Generational Wealth Pt 2…Leave A Legacy
Ee M htp (I come In Peace)
After writing my previous article on generational wealth, I realized it was much more I wanted to talk about on the subject. I’m not sure If I got my thoughts out the way I truly wanted to last time. Anyway I’m back, so lets dive into my thoughts.
When I think of generational wealth, I often think of chess. The idea of chess is that of a competitive scenario, where the object is to out think your opponent. A master of chess is often thinking ahead of his/her next moves; also the opponents counter moves. When thinking about generational wealth, one should think about their moves for years to come.
Conceptualizing generational wealth is to unselfishly think about your own individual time of death. How will you be remembered for years to come?
Will you be an after thought? Will you be remembered for your thoughts and ideas? Will you be remembered for your hard work and diligence? Will you be remembered for your philosophies and integrity? Will your children’s children work just as hard as you, or will they continue your legacy?
Having thoughts of generational wealth, as well as entrepreneurship has always been on my agenda. When I was 18 years young, I wrote my very own 10 page business plan. Reading vigorously through Wendy Beech’s – Guide to starting your own business. Back then at the time I wanted to be a photographer, then eventually open up my own studio. Due to technology, everyone and their grand mother became a photographer, so those aspirations faded.
1st time around I spoke on things such as Investing into the stock market. I learned about the fundamentals of investing when I was a teenager. I learned by playing the virtual stock exchange game: www.marketwatch.com/game/
I recommend that anyone who purchases stocks, purchases stocks to hold them long term and not fall into the trap of day trading, which can feel like a night in the casino. In present day and time investing is quite as simple as you using any application on one’s mobile phone. There’s numerous of applications one can download to their phone to start purchasing and investing in stocks. My personal favorite is the robinhood application.
There’s also the stash app and also acorn app, where one can purchase stocks with no fees. If one would like to know the difference between the three apps, one can find articles and websites that compares the three applications. It‘s really going to boil down to personal preference and how user friendly each application is.
Before I go further there’s some key terms and definitions I believe people should become very familiar with.
- A stock or any other security representing an ownership interest. This may be in a private company, in which case it is a private equity.
- On a company’s balance sheet, the amount of the funds contributed by the owners or shareholders plus the retained earnings (or losses). One may also call this stockholders’ equity or shareholders’ equity.
- In margin trading, the value of securities in a margin account minus what the account holder borrowed from the brokerage.
- In real estate, the difference between the property’s current fair market value and the amount the owner still owes on the mortgage. It is the amount that the owner would receive after selling a property and paying any liens. Also referred to as “real property value.”
- In investment strategies, equities are one of the principal asset classes. The other two classes are fixed-income (bonds) and cash/cash-equivalents. These are used in asset allocation planning to structure a desired risk and return profile for an investor’s portfolio.
A stock is a type of security that signifies ownership in a corporation and represents a claim on part of the corporation’s assets and earnings.
A cash dividend is money paid to stockholders, normally out of the corporation’s current earnings or accumulated profits. Not all companies pay a dividend. Usually, the board of directors determines if a dividend is desirable for their particular company based upon various financial and economic factors. Dividends are commonly paid in the form of cash distributions to the shareholders on a monthly, quarterly or yearly basis. All dividends are taxable as income to the recipients.
Dividends are normally paid on a per-share basis. If you own 100 shares of the ABC Corporation, the 100 shares is your basis for dividend distribution. Assume for the moment that ABC Corporation was purchased at $100/share, which implies a $10,000 total investment. Profits at the ABC Corporation were unusually high so the board of directors agrees to pay its shareholder $10 per share annually in the form of a cash dividend. So, as an owner of ABC Corporation for a year, your continued investment in ABC Corp should give us $1,000 in dividend dollars. The annual yield is the total dividend amount ($1,000) divided by the cost of the stock ($10,000) which gives us in percentage terms, 10%. If the 100 shares of ABC Corporation were purchased at $200 per share, the yield would drop to 5%, since 100 shares now cost $20,000, or your original $10,000 only gets you 50 shares instead of 100. If the price of the stock moves higher, then dividend yield drops and vice versa.
Financing is the act of providing funds for business activities, making purchases or investing. Financial institutions and banks are in the business of financing as they provide capital to businesses, consumers and investors to help them achieve their goals. The use of financing is vital in any economic system, as it allows companies to purchase products out of their immediate reach.
Appreciation is an increase in the value of an asset over time. The increase can occur for a number of reasons, including increased demand or weakening supply, or as a result of changes in inflation or interest rates. This is the opposite of depreciation, which is a decrease over time.
A shareholder, commonly referred to as a stockholder, is any person, company, or institution that owns at least one share of a company’s stock. Because shareholders are a company’s owners, they reap the benefits of the company’s successes in the form of increased stock valuation. If the company does poorly and the price of its stock declines, however, shareholders can lose money.
Invested capital is the total amount of money raised by a company by issuing securities to shareholders and bondholders, and invested capital is calculated by adding the total debt and capital lease obligations to the amount of equity issued to investors. Invested capital is not a line item in company’s financial statement because debt, capital leases and stockholder’s equity are each listed separately in the balance sheet.
Principal is a term that has several financial meanings. The most commonly used refers to the original sum of money borrowed in a loan, or put into an investment. Similar to the former, it can also refer to the face value of a bond
Principal can also refer to an individual party or parties, the owner of a private company or the chief participant in a transaction.
These are some key terms one will see often, along with other terms not covered, when Investing. I thought I’d cover the basic terms. I’d suggest using the investopedia website for other definitions of terms.
Also there’s imperative retirement financial terms one should know.
- Bank loan funds
- Defined benefit pension
- Defined contribution plan
- Individual retirement account
- Life cycle fund
- Lifestyle fund
- Mutual fund
- Required minimum distribution
- Rollover IRA
- Roth 401k
- Roth IRA
- Self directed IRAs
- Simple IRA
- Social Security
For full article/definitions: https://www.bankrate.com/retirement/17-retirement-savings-terms-to-know/
In the last article I mentioned Real Estate investing; there’s a few ways of investing into real estate. When I was younger I went to school for real estate earning a certificate in real estate practice and fundamentals. My goal at the time was to sell real estate. I never went on to sell real estate, one because I failed the exam only by two questions, second because the economy was going downward. That along with the subprime lending crisis, which caused the economic collapse. There was no money to be made, selling houses for a broker/company, which I eventually learned. Real estate sales people at the time had to find supplemental income. Also during this time, what I learned; was that investors who had the money and resources laying around, purchased investment properties like a kid in a candy store.
So as I mentioned before there’s a few ways to Invest in Real Estate. 1st you have investors who purchase the fixer uppers, often called the handy man specials. These type of Investors typically buy homes that need interior/exterior reconstruction done to them. These type of investors are typically pretty handy with fixing things themselves, or have close relationships with contractors who will do the work for a fixed rate no matter how much or little work needs to be done. These investors will buy, fix, flip for a profit. You also have investors who will purchase properties, typically duplexes/triplexes or small apartment buildings; seeking long term investment and residual income, from collecting rent money from tenants every month.
Also there’s investors, who invest in mortgage foreclosure properties. This is typically when a home owner forecloses on a property, due to not being able to pay the mortgage. The mortgage company or the bank which takes control of the property, typically puts the home up for auction. Seeking either the remaining balance, or a fraction of the balance. With these auctions Investors are not usually permitted to enter the residence until after the sale. These type of Investors typically have lots of cash at their disposal. Also it’s a lucrative way to purchase a very expensive home pennies on the dollar.
Another way to invest into real estate, in which many people have charged thousands of dollars just for this information alone. Is acquiring properties through tax liens.
Similar to foreclosure properties, but different, a home owner can lose their property for failure to pay their local municipality taxes. Even if a homeowner has paid off their home after a 15/30 year mortgage, every homeowner still has to pay property taxes.
“Investors buy tax lien certificates at auctions, effectively owning a claim against the property until the homeowner pays the county or municipality back or until they default on the debt entirely. In return, the county gets the money it needs to fund schools, pave roads and pay for other infrastructure and services”. (Les Christie, Investors Target Property Tax Deadbeats, 2012) Full Article Here: https://money.cnn.com/2012/03/05/real_estate/tax-liens/index.htm
Essentially if an investor buys a tax lien certificate the owner is in debt to the investor, if failure to pay the debt; investor then can legally acquire the home.
“When a landowner fails to pay the taxes on his or her property, then the city or county in which the property is located has the authority to place a lien on the property. A lien is a legal claim against the property for the unpaid owed amount. Property that has a lien attached to it cannot be sold or refinanced until the taxes are paid and the lien is removed.
Similar to how actual properties can be bought/sold at auctions, these property tax liens can be purchased as well. CNBC reported that approximately $14 billion in property taxes are not paid each year, and about a third of this amount is subsequently sold off to private investors, according to the National Tax Lien Association (NTLA). Local governments benefit from private sales because they immediately recoup the monies owed on the property in question” (Mark P Cussen, Investing In Property Tax Liens, Investopedia.com) Full Article Here: https://www.investopedia.com/articles/investing/061313/investing-property-tax-liens.asp
The wealthy stay rich because they form corporations around their businesses.
Tax Advantages: “A corporation can do so many things that an individual cannot. Like pay for expenses before it pays taxes. That is a whole area of expertise that is so exciting, but not necessary to get into you have sizable assets or a business. Employees earn and get taxed and the try to live on what is left. A corporation earns, spends everything it can, and is taxed on anything that is left. It’s one of the biggest tax loopholes that the rich use. They’re easy to set up and are not expensive if you own investments that are producing good cash flow. For example; by owning your own corporation, vacations are board meetings in Hawaii. Car payments, insurance, repairs are company expenses. Health club membership is a company expense. Most restaurant meals are partial expenses. And on and on, but do it legally with pre tax dollars”. (Robert T Kiyosaki, Rich Dad-PoorDad, 1997)
There’s some key terms to remember when investing in real estate. I wont give the complete definition, but I encourage one to look them up.
- After repair value
- Buy and Hold
- Fico Score
- Rent / Renting
- LLC (Limited Liability Company)
- Cash Flow
- Property Tax
- Property Insurance
- Capital Expenditure
- Property Management
There’s many terms and definitions one can learn in real estate. A good book I suggest that one can obtain is: The Language of Real Estate by John W. Reilly.
That book has about 2,800 terms and definitions in it. At the time of this writing, the book is currently on it’s 7th edition. Older editions of the book such as the 5th edition can be found online for a cheap as $3.00 USD.
Moving along; when I look at the Black/Afrikan community I find that our people often do not create a will, also known as, last will and testament.
Last Will: A last will and testament is a legal document that communicates a person’s final wishes pertaining to possessions and dependents. A person’s last will and testament outlines what to do with possessions, whether the deceased will leave them to another person, a group or donate them to charity, and what happens to other things he or she is responsible for, such as custody of dependents, and management of accounts and interests. (investopedia.com)
Last Will: A last will and testament is a legal document that lets you, the testator (the person making the will), designate individuals or charities to receive your property and possessions when you pass away. These individuals and charities are commonly referred to as beneficiaries in your last will. A last will also allows you to name a guardian to care for minor children. The main purpose of a will is to ensure that the testator’s wishes, and not the default laws of the state, will be followed upon the testator’s death. (legalzoom.com)
Family’s often get into moments of disarray, confusion, chaos, when a family member passes away and there is no last will. One will commonly see this happen when a person has multiple children and, or siblings; of course everyone is going to feel entitled to assets that may; or may not be attended for them to inherit.
A Last will is legal binding, which can’t be contested or undone. Most importantly it cuts out the confusion of what assets go where and who is to care for specific unfinished business. Also situations like who is to raise one’s children, if they’re minors. A will is typically consulted with through one’s attorney. One can also have a will done through the website: www.legalzoom.com
In the previous part one of generational wealth, I mentioned life insurance. Life insurance is one of the smartest moves any one can invest into. Rates of life insurance varies do to age, pre existing health conditions and the actual payout of the policy, once the policy holder is deceased.
Life Insurance: Life insurance is a contract between an insurer and a policyholder in which the insurer guarantees payment of a death benefit to named beneficiaries upon the death of the insured. The insurance company promises a death benefit in consideration of the payment of premium by the insured. (Investopedia.com)
If one is married and has resposibilities such as a home mortgage or children that are minors; life insurance is a safety net. Policy payouts can range from $10,000 – $1,000,000+. This could payoff one’s home, put one’s children through college, investment money for children, money to support a spouse to help take care of children etc. Also first and foremost help give one a proper burial/funeral arrangement. It’s nonsensical for family members to have a fish fry or donation pool, to help collect money for proper funeral arrangements. I myself have experienced this, in the trying time of my own mother’s untimely transition. I would not want the same burden for my own child; my child should have the resources available to handle business without added stress.
If one is to try to find life insurance, I would first suggest going to which ever provider one has home insurance and, or auto insurance. A lot of providers offer life insurance as well; more than likely giving you a deal for being a pre-existing customer. One can also shop multiple carriers here: www.selectquote.com
A very good documentary DVD I watched is: Generation One, The Search For Black Wealth – Lamar & Ronnie Tyler . It’s a very good documentary with very insightful information. It will definitely elevate one’s mindset on thinking about generational wealth.
Purchase Here: www.generationonemovie.com
Moving along, I also feel it’s imperative for an individual to start a family archive of photos and key events in family history. Starting a family tree, of names, dates of birth, marriage unions, accomplishments. Each family should have at least 2-3 family historians who keep and archive records for future generations to come.
Video interview your oldest living relatives, ask them specific question pertaining to family history, legacy, traditions. Pass down heirlooms, books/personal library etc.
I mentioned in the previous article that having a personal library to hand down is imperative and resourceful; considering the fact books can be costly.
Please know, video interviewing and having many conversations with your oldest living relatives is imperative for wisdom etc.
There’s an Afrikan Proverb that states: “ When an old person dies, a library burns to the ground”
I myself have been privileged in my youth to acquire much wisdom, by surrounding myself with Elders. Me being able to listen with discipline; without ego. In Afrikan culture one is to ask their Elders for permission to speak.
The moral concept is that listening to one’s Elders is imperative; getting their story on record/documented is imperative to one’s legacy. Suggested reading; my Elder Mkuu Mzee’s article on family archive: http://raisingawarenessgroup.com/visionary-thoughts/mkuu-mzee/afrikan-family-history/
In addition to family archiving, and starting family trees. We need to start tracing family lineage and ancestors. One can visit their local federal archives building for free and search census records, review documentation and put together family trees of past relatives. For Afrikans in the diaspora, this will be a trying effort, due to the human trafficking events in history;known as the Trans-Atlantic slave trade.
Along with family archiving; one needs to do DNA testing.
- (DNA) A molecule found in a cell nucleus that carries genetic information.
- (DNA) A nucleic acid in the cell’s chromosomes, which contains the cell’s coded genetic instructions. (thefreedictionary.com)
‘’DNA, or deoxyribonucleic acid, is the hereditary material in humans and almost all other organisms. Nearly every cell in a person’s body has the same DNA. Most DNA is located in the cell nucleus (where it is called nuclear DNA), but a small amount of DNA can also be found in the mitochondria (where it is called mitochondrial DNA or mtDNA).
The information in DNA is stored as a code made up of four chemical bases: adenine (A), guanine (G), cytosine (C), and thymine (T). Human DNA consists of about 3 billion bases, and more than 99 percent of those bases are the same in all people. The order, or sequence, of these bases determines the information available for building and maintaining an organism, similar to the way in which letters of the alphabet appear in a certain order to form words and sentences’’.
‘’DNA bases pair up with each other, A with T and C with G, to form units called base pairs. Each base is also attached to a sugar molecule and a phosphate molecule. Together, a base, sugar, and phosphate are called a nucleotide. Nucleotides are arranged in two long strands that form a spiral called a double helix. The structure of the double helix is somewhat like a ladder, with the base pairs forming the ladder’s rungs and the sugar and phosphate molecules forming the vertical sidepieces of the ladder’’.
‘’An important property of DNA is that it can replicate, or make copies of itself. Each strand of DNA in the double helix can serve as a pattern for duplicating the sequence of bases. This is critical when cells divide because each new cell needs to have an exact copy of the DNA present in the old cell’’. (ghr.nlm.nih.gov)
When I was child, I use to hear the rhetoric that many Black/Afrikans ignorantly suggest. The suggesting is that; Black/Afrikans have genealogy and descend from Native Americans. My mother use to tell myself and my sister this. I subconsciously never believed or subscribed to this theory. While most certainly there may be some lineage that may trace back, it certainly was not a significant percentage of my DNA make up.
I conducted DNA testing through a company called Ancestry DNA. To my surprise majority of my DNA was of African descent, with Native American only being 1%. According to my results conducted by ancestry dna.
Furthermore Native Americans are of the mongoloid race; in addition they too owned chattel slaves (Black/Afrikans). I won’t spend much time on this because it’s not my main focal point of the article.
But I will leave my readers with the following:
“From the late eighteenth century through the end of the U.S. Civil War, Choctaw and Chickasaw men and women held people of African descent in slavery. Like their White southern counterparts, Indians (Mongoloids) bought, sold, owned, and exploited black (Afrikan) people’s labor and reproduction for economic and social gain. Choctaws and Chickasaws purchased slaves—men, women, and children—to work on their Mississippi farms and plantations and to serve in their homes’’.
“Slaveholders and those who did not own slaves embraced a racial ideology that affirmed black people’s inherent difference and inferiority and thus justified their enslavement. Whether they owned only a few slaves, rented a slave for seasonal labor, or operated a large plantation with hundreds of slaves, Choctaws and Chickasaws understood that slavery allowed for the accumulation of personal wealth’’.
“Enslaved people(Black /Afrikans) cleared and plowed fields, hauled logs, drained swamps, planted and harvested crops, drove wagons, built homes, wove fabric, sewed clothes, cooked meals, and cared for Indian children, all for their masters’ benefit. Choctaws and Chickasaws purchased slaves in private transactions with other slaveholders and at public venues in cities such as New Orleans, conducting their business with White traders and slaveholders as well as with other Indians’’.
(Black Slaves – Indian Masters, Barbara Krauthamer, 2013)
So to sum this quote up, Black/Afrikans were not friends, or considered family to these mongoloid Native Americans. Native Americans/Mongoloids purchased men, women and…children! So Black /Afrikans need to sit ourselves down and relax on the Indian pow wow Mongoloid/Native American talk, culture etc. Embrace your own cultural roots and glorious past!
This is why it’s imperative to start DNA testing, so that one’s children/grand/great children will have them and archive the results. No longer can we as a people continue propelling ignorance about our past. The resources are available now; time to take advantage of them.
Ignorant people want to debate the claims of DNA testing are the same ones sitting on the couch at home watching the Maury show, finding entertainment from paternity testing. We cannot advocate for science for certain needs, then try to dismiss it as propaganda when it comes to DNA & genealogy. Even Black/Afrikans falsely accused of crimes are now being released through new means of DNA testing.
If one wants to get a good understanding for DNA & genealogy, I suggest: DNA & Genealogy by Colleen Ritzpatrick PhD & Andrew Yeiser.
Since doing my testing through Ancestry DNA, I’ve found the African Ancestry company. Which states they hold the largest database of African Tribal DNA samples than any other company.
There’s several people that have told me that they’re extremely satisfied with their results.
There’s other companies out there such as www.23andme.com which specializes in DNA testing to search for specific traits in DNA relating to potential health issues, or physical defects etc.
So my top 3 companies are:
Another way to leave an impression for future generation to come is to write a memoir. Not to be confused with an autobiography. An autobiography is in chronological order from beginning of life till time it is written.
Memoirs are similar but are less detailed and focus on highlights in one’s life, or key events they want to write down. In a few years I plan to start writing my memoir. With the full intentions of handing it down to my child, then my grandchildren. With the intentions that my story, thoughts, ideas, philosophies, integrity will be remembered long after I transition. There’s many books available to help people begin to form memoirs or even autobiographies. Why let your story go un-heard? Why leave it up for outside influences to steer your lineage? Let the future generation know the traditions and experiences of your living days.
In conclusion: leaving a legacy is totally up to the individual, Black/Afrikans have to stop this ignorant cycle of complaining how much the past is lost or foreign to them. We have the means and tools of putting the pieces to the puzzle back together through family archiving, genetic testing, video archiving, memoirs/writings. We have to start getting smart and thinking about generational wealth. We have to begin putting aside the selfish mentalities of useless spending, and not taking the measures to Invest in avenues that will secure our future generations to come.
Handing down resources of books full of information, data, history, education, which will be tools for young adolescent children. Why continue the cycle of taking out loans to bury loved ones, or take out student loans to finance higher education, or start a self business? These resources should be at our future generations fingertips. Mongoloid (Native Americans), Indo-Europeans(Europeans), Indo Aryan (Arabs) have built generational wealth, off of the genocide, blood, sweat & tears of Black/Afriakns.
Anyone who says we cant do this for ourselves is either ignorant, or just a plain fool. There’s an article that I’ve read: https://www.thenation.com/article/the-average-black-family-would-need-228-years-to-build-the-wealth-of-a-white-family-today/
The article stated the average Black/Afrikan family needs 228 years to catch up to the wealth of Europeans. Well the time is now, the excuses are tired. If we built wealth for other races off of our backs; then we can build generational wealth for ourselves!
Until next time these are my thoughts and I hoped you enjoyed reading them!
Don’t forget to subscribe for future articles!
Black Slaves, Indian Masters – Barbara Krauthamer
DNA & Genealogy – Colleen Fitzpatrick PhD , Andrew Yeiser
John W. Reilly – The Language Of Real Estate
Black Enterprise Guide to Starting Your Own Business – Wendy Beech
Rich Dad Poor Dad – Robert T Kiyosaki
Real Estate 101 – Anthony Lee & Lisa Puerto
The Entrepreneur Mind – Kevin D Johnson.
Investors Target Property Tax Deadbeats – Les Christie
Investing In Property Tax Liens – Mark P Cussen
Afrikan Family History – Mkuu Mzee
The Average Black Family Would Need 228 Years to Build the Wealth of a White Family Today – Joshua Holland
Generation One, The Search For Black Wealth – Lamar & Ronnie Tyler (DVD DOCUMENTARY) Purchase Here: http://generationonemovie.com