Are Legacies Really Based on Money? Easy Eddie And Busting Myths About Legacy -Part 1-
On November 8, 1939, Easy Eddie, a notorious mob lawyer, died for his son. I don't mean that metaphorically either. Eddie O'Hare wasn't just considering leaving the mob for his family; he was already gone. He had closed down his mob dealings, severed his ties, and testified against Al Capone, the Al Capone. Eddie was one of the bookkeepers who turned Capone's finance records over to the authorities, which landed Capone in Alcatraz prison.
That's how close Easy Eddie’s ties were with the mob. This man could touch the crime king of prohibition. Furthermore, Easy Eddie didn’t do this all over a guilty conscience - he regularly took mobsters on his clients, and he operated a crooked race track. When the last owner of the track died, Eddie took over the business. He also convinced the grieving widow to sell the dead owner's patent to him, a patent for a little electric rabbit that ran around the track so the greyhounds would chase it. That's how Eddie made his fortune - off a dead man's patent and by shaking hands with politicians and criminals who gambled on the greyhounds.
So why did Eddie do it? Why betray Al Capone, and why risk everything he'd built and all the money had made as a mob associate? One word - legacy. Easy Eddie had a son named Butch O’Hare, who was trying to get into the Naval Academy to fight the Japanese in World War II. But there was a problem; to get into the academy, Butch needed a recommendation letter from a congressman, and he needed a pristine reputation. Connections to congressmen were something Eddie could swing, but the clean reputation, that wasn’t as easy. But easy or not, he would do it. Easy Eddie handed Al Capone, got his son into the Naval Academy, and cleaned up his act, mostly.
When Easy Eddie died, he looked surprised. You can see it in the photos taken after his death; his eyes were wide and staring straight ahead. There was broken glass and blood all over the seat, the door, and the dash. But even though Capone's hitman got their revenge on the lawyer, Eddie won in the end because Eddie's son also died at the wheel four years later. Just like his father, he also died surrounded by broken glass, blood, and bullet holes. But butch would do it building a new family legacy, something grander than a reputation of mob connections and crooked dog races. Butch would die in the cockpit of a fighter plane doing something so unbelievable and so heroic that they would name the Chicago airport after him.
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If you're aiming to leave a legacy, leading your children to get an International Airport named after them isn't a bad start. The O'Hare family name went from being a footnote in the saga of Al Capone to saving an aircraft carrier to finally be in the name everyone hears when they touch down at Chicago O'Hare Airport. If Eddie were alive today, he'd probably say it was all worth it. In today's episode, we're exploring legacy, and because there's a lot to talk about, we're tackling this in two parts. For this first part, we'll cover legacy part one, which concerns myths about inheritance and reputation.
Myth 1: Leaving cash is the only worthwhile legacy. Besides, there's no way leaving my son a bouncy castle made of cash could backfire.
Joe: What I know from World War II history, most people got little white crosses or maybe a metal. How did O'Hare manage to get an airport?
Todd: The airport was named after him because he was such a brave aviator, and he saved so many of his fellow sailors’ lives and even more civilians.
Joe: In the second half of the show, we will go over exactly what he did. But, can you give us a teaser?
Todd: Well, the funny thing about this is that Butch not from Chicago; he’s from St. Louis. He used to visit Chicago, but we never lived there. A lot of this is about the aircraft carrier, The Lexington.
Joe: Okay, so he didn't save Chicago.
Todd: No, he didn't save Chicago. This was in the Pacific during World War II, and this is all about the attack on Pearl Harbor. Now, the Lexington was sent on a mission to attack some other ships. The Japanese bombers came in to destroy that because if they had destroyed all the carriers, we would have lost World War II. These bombers were coming at the Lexington. The first wave of them were all shot down by the anti-aircraft from the ships. Then a whole other wave came, and the only person that was in line to fight them was Brave boy Butch and his copilot Duff. He took down five Japanese bombers, and if those had got through, they would have probably destroyed the Lexington. To add to that, Duff's gun went out, so Butch has to fly and fire on his own.
Joe: That sounds suicidal. In our second half, we will go more into the blow by blow about what Butch did.
Todd: In short, if he hadn't gone to the Naval Academy, an opportunity that Easy Eddie helped him get by cleaning up his reputation, there could have been a chance we could have lost the war.
Can we leave something better than money? Is there something better than money to leave? Because Easy Eddie left a reputation, both a good one and a bad one. He was leaving a bad mob reputation, which resulted in Butch gaining a military reputation. I couldn't find that in research, but you'd think a mob lawyer with a patent would have quite a bit of cash to leave. But that's beside the point because Butch ended up going into the Navy.
As for businesses, when we started researching this, we thought that we were going to find out that an inherited business was stable. However, it may sound great on paper, but it also has to align with the kids' ambitions as well. Furthermore, with trust funds, the parents control the money, but it leaves little room for the kid to live out their passions. In a nutshell, the money and stability can be there, but it may not get spent in the way the parents intended to be – that’s on the heirs whether or not to use it productively if available to them. This is where communication on intent is key. Plus, trust funds only work if you have money to begin with.
Myth 2: What about family businesses or trust funds? If I can control how my children spend the money, that should secure their future, right?
Let's go through the stats. Would it surprise you to know that most family businesses fail, usually in the second or third generation? You would think that kids who grew up around a family business would want to innovate when they take over to keep it alive.
However, in this article by Harvard Business Review, they say that the business is usually lost before the third generation. According to the article, about 70% of family-owned businesses fail or are sold by the third generation. If you have three kids, two out of those three are likely to lose your business. So, if you see a sign that says operated by this family for a hundred years, they're doing the impossible. I absolutely believe many family businesses fail like that because if you grow up in a business, you may grow to hate it. It might represent things your parents made, and you don't want to be a part of that.
Now, the average American retiree is probably going to leave about $177K to their heirs.
Have you heard of the great silver? The silver inheritance that's coming when the baby boomers start to die off. Because there's such a huge generation, they're also calling it the great wealth transfer. It'll be like the biggest transfer of money from one generation to the next in America. In short, leaving money behind is for the pure hope of helping our kids live comfortably. According to a survey of consumer finances, the median inheritance is $69K, and the average is higher. If we talk about trust funds, it's way higher because apparently, you don't set up a trust fund unless you have money to begin with.
There's a guy named Lord David Willetts of the Royal Institution, and he proposed an idea for the UK because Britain is going through the same thing debt issue that millennial Americans have. This guy proposed the idea that when you hit 30 in Britain, you might get a 10,000-pound inheritance. Everybody kind of scoffed at him because that was not enough to do anything. I have mentioned how much I hate banking, hedge fund, and inheritance websites. My hatred for basically third-party institutions that want to manage your money is so evident. If you are looking to leave money to somebody, there are so many websites that use statistics. We just mentioned that 35% of inheritance is squandered, that one in three will be thrown away, and they use that to convince boomers not to leave an inheritance. But again, that's not being squandered; that's Millennials using inheritance to get out of debt.
Myth 3: Can you pass on a reputation? If Butch did not become the Navy's biggest badass, would he have been known as the mob lawyer’s son until the day he died?
In this section of the podcast, we want to talk about what Eddie actually did leave his kids and what he was about to leave. If he owned 3 dog tracks and he was in business with Al Capone, he was about to leave the reputation of a mob lawyer. But he didn't. Overall, if you can leave a good personal reputation for your kids, that would be amazing, as a good reputation can carry you. If you have a reputation and added connections, then you've already got a huge lead and along with people who will listen to you.
We had a Smithsonian article that talked about how the more you make, you have a higher chance for your kids to be in a creative field. It offers a safety net to make you more willing to take risks and become creative. Let's tie this back a little bit to Eddie O'Hare. The money he made from those mechanical rabbits may have given his children money to broaden their horizons and think about doing creative things. But reputation definitely stuck more. Now, let's talk about how reputation actually affects you.
It sounds like Todd and I are reminiscing about past episodes and people with reputations. But what we're actually talking about is connections, physical fitness, and emotional stability, which are all things you actually pass on. We just brought up a series of parents whose experiences and reputation were passed on, but not in the way you'd think. If Eddie O'Hare passed on his reputation to his kids, his kids would have been mob lawyers. This comes from Business Insider, and they had a good article about psychologists who have done studies and found that experiences with popularity will dictate how children think about social interactions.
So basically, if your mother is happy and popular and they have low hostility, it lowers anxiety and raises the popularity of their children. You can't hide anything from kids, especially when it comes to behavior and emotional control. The same thing goes on the flip side. If someone tends to be aggressive, that becomes normalized to their kids. Lifestyle is contagious. There was an article from the Encyclopedia Britannica that mentioned that emotionally independent people who have good emotional control would likely have children take that and become more popular with their peers. Bring it all to a head, you can't really pass on money with a good chance of success. However, you can sure as heck pass on emotional stability, independence, all these things that are basically about reputation. According to all of this, leaving a successful legacy is much more about reputation and values than it is money.
Final Thoughts – Part 1
Todd: Easy Eddie was a creative and ambitious man. He thought this whole reputation thing up himself. He's the one that contacted the authorities and reached out to the IRS. He could have tattled for all kinds of things, but he knew the only chance they would have because of how corrupt the legal system was.
Joe: Okay, I did not know about the finer points of that. This all draws a direct line to how our man Butch becoming a war hero. That's awesome.
Todd: I want to talk about Eddie's last drive. Now, as smart and rich as he was, he was driving back from the dog track in his Lincoln. That was when he was killed by a shotgun blast, which is the photo we have. It was a double-man shooting drive-by, and there were never any arrests or even suspects. Back in those days in Chicago, nobody saw anything. Let me ask you this, Joe. You just ratted out the most notoriously violent gangster of all time. Why would you just be driving around to and from work in a Lincoln and not expect to get killed?
Joe: Yeah, that's crazy. I would be in a steel box somewhere and wouldn't leave the house.
Todd: I would have gotten under the witness protection program or have 25 goons with me as bodyguards. Not this guy, just driving around openly in a Lincoln. Now, on the day of his dad's death, Butch was training flights at a naval air station in Pensacola, Florida. He was flying around on a beautiful day and did a few test flights. When he came down and got off his plane, he was told his dad was killed today.
In part 2, we will be talking more about legacy and if we can pass on talent. So please join us next week.