'You've got to be a plumber first': Former NBA star Kenny Smith says he learned this 1 crucial lesson from his billionaire college roommate — now he's using it on his kids

Practical experience

The Kohler family isn’t the only one that insists that 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.

“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.