bit different than Taylor's advice, and personally I am not sure which I prefer. I see the value of each. I think that right now my my stance is I just need to get to know my kids personality and hopefully by the time they're 4 or 5 years old, I can kind of figure it out. But frankly, I don't have a perfect answer for myself as to which one is best. But at the end of the day, as much as how, when, or even if you give your kids money matters, everything is ultimately going to rely on one thing. The thing that a financial planner can't set up for you over a couple of meetings. It's something that we just have to learn to be good at, and that's parental guidance. Taylor says that that starts with understanding the journey your kids have to go on.

[00:26:34] Taylor Adams: If you're a parent and you're analyzing, am I doing a good job of raising my kids? Am I setting them up for success? It's very much a TBD process, and so we tend to default on lazy vanity metrics of like, all right, which private school did they get into? Did they get into Ivy leagues? Are they on a career path where they can achieve success? Whereas founders know that the success journey is highly non-linear? It just takes forever nonlinear.

[00:26:59] Sam Parr: That implies ups and downs, and I'm sure a lot of them, when you have money and you have the resources, parents can overprotect their kids from failure. But failure is crucial for growth. And when you don't give your kids opportunities to fail, which is a really hard thing I imagine to go through. They won't understand that. Taylor's dad made sure to give him experiences that taught him this.

[00:27:20] Taylor Adams: When I was 13 years old, our family acquired an automotive company. So a company that manufactured superchargers for cars. So you put a supercharger on a car. It makes it go a lot faster. Yeah. And so pretty much overnight, there were, like, tons of awesome cars. So I had these ridiculous cars like a car that was like, called the Batmobile. That was a lifted Ford Expedition that had, like, the back cut off of it. And it was ridiculous. When I was 13 and we the company was just acquired and I thought it was the coolest thing ever. I was at dinner with the family and I said, dad, Paxton needs to advertise on the on the radio because if if everyone knew that superchargers existed, they would all want to put one on their car. If my dad was wearing the business hat during that interaction, he would have said, Taylor, I respect your idea, but it's not a good idea. This is a niche market. Mass market advertising won't work, but that's not what he said. What he said was, okay, go put a radio commercial on the air. I'll drive you to the radio station. I'll pay for the commercial. Two weeks later, I'm on the bus on the way to school, listening to my Walkman, and I hear a radio commercial that I produce go over the air.

[00:28:25] Taylor Adams: That was the first time from like an entrepreneurial standpoint that I was like, oh shit, I can actually do stuff. I can actually influence my environment and make things happen. And meanwhile, like, only seven people called the company and we didn't sell any superchargers, but that wasn't the point. It was a really, really short feedback loop where I actually completed a project and where I was able to see it manifested in the real world. What my father did from a mentorship standpoint was just encouraged me to try shit and fail at it. And I think when we think about empowering people on success journeys, success in my mind is nothing more than a compounding and perpetual series of failures where we learn how to fail small while failing forward. Until one day we wake up and we're like, Holy crap, I've actually built something that's significant. But growing up in an environment of extreme success. There can be the subtext of you can't fail if you think about it too long and you think about how success is measured within that relative context. You go, man, I'm never going to be successful. I might as well not try. And that's okay, because I know that there's resources that will take care of me.

[00:29:32] Sam Parr: Now, failing forward or having ups and downs, that's not the same thing as just winging things. With no real long term goal. You still need to approach this journey with an end goal in mind. The end goal being discovering a life that brings purpose. And there are things that you can do to help your kids along the way.

[00:29:47] Taylor Adams: First and foremost, it's meet them where they're at with respect to their interests. Because if you don't do that, like you're not going to get anywhere.

[00:29:55] Sam Parr: So what's that look like?

[00:29:56] Taylor Adams: Like if your kid is super into watching YouTube videos or playing video games rather than be like, hey, I think you should go do something that's more meaningful and productive or like, why don't you go get a job with so and so. And rather than going down that route, just meet them where they're at with respect, with respect to their interests and say yes and and see if you can leverage assets to be an empowering force in pursuing the things that they're already interested in. And that might be like sounds super simple, but it's not practice that often.

[00:30:27] Sam Parr: The yes and concept is exactly what Jane's parents did with her.

[00:30:31] Jane: I wanted to plan events. I wanted to plan like weddings. A traditional wedding planner in a in a small town makes 3040 maybe ish a year. And he was like, well, if you want to plan events, go to college, get a business degree, plan events for companies, then you have a little bit more of a safety net there. And I think having a business degree would be really valuable for you. I have been able to plan events for some very well-known brands across the globe, and that's not something that I ever had envisioned for myself in my early 20s. I definitely think that their guidance has influenced my career in a significant way, and I certainly wouldn't have gone to a private college for four years if I hadn't had them paying for it. So absolutely, their money and guidance helped shape my career.

[00:31:28] Sam Parr: And that didn't just mean taking away her initial dream and morphing it into something else. It helped her build the foundation that was conducive to actually attaining that dream.

[00:31:37] Jane: So I actually started my own business about 11 years ago, and I did plan events on the side. I was able to follow my passion when it wasn't like the primary income, and it was just like something that I could do for fun. And I also think that having the financial, that independent financial security that I have now is a huge benefit to me and my children. And I would not have had that if I'd had that other career.

[00:32:05] Sam Parr: That foundation, by the way, it's pretty decent.

[00:32:08] Jane: Base salary is about 150. And then with bonuses, I'd say close to 200. My net worth is just over 800,000, so I'm on a track to have about a million in net worth.

[00:32:21] Sam Parr: And there's another thing that Jane's parents did that significantly contributed to her success. It goes back to what Taylor was just talking about, which is that your kids are going to emulate you, which means ultimately, their work ethic, their habits, they're likely going to come from what they observe from you.

[00:32:37] Jane: I think that my career was heavily influenced by seeing my dad's career, and it always was kind of something that I aspired to be. So he worked in business, I worked in business and definitely heavily influenced by his career. And quite frankly, I was aware of the choices that you had to make in college and how important networking is and how you present yourself and all of these things that he instilled in me in like an early age that I think a lot of people don't traditionally have.

[00:33:07] Sam Parr: So there's the easy answer you want your kids to be successful, then you need to be the best version of yourself for them. The version that brought you success. Hard work, commitment, good spending behaviors, and a healthy relationship to your own wealth. All right, we have to take a really short ad break here when we get back. We still got some things to cover about being honest and empathizing with your kids. We're also going to learn about Taylor's concept called the Four Horsemen of Destruction and Wealthy Families. Hang on. So we were just talking about how important your own actions are for creating success in your kids. But that means being honest about your wealth. To show them healthy financial behaviors, they have to understand the context.

[00:33:47] Taylor Adams: So what you implied about frugality of lifestyle and living way below your means, in an effort to help your kids grow up with the right kind of mindset. Oftentimes, I've seen that be counterproductive, where you can take frugality too far and start living in a in a scarcity mindset rather than an abundance mindset.

[00:34:06] Sam Parr: Now, I don't think that means you have to share every little detail with them. Jane's parents found a pretty good balance. They didn't share details, but they still enjoyed their money and they didn't hide it.

[00:34:15] Jane: They were very open about the fact that they didn't have a mortgage. They were very proud of the fact that they didn't have a mortgage. My dad owned convertibles. There were certain clues that clearly we had some money. They never talked about how much a house cost that they purchased, or certainly didn't talk about his salary openly. But it was the thought that whenever we would ask, which I don't think I did a lot, he just said, we have enough. It's not a concern, was basically the general gist of it.

[00:34:47] Sam Parr: Even so, Jane is even more open about money with her children.

[00:34:51] Jane: My kids are always asking me, how much do you make or how much does a house cost? I'm not in a situation where I want to share my salary with them, but I have had detailed conversations with my 11 year old about how much our house cost when we purchased it eight years ago, and how much harder it is for people now that are trying to buy homes because of interest rates and because of inflation. And I, you know, try and explain interest rates to him. And and I'm not sure how much he gets it. They both have, um, high yield savings accounts. And so when they get Christmas money or birthday money, we'll put it into our betterment account. And they like to look at that and like, ask me how much it's grown, trying to kind of instill that joy around the choices that you can make when you budget appropriately and you can plan for things versus money being a source of fear and insecurity.

[00:35:48] Sam Parr: But even if you're doing everything right, we have to remember that look, we were all young, we were all naive, and maybe we were even a little entitled at one point. But it's not fair to assume that your kids won't also be that way some of the time. Both Taylor and Jane have turned into successful adults, but they both admitted that they both had to grow a little bit to get to this point.

[00:36:08] Jane: I mentioned that my parents paid for the down payment of my first home. I lived in that house for nine months, sold it, and moved for a job opportunity. And about two years later I went to go purchase my second home. My parents helped pay for the difference so that I didn't have a PMI. They paid for, you know, to get up to that 20%. And I remember mentioning something to them about like how I was like entitled to it. Right? Because it was like, well, you helped me with my first house. Like looking back as a 37 year old person, I'm like because of why, right? Like, that's so crazy to me that I thought that I deserved thousands of dollars for just existing as their child, especially as a parent myself with elementary school aged kids, I want them to have a sense of self-worth and motivation and all of the things that bring me purpose in life. I definitely took for granted what they provided for me in my 20s, and I appreciate, I think I appreciate everything that they've done for me so much more in my late 30s than I did when it was actually happening.

[00:37:18] Taylor Adams: I think I was 23 at the time, and I met with the trustee, who was the president of our family office and was kind of like this ominous thing where there was a piece of paper folded upside down on the table, and then he slid it across the table, turned over the piece of paper, and immediately went to like the bottom right and looked for bold numbers. I remember in that moment it was like I had this weird thought that there was like these two schools of thought. One was like, whoa, that's a big number. And the second thought was, that's not enough.

[00:37:54] Sam Parr: You've got to empathize with your kids and understand that they have unique mental hurdle to get over. They have different privileges and a different experience with money than you probably did. And when it comes to their me years, which is probably in their late teens and early 20s, they're going to feel a different sense of entitlement. Your job is to guide them through that, but understand that they're going to make some mistakes and potentially probably have a lot of wrong ideas. All right. Now, of all these mistakes that parents make, everything that we've talked about can basically boil down into four things. This is a concept that Taylor calls the Four Horsemen of Destruction. That's a great name. Before we end this episode, we're going to do this on rapid fire. The first horseman is preservation.

[00:38:38] Taylor Adams: An entrepreneurial value creator grinds and experiments and takes risks until one day they look around and they're like, Holy shit, I've actually built something. And then inevitably, an advisor will whisper in their ear, shirtsleeves to shirtsleeves in three generations, and they think to themselves, you're telling me that some entitled little shit, 2 or 3 generations down, down the line, are going to just destroy everything that I've created? I'm not going to let that happen. So they switch from a strategy of entrepreneurial value creation to one of wealth preservation, which I think is crazy because it's in direct opposition to the strategy that created the wealth in the first place. But the most important mistake in that is that it makes the financial capital the priority.

[00:39:17] Sam Parr: The second protectionism.

[00:39:19] Taylor Adams: If the number one priority is preservation of the wealth, then the number two priority is to protect family members from the wealth, because we've seen how wealth can rob future generations of meaning and purpose entirely. The problem with that thinking is, is this preservation mindset. It creates this incentive where we're going to try and set them up for success. But the reality is that what we should be doing is teaching them how to fail while failing smaller and failing forward.

[00:39:45] Sam Parr: The third is stewardship.

[00:39:48] Taylor Adams: In my experience, future generations only care about stewarding something that was created in the past. When they can't access a vision for their future that's more meaningful than what already exists. And the subtext of stewardship is, hey, something really significant was created before you. And so we don't need you to create anything new. So disincentivizes future value creation.

[00:40:10] Sam Parr: And last collectivism.

[00:40:13] Taylor Adams: A first generation wealth creator can say, man, I've seen what wealth can do to tear families apart. I'm not going to let that happen. So I'm going to create really rigid, top down governance structures that prioritize family unity by forcing everyone into a room together where they can make shared decisions around or collective decisions around shared assets. And the paradoxical outcome that creates is it just accelerates the likelihood that they all end up suing each other, which, by the way, is par for the course. It's not the exception. It's the norm that family members end up suing each other.

[00:40:46] Sam Parr: All right. Let's do a quick highlight of the main things that we learned from Taylor. In my opinion, the biggest and most important thing is that your children are going to emulate you. And so as a father, I need to work hard not just for myself, but to show to my daughter and future children that I work hard because I think that's the right thing to do, to show them that if I commit to something, I follow through, that if I want something, I put in the hours to go and get it. The second learning is to not push what I love onto my kids. Just because they are half me, doesn't mean that they are actually going to have my same personality. What I love, which is business. I love hiring people. I love creating teams. They probably won't care about that. Maybe they will, but I think it's safe to just expect that they're not going to really care about that type of stuff, because that's kind of a weird thing to care about. And the third thing, I think, is to change the language around success and wealth. I think that as my daughter grows and as my future kids come and grow, I don't think I'm going to talk to them about money in the sense of like, this number is good, this number is less good. I think it's more going to be about, hey, look, here's the effort that you put in and I'm proud of that effort. A little bit less results oriented and more action oriented, because I think this type of encouragement could be good regardless of what you do, whether you go into business, whether you become a teacher, it doesn't matter. I think this type of encouragement of hard effort is what really matters.

[00:42:16] Sam Parr: And that brings us to the end of this episode of Money Wise. And I'm curious, what are you guys going to do with your money if you are lucky enough to have a little bit of wealth, what are you going to do with your children? Are you going to leave it to them, or are you going to hide it from them? Are you going to talk to them about it really early on about your money? I want to know what you're going to do. You guys can tweet at me. I'm at the Sampah or if you're watching on YouTube, just tell me in the comments. I'm very curious. And of course, this podcast is made by my company, Hampton. Hampton is a community for CEOs and founders and people who own Owned businesses. We let in people who have something like a million in revenue, all the way up to 2 to 300 million a year in revenue. And most of these people who I meet, it comes from that group. We have all types of conversations that rarely happen in public, things you cannot Google. So if you own a company or you're the CEO of a company, check it out, join Hamptons.com. And of course, I have to give a shout out to my team at Lower Street. It's Lower Street. I've said many times in this podcast that these episodes are terribly hard to make, but guess what? They're not hard for me to make because the team at Lower Street makes it very easy. So if you're a company looking to produce a podcast, check them out. Lower Street.com the team over there, particularly Jackie, who I work, they make my life so easy. They help me find guests, they help me edit the podcast. They help write these scripts that I'm supposed to read. It's been so easy. So check them out again. Lower street.