Scott Donnell – Helping Kids Understand Money

Financial literacy is one of the most important skills for individuals to acquire especially for children as they grow up and venture into the world. But how do parents go about teaching financial skills in a meaningful way? Scott Donnell has created an app, GravyStack, which helps parents teach their children the necessary financial skills so they can be successful in life.

Interview Transcript of: Scott Donnell – Helping Kids Understand Money

Alan Olsen: Hi, this is Alan Olsen and welcome to American Dreams. My guest today is Scott. Donnell. Scott, welcome to today’s show.

 

Scott Donnell: Good to be here, Alan. Thanks for having me.

 

Alan Olsen: So Scott, for the listeners, I’m just going to introduce you as a serial entrepreneur, critical thinker, done a lot in your life, but I’d like you did to, in your own words, describe what it took for you to get to where you are today.

 

Scott Donnell: All right, well, yeah, I’m I was raised by wolves. Shall we start with that? Actually, when you think about it, I was raised wild like there. My first business was in third grade, believe it or not, it was in my blood. I started making bead keychains like little gecko bead, keychains in third grade, and selling them for like, $1.50, door to door. And about a month in all of my classmates, were not going out to recess or lunch. They were in their classroom making my keychains for like a quarter each. And I got suspended, believe it or not, because my principal didn’t like the idea of the small business. So my supply line got cut, I got suspended, and I went home from school that day. And my dad instead of punishing me, he gave me a huge high five and took me to dinner. And said, Whatever you just did, I want you to do for the rest of your life. So I’ve had it in the guts. My whole life. I come from four generations of entrepreneur, my grandpa started Inner West Bank with my dad, they both build it to about 90 small banks up in Washington state where I grew up. And they’re just they exited for, you know, in the billions to Wells Fargo and they gave the whole thing to charity. So I come from for generations of entrepreneur that basically gave everything away. So everything I’ve got is I was taught to fish, but I wasn’t given the fish. And I couldn’t be more thankful for that. But my grandpa was like Ronald Reagan’s bank, board advisor. So we go deep into entrepreneurship and our family. But when I say I was raised by wolves, it’s kind of true. I grew up on Whidbey Island on an island north of Seattle. And I was booted out of the house starting at age four booted out of the house at 6am. Just said Go get dirty go play in the woods, go play and by the ocean make rafts. I mean, we were if somebody was going to had to go to the hospital or got hurt, then you could come home. But the point was just go out and be wild. And I really do think that that created in me this kind of this courage and wild spirit to create drive for entrepreneurship. I think that a lot of things today, especially in the education system, is breeding sheep. And I think the more wild we can become, and the more courageous and confident we can become in our unique abilities and creating value for other people, the better off society is going to be so I really am serious, like I was kind of raised in the wild.

 

Alan Olsen: So that it leads me to this question before we get to coming up to today. Are entrepreneurs born that way? Or are they made?

 

Scott Donnell: I love that question! It’s such a hard question to think about because, I was just with Joe Polish, a good friend of ours, mutual friend and a guy named Sam print. Sam Prince is on Forbes list. He’s a billionaire out of Australia young guy my age. He started the largest restaurant chain in Australia for burritos and Mexican food. And now he has a huge AI medical company. We literally flew up to Sedona here from Phoenix in his jet last week for three hours went to lunch. And the whole question was are entrepreneurs born or made? And we went round and round and round. And I think what we landed on and it’s not conclusive is that I think it a lot of it is innate. I think a lot of it is born into a system. But I think we have no idea how much value there is in apprenticeship. How much value there is in mentorship, how much value there is in training up leaders in the ways of entrepreneurship. So maybe it is born not made. But I would say this, I think that there are 10s of millions of entrepreneurs who were born to be entrepreneurs that don’t know it. That’s my that’s my gut.

 

Alan Olsen: You mentioned earlier about the the sheep in the education system. What’s your take on the way that that students are trained today? Is are the is done in the right way? Is there a better way that you have in a vision?

 

Scott Donnell: Yeah. So there’s a lot in the education system. So for the last 12 years, that’s all I’ve been doing. So I started a company to raise money for schools, called Apex leadership, CO, we started in 2011. And it grew to be I did it to help my wife’s first grade class, she was a public school teacher, she’s an angel sent by God. And we raised money for her school. And we taught the kids leadership character traits and fitness. And the school loved it so much they made $50,000 Total instead of the most I’ve ever made was 12. And we knew we had an incredible company. And so over the last 12 years, we’ve served, I believe, five to 6 million families, we have 120 franchises, 600 employees. And we have seen the guts of the education system from the inside out. And we’re trying to raise hundreds of millions of dollars for them, to support the teachers to buy supplies, shade structures, playgrounds, really helping the leadership of these public and private and charter schools, educate the kids in fun things leadership, fitness, character, and what I’ve seen. First, I’ll tell you this, teachers are angels, they have the one of the hardest jobs, yes, they get their summers off, but it is a difficult job for not enough pay. And they’re doing good for a lot of people. The hard part is I think the the educational structure, right? Like the there’s so much money put into the governance of education. And it’s, No Child Left Behind, you’re grading to the lowest student, there’s a lot of things with the education system that are today, there are gaps and holes in the system. And so that’s actually one of the newest companies that I launched about a year ago called Gravy Stack. And the mission of Gravy Stack is to combine banking. So it’s an actual debit card that kids get with gaming to learn all of the life skills and the financial literacy and the grit, delayed gratification, the personal responsibility, compounding interest, all these life skills that kids are not getting in the traditional education system. So the mission of Gravy Stack is to really help 10 million kids, in the next few years start to learn these really core skills of financial education and life skills that are going to help them get ahead in the real world, once they’re done with their normal education up to 18 years old. So that’s what Gravy Stack is doing. So we’re trying to solve it. But yeah, there are definitely holes in the system right now.

 

Alan Olsen: There seems to be competition for the children’s education know who’s in charge, different groups stepping in. How do you plan to integrate the company into a current education system was so many other factions competing?

 

Scott Donnell: Yeah, so we’re building it as a standalone. So we’re not doing it inside of the traditional education structure. Gravy Stack is banking needs gaming, right? Because the only way that I’ve seen watching five and a half million kids now learn, kids learn through fun. Kids learn through by doing, okay, kids have to do things in the real world, they have to try they have to fail, they have to learn by doing. If you take a test, and you try to memorize facts that really only lasts for about two days, and then most of it is out the other ear. Okay? So the way to get kids to learn is by creating a hero’s journey, put the kids in scenarios where they are living and experiencing something. So if you want to teach them about space, why don’t you put them inside of the Apollo 13 mission. And every kid has a character inside of it. And they have to learn about those characters from the inside out. And they’re the captain of the ship. And they have to figure out what to do in this scenario. Like they’ll learn 100 times more and faster if they take a hero’s journey. So if you want to learn about the foundation of our country, why don’t you put the kids in your class inside of the founding fathers and everybody gets a roll. So I’m Benjamin Franklin for the next six weeks. I gotta learn everything about him what he was thinking what he was doing, how did he create so much of what he did? Right? Or George Washington or Madison, all those people. That is how kids learn. And so with gravy stack, the goal is learn by doing we have so many real world missions that kids complete from investing real life investing to learning real estate to learning, the subscription hunt where they have to try to cancel subscriptions in the house and planning the next family trip where they get three flights, hotels and cars and get the best deal for mom and dad for the trip actual real life experiences. I think that’s how kids learn. What I would love to see is there’s a school called Acton out of Texas that now has 6000 locations around the world Acton Academy, Jeff Sandefur is the founder. He’s a close mentor of mine. They are a kind of self paced hero’s journey, Socratic style of learning, where every Friday the kids have an apprenticeship. So they’re going out in the city, finding somebody they want to emulate when they grow older, and they just shadow them for the day, or do a project or just learn from them and learn by doing. That is my favorite way that kids learn. That’s how my kids learn. I’ve got three little kiddos, and we try to give them real life experiences as much as possible, because that’s what really moves the needle.

 

Alan Olsen: In the world of entrepreneurship, there’s obviously a lot of change going on in the world today; we hear about blockchain, we hear about crypto, we hear about all these terms that the old timers aren’t clued in, but the younger generation picks it right up. How do you integrate that into the model of Gravy Stack?

 

Scott Donnell: Yeah, so Gravy Stack, the gaming side, we look at it as countries continents and islands of games that the kids play. And every single plot of land is a bunch of real life missions and mini games that the kids have to complete, to be able to learn a skill. So we have save country, spend Island set, you know, earn, invest, protect borrow, we’re going to be having almost 100 different pieces in our world that the kids unlock by learning these life skills. So we’re going to have an entire country missions in our game, around real estate, around coding around construction, around negotiation, and persuasion and public speaking and nutrition and all the things that are kind of the holes in the traditional educational system that we think that there are experts in the world who have incredible things that we can teach kids through gaming, and fun, that are allowed, that allow them to really prepare for the real world to prepare for real life. We want kids to be graduating from high school fully ready for the world ahead. Instead of getting hit by a Mack truck, their freshman year of college or their first job at a school where they’re like, I don’t even know how to balance a checkbook. I don’t even know how to sell a product. I don’t even know how to build anything. I don’t even know how compounding interest works, or delayed gratification or defy, you know, or all these different things. So we’re going to use gaming to build a system where the kids create their own resume of achievements using our game that they can have for their future. Right. The goal is to create the future of resumes with these life skills for them to be able to use anywhere else.

 

Alan Olsen: Who’s your target them with the kids? I mean, is it within the continental US North America South worldwide who, as you’re looking at gamification, how big do you want to be?

 

Scott Donnell: Yeah, this is a worldwide effort. The financial illiteracy gap is expanding, it’s not shrinking. They’re looking at potentially 40% of all student loans going default in the next decade. That’s a multitrillion dollar hit. There’s a lot of kids that have issues. And so the game itself is actually free to play. Once we launch, we’re launching in just a couple of weeks. So when a lot of people listen to this, they can go to gravystack.com, and just start playing in the app, download it. But we want to have that free worldwide for people to play in Asia, Europe, Africa, Mexico, Canada, North America, we but then with the debit card, the debit card banking side of it, it’s starting in the States, and then we’re going to be moving to the global north. And then eventually our goal is to go worldwide. With the banking side as well. We were kind of reimagining banking, to sort of help kids understand the flow of money instead of just seeing one number in their checking account and spending it and their debit card. I think that’s archaic. Why do you have a checking account if no kid under 20 is ever going to write a check ever again. So what we’re trying to do is really build a system where kids see the flow of money, they learn to create value in the home and in their neighborhood. And they’re really understanding the core fundamentals of financial literacy and financial independence. So yes, the goal is to go worldwide with this. We want to have 10 million kids on here in the next five to seven years. And then as we expand to new countries, we’ll be able to have it in different languages. and different games in different areas of the world. But yeah, we want to create a platform where people can come in just like you, we want a platform where someone like you can come in and really impact the next generation by creating a level of missions based on your unique ability and skill set. There’s so many people that I meant, if you could go back and teach fifth graders right now, Alan, you would have an unbelievable impact on their lives, right. But the traditional system is not set up for that to thrive. So what we want to create as a platform for people like you that are world class experts to come in and create games with us and content that kids can engage with, have fun with and build their resume out.

 

Alan Olsen: Okay, so as a kid, the user of the Gravy Stack moving in, I guess the first thing is capturing attention of 10 million kids and more by interactive games, but there’s this other element of money, debit cards, who’s putting the money in the account for the debit card? And as a kid, am I going to get that card? How do I get to spend the money?

 

Scott Donnell: Yeah, so these are kids ages eight to 18, by the way, and mom and dad or a guardian, right? They are the ones that do all of the setup in the background. So the game is free, the debit card is five bucks a month, it’s cheaper than Chase, you can have up to five kids on that one account, and mom and dad set it up. And then the kids are able to use a phone or an iPad or login and see the flow of their money coming in. So they’re the debit card itself, is actually only part of the account. Because we don’t want to teach kids that you can just spend anything you get on a debit card. So what we have is our three jars, the save, spend and share. So as they watch their money flow through their income streams for home gigs, and missions and matching, and eventually their first job W2 income, they’re going to watch it flow into their save, spend and share jars. And in the Save jar, we’ve got investing long term and short term savings for goals. In the share jar, we’ve connected to almost any nonprofit in the world at this point that they can just look up and give to and get the deduction deduction for mom and dad. And then the spend jar is the only jar that they can use for their debit card. So we’re trying to teach kids that money in is not money out. In fact, what people don’t realize is that from a very early age, maybe three, four years old kids start to have a relationship to money, even if they don’t have it, right. People like think about this, if sex and money are the two biggest things that parents fight over? What do you think kids are going to start to believe about those things. So when it comes to money, we have a lot of kids that don’t want to talk about money, because they think it’s a source of conflict in the home, they’re scared of it. So they don’t even approach money. Other kids, they watch what their parents do. And so for them, it’s like, if I got 10 bucks, I’m gonna spend it because who knows how long we’ll have it. Right? Maybe it was taken for me and put in some other account that I never saw. So it’s not mine anymore, even though mom and dad set up an account for them or something. So the kids are either worried about the money, they’re scared to talk about the money, or they’re hoarders, they don’t ever spend a penny because they’re terrified that if you know they lose it, their life is over, which is also a bad relationship to money. So a lot of the gaming and the training we’re doing with the kids is to give them the right relationship on how to make and manage money. Well, and truly the goal is to help them master the art of money rather than have money master them. So that’s a lot of what the mission of our game is for the 8-18 year old kids.

 

Alan Olsen: So let me see if I understand that the the workings of the debit card. Whatever happened to the parents chore list of the make your bed and take out the garbage and I’ll give you a reward or go babysit and I’ll give you some funds. Is that going to play into this Debit Card?

 

Scott Donnell: Yes. So one of the things that we don’t like at Gravy Stack is allowance. Allowance to us is basically giving kids something for free and teaching them the fundamentals of the opposite of what society really is about. So we are anti-allowance, but we have to fill in that gap because the reason why parents give allowance is because one it’s easy and two, it helps their kids start to have some funds to do something with and so the parents their their mission is correct, trying to get the kids to understand the flow of money, but the setup is all wrong. And so what we created was something called home gigs. And this is something we’re protecting through IP right now. But the idea is home gigs is created so that mom and dad have a list of things around the house that the kids can do to earn extra cash at all times. So the goal is sweep a garage, mop a floor, do the dishes, organize a closet, alphabetize, the books, go do something in the yard, these aren’t everyday things that are chores, these are extra projects that the kids can get paid to do, we actually love chores, we think we actually believe that chores should be done for free. So you’re gonna get up, make your bed, brush your teeth, get dressed, clean your room, and maybe take out the trash or something like those are things you do to be a part of this family and be under this roof for free. I’m not paying you to do chores. But there are almost 100. Now on our list of other things around the house, that kids should be paid a small amount to be able to do. And so the goal is have the parents set all this up in a couple minutes in the app, and it auto renews and it auto sets up their list. And kids at all times have a way to earn money for anything they want to do. So if you want to go to the movies to the arcade, you want to buy a birthday gift for your friends, you want to save up for something you want to buy. It’s all there for you to go get. But you’re not allowed to ask mom and dad for money ever again. That’s the goal of Gravy Stack.

 

Alan Olsen: So if I then take an example of the kids want to go out they mow lawns or do their babysitting money, or even maybe pick up a job at a fast food restaurant, how does the debit card interact with money coming from that third party,

 

Scott Donnell: We built something called a money machine. So it hooks up to one of their revenue pipes. So it starts with home gigs. And then the missions matching from their family and friends when they complete the levels that grandma is going to want to pay them to do special missions and complete levels and things like that. And then once they start doing gigs out in the neighborhood, that’s the next step, you start by doing gigs at home, projects and work at home. And then it’s babysitting, walking a dog, washing a car, cleaning up for the neighbors helping in your neighborhood, that just creates another revenue pipe for the kids to understand revenue streams. And then when they get their first job at the coffee shop or the theater or grunt work somewhere for income, it just creates another revenue stream. And that goes right there into their account and then flows the same way into the jars for save, spend and share. And they watch it flow in real time. That’s one of the most critical things is having kids watch how money flows in and out of their account. And so we have to visualize that. And we’re using animation and you literally see coins go through the pipes, and you also see it shake out of your debit card if you spend it. So you’re going to see where it goes and how much so kids can start to understand saving and sharing and spending correctly.

 

Alan Olsen: So getting the money in there’s that Venmo there’s Zell is going to be a similar process to the person hiring for babysitting, hey, send the money over to my digital account.

 

Scott Donnell: Yep, it’s just like Venmo in a lot of ways we’re using tablet pay. And so they just click one QR code or one text to the kid and the money goes straight into their account. And when they reach a certain level, we have an autonomy meter, which tracks their autonomy level of how independent they’re becoming for financial literacy. And when they hit certain levels, they can unlock the ability to start to earn credit, they can unlock certain spending limits that mom and dad start by having more limits, and then they take off the veil as the kids get more independent. But the more that they do that, the more opportunity they they’re going to be able to have to send and receive payments between their friends. It just there’s a whole list of things that we’ve shown here that kids need training, to be able to become financially literate, it needs to be done through gaming and real world earning and learning. One of the biggest problems out there is there’s a lot of other debit cards you can get from a lot of other companies for kids, but a lot of is just a debit card. All they’re giving is a debit card, and they’re not doing any of this training or gaming or real world learning. So the kids don’t even log in. They just keep asking mom and dad to send them more money. And I think that having a debit card as a kid without the training and the gaming and the learning. It’s like giving them a weapon really. And it’s not I don’t think it’s responsible. I think it’s it might teach them how to go buy something at 711 but it doesn’t really give them all the fundamentals needed to be successful later in life. So that’s why gravy stack is there.

 

Alan Olsen: Well Scott it sounds exciting that you’re getting ready to launch your first product here within the next few weeks, and I’m really excited to see that how Gravy Stack will transform our education system today. Awesome. Last words here, Where do you expect to be in five years from now with this company?

 

Scott Donnell: This is definitely a unicorn in the making. It’s such an important mission. We interviewed over 1000 parents, and none of them. And I’ll repeat this, none of them had a financial roadmap for their kids. They didn’t have a plan, the best they had was like, yeah, we’ll try to maybe like give them the three jars piggy bank, and then we’ll give them a bank account when they’re 12. And then maybe they’ll try to like, sell some lemonade or something like that’s as good as it got. And so this is a huge need a huge need. And we want to be able to have parents trust this app as like the outsourced roadmap for their kids to become financially independent. So in five years, I think, you know, we’ll have millions of kids using the app learning and growing, we’re gonna have a marketplace for their results, we’re going to have millions of custom missions that families create for their kids. And really, the goal is to create a movement, not just an app, like the goal is to really create a movement to close this financial literacy gap. And so I think in five years, we will have moved the needle significantly to help families really outsource that financial literacy through gaming and fun and real life learning. So that’s, that’s really the goal. I think in five years. I’d like to have at least three 2-3 million kids on there.

 

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This transcript was generated by software and may not accurately reflect exactly what was said.

Alan Olsen, CPA

Alan Olsen, is the Host of the American Dreams Show and the Managing Partner of GROCO.com.  GROCO is a premier family office and tax advisory firm located in the San Francisco Bay area serving clients all over the world.

 

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Scott Donnell on Alan Olsen's American Dreams Radio
Scott Donnell

Scott Donnell, Founder of GravyStack

Alan Olsen on Alan Olsen's American Dreams Radio
Alan Olsen

Alan is managing partner at Greenstein, Rogoff, Olsen & Co., LLP, (GROCO) and is a respected leader in his field. He is also the radio show host to American Dreams. Alan’s CPA firm resides in the San Francisco Bay Area and serves some of the most influential Venture Capitalist in the world. GROCO’s affluent CPA core competency is advising High Net Worth individual clients in tax and financial strategies. Alan is a current member of the Stanford Institute for Economic Policy Research (S.I.E.P.R.) SIEPR’s goal is to improve long-term economic policy. Alan has more than 25 years of experience in public accounting and develops innovative financial strategies for business enterprises. Alan also serves on President Kim Clark’s BYU-Idaho Advancement council. (President Clark lead the Harvard Business School programs for 30 years prior to joining BYU-idaho. As a specialist in income tax, Alan frequently lectures and writes articles about tax issues for professional organizations and community groups. He also teaches accounting as a member of the adjunct faculty at Ohlone College.

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