How to Build Wealth with Intention: Blake Johnson's Family Bank Secrets
Today, we're diving into the transformative concept of the "family bank" with our guest, Blake Johnson, a recognized estate planning attorney. Blake's approach isn't just about wealth transfer; it's about teaching families how to build generational wealth with intention and prepare their heirs to be responsible stewards of their resources. Through his own journey, Blake discovered that giving children everything can lead to entitlement, which is why he emphasizes the importance of teaching kids the value of hard work and financial literacy. We'll explore how the right financial education can help prevent families from slipping back into poverty and discuss innovative strategies that can foster meaningful relationships while empowering the next generation. Join us as we uncover the principles that can lead to lasting success—not just for individuals but for families as a whole.
Today, we dive into the world of generational wealth with Blake Johnson, a savvy estate planning attorney and creator of the Family Bank method. This episode highlights how we can empower families to build wealth with intention and ensure their children are prepared to manage it wisely. Blake shares his personal journey, illustrating how teaching financial responsibility can transform not just family dynamics but also future generations. We explore the pitfalls of giving kids everything without teaching them the value of hard work, and how a structured approach can prevent cycles of poverty. Join us as we unpack these valuable insights and discover how to create a legacy that lasts!
Blake Johnson, a recognized estate planning attorney, shares his journey and insights into building generational wealth through his innovative 'family bank' method. This concept emerged from Blake's personal experiences, notably when he had to convince his father to hire him after law school. Their partnership led to the realization that financial structures could help families avoid pitfalls in wealth transfer and raise responsible heirs. During our engaging conversation, Blake emphasizes the importance of teaching children financial literacy and instilling values that prevent the cycle of poverty. He compares the successes of families like the Rockefellers, who educate their heirs, against those like the Vanderbilts, whose wealth dissipated due to lack of guidance. Additionally, he discusses the significance of responsibility and creativity in family financial planning. Together, we explore how these principles can transform not only individual families but society as a whole, encouraging listeners to adopt a proactive approach to wealth management and education.
Takeaways:
- Blake Johnson emphasizes that creating generational wealth requires intentional education and preparation for heirs, not just financial gifts.
- The concept of the family bank helps families manage wealth sustainably, teaching kids the value of hard work and responsibility.
- We discussed how financial literacy is often lacking in our education system, contributing to cycles of poverty that can be avoided with proper guidance.
- We learned that successful families pass on values and knowledge, not just money, which helps avoid the pitfalls of entitlement and financial mismanagement.
- Blake shared that creativity in structuring financial agreements can foster better family relationships and teach valuable lessons about money management.
- The podcast highlights that teaching financial responsibility can lead to a more equitable society, where individuals understand the importance of stewardship and accountability.
Transcript
Well, hello, everybody, and welcome to another amazing episode of Unstoppable Success. I am your host, Jaclyn Strominger. And today we have an amazing guest, Blake Johnson.
And as you know, on this podcast, we hear from amazing business owners, leaders, and entrepreneurs about their rise to success and how they help others also gain that unstoppable success. So let me just give you a little bit of background on Blake.
And because he actually, he's a recognized estate planning attorney, and he's the creator of your family bank method, which is a legally focused framework that helps families build generational wealth with intention, structure, and sustainability. He has. Blake's legal and business roots run really deep, with degrees in finance and law, including a J.D.
and a graduate degree on comparative law from LSU. And. And his work is grounded in strategy and real world insight. He has a podcast, he has workshops, and he has a great firm.
And he, Blake, equips his clients to avoid common pitfalls of wealth transfer, sidestep family conflict, and raise heirs who are prepared, not just privileged. Oh, God. And I love that. So welcome to Unstoppable Success, Blake.
Speaker B:Thanks. Yeah, I had a lot of help writing that one. It turned out really good.
Speaker A:No, it came out really good. But that's so important.
You know, we talk about success and actually, that's actually one of the things, you know, that I actually want to touch on, you know, touch on your story. But, you know, having success also starts with the right grounding and of how you operate as a person.
So how, you know, so tell us about how that's your. What you're doing helps other people have success.
Speaker B:So it. It's all started from, you know, personal experience of. Of having to. To kind of go through that. Out of law school, I had two.
Two job offers, and by the time it took me to. Drove to drive from Louisiana to Las Vegas, they both withdrew just based on the economy and so kind of had to start from zero.
Took me three months to convince my dad to hire me because he didn't want to do the training and the hard work that would go along with that. But we figured out we ended up being partners for a bit. And so that's a little bit of my background of getting into this.
And when we started butting heads about, you know, I wanted to grow. And he was at a different point in his career where he just kind of wanted to coast. He's like, hey, just buy me out. I'm like, okay, cool.
I'd love to do that, but I don't have money and I don't think a bank's gonna lend to me based on where I'm at. And so he said, all right, well, I'll be your bank. You pay me back over time.
And that's where this family bank concept really became real for me, was experience that. It was a great opportunity. I was able to pay him off over five years, get on my own.
He loved it because he got paid over time, reduced his taxes instead of, you know, recognizing it all at once. And I didn't realize at the time, but that was. That was the family bank. And then a couple years later, I was introduced to a guy who.
Who gave me the full version. He's like, oh, you've already been doing this.
Personally, I need someone to help create the legal structure so that we can do this, you know, for other people. And so that's what we do, is we create these opportunities to help other.
Other people who've been successful and to pass their wealth onto their kids. Not just giving it to them, but teaching the kids how to use it. You know, giving them opportunities to succeed without just giving them everything.
Speaker A:I absolutely love that. But so.
So when you think about that, you know, helping kids not just be given, but, you know, so that they can actually learn to use money, you know, how do you see that, that impact? What's the greatest impact with that?
Speaker B:I think the biggest thing you'll see is you have a far less likelihood of families going back into poverty. You know, you've probably heard the. The term, you know, shoestrings to shoestrings.
In three generations, someone pulls themselves up by their shoestrings, does really well, becomes successful, and within three generations, they're back to where they were because the values and the work ethic and all the things that made them great weren't passed on. So that's what we focus on is how. How can you pass those things on as opposed to just passing on money?
Biggest comparison that people talk about is you have the Vanderbilts versus the Rockefellers, you know, similar timeframes. Both at one point in their lives, were the most wealthy men in the world.
But at the Vanderbilts, within three generations, had nothing left to show for it because they just spent. They were consumers. They didn't teach anything about business and how to actually provide value. Whereas the Rockefellers used trust, set things up.
So that way it was, here's how you become successful. Here's education pieces here you can borrow from the trust assets, but you're not going to get the whole thing.
And they're still today One of the wealthiest families in the world because of that. And so we take those principles.
It's done every day in super high net worth families, but they have a private family office so people think that they can't do that stuff. And so we take that, we distill it down and make it so that, you know, more people can implement those tools.
And we're actually working on a program that's kind of an entry level for even if you only have, you know, a few assets, but you want to start teaching your kids these principles. Okay, we're going to have a program for that. So that way you get the entry level and then you build up to doing the full actual trust stuff.
Speaker A:I absolutely love that where you're, where you're giving people a starting block because, because wealth, you know, like anything, it's like wealth can be get wealth but you have to be able to have that. So you know, somebody might let just, I'll just say, you know, have like $10,000, which is not a lot. You're not a huge amount.
But if somebody who's starting out, if you take that $10,000 and, and you start to save that compound effect of where it can go. And so being able to teach that to people is, and build it is so important.
Speaker B:Yeah, really has become my passion to teach people about this.
You know, I've got two kids of my own and so, you know, I with them and, and basically what I, you know, the stuff that I figure out that works well with them is what I'm trying to teach others to do. Because if we, you know, I see with their friends, they're just giving.
Given a bunch of stuff and their attitude towards things, their attitude towards people is so different from the one. The friends who come from areas where the, the parents require things of them. They were, they have to work, they have to, you know, contribute.
Those, those things make all the difference.
Speaker A:Yep, it does. You know, I always, I say this term a lot, but it's. We want people who are not just participating members of society.
We want, we want people who are participating, participating members of the family, which is so important. So tell me how you think what you're doing actually translates out into the workforce, into the world.
Speaker B:So I mean, most people are going to have kids, they're going to have families. So you know, you're going to have that opportunity to, to teach your own kids. But I think it starts with you like do you understand money?
Do you understand how investing works? Do you understand, you know, how working hard is A piece of the puzzle. But it's not the only piece.
Like how do you apply yourself in the right direction? So it starts with that maybe you need to understand that yourself.
And then you can turn around and translate that and teach that to the next generation or maybe it's younger siblings or whatever, but it affects everybody.
You know, our education system unfortunately does not do a great job of educating on financial literacy and that's what leads to so many problems with poverty.
And so if we can teach more people about how to be responsible and learn these things and couple that with when you are successful, teach other people, be charitably minded, we can bring up society as a whole as opposed to just, just giving money to the problem. We need to fix the root cause.
Speaker A:Right? Yeah. No, I love that. And I mean, I see this also just having a really big impact in the boardroom, so to speak, in corporate, you know.
So what's your take on that? Like, you know, the kid to corporate.
Speaker B:There's a lot of people who've been successful with transitioning businesses to their kids, but there's also probably three times as many who did not have that success. And it comes down to how early did you involve them in the process, did you expose them to it and do they want to do it?
You know, is the first question. Because they've got to, got to have a desire to be involved in there. But I think it will, it helps change how you make your decisions.
You're thinking more long term in how you make your decisions in the boardroom and what, what that's going to look like instead of just short term needs.
Speaker A:Yeah. And well, I'm looking at this also from the standpoint of, you know, somebody who's listening to this today. There's a couple of key things.
It's like, you know, listeners, if you're, you know, looking for that greater success and being unstoppable, it's, it's learning that you know that you have to be able to teach and that you know, your, your person, your financial stability has a huge impact of how you actually act in your, maybe you don't have your own business, but you know, in your day to day job or wherever you're doing for your work because there's a level of stress. Right.
But you also, you're, you're, you know, what you're doing is helping families educate their kids which therefore in the long run the benefit is that they're going to be able to understand how to use those same principles in the corporate world. Right.
Speaker B:Yeah, they are for sure. It's, there's not a whole lot that's not applicable in every part of your life. You know, most principles are universal no matter what you use it for.
And so if you're looking for stewardship, accountability, all those things that you want your kids to learn, that starts with you, are you living those principles yourself? Are you doing that in your day to day job in the boardroom or wherever you're at?
Speaker A:Right.
So how do you, as you're working with your clients, how does you know how much does the, the, that personal, both personal and professional mission come into play?
Speaker B:It's a, it comes in every day because inevitably a client lasts. Well, what did, what do you do? What, what do you do with your kids? What are you doing with your trust?
You know, that's where they want to start as the baseline is, is because if I'm not living it, if I'm not doing it, then, then why would I listen to what you're saying? So I have to, to be, you know, practicing what I preach. And then from there it's, you know, I, they need to feel the passion behind it as well.
Because if, if I'm not excited about it, well, then why would they be excited about it? So I think those are the, the two main things. It, it really is a daily thing that I have to, to think about.
But luckily it's something that I enjoy and I'm really passionate about and feel that it will have a huge impact. And so I'm able to share that every day.
Speaker A:So, you know, I love that.
And somebody shared once, once with me that whoever you're going to hire, whether it's in a financial situation or a trust, like, ask them to show you either their, what they're doing, like, literally show them. Because if they're not doing that themselves, as you just said, how can they do it for you if they're not doing it for themselves?
So I'm curious, like, what are some of the biggest pitfalls that you see people doing? Like, like you're like, oh God, if I could stop the world from doing these three things.
Speaker B:The, the biggest one is trying to give your kids everything that you didn't have. It all stems from a good place. People want to give their kids everything.
They think they're helping them by giving them all the tools, they're giving them the best equipment, they're giving them, you know, all the, the private lessons and everything else. Not to say those things are bad, but if you just give it to them, there's no value there for the kid. It's what you want.
And so they start to build this entitlement attitude towards things. Well, I should just get it because of, I was born into this family.
I got the, you know, the gene pool lottery or I, you know, happen to get into a great family. And so I'm entitled to always have what I want instead of thinking through and being intentional with it.
I think gifts are great in certain circumstances. Obviously, if it's kid's birthday or Christmas, yeah, give them some gifts, but at the same time, don't give them everything.
You know, my kids want to go to sports camps during the summer and, you know, we're going to make them work to contribute to part of that. My wife and I have also told our kids that if you want a car when you turn 16, you have. We will match whatever you saved and can put towards that.
So if they don't care about it, great. We don't care about it either. It's something that they have to put in that effort.
But if they're going to put in that effort, okay, then, you know, we'll help them with that they wanted. So one, my oldest son wants to earn more money right now.
And so we came up with a business plan for his lawn mowing business, us, and he's borrowing money from us to buy a bigger electric bike. So that way he can pull a trailer to carry the lawnmower throughout the neighborhood because he's only 13 and can't drive a car.
He came to me with that idea that was super creative. Okay, here's how it's going to work. And then here's the loan terms. And we, you know, sign an agreement.
This is what you're going to pay me over the next eight months as you do this. So those are the kind of things you have to do is be more creative with it instead of just.
It's so much easier to just write a check or to just buy the thing instead of going through those things. So really, you know, you asked me for three, but that's the big one that I see over and over again is just giving it.
And then we, you fast forward that to, you know, 50, 60 years down the road when someone passes away.
All the estate planning stuff that you see, everything that the professionals do is based on giving away as much money as possible to the next generation to eliminate tax and lower the taxes that are going to be generated from that.
That, that's a great strategy, but it's not necessarily the best one for Your kids, if they don't have any preparation for how to handle a big influx of cash, what's it going to do to them? It's just going to magnify whatever issues that they have. That's what money is. It's a tool that magnifies.
If you're a really good person and you're smart with money, it's going to magnify your ability to do that. But if you're really bad with money and you're just going to waste it on dumb things, it's just going to magnify the amount that you can do that on.
And so, you know, same thing. When you do pass away, just giving it to them because they are your kids isn't necessarily the best aspect. We always start our planning from does.
What would you do if you were still here? What are the things that are important to you? Your values there, that's where your estate plan needs to start.
And we, we pull, we make the plan around that. And then once we have that, then we can look at the best tax strategies instead of tax strategies and passing on first.
Speaker A:I love that.
And all I kept is, you're talking like, what I'm thinking about is like, you're talking about people who just like, you know, don't know how to handle the cash. It's like the lottery winner, right? The guy who wins the Uber, blah, blah, blah, money from the lottery, and next thing you know, he's still broke.
Speaker B:It's, it's like 95 or higher of lottery winners within five years are back to being broke. Like it's a crazy statistic. And it just shows you have to have some education and some knowledge around it to be able to handle it.
And yet we do that to each generation time after time. It's just estate planning is give the most money amount you can to your kids, give it to them when you die, give them to him when you die.
Instead of, let's think about how we can educate them so they're prepared for it. So it is ongoing.
There's some families in who have throughout history who have mastered that and they do really well and they're always influential, they always have money, but the vast majority don't. And that's why, you know, you see problems created over and over again.
Speaker A:Yeah, no, you know, and it's interesting.
I, you know, I, I, I think it's so important today to teach our kids those, those values of understanding that they're not just, not, not everything is just given to them. They have to understand that, like, the value of working for something, it just doesn't have to happen.
I mean, it's even like your grades, like, you don't just get given a grade. It's like one of my big pet peeves is like, don't give everybody. No offense. And people might yell at me for this.
Do not give everybody a freaking trophy. I am sorry. Like the Olympics, there are three. Have you, have you seen the Olympics, by the way? There are three medals. Gold, silver, and bronze.
Not everybody gets a participate in, you know, medal just for going.
Speaker B:And it could be the difference of 0.01. Like you want to give that person a medal because they were so close, but that's not the way it works.
Speaker A:It doesn't work that way. Like, don't give everybody a medal. No, work for it. You know, the guy who's the mvp, he's working his ass off. Like, work for it. Right.
And, you know, it's, you know, it's crazy, you know, that, that mentality. We don't want to hurt people's feelings. No, actually, no offense, but you kind of do because if you don't have something, you have to give something.
So people want to earn it and want to work for something, and it's same, you know, same thing with money. You've got to work for it and earn it.
Speaker B:Yeah, I do want to be put, like a little caveat or maybe, you know, a little caution there. Don't cut them off and don't make them solely reliable.
That's not what I'm trying to say here is the, the idea of the family bank is give them opportunities to have those learning experiences in a safe environment where they can recover.
If they do fail and lose everything on, you know, a dumb purchase when they're 12, okay, that's a good catalyst for them going forward, but they're not going to be out on the street. Like, that's not this type of stuff we're talking about, right? Yeah, it's about creating opportunities.
And then if you have the funds available, lend it to them, because then they have an opportunity to get it at better capital rates. You know, they have access to it a lot quicker than going through a bank loan or that kind of stuff.
So it gives them great opportunities, but they're not just giving it. Like, we want to find that happy medium. And so it's going to be different for each person, each kid that you have and each family.
So I'm not just saying, hey, kick them out. They're on their own. They don't get any help. We want to help them along the way and give them the best opportunity to succeed.
Speaker A:I love that, you know, and I.
And I really want to actually emphasize the idea also of the, you know, what you're talking about with the family bank, because, you know, getting capital for something today is hard. And if you can, you know, and I guess this is the question, how would you.
Maybe a family doesn't have it, but maybe they've got two families, like, you know, their grandparents, like, how do you work with them on. On the, you know, capital investment from 2.
Speaker B:The best part about this is there's no single right answer on how to do it. You know, create. Creativity is king here. So it really is.
You know, how can you structure these things and starting to think creatively of how we can make this work. One of my favorite stories, success stories, wasn't even about necessarily the money. It was about mending a relationship.
And so, you know, a grandmother was lending money to her granddaughter that she did not have a good, good relationship with for her to buy a car. And one of the things she required of her was that she had to write a letter to her every month when she wrote that check in and she wrote her back.
And so they started this pen pal, you know, series of going back and forth, and their relationship changed, and they became so close because of that. So, like, that's the creativity I'm talking about. It doesn't necessarily have to be just a straight money thing. It can be any number of things.
And so use your imagination. Think about that. If you've got multiple families who want to help out, great, do that. Create a little bit of structure.
Have written agreements, make it formal. But, yeah, pull from different resources. That's absolutely fine.
Speaker A:Yeah, I absolutely love that. So, you know, in your practice, like, how many people do you want to impact? How many families?
How do you, you know, is there a goal like you like, oh, my God, like, I'm working with how many today, and I would love to.
Speaker B:So I want to scale this. You know, the company that we're building to be, it doesn't necessarily need to be just us, our firm doing the work. I want to have it be.
So we teach other attorneys how to do this stuff, because really it needs to be a national and then global impact of teaching these skills, because that's really the goal is to help teach financial literacy to everyone so that we don't have that poverty level anymore. Because if we can teach these tools and help people understand this, that goes away and that's what we're looking for is to impact that.
Speaker A:I love that. I love that. So bringing it to more people, more attorneys. And. And. And I'm kind of curious. Do you know, is.
Do you see a different in other parts of the world versus United States versus Europe versus.
Speaker B:So I haven't looked a lot into to other countries as of yet, but I was reading an article the other day about Switzerland, and it was fascinating because they have doubled the amount of millionaires per per capita than the US does, and they have almost zero poverty.
And it's because they teach a lot of these skills about delayed gratification, stewardship, you know, living within your means, those kind of things, and so you have very little problems there.
They're one of the most affluent countries in the world because they take that stance and they educate that, you know, in the family, first and foremost, it has to happen at home, but then there's a lot built into their education system around that, and then it's just a cultural shift that they've made. So it's an, you know, nationwide, they have that.
So it's really cool to see that if you can do this the right way, it can have a huge impact on the nation as a whole. So, you know, that they'd be a system to model.
Speaker A:I absolutely love this.
So, listeners, you need to connect with Blake, because first of all and foremost, at the end of the day, we're also talking about ending poverty here in the United States and bringing up the values of every family, right? So, listeners, do me the favor. Connect with Blake, learn, and get in with the family bank, because it is so important.
And then I want you to do me a favor, and I want you to share this episode with your friends, families, and colleagues, because the more people we can have working with Blake and his system, the better we all will be. So please do me that favor. Reach out and make sure you're connecting with him. Blake, thank you for being a great guest.
And listeners, thank you for listening. This is the unstoppable success helping you be unstoppable.
