Nov 8, 2024
In his memoir, “Talk of Champions,” former NBA point guard Kenny Smith shares that he was roommates with billionaire David Kohler during college. That’s Kohler, as in the person who would go on to be the fourth generation of his family to head the giant plumbing manufacturer of the same name.
According to Forbes, the Kohler family is worth an estimated $16.2 billion. Smith says he was surprised to see his roommate sleeping on his couch instead of working for the family business.
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“‘Why didn’t your father just make you an executive?’” Smith, now an analyst on “Inside the NBA,” recalled asking Kohler at the time, in a 2023 conversation with radio personality Big Boy.
“He said, ‘No, I’ve got to be a plumber first,’” Smith continued. “‘He's going to make me be a plumber and then I go through the steps so if I get an invoice as an executive for $7 for screws I know that they're really $3. So I know everything about the company.’”
Smith says the conversation changed his perspective on business, sports and life.
Practical experience
The Kohler family isn’t the only one that seems to insist the next generation acquire practical work experience.
According to researchers at the University of Louisville, St. John Fisher University and Kennesaw State University, many business families mandate external experience for younger generations “believing it to be the best way for younger family members to gain legitimacy, to learn what work ‘is really like’ and to make mistakes at no cost to the family business,” as written in Family Business.
To be clear, you don’t have to be a billionaire business family to implement these lessons, as described by Smith.
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“Now, when my kids ask me for things, I’m, like, ‘No, you’ve got to be a plumber first. I’m going to give it to you, but you’ve got to go through the steps, and you’ve got it, it’s waiting for you. It’s waiting for you at the end,’” he told Big Boy.
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Seeking it out
A quick brush of practical experience can help you as an investor and as a parent.
Making use of a product or service before purchasing or investing can help give you insight and could be a part of doing your due diligence. If you’re trying to invest in an industry where practical experience is inaccessible, try reaching out to experts and veterans of the industry to get their perspective before putting in any money.
In other words, be a plumber first or speak to a plumber first before investing in a plumbing company.
Similarly, encouraging your children to develop personal finance skills can go a long way. Teaching them early about things like budgeting and operating a bank account can help them gain the skills to control their financial destiny independently.
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Vishesh Raisinghani is a financial journalist covering personal finance, investing and the global economy. He's also the founder of Sharpe Ascension Inc., a content marketing agency focused on investment firms. His work has appeared in Moneywise, Yahoo Finance!, Motley Fool, Seeking Alpha, Mergers & Acquisitions Magazine and Piggybank.
