Absorbing the lessons
When Spence Wilson’s sister Carole was a student the University of Alabama in 1972, their father, Kemmons Wilson—founder of the Holiday Inn chain—was featured on the cover of Time magazine. “She called Dad and said, ‘They say you’re worth all this money, and I’m down here and you give me this lousy allowance,’” recalls Wilson, 64. “The company’s Holiday Inn franchises were in their heyday, and Carole had no idea about how successful Dad was, what his net worth was, which was mentioned in the story.”
The family’s current company, Memphis-based Kemmons Wilson Inc., derives its $400 million annual revenue from real estate, investments, hospitality, insurance, aviation and other industries. Wilson, the president, works with brothers Robert, 62, and C. Kemmons Jr., 60, both executive vice presidents and principals.
His sister’s phone call to their father, Wilson says, “tells you something about the way we were brought up. I have no great recollection of our parents ever saying we need to talk about financial responsibility. We just absorbed that from the way they lived their lives: very simply and modestly.”
Wilson and his brothers worked every summer from age 14 on, through college. He continued the tradition by putting his own children to work during the summers once they turned 14.
When his children, nieces and nephews—14 in all—turned 16, he and his siblings set each of them up, with a friend, at the company’s time-share resort in Orlando. “They’d go down and live on the property,” he explains. “We’d get them a car to drive—they had to put gas in it. They worked at the resort and were paid a wage and had to pay their own expenses.” One son worked in a warehouse; one cut the golf course grass each day at 6:30 a.m. His daughters worked in the retail store. “It was a great sense of independence and trust,” Wilson says. “They could do what they wanted with their money. Most of them saved. But they didn’t have a whole lot left after paying for food, which was another lesson. It was a subtle message that says it’s kind of expensive to live, and you do have to watch your Ps and Qs.”
At home, Wilson and his wife, Becky, gave each child an allowance. “It was based on a budget we’d sit down and put together, to cover school requirements but also clothing,” he says. “Rather than giving them $20 a week, idle spending money for whatever, we might give them $100 a week. But they had to spend that on all their needs. They got very frustrated having to balance their checkbooks, but it made them aware of what it costs to live.”
Today his son, Spence Jr., 36, and nephew Kem Wilson III, 32, are vice presidents in the private investment group. Daughter Lauren Young, 31, is executive director of the Kemmons Wilson Family Foundation, where his daughter-in-law, Stephanie Wilson, also works. Nephew McLean Wilson, 29, just entered the real estate development division after finishing an MBA at Dartmouth. Wilson’s daughter, Rebecca, 33, works as marketing director at a bank and trust company in Denver.
“We have always been pretty balanced and pretty modest,” Wilson says. “So maybe that’s kept us out of financial trouble.”
— Spence Wilson
Kemmons Wilson Inc., Memphis
Steering clear of peer pressure
George D. Bartell, 56, third-generation chairman and CEO of Bartell Drug Co., a 54-store pharmacy chain based in Seattle, says he doesn’t remember how his parents taught him about money. He and his sister, Jean Bartell Barber, 55, the company’s vice chairman and treasurer, both received an allowance, but he doesn’t recall how much. “My parents went through the Depression,” he says, “so I think we got lectures about how you never can tell what’s going to come next, so you ought to save. There was a savings program through our grade school that some local savings and loan ran. And I remember one time I needed a new baseball glove and I needed to work to get it. I helped in the garden.”
Bartell wonders whether he is doing enough to teach financial prudence to his own children, Claire, 13, and Mike, ten. He ticks off some of the strategies he and his wife, June, have implemented. “They get an allowance, although we have not thought carefully enough about how to stage that—how much and what I expect them to do with it. Claire does have to pay for school lunch, but she can make lunch at home and save. They both have savings accounts, but I don’t know that they do a lot with them.”
For someone who presides over the oldest family-owned drug chain in the U.S., with sales of $300 million, he sounds almost insecure when it comes to teaching his children the financial facts of life. “I try to explain some general things about business to them—things like credit, mortgages—but not in any organized, thought-out way,” Bartell says. “I don’t know if I’m making any impact or not.” He’s especially concerned about the pressures from his kids’ peers and the media.
Bartell needn’t worry so much. So far, at least, his children seem to be unusually immune to labels and fads. “I think my son can recite advertisements by rote, but he’s never been a toy guy,” Bartell says. “Some pressure is mitigated from that. We never let them have video games, and they never put that much pressure on us. Some kids would keep working on their parents till they get [what they want], but our kids haven’t done that.”
Claire is expressly anti-designer clothes, her father reports. “She was never interested in Barbie,” Bartell says. “She was never interested in what others are interested in. The only expensive thing she’s done is buy beads or crafts.” She’s also bought pets, he says. When his kids get gift money, Bartell says, his wife urges them to put some of it into their savings accounts.
But, he cautions, they’re still young. “I think it’s kind of too early to tell.” To make sure they appreciate that money is a finite resource, he’s thinking about giving them a clothing allowance when they get older.
— George D. Bartell
Bartell Drug Co., Seattle
Learning the hard way
“Dad always told us, ‘If you want something in life, you’re going to work for it,’” recalls Matthew Hoth, 34, senior vice president of Advanced Military Packaging, a Milwaukee wooden crating and packaging company. As a youngster, Hoth cut lawns, shoveled driveways and did other odd jobs. At age nine, he got a job at the farm across the street, feeding calves and cleaning hutches. “Everything I wanted—a fishing pole, bike and car—I had to earn myself,” Hoth says. His father, Howard, the company president and founder, “instilled in us that money is important,” Matthew notes.
He and his brother Mark, 31, now senior vice president, operations, received an allowance for doing household chores. “We were not allowed to spend it without permission,” he says. “I fought about that until I reached age 12 and it started to make more sense.”
Every year the family took a trip to Disney World. When Matthew and his brother were young, their parents, now both 59, bought them $700 worth of Disney stock. Today that stock is worth almost $80,000. “I can’t retire on it or anything,” Hoth says, “but I used it [as collateral] to get a loan to build my house.”
But these early lessons did not prevent Hoth from having to learn a few financial lessons the hard way. When he got his first apartment at age 19, Hoth got a credit card—against his parents’ wishes—and racked up $15,000 in debt. “All the sudden it became, ‘Now it’s mine. I can do what I want,’” Hoth remembers.
When the debt became overwhelming, he moved back home. His parents made him pay rent, which they used to pay off the outstanding balance. It took several years to clear the debt. “I haven’t used a credit card since,” Hoth says. “I keep one credit card in a box in the freezer, to make it difficult to access.”
Hoth, who now values his good credit rating, is trying to impart his father’s wisdom to his daughter, Alyse, 13. He requires her to save most of her gift money. Alyse used to argue about that, as her father did, but “she calmed down a couple years ago,” says Hoth. He also bought his daughter Disney stock—before she was born. Alyse works at a nearby farm, as her dad had done.
Hoth notes that he is doing one thing differently from the way his parents did. “My mom and dad never took me to the bank until we were teens,” he notes. But Alyse has been doing her own banking since he opened up her savings account when she was about five years old. That way, he notes, “It’s not just Dad taking her money. She gets to see where her money is going.”
— Matthew Hoth
Advanced Military Packaging, Milwaukee
Perpetuating family values
Bernie Rubin started working at age 11, delivering newspapers. His mother had died when he was four, and the extent of his father’s financial advice, he recalls, was “Don’t spend foolishly.”
Rubin, the 69-year-old co-founder and chairman of Bernie & Phyl’s Furniture in Norton, Mass., worked his way through college and then did manual labor at his father’s trucking business for 25 years.
“It wasn’t easy to make a living all those years,” recalls Rubin. When Rubin was in his early 40s, his father passed away, “and we lost our biggest account when it went out of business. That client was 75% of our income.” So he and his wife, Phyllis, now 67, used the trucking business to get a bank loan to open a small furniture store.
Today, Bernie & Phyl’s Furniture has six locations and employs 450 people, including the couple’s two sons: Larry, 47, the CEO; and Robert, 44, president of merchandising and marketing. Daughter Michelle, 39, used to manage one of the stores but “retired into motherhood,” says Rubin. Her husband, Bob Pepe, 40, heads up customer service and is warehouse coordinator.
Rubin says his father “taught me the value of working hard for the dollar. I never spent more than I had, and my sons did exactly the same. I always told them, anything you want, you have to work hard for it.”
Like their father, Larry and Robert started out by delivering newspapers. “I never gave them allowances,” says Rubin. “If they needed something they’d ask me, but they worked and had their own money.” Larry worked his way through college. Robert took out student loans, which Rubin repaid. By the time Michelle went to school, Rubin’s business was doing well enough for him to afford to pay her tuition. “Michelle demanded more from her parents and wanted more,” Rubin reflects. He admits he had a hard time saying no.
“Now they’re adults, and I could say they’re cheap,” Rubin observes. “Now that we’re successful, they know what to do with a dollar. I told them, ‘I don’t want you to break the chain. Keep the chain going.’”
Rubin’s children seem to be passing on what they’ve learned to their own kids. “My children are teaching them the values that I taught them,” he says. “They’re not spoiling their children at all. You could say their grandparents spoil them, but in a small way.”
— Bernie Rubin
Bernie & Phyl’s Furniture Norton, Mass.
Teaching the basics
“When you’re brought up by parents who went through the Depression, money is always an issue,” says Tom Roberts, 51, the fourth-generation owner of State Publishing in Pierre, S.D. His father, Godfrey, 84, taught Roberts about personal and business finance, mostly by example. For instance, Roberts says, his parents borrowed money only once, to buy a vacation home. For their other major purchases, “They saved before they bought,” he says.
As a youngster, Roberts says, he received an allowance; later, “I worked summers and after schools all the way through high school.” At age 17, he wanted to buy a 1965 Pontiac LeMans, priced at $600. Roberts put down $200; his father lent him $400 and made him pay back $50 a week. “He gave me a good lesson there,” Roberts says. “I just worked and saved my money.”
Roberts considers himself fairly disciplined with money, but he admits to having amassed some debt after his divorce a few years ago, when he had to buy back half the business from his ex-wife. “It’s been a whole new world of learning how to manage finances with that black cloud over me,” he says. “I have a little different approach to my thinking now.”
As for his own children, “they’re a whole lot different than our generation,” he says. “We’ve raised them to have some of the nicer things without having to work for it.” He marvels that each of his three children—daughter Tracy, 23, son Michael, 20, and son Alex, 18, have different attitudes and habits around money, even though he says he’s treated them equally.
Tracy’s responsible, Roberts reports, although when she spent a semester in Scotland “she used the credit card more frequently than she should have.” When his middle son wanted a pick-up truck, Roberts co-signed on a loan, which his son paid off on time. His youngest son worked for two summers and put all his earnings in the bank. The next summer, though, his attitude was “Why should I work?” Roberts reports. “I told him, because you’re supposed to.”
— Tom Roberts
State Publishing Pierre, S.D.
Jayne A. Pearl is the author of Kids and Money: Giving Them the Savvy to Succeed Financially and a workbook based on her seminar, How to Gimme-Proof Your Kids (www.jaynepearl.com).