Youve spent years building and protecting wealth that you one day hope to pass on to your children. But as you dig into that planning, fear starts to creep in. Youre worried that lacking proper experience or financial education, your children will fail to preserve your familys wealth for future generations, or even worse, squander it.

In their new book, Pass It On, Roger and Lori Gervais show you how to transfer not just your wealth but also the family values that will enable future generations to preserve and grow what youve built. Mixing financial knowledge with client stories and nuggets of wisdom, Roger and Lori will set you up for success as the steward of your familys wealth and give you the peace of mind that your children are prepared to inherit that responsibility.

Drew Applebaum: Hey listeners, my name is Drew Applebaum and Im excited to be here today with Lori and Roger Gervais, coauthors of Pass It On: Transferring Wealth, Wisdom and Financial Smarts to Future Generations. Lori, Roger, thank you for joining and welcome to the Author Hour podcast.

Lori B. Gervais: Thank you for having us.

Drew Applebaum: Lets kick this off, can you give us a rundown of your professional backgrounds, respectively?

Roger G. Gervais: I pursued engineering for about a decade and went on to get a graduate degree in finance and also my chartered financial analyst designation. I then moved into the finance world and joined Lori about 11 years ago and have loved every minute of it.

Lori B. Gervais: I went to school for finance. I headed down that path pretty much right out of high school, just having my own interest in managing money and managing my finances. Out of college, I got an entry-level position at our current firm that were in now and then quickly worked my way up to becoming a financial advisor, and then a certified financial planner, and now Ive been in the investment business for nearly 20 years now.

Drew Applebaum: Was there inspiration for this book? Was there an “Ah-Ha” moment, and why was now the time to write it?

Roger G. Gervais: Yeah, I think there was absolutely at least one Ah-Ha” moment. For a little bit of background for Lori and I, pre-formal education. We both grew up in the state of Maine, we grew up in a very rural area, and money wasnt something that was part of the formal curriculum, which I think is consistent with the rest of the United States. We muddled our way through, we had the good fortune of finding these wonderful careers where we got exposure to how people had helped their families be successful through education and experiences.

Over the years, we had really developed a desire to want to communicate that success to our own children and throughout time, we gained more and more insight into what made family successful, especially in communicating the topic of money. It was probably within the last five years that the catalyst actually gave us the thought of writing a book, to communicate this message, primarily to our kids first and foremost, but we had a good friend who was about our same age who had four children about the same age as our children. He thought he had some form of pneumonia and was battling that and about a week into battling what he thought was pneumonia, he found out that he had a rare form of cancer that was attacking his heart. Within a three to five-month window, he was gone.

That really moved us to think about the things you dont want to think about and we wanted to get this message on paper for our kids.

Its not about technical analysis or fundamental analysis of the stock, this is a message about what money really means to us, about our family vision, the things that we want our kids to carry forward if we werent here.

Money Conversations

Drew Applebaum: What do you hope for families to accomplish by reading the book?

Lori B. Gervais: Were hoping that they could walk away with, at minimum, a few nuggets of how they can have these money conversations with kids, how they can share stories, and surround them with history and examples of how their wealth was built. What their values are and what they want their kids to do with their money. Also making sure that their kids are financially literate and even ready for that responsibility when and if they were to inherit money.

We want them to walk away with at least a handful of nuggets that they can dive into helping their kids. I think, a lot of times, when I say kids–by the way, I mean, everything from five years old to 55–there are all sorts of financial conversations over the years, but so often, people are just not comfortable talking about this conversation. So, were hoping this book helps spearhead that and kick things off for folks to be good family stewards.

Roger Gervais: One thing I would add to that, Drew, is we also hope that they walk away with a message that your kids view of money, either intentional or unintentional, youre going to provide that education to them. Theyre watching you just like any other aspect of life, they watch your spending habits, they watch your saving habits, and if you dont talk about it and you dont show them by example, its not going to matter a whole lot what kind of formal education they might get later in life, they’re going to follow probably a very similar path to what their parents did.

Drew Applebaum: Did you two learn any of these methods growing up or is this what you maybe wish you would have learned from your parents growing up?

Roger G. Gervais: I think its a mix actually. I will say, for instance, with my parents, I certainly learned a lot through the modeling. I can give you stories of, if I wanted to buy something, I had to go earn that money myself. Id pick strawberries, I raked leaves, and would babysit. The list goes on and over the years, I learned if you wanted something, you had to work for it. There are plenty of other stories I could share growing up, but its things like displaying that a credit card, and you dont use a credit card unless you have the money to pay for it.

Youre just using that to build credit, for example. Or, the fact that when I had a phone bill in high school, I had to pay for that. These little modeling examples showing how they acted and behaved, but Ill tell you, my parents didnt sit me down and teach me about compound interest or how to invest in the stock market. To answer your question, there are many stories and anecdotes in the book. Things that we grew up and learned and valued but then there are other things, the other stories that stem from our experience as professionals that weve seen other families do.

Lori B. Gervais: Most of the money experiences from when I was a kid were very negative, in the sense that I saw the struggles of not having a lot of money. I also saw what I would consider the negative health effects of not having money or not really even having the opportunity to make material amounts of money.

So, those experiences certainly stuck with me, and later in life, I did have more positive experiences, and parents that really pushed for education, which was instrumental in helping me get out of the negative experiences.

Drew Applebaum: Lets talk about the transition for you two, from riding Harleys to focusing on the wealth of your family.

Roger G. Gervais: I think the first word that comes to mind in the intro of the book is managing risk. It is funny as advisors, as parents, and even as an engineer, I would say, that was something that we thought about a lot and as you move through different phases of your financial life, and life in general, I think it means different things to you. When it was just the two of us, that was a risk we were willing to accept and quite honestly, we just didnt think about a whole lot.

But once we started having children, it was something that became top of mind, you have somebody else to care for, youre responsible for, you want to make sure that their financial wellbeing is going to be there perpetually, even if something happens to you. It really changed the course of our thinking as it related to risk management and how we manage money.

Drew Applebaum: Do you still have the Harley stored away, just in case one day you want to get out there?

Roger G. Gervais: We do not. No, that was a part of the risk management strategy.

Drew Applebaum: What are some ways to create a family vision for the financial future of your children and how do you start that conversation about the future of wealth with your family?

Lori B. Gervais: I think when theyre young, youre not going to have a big formal discussion like that, youre simply going to work it into conversations and everyday modeling, either asking them or modeling through example, what the purpose of money is, what it means to us, how we view using it to have an impact on the family, and to have an impact on the community. You live it and talk it through and explain what you’re doing with your money.

As they are getting older, you can have those more adult conversations. Some people may formalize it, really put it right down on paper and have a formal meeting with their family and talk it through about what they envision for this wealth.

Think of families like the Rockefellers. That makes sense but it also makes sense for folks of more modest means than the Rockefeller family. You can be formal about it or casual about it, but the bottom line is back to what Roger mentioned earlier because its the modeling, the understanding, the knowing where the money came from and expressing your values, your value system, and what you envision happening with this wealth, and how money is viewed within your family. Thats really what its all about.

Drew Applebaum: I think one of the more heart-warming stories in your book is you created a family bank with your children, which I think is super cool. Can you tell us about that family bank?

Roger G. Gervais: Yeah, its a lot less sophisticated than what it might sound like in the book. It really boils down to an excel spreadsheet and that excel spreadsheet has three tabs in it–Ana, Will, and Jack. Each month, we talk about it. There was a period of time where we were really disciplined about printing it but honestly, its become more just talking about it and looking at it electronically and talking through how the numbers were arrived at.

They get an allowance, its deposited, they earn money around the house, we deposit the money, they do get paid a hefty interest rate, which you couldnt get out on the market today, but its been a healthy way to talk about the concept of interest and the benefits of saving.

The Family Bank

Drew Applebaum: You talk about teaching your children financial literacy to provide them with financial experiences like you just mentioned the money management. Are there other ways to do this?

Roger G. Gervais: Certainly, on the spending side, we try to talk to them about that and the family bank has really created a platform to have those discussions. The most rewarding thing for Lori and me is if they want to buy something, they come to us, which has happened recently. Then it is very rewarding when they come to us and say, how can I earn it?

When they understand the pluses and minuses associated with managing their own money, in their family bank account, it gives us the opportunity to talk about spending and being responsible for spending their earnings. When they ask for things, were able to say, “Is that worth it to you? This is what your account will look like after you buy that.” Its been really interesting to see how that can curb their desires and behaviors and quite honestly, help them become more responsible with their own money at an early age. Weve seen a lot of evidence of that in our own children.

Lori B. Gervais: I think if I could add to that also, well also save little nuggets. For example, we would say, “All right. thanks for letting me know youre interested in that, was it something you wanted to ask for for Christmas?” Or, “Why dont we wait a couple of weeks and see what you’re still thinking of that?” The wait two weeks concept came from my grandfather. Thats something he always said, and it just gets people to pause. Quite frankly with our kids most of the time, they forgot they asked for the item two weeks ago.

It just gets you to sit back and realize that theres just so many things advertised out there, or point of purchase kind of things on the shelf that they forget about in a couple of weeks. But if they come back and its something theyre seriously considering, then, of course, its healthy to enjoy things, but youre setting a tone that you dont spend just to spend, and by asking is this something you really desire? Are you really going to use it? Is it worth spending your money on?

Roger G. Gervais: One of the more most recent experiences that just came to mind that made us chuckle is, weve talked about investing more so with our 10-year-old daughter. She kind of understands it and weve taken the opportunity when were at a publicly traded company, lets say McDonald’s for example, I think we talked about that in the book, we have talked about how you can invest in equity state in a company like that and that conversation just went by the wayside probably two to three years ago. Just two weeks ago, my daughter asked me if she has enough money in the bank to buy a stock.

That was rewarding and if nothing else, it was feedback that we have been having the right conversations. Sometimes as a parent, I think you often wonder if any of the conversations youre having actually getting through in a way you hope they will.

Drew Applebaum: Now how early is it to introduce these concepts to your kids? Are you spoon-feeding stock advice at the breakfast table?

Roger G. Gervais: No, not at all. It is just inherent to Lori and Is relationship and our jobs, our kids probably hear a lot more in the background than the average. I am not sure if that is healthy or not, and this is anecdotal–so our kids range from age four to 10, and there is one right in the middle at age eight, and the four-year-old was not collecting allowance until recently, but he quickly gained an understanding that his siblings who are getting money–when they went to the store, they could buy candy without really needing to solicit mom and dad too much, and he has since asked, When am I going to get an allowance?”

I am not sure that there is a black and white answer on what age the conversation starts. I am sure it is different for every family and every family has different values. So, I dont think Lori and I would put a stake in the ground. I think the general message is it is important to have these conversations and make the kids part of these conversations.

Lori B. Gervais: I think another important message is that it can be as simple as witnessing how you spend money or running around the store frivolously, or youre looking at and sticking to a list. Are you tithing at church? Do they see you donating? So, some of it in those younger years you might not be talking too much about it. Its just watching your behavior and sneaking in little snippets.

You know if you are making a donation, you might want to mention so that they can hear and see and feel that you give back to the community. It can be little comments here and there. It doesnt need to be a big discussion at the age of four about how to invest in your first stock. It doesnt have to be like that at all.

Roger G. Gervais: I think it is important for us to note, as well, we are talking a lot about our own lives and our own children. Most of our professional experiences with parents or grandparents of adult children, although it is on a different scale, much of the conversations we are mentioning right now is applicable throughout age ranges. The very successful families that we see are communicating with their kids regularly on much of the same topics that Lori mentioned.

Whether that be spending or understanding how to spend or being responsible for spending, those same conversations are very relevant as the kids grow older and get their first jobs. The family bank concept as well, we see that carried through adulthood, whether that be the parents lending money for the children to buy their first home, or provide a down payment, or in many cases, provide a small business loan.

So, all of these points that Lori and I are trying to communicate about talking with your kids, I just want to be clear that our experience and our opinion is they are very applicable throughout the age ranges, and throughout adulthood as well.

Drew Applebaum: Im glad you guys mentioned that because strategies do change as your kids grow up. So, I love that you mention in the book there are ways to get teens on board by giving them more responsibility with managing their money. What does that look like and what kind of responsibilities would you give a teen?

Lori B. Gervais: There are a few ideas there to start with. You can have them handle the grocery trends. They can understand, Okay, we have X amount of money to cover the groceries for the week,” and they can see how that works and how it evaporates quickly when youre at the store or the Target trip. Or say you have a hockey tournament that weekend and you allot them $100 to cover all of their food and games and whatever it is youre going to be doing for the weekend.

Giving them these little challenges where there is really not going to be harm if it doesnt work out or if they get the answer wrong. You want them to fail early, when it is simple. You want them to try these things, be challenged and stressed by it, but you know there is really no harm in it at these ages.

Giving them those examples of how to manage money and other things, like being accountable.

I mentioned earlier about how when I was in high school, we didnt have cellphones, but we had long-distance phone calls to my high school friends and I had to pay my own phone bill. That is how it worked in my household. So, that was teaching me accountability. If I am going to talk to my friend for an hour, long-distance, I am going to pay for that. It is okay if that is what I choose to do but it was teaching me to be accountable for my actions. No one is going to be there, save the day all the time, and pay for things.

So, there are different nuggets in that perspective of accountability, and saving towards a large item like a car, or it could be smaller than that of course as well, but those are things you can do to get those teenagers going before they are off on their own in college trying to manage bills.

Roger G. Gervais: I think if I was to just boil it down to Lori and Is philosophy throughout the age ranges, one of our primary objectives is to have the kids have the internal motivation, the self-motivation, to be responsible with their money regardless of how much money they have. Our experience outside of talking about money but in raising kids in general, and trying to use external motivation, meaning dictating or telling them what to do is usually not a path to success.

Maybe you get some short term wins but long term that doesnt seem to be a successful strategy. So, if we can get them to internalize these concepts and ultimately start feeling self-motivated from the inside out, that would be ideal for Lori and me.

Building Internal Motivation

Drew Applebaum: Yeah, you mentioned kids dont really learn this stuff in schools but you want them to learn these techniques. Is there a strategy to learn financial smarts, more than just saving in the piggy bank but talking about long term investments and stocks and bonds?

Roger G. Gervais: I think we are progressing since I was in school, I feel like some of the curriculums now were seeing with our oldest child, they are talking about money and commerce. I think it is still challenging even up through high school because you dont see a lot of it. I think parents should look for opportunities. I know there are third parties that offer education. But again, at the end of the day, if the parent isnt modeling what behaviors they want to see, it is probably not going to do you a lot of good to go pay for a class or push your kids to take the class.

Lori B. Gervais: Roger talked earlier about that internal motivation and we have been talking a lot so far about the younger years and we are talking a lot about that because I think building that foundation first is ideal. So, if you are a younger parent right now working through this thats great, but we are talking a lot about that because to Rogers point earlier, most of our professional life, we have been working with grandparents or parents.

They have adult kids and theyre living in fear about how the estate plan is going to work out. They want their kids to be responsible with it. I am book shelving this–I am saying okay, we are talking about the younger years, but we are talking about that out of concern for those older years, the fears that we see in people who have built up wealth and they want their kids to be smart and educated, financially literate, and they want them to do good with any money that they inherent, and that they will make wise decisions.

So, it is a building block approach. You start when they are young, and if you didnt, well, you can still start now. You just keep building upon all of that so that you do feel good. The clients that we work with, they are thinking constantly about taking care of their kids all the way through their passing. They want to make sure that their kids and grandkids are taken care of. So, it is a building block approach really.

Roger G. Gervais: And maybe one other angle to answer your question related to how, on the educational side, the other hurdle for parents, especially as kids get older, in finding a formal curriculum is your kid might not have any interest in learning about finance or the stock market or how a mortgage works, which I think is okay. That is not everybodys interest. Lori and I certainly are conscious about that with our own kids.

We dont want to put our passion for the finance world on our kids. We want them to do whatever they desire to do, whatever they are going to be best at, and in lieu of formal education, the other thing we encourage parents and grandparents to think about a lot is building a team, a virtual family office, if you will, around your wealth and your money that can be there as trusted advisers to your kids. So, they dont have to be experts in how to pick a stock or how to manage allocation, or which insurance policy might be best for their family, what they do need is a team of trusted advisers that can put them in a good place.

Drew Applebaum: Yeah, you guys mentioned this in the book and I think it is a really, really wise decision but at what age is it appropriate do you think it is to bring your children to meet your financial team?

Lori B. Gervais: I think it goes back to a family desire honestly because it might be okay in your family if you are swinging by to see your financial advisor about something and you bring your 5 year old along, or your 15 year old along, or your 25 year old along. Each family is going to have to decide what makes sense to put that knowledge into your relationship. I dont think we can say that there is a line in the sand of what age is appropriate in that respect.

It is going to be about comfort level, and it depends on where you started with these building blocks that I mentioned. How are your money conversations going with your kids? Have you built up to that level where they can be sitting in a room in a meeting with you and your financial adviser, or just waiting in the car while you are inside? That will all be up to the family.

Drew Applebaum: Lori and Roger, writing a book, especially like this one, which will help so many families, is no small feat, so congratulations.

Roger G. Gervais: Thank you.

Lori B. Gervais: Thank you.

Drew Applebaum: If readers could take away just one thing from your book, what would it be?

Roger G. Gervais: In my opinion, its that everybody can have a different perspective on money. The important thing to consider, as it relates to money and your family, is communication. I think we hear a lot in the media and society in general about a lot of the technical things about business, the best next investment, and that you should do this, or you should do that. Well, Lori and Is experience and opinion is yes that is a part of it. It is on the periphery though, the real nucleus to having successful financial and family relations is communication and education. It can mean different things to different people.

Drew Applebaum: Lori and Roger, this has been a pleasure and I am really excited for people to check out this book. Everyone, the book is called, Pass It On, and you can find it on Amazon. Besides checking out the book, where can people find you?

Lori B. Gervais: They can find us on LinkedIn, on our business Facebook page, or on our website, and we really try to put some educational articles out there to help people along and that would be a nice place to start.

Drew Applebaum: Awesome, Lori and Roger, thank you so much for coming on the show today.

Lori B. Gervais: Thank you. Thank you for having us.