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Raising wealthy kids isn’t about giving them a big allowance. It’s about teaching them to create, own, and grow. In this episode, Sharran introduces the Millionaire Kids Flywheel, a six-step framework designed to help children develop financial literacy, ownership, and confidence in their abilities. Unlike traditional allowance-based models, Sharran emphasizes teaching kids to earn, invest, and make real decisions with real money.
He explains how to teach children the value of work, build something tangible, turn skills into income, and structure their finances through trusts and LLCs. Sharran also shares strategies for teaching access to capital, converting income into ownership, and instilling generosity as a core value. Using real-life examples from his children, Sharran demonstrates how this flywheel creates a system where kids learn to think like entrepreneurs, understand investment, and make money decisions responsibly.
Today’s episode offers practical guidance for parents who want to create wealth-minded children rather than just financially dependent ones.
“Teaching your children how to work is more valuable than any money you could leave behind.”
– Sharran Srivatsaa
Timestamps:
01:23 – Why kids’ wealth isn’t about allowance or piggy banks
01:52 – Step 1: Teach children how to work with pride
07:11 – Step 2: Build something real for children
10:18 – Step 3: Turn skills into income
13:52 – Step 4: Teach access to capital
19:19 – Step 5: Convert income into asset ownership
22:17 – Step 6: Teach generosity as a way of life
24:10 – What generational wealth really means
Resources:
– The Millionaire Mindset I’m Teaching My Kids
– The Next Billion by Sharran Srivatsaa
– Board Member: ARC Multifamily Real Estate Investing
– Board Member: The Real Brokerage
Connect with Sharran:
– X
– YouTube
– Threads
Transcript:
[00:00:00] Hey, this is Sharran Srivatsaa. Welcome back to the Business School Podcast. And in this episode, I’m gonna teach you about how to make millionaire kids. Now, you must be thinking, “Well, I’m trying to make tens of millions of dollars myself. Why should I care about making millionaire kids?” And I realized that if I could create millionaire kids, then I could just add a lot more net worth to myself in the bargain.
[00:00:20] So I created this concept called the Millionaire Kids Flywheel. I actually made this YouTube on video. It’s starting to do really well, and I thought I would give you an audio version of that to help you here as well. So if you have children, if you know people who have children, or if you just want to take these ideas and say, “Hey, listen, I should just do this for myself,” this may be really helpful to you.
[00:00:38] It’s short and sweet. I break it down step by step, all starting right now.
[00:00:48] One thing is for certain, just because it’s tried and true doesn’t mean it’s working right now. So the big question is this: Where can you learn what is working right now? The strategies, the tactics, the psychology, and the exact how to. How to grow your business, how to blow up your personal brand, and supercharge your personal growth.
[00:01:10] That is the question, and this podcast will give you the answer. My name is Sharan Srivatsaa, and welcome to Business School.
[00:01:23] The difference between kids who become millionaires and the kids who don’t isn’t luck or inheritance. It’s actually a repeatable structure, and it’s what I’m using with my own two children. Most money advice for your kids is about giving them an allowance or having a piggy bank, and that’s fine, but all of that just teaches them to manage the money that you give them.
[00:01:43] None of it teaches them how to make their own, and I wanna show you exactly what to do about it. I call this the Millionaire Kid’s Flywheel, and it has six steps. So let’s talk about step one. Step one is to teach your children how to work, and I don’t mean to give them chores. I mean to teach them how to take pride in everything that they do.
[00:02:04] Teaching your children how to work is more valuable than any amount of money you could leave behind. Many families pay their kids to do chores. Think about that word. Chores. We’re literally wiring their brains that work is a terrible thing, and that you have to do crap work like taking out the trash or doing the dishes to just earn a few dollars.
[00:02:25] It starts them off with an unhealthy relationship with the concept of work. And then we turn around and say things like, “What do you want to do when you grow up?” Or, “You should go find your passion,” when the only reference they have to work is that it’s a chore. By the way, I’m not a fan of allowances either.
[00:02:42] Why? Because life doesn’t give you an allowance. I’ve had many a heated argument with my friends about this very topic on why they ask kids to do chores or give them allowances, and you know what they tell me? Because that’s how they were raised, and that’s what their parents did. And so they run [00:03:00] the same playbook.
[00:03:01] This is not your fault, however, it is your problem, and you’ve just decreased the likelihood of your kids becoming millionaires because now they hate work and expect a handout. So here’s how to change your thinking right now. You start by separating two things that most parents have been blending together their whole lives.
[00:03:18] The first is the day-to-day responsibility like chores or cleaning their room, doing the dishes. That’s the bare minimum. That’s what we do as a family. There is no payment for that. But paid work is the second thing, and it doesn’t have to be complicated. They could help with your business by packing orders or reorganizing your files, or you could even pay them to learn by reading books, like my wife and I do for our children.
[00:03:42] But it should be something that actually matters so they can see that what they’re doing is useful. The big unlock for me was when I learned how to recognize them. Instead of generic compliments like, “Hey, good job,” or pointing to the results of organizing the files, I learned to praise their effort. This simple thing will rewire your child forever because you’ve taught them to take professional pride in what they do.
[00:04:08] And last but not least, you need to make sure you give them a chance to own something. Set up the structure that builds for them now so that when they are older, they have something that they can truly own. So here’s a deal I have with my son, Neil. He’s 14 and he’s a voracious reader, and for every book that he reads, he gets a certain amount of money, and then he invests that money in the stock market.
[00:04:29] If he believes that AI is going to do well or technology is going to do well, he’ll say, “Hey, Dad, I wanna invest in the XLK ETF.” And then he has a much longer-term view of this investment. And here’s the key thing I want you to understand about this: It allows me to talk to my family about money. Most parents were never raised in a home where people talked about money, and I want to make the money conversation both open and something we own as a family.
[00:04:55] Now, my kids are very happy to talk to me about money, and they understand the concept of investing. But here’s the thing that nobody talks about. When your kids start earning real money, where does it go? Most parents just hand it to them or drop it in a piggy bank, and here’s the problem with that. Let’s say you want to invest some of that money for your child.
[00:05:14] You buy 100 shares of Apple and you say, “Hey, this is for them.” But it’s not actually theirs. It’s still in your estate. It’s in your account. They can’t touch it. They can’t build on it. They can’t do anything with it until they grow up. The other solution is a custodial account, where you as the adult custody your account for your child and you invest on their behalf, and when they become an adult, they can take it over.
[00:05:35] But that is extremely limiting for three reasons. Number one, when your child becomes an adult, there is no asset protection, meaning other people can come at it. Number two, they instantly get all the assets as soon as they turn 18 in the US, which you may or may not want. Number three, it’s extremely limiting because it can only make investments in the public stock market.
[00:05:54] The solution is a Neal irrevocable trust that owns a Neal Investments LLC, and that trust owns the LLC and the LLC owns the assets. Let me also tell you about a massive tax advantage. When you set up the trust as a grantor trust, you as the adult take the responsibility for paying the taxes of the trust, and we all know that taxes are the number one drag on wealth creation.
[00:06:18] Since I will pay the taxes for my children anyway, setting up the structure where I as the grantor can pay the taxes and the child’s assets compound essentially tax-free is a magical thing. So how do you fund this trust? Anyone, it can be me, my wife, a grandpa or grandma, can gift my son, Neil, up to $19,000 a year tax-free, and that money goes into the trust’s corpus and starts to compound over time.
[00:06:42] The control stays with you, the parent, and Neil, my son, is the beneficiary. I am their trustee. I have the same control, and I have a cleaner structure. Everyone talks about asset allocation for their children. It’s actually about structure and asset location. Do this over 10 years and suddenly he has a bunch of cash only because you started early.
[00:07:03] This is the foundation. Every step of this flywheel flows through this structure. With that foundation in place, step two is to build something real because effort without a real example teaches them nothing about how money actually works. Most kids grow up thinking money just appears out of thin air.
[00:07:23] They never see a client. They definitely never see the moment that someone decided that your work was worth paying for. A lot of kids think money comes from their parents. They see you hand it to them, but they never see the person who paid you first, so they learn that money just comes from asking, not from helping someone.
[00:07:40] Let me tell you a story about how I built something awesome with my daughter. So when my daughter was seven, I partnered with another dad, and we bought a small e-commerce site together. It was called 100unicorns.com. And I want to be really clear about something. We did not build her a fake project. We did not set up a pretend store so she could feel good about herself.
[00:07:59] This was a real business with real orders and real people on the other end expecting a product that they paid for. She could log into the backend of the website and see every single transaction. She was the CEO, and she had clear responsibilities. Now, the business did not make any meaningful money, but that was never the point.
[00:08:17] When kids get handed money, like when you hand them a $5 bill for doing something, they almost never connect it to the value that they created. They have a distorted perspective of how money works. But when your kids solve a problem for someone, like when they fulfill an order for a unicorn blanket, something different happens in their brain.
[00:08:35] They start to understand that there was a trade. And that someone paid money in exchange for something, and that something was not an allowance that they got every week. And that’s what 100 Unicorns did for my daughter. She could say at seven years old that, “I helped run this.” So instead of getting $5 for taking out the trash and hating it, she started to realize what real value exchange looked like.
[00:08:59] By the way, this happens with adults, too. Sara Blakely started Spanx with $5,000 and no outside investment. She didn’t have a business degree or someone telling her what to do. She did her own product testing. She built distribution by physically walking into stores and talking to buyers. She learned through iteration, meaning she figured it out by doing it, failing at it, and doing it again.
[00:09:22] You can’t teach that in a classroom or by handing a kid an allowance. The only way they get it is by being in it, by having something real to own and to do, and something real to figure out. Now, here’s where the structure comes back in. Remember what we drew in step one? Lara isn’t just helping run 100 Unicorns, her trust can own a piece of it.
[00:09:43] So Lara’s trust would just own a piece of 100unicorns.com, the same structure just applied to a real business instead of a stock. Now she’s an owner, and if that business ever becomes something big, the value flows directly to her, not to me. That changes everything about how she sees what she is building.
[00:10:02] So the next time your kids ask you for money, don’t just hand it over. Stop and ask yourself one question. Am I teaching them that money comes from solving problems for people, or am I teaching them that money comes from just asking for it? Those two answers produce two completely different children.
[00:10:18] Step three is about turning skills into income, because the only thing that builds real confidence is when someone pays you for it. Kids don’t gain confidence just from being told that they’re good. They gain confidence when someone is willing to pay for what they can do. Parents can cheer their kids on all day, but the real confidence comes the first time someone says, “Hey, I’ll pay you for that.”
[00:10:40] So now your kid knows how to think about work, and they’ve got somewhere to direct their efforts. But here’s the next question. My kid has skills. How do I actually turn that into something real? And I wanna be really specific here because this matters. The skill has to produce documented income, meaning someone has to find it valuable enough to pay for it.
[00:11:01] That is documented income. You can’t just build confidence in your children by telling them that they are talented or smart or creative. Pretty soon they’re going to realize that in the real world it may not be true. So now do they believe the real world or do they believe the affirmation that you gave them?
[00:11:18] Confidence doesn’t come from telling your kid that they are talented. It comes from proof, and it is our job to help stack massive proof for themselves so that they can believe that they are who they say they are, and more importantly, they believe that they are who you say they are. Let me tell you what I did with my son.
[00:11:36] He was interested in writing, so I found him a ghost writing course online and he took it. Mind you, he was just 13 when he did this, and he focused on learning to write on Twitter and Threads. After he had learned the skills, I asked him to start writing some of my Twitter and Threads posts as a ghostwriter.
[00:11:53] He studied my topics, he learned my voice, and he was my ghostwriter for a year. We set up a bank account in his name, and he received payment for the number of posts that he wrote. This is how he could see that the skill he had learned would make him money. We took it one step further. We filed a tax return for the income that he received, and he started to understand how taxes work.
[00:12:12] But the coolest part about all of this was that he started seeing himself as a professional. It created professional pride, and that mentality is exactly what changes how they see money, not as something that you ask for, but as something that you earn by being really good at something. And here’s the best part.
[00:12:30] Now when my kids want something, and instead of asking for it, they say, “Dad, how can I earn it?” Imagine that. So here’s how you can use this lesson. Ask yourself, “What skill does my kid have that someone would pay for today?” Not eventually, not someday, but today. Once you’ve identified the skill, find one person who will pay for it.
[00:12:50] It can even be you to start. Structure the work with real deadlines and real documented payment, because what you’re doing is teaching them to see their skill as a currency. You’re training them to look at what they can do and ask, “Hmm- Who else could benefit from this? So now that my son Neil has documented income, where does it go?
[00:13:10] Not in a piggy bank, not in a savings account. Back into the structure. The income flows into Neil’s trust. The trust deploys it through Neil’s consulting LLC, which is treated as an S corp for tax purposes, where he gets the benefit of being an employee of the entity. Remember, he’s not 18 yet, so he can’t own the LLC, but his trust can.
[00:13:29] And now that skill, that ghostwriting income, is being converted into real ownership, into real assets inside a structure that actually belongs to him. And because we filed a tax return, Neil sees exactly what he earned, exactly what he owes, and exactly what he keeps. That’s the proof that he’s operating at a real level as a 14-year-old.
[00:13:49] Here’s where it gets interesting. Step four is to become your own bank, and this is where the wealthiest people I know start thinking completely differently from everyone else. Having money means you saved it up and it’s sitting in an account somewhere. Having access to money means you can move capital when the right opportunity comes up, especially without waiting or without asking someone else for permission or even having to sell off your stocks or bonds or real estate at the wrong time.
[00:14:16] These are two completely different positions, and we’re raising kids who don’t know the difference. Neil is now 14, and a while back, he got interested in land investing. He found a course from Mark Podolsky, the Land Geek, and he went deep on it. But at some point, he looked at the process and realized that it was way too laborious.
[00:14:35] Building a portfolio from scratch takes a long time. So he went directly to Mark and said, “Hey, I would be open to buying a portfolio from somebody who has already done the work.” A smart kid for 14 years old. Two years went by, and that’s when Uncle Mark called with an offer. Now, this is where it gets interesting.
[00:14:51] Neil didn’t have all the money, and here’s what he actually did. He borrowed against his own life insurance policy. His sister borrowed from hers. I borrowed from mine. And he still needed more partners, so he reached out to my business partners, Alex and Leila Hormozi, and invited them to invest alongside him.
[00:15:09] At 14 years old, Neil had syndicated a multi-party land deal. Neil didn’t just stumble into a land deal. He had a system that gave him access to cash when the moment came. Now, let me tell you why that was even possible, because this is the part that most people don’t know. Instead of putting money in a Roth IRA or a 529 plan, what I did for my kids was create a series of very intentionally designed whole life insurance policies as a store of value, as a cash flow system.
[00:15:38] And you may say, “Sharan, why would you do something like that?” Well, a couple of reasons. One, it’s asset protected. Nobody apart from them can touch it. And number two, they can actually borrow from it. My son and daughter can borrow from these policies whenever they need to. And here’s the best part: when they borrow from their policy, the value of the money inside their policy continues to grow.
[00:15:59] So even though they’re borrowing from it, the compounding never stops. You get an insane leveraged effect in this entire process. And here’s exactly what I mean by that. My money coach, Joey Muray, always says this, and it stuck with me: When you wake up in the morning, you go to work. When you wake up in the morning, your money should go to work, too.
[00:16:17] Let’s say you have $100,000 sitting in a bank account. It’s not an emergency fund. There’s no plan for it. It’s just sitting there, making you feel better about yourself. Joey calls that lazy cash. Now, a lot of people hold onto cash for three reasons. Number one, it makes them feel safe. Number two, they have some kind of savings plan in mind.
[00:16:37] Or number three, they just don’t know what to invest in yet, so they wait. And here’s the thing: it’s not the cash in the account that matters, it’s the access to cash that matters. Now, there are a couple of places that you can put that money to work while you wait. Option number one is to use a CD ladder at a bank.
[00:16:56] A CD is a certificate of a deposit, and what that means is it’s a fixed term of an investment with the bank that gives you a fixed rate of return. So if you have a certificate of a deposit for six months, that means your money is committed for a six-month period, and you get a certain return for that, say 3%.
[00:17:13] You cannot withdraw your money during that time. So the idea here is you would do a six-month series of investments, so every time a investment matured, it would automatically go into the next six-month investment, and the next six-month investment, and the next six-month investment. The main reason for this is you’re never locked out for more than a six-month period.
[00:17:34] But if you make a three-year investment, then you’re locked out for a good three-year period, which affects your access to the cash. The second option is private credit, and private credit is loaning money to a private business that is probably not eligible for a bank loan. The vast majority of businesses in the world are not bankable, meaning the banks don’t have the risk profile to actually touch them because either they’re new or they don’t have the right business model that the banks exactly like.
[00:18:03] But they may be healthy, vibrant, and active businesses, some of which you and I may actually own, but we’re just not eligible for bank financing. This has opened up a large market called private credit, where individuals, companies, institutions, and funds are investing in these private credit, as in private companies, in a loan-based format to get healthy returns.
[00:18:23] The third option is cash management, and the main idea there is to put your cash in a liquid portfolio made up of a certain combination of funds that gives you a significantly better return profile than just having your money in cash. What type of funds you invest in is based entirely on your risk profile or the number of years of time horizon that you have.
[00:18:44] But putting them in a portfolio of funds allows you to gain a much better exposure to higher returns while you wait for what you want to invest in. This is my exact portfolio. It suits me. It suits my risk profile and my family’s goals. I’m sharing the exact portfolio with you for transparency. But you should consider building a cash management portfolio for yourself instead of accepting lazy cash.
[00:19:08] So the question I want your kids asking is, “Is this dollar working, or is it being lazy?” Because there’s a difference between having cash you can access and just having cash that’s sitting there idle. Step five is to convert income into assets, because while income pays your bills, ownership will build your children’s wealth.
[00:19:26] I used to think the goal was just to make more money, keep increasing income, and eventually you’d be wealthy, but that’s not how it works. There’s a difference between being rich and being wealthy. Rich means your income is high. Wealthy means your ownership is compounding while you sleep. So with my son, every dollar he earns gets divided intentionally.
[00:19:46] The spending is secondary. The first question we always ask is, “What can we own with this?” We’ve sat down together and talked about ETFs. We’ve looked at XLK together, which is the technology ETF. We’ve talked about thematic investing versus passive investing. We’ve reviewed volatility together. We talk about time horizon.
[00:20:06] What does this look like in 10 years or 20 years, or even 30 years? We all baby our kids. They’re way smarter than we can imagine. In fact, my son places his own limit orders. He tracks his own stock positions. And here’s the thing: he’s learning what most adults never figure out. The decision to hold is just as important as the decision to buy.
[00:20:27] Patience is a skill, and that’s a skill that you can teach. Charlie Munger said something I think a lot about. He said that, “The big money is not in buying or selling. The big money is in the waiting.” He spent his entire career focused on buying great businesses and holding them. He avoided overtrading, and he let time do the work for him.
[00:20:46] And now I want to show you the thing that changed everything for me when I first saw it. I call it the forever five-year double, and this is the golden ticket Instead of making one large lump sum investment upfront, you invest $100,000 a year for five years, and then you stop. You never invest another dollar.
[00:21:04] What happens next is what gets me every time. In year six, that first $100,000 doubles to 200. In year seven, the second doubles to 200. Year eight, 200. Year nine, 200. Year 10, 200. You stopped investing in year five, and you’re still collecting doubles all the way from year six to year 10. But here’s the part that really matters: you still don’t touch it.
[00:21:26] Now, in year 11, that first $200,000 doubles again to 400, and it keeps going. That’s why I call it the Forever Five-Year Double. $500,000 invested over five years, and then you step back and let time do the rest. And this is what I’m building for my kids, not to hand them wealth, but to give them a system that works whether they’re watching it or not, because that’s what ownership compounding actually looks like when you give it enough time.
[00:21:55] The best time to start is not when your kids are adults. The best time is to start right now. Every time money comes in, the first question is not, “What do I spend this on?” The first question should be, “What can I own with this?” And the earlier your kids make this their default question, the longer that compounding can work in their favor.
[00:22:14] The final step is the one that makes everything else mean something. Step six is to teach generosity as a way of life. Without this one, the whole playbook is incomplete. Now, you may think that making money and giving money away are opposite concepts, but the reality is that they’re actually deeply connected.
[00:22:32] So let me tell you about what we set up in our family, a donor-advised fund. And I know that sounds complicated, but it’s not. There are three giving strategies. The first one is the good strategy, where you take your cash and you give it to a charity that you’re deeply connected to, having a great impact for the charity.
[00:22:48] You get a deduction for your cash donation, and the charity gets the money. The better way is to actually give your cash to a donor-advised fund. A donor-advised fund is just a simple private foundation without all the paperwork, where you get the deduction immediately today, and then the fund can now give to the charity.
[00:23:05] You get your deduction today, and the fund gets their cash, but with a nice vehicle in between, giving you the accessibility for when you want to take your deduction. The best way is to actually give stock, meaning not just any stock, but completely appreciated stock, stock that has built-in taxable gains.
[00:23:22] So instead of paying taxes on those gains, you can donate that stock to the donor-advised fund and get the full tax deduction and not pay any taxes on the gains. Then the donor-advised fund can choose when to give those monies to charity. That is the best way to give money. The donor-advised fund is a simple version of a private foundation for your family without all the paperwork of a private foundation.
[00:23:45] Think of it like a giving account. You put money in, it grows tax-free, and whenever you’re ready to give, you choose the charity and you send it. And here’s the part that I love the most. My kids can log in too. They see the balance, and they can pick the charity, and they can click the button, and after they choose, we sit down and we talk about it.
[00:24:02] I’ll ask them questions like, “Why did you pick this charity? What will this organization actually do with the money? Why does our support matter here?” But here’s what I want you to sit with for a second. People talk about generational wealth, but generational wealth isn’t a number in an account. It’s a way of thinking that gets passed down from generation to generation.
[00:24:22] It’s a kid who grows up knowing how to work with pride, how to build something real, how to turn a, a skill into income, how to access capital, how to convert the capital into ownership, but also how to give it to someone in need.
[00:24:44] Hey, this is Sharran. I have an awesome free gift for you just for listening to the podcast. As you may know, I’ve got a chance to build $2 billion companies the hard way. So if you like this episode, you’ll love getting the exact playbooks from those wins. It’s on my Substack, called My Next Billion. It has the exact frameworks I wish someone had given me when I was figuring it all out. Now you get the real lessons from the trenches as I go for a three-peat and build the next billion. So everything’s free at mynextbillion.com. Please check it out at mynextbillion.com.