You may have hear the terms family company or family office and wondered what they mean. Here is a link to Investopedia with a traditional definition of the typical “family office”:
“Investopedia: What Is a Family Office?”
Though we love Investopedia, and see it as a great source of definitions for the finance world, especially terms around investing, we’d like to propose a new definition for the Family Company. Our definition is based on the “Grow Family Wealth” principles created by SIMVISR Financial and taught by Academy Evolve.
To begin with, that is the purpose of Kennedy Family Ventures Limited; to act as the center organization of our Family Company. Its purpose is to invest in companies that support our families, growth our wealth as individual family units, provide opportunities for our families to grow, and to provide for the future of our family; including college, lending opportunities, and protection of our assets.
Though I do not have the time or opportunity here to present the entire concept of family wealth or family companies, I will cover some important topics as they relate to the purpose and goals of Kennedy Family Ventures Limited, and how they relate to the concepts of family wealth and companies. The first topic I want to hit is our family’s definition of wealth.
Starting there I understand many people have an idea in their head of what wealth means, and if you read the Investopedia article linked above you will quickly see they likely have the same definition. This definition is that high net-worth equals wealth. After all, when an individual creates a large amount of capital they need to protect it, determine how to best dispose of it, and place it where it is secure and can of course generate more capital.
In that one paragraph though we have completely left the ballpark that includes our thoughts on wealth. As a family that has generated millions of dollars in capital, alienated friends and family members alike trying to “protect and secure” our wealth, we have grown to have a vastly different understanding of what wealth means, and as a result how to grow it, secure it, and dispose of it. Our belief is that wealth is not rooted in assets and increasing net-worth themselves, but in opportunities, connections, and creating pathways for the future.
We believe that wealth is about the ability to live comfortably, sharing opportunities with family members in a way that protects their assets, and presents the maximum amount of opportunity for returns. We also believe it is about creating funds that support and uplift family members away from poverty driven behaviors (excess spending, predatory lending, liability creation). A large part of that is education – showing family members what it means to generate REAL with. The definition there is quite simple:
Wealth is our ability to spend time together, as family members and people; and to learn from and share with each other unencumbered by the financial issues that plague most of society. Wealth is our ability to uplift our brothers, sisters, sons, daughters, fathers, and mothers out of those encumbrances to allow them to focus on truly being a family together, and ultimately helping others. The bottom line, is that wealth, to us, is the ability to serve others freely, without the limitations that work places on our time.
The Benefit Plan – Membership
Digging into the simple details for how our family company works, it all starts with membership. In Kennedy Family Ventures Limited there are two classes of membership. Those are invested members and access members. Each of these levels of membership incurs different responsibilities, obligations, and benefits. At current our automatic family membership includes 2 generations from our founders in any direction, and relations by marriage. This means for example the founders’:
- father and grandfather
- daughter and granddaughter
- aunt and cousin
- brother and niece
are all automatic members. That being said, being an automatic member does not immediately grant rights from the family company. It does grant some obligations and responsibilities that allow them to benefit from membership. For them to become an Access Member, the obligation is simple. A member must simply identify their relationship to the founders, update their contact information quarterly (name, phone number, address, email, etc), and agree to receive messaging and updates from the family company.
This simple act allows for something beautiful, a deeper family connection. Before anything gets into money, safety, security, sharing, philanthropy, borrowing, obligations, gains, losses; we have connection. This means an avenue for planning gatherings, reunions, sharing Christmas cards, birthday wishes, and family stories.
As a benefit of this level of membership the access member is given just that – access to the family wealth system. They are given at no cost, access to educational resources about finance, access to some loan and financial products reserved exclusively for family members. They are also given access to some services at discounted rates from family owned companies, as well as announcements to employment opportunities, investment opportunities, and access to college and other educational loan programs.
The second class of membership, and invested member, means they have opted to participate in the company actively, and its pursuit of wealth generation for the family as a whole. This level of membership comes with the requirement of an investment into the membership, as well as the creation of organizations owned by the family company to assist in generating wealth and offering additional benefit to family members.
An invested member gets the same benefits as an access member, but also has the added benefit of access to business loans, management consulting, recruiting, and access to a portion of the returns generated by the family company. An invested member also receives voting rights and equity in the family company and the opportunity to sit on its board or take a position as one of its executives.
Risks and Rewards
As with any investment or financial system there are obviously risks and rewards. With any company there always exists the risk of loss. This may happen for a myriad of reasons, but the goal of a family company and its governing body is to review that risk and mitigate as much of it as possible. This means avoiding bad investments, steering away from legal gray areas, not falling into fad investment traps, and not overleveraging the company, individuals, or assets. They are lessons hard learned, and best avoided when possible.
It also means the focus is on the development of rewards. Our family company uses insurance products for example as the one of the many ways to help individual family units build secure wealth and access to finances that can be life changing. On top of this education about these types of financial instruments are provided for free to our members. One of the additional rewards is the application of trust over analytics. When accessing available loan funds our underwriting process includes not only the basic financial requirements, but also those of merit, trust, and a more introspective look at the borrowers ability and desire to repay. A bank may tell a borrower no on an automobile loan, while our family company may be able to say yes based on a deeper look at the circumstances involved.
This different level of financial access of course present their own challenges, but seek to fairly secure the money generated by invested members, and not penalize the use by access members. As with all parts of this system, the risk here is mitigated for both sides as much as possible to create a beneficial service to all members.
Asset Protection
Two goals exist in the family company that are designed to benefit all members. The first is basic asset protection. The family company is designed to be an organization owned directly by a family asset protection trust. This trust is setup in a traditional way that separates its capital and assets from any individual ownership and as a result protects those assets from seizure or loss based on any individuals actions or financial situation.
Second, one of our primary tools for generating wealth is an indexed universal life policy that has a cash value and benefit, and after a period of time can be used beyond just the death or long-term care benefit that it provides, but can actually be used as a lending instrument to generate capital for other investments. As a part of a life insurance policy these assets are protected, tax benefited, and can create generational wealth. They are based on the rise and fall of the stock market but offer a cap on losses and gains to protect the holder.
Improving Futures and Presents
The biggest gain we have from this system is access to information, assistance, and the opportunity to create deeper more meaningful connections in our own families. By sharing wealth, sharing the knowledge of how to create and keep it, and share the knowledge and common sense on how to protect it we can benefit from each other. With a growing network of people as a part of the family company its functions almost like a network marketing company, but made up of individuals who are related to each other and have some deeper connection that just two boats floating in the ocean together.
The aim is to create more financially literate individuals, more opportunity for them, and their direct family lines, and the ability to uplift and support members of the family that may be struggling. As the size of the family company increases, and its profits increase the benefits list can grow easily. Our next goal is to provide a health insurance group plan for all of our members, as a part of their invested membership, and then eventually to anyone who has access membership in the company. Which leads us into the most important philosophy of our family company – PEOPLE OVER PROFITS.
The Family Motto – People Over Profits, On Every Level
When generating capital it is sometimes difficult to keep an eye on the golden rule – treat others… (you know the rest). That is why our family motto is so important. Everyone needs to be treated as a person, with the highest regards, dignity, and respect – over the acquisition of profits. If and when profits come first we are no longer a family, we are simply a business. We call this a FAMILY business because the FAMILY or PEOPLE part comes first.
This is why we offer different underwriting terms for our loans to members, why we look at opportunities differently, and why we focus on connections. Once the systems becomes about money first, it has raised a serious red flag about its health. Money is an important factor of the family company system, but not what sits at its core.
Learning at the Core
In the family company system, learning is at the core. Financial literacy, monetary policy, and fiscal responsibility are at the root of family members participating and benefiting from the system. This does not mean that every member has to become an accountant or a spendthrift. It just means that learning about success and the factors that create it are a core part of the responsibility of members at every level.
By learning these things we allow the tenants of good financial literacy to be spread to our children, their friends, our associates and more – and ultimately help the world around us by creating more financial stability, reasonable fiscal policies, and monetary systems that benefit everyone.
Part of the important access given to our members are educational resources, mentors, and information resources to help improve our collective and individual knowledge about wealth, money, finances, rules, and regulations. By taking these lessons to heart we can and will share them with the next generation, better preparing them for the world that they will be a part of, not to mention funding their pursuits and dreams.
If you are within the two generation requirement to Brian Kennedy and/or Victoria Kennedy please fill out our form with your updated contact information and we will add you as an access member. If you are interested in joining as an invested member, please let us know in the form or contact us directly.
If you are not a part of the Kennedy Family Ventures Limited family, but would like to work with us on an opportunity, please feel free to let us know. Best Regards from the Founders,
Brian M. Kennedy and Victoria D. Kennedy
Grand Junction, Colorado
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