This article has spurred me to write a post on Generational Wealth. What is Generational Wealth (GW)?? This is simply money or property that gets passed on after death and IT IS USED TO BUILD MORE WEALTH. Another way to put it is that GW means that you children and their children will never have to work.
Why are black people struggling with this concept??? Hmmm.... well, as Keith Jones so eloquently stated, we don't want to BE rich, we just want to LOOK LIKE we are...LOL. CNN Money reported that wealth gaps have widen to whites having 20x net worth over blacks. Numbers wise, white median net worth is around $115,000 whereas blacks are around $5300. ARE YOU SERIOUS. This makes me mad, sad and sick. The article also points out that most of black's wealth is invested into their homes (which is totally in the tank) while whites have 401Ks and stock investments.
So what are where do we go from here>>>>> or should I say I know where I am going and hopefully I can get some of us to jump on the bandwagon! Upon reviewing a couple of articles on the web, I was able to come up with a guideline to set yourself up on the path to GW. Hopefully this will lay the foundation to pass on GW instead of Generational poverty, because having a median net worth of $5300 is POVERTY.
1. Be disciplined in your spending habits, Keith Jones, Founder of Black Investor Organization, says that Black people spend thier money making other folks wealthy!
2. Teach wealth building to your children, Mr. Jones says that we can do three things with our money--CONSUME IT, STORE IT, INVEST IT. Start by teaching our children the differences and which one is most appropriate for the occasion.
3. Set your businesses up to run independently. They should be able to run on auto pilot so that if the owner is sick or can't come to work it does effect their bottom line. This means that you should have great managers, accountants and sales to make it happen with you guiding the reigns.
I also found 6 principles in Generational Wealth 101 with Miss Young that were very helpful:
1.Debt Reduction--have debt work FOR you instead of WORKING FOR debt
2. Save in Gold, Silver and/or Platinum--Mr. Jones advises that putting your money in savings accounts is worthless because inflation will ultimately DECREASE your investment instead of adding to it
3. Create a self funding monthly cash flow-- like your own business
4. Reduce Tax Liability by 97% using IRS Asset Protection to control and protect your assets (need to look into this one myself!)
5. Create a family foundation for charitable giving
6. Implement an investment strategy--research to make sure they have good returns!
Generational wealth takes decades to develop. But here are some things that you CAN achieve in your lifetime that will ultimately affect your children's futures. They/you won't have to finance purchases, pay high interest rates, have student loans or be responsible for your debts when you pass. My husband and I are struggling to graduate from the Paycheck to Paycheck Club but our goal is we will be moving up to the making our Debt Work for Us Club by the end of the year. Who is with me?!?! I will keep you posted along the way!
For more information please read Building Generational Wealth by Keith Jones.
