Why Generational Wealth Is The Ultimate Form Of Securing The Bag
This post was originally published on MommiNation.
I want to take a moment to discuss a very serious topic. A topic that the success of our children, future grandchildren, and even our nation depends on. Let's have an open dialogue about wealth in the black community.
According to a study completed by Prosperity Now, "If the racial wealth divide is left unaddressed and is not exacerbated further over the next eight years, median Black household wealth is on a path to hit zero by 2053." $0?!? That is in less than 35 years. Personally, my son will only be 47, and I, for certain, cannot let this become his reality. We cannot let this become reality!
Reflect on the concepts you learned growing up around wealth. Where did you learn those concepts? Most likely, you didn't learn anything about wealth in school. I'd be willing to bet that whatever you learned, good, bad, or indifferent, you learned from the examples within your family dynamic. Have you noticed the difference between the wealth of blacks vs. wealth of whites? I'm sure you have. But how can we close this gap and how can we blur the lines to make it impossible to notice this difference?
The answer is within our children.
It is our responsibility to teach our children about generational wealth. It is one thing to teach our children how to have a healthy relationship with money, but if we are not passing wealth on to them, we cannot be sure they will acquire it. It is time we break the generational curse of scarcity and start securing our legacies. We can disrupt the wealth gap, but we must be intentional and forward thinking. Generational wealth is not just about money passed down, it is also opportunities, support, and investments to generate more money.
Let's talk steps:
Self-Care
GiphySelf-care is not only about taking bubble baths, meditating, and working out. Self-care is about preserving your health, which includes your financial health. If you have mountains of debt, poor credit, no savings/investments, or unhealthy spending habits, that is what you will pass to your children. Before your child can become wealthy, your financial independence is required. This is the first step to setting your children up for generational wealth.
Multiple Streams of Income
GiphyWe are talking about building wealth, therefore having only one source of income will not cut it. Take all of your eggs out of that one basket and start spreading the wealth. It is almost impossible to depend on a 9-5 to build wealth when lay-offs, pay cuts, and unforeseen circumstances can storm through your life at any moment. Multiple streams of income not only provides security, but it also builds wealth. Many financial books (as well as the internet… and you know the internet is always right) proclaim that the average millionaire has seven sources of income. How many streams of income do you have?
No Fund Me
GiphyLife insurance is not to protect you, it is to protect your family. Life insurance is important for several reasons. The most important reason is to ensure that you do not pass on debt to your loved ones. Leaving funeral expenses, debt, and financial burdens to our loved ones must stop! If you take nothing else from this article, take this. Go get a life insurance policy ASAP! I cannot see another GoFundMe as a substitute for life insurance. In addition to covering your debts, life insurance can leave a substantial inheritance for your family leading up to the time that you have successfully built wealth yourself.
Credit
On the personal finance scene, there is a big debate around the use of credit. Personally, I feel like credit is a necessary evil. When your child is 16 (as young as 13 with some companies), add them to your oldest credit card with excellent payment history, utilizing 10% or less of the limit, and ensure the company is reporting to the credit bureau. Warning: This should ONLY be done if you are an extremely responsible credit card user. If you are not, DO NOT take this action and see number 1 on this list immediately. Please do not ruin your child's credit before they are old enough to ruin their own. Building your child's credit at an early age allows them to immediately obtain business loans, an auto loan with a low-interest rate, buy a home, get an apartment, etc. If you are successful at building wealth, which allows them to cash flow all expenses, they will not need credit. But, it will not hurt to have a 700+ credit score at the age of 18.
Investments
I could write an entire blog post about investments and how important they are (and actually, I probably will in the future). But for now, I'll keep it brief. THIS is the part where you build wealth. In order to pass down wealth, you want to pass down assets that will continue to generate more assets.
Retirement Account
- First and foremost, you should have a retirement investment account. This will prevent you from working the rest of your life while continuing to generate passive income. Once you leave this earth, your contributions will be transferred to your beneficiaries (your family).
Real Estate
- Investing in property is arguably the most efficient way to build and pass on wealth. Real estate is a tangible purchase you can make that will appreciate and become more valuable over time.
529 Plan
- Invest in your child's education. Now this is one I am passionate about because I have a massive amount of student loan debt that has prevented me from living my best life and also put me behind the curve of building a legacy for my child. Recent studies show that the US student loan debt is $1.5 TRILLION and black women hold $890 BILLION of this total. Whether college is necessary is debatable, but I can tell you as a person that hires/fires in corporate America and a person whose income has tripled because of a Masters degree, having a degree opens more doors than not. Take advantage of a college savings plan at a young age and prevent your child from falling in the student loan trap that will make it difficult for them to build and pass on generational wealth.
Stocks, Bonds, and the Likes
- Stash money into low-cost investment funds for your children at a young age. Let compound interest do its thing, and your child will be set when they enter adulthood.
The transmission of wealth is often accomplished much earlier in life and in less direct ways than inheritances during late adulthood. Securing your family's legacy will take intentional small steps that will make a substantial impact. Start now! Finish strong! And let's secure the bag our children will benefit from for generations to come.
Were you set up financially for generational wealth? Have you utilized any of these tips to set your children up for wealth? Or were any of these tips utilized to prepare you to receive wealth?
Written by Mykal Steen
Originally published on MommiNation
Kids need a village and moms need a nation! MommiNation serves the tea on everything about motherhood you never thought you needed to know by bringing together many of your favorite mom bloggers and experts all in one place.
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ItGirl 100 Honors Black Women Who Create Culture & Put On For Their Cities
As they say, create the change you want to see in this world, besties. That’s why xoNecole linked up with Hyundai for the inaugural ItGirl 100 List, a celebration of 100 Genzennial women who aren’t afraid to pull up their own seats to the table. Across regions and industries, these women embody the essence of discovering self-value through purpose, honey! They're fierce, they’re ultra-creative, and we know they make their cities proud.
VIEW THE FULL ITGIRL 100 LISTÂ HERE.
Don’t forget to also check out the ItGirl Directory, featuring 50 Black-woman-owned marketing and branding agencies, photographers and videographers, publicists, and more.
THE ITGIRL MEMO
I. An ItGirl puts on for her city and masters her self-worth through purpose.
II. An ItGirl celebrates all the things that make her unique.
III. An ItGirl empowers others to become the best versions of themselves.
IV. An ItGirl leads by example, inspiring others through her actions and integrity.
V. An ItGirl paves the way for authenticity and diversity in all aspects of life.
VI. An ItGirl uses the power of her voice to advocate for positive change in the world.
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When discussing the topic of raising children, discipline is often the first thing that comes to mind. Children need discipline. Full stop. But what is discipline? And how do we draw the line between discipline and revenge?
The origin of the word "discipline" can be traced back to the Latin word "disciplina," which means "instruction" or "teaching." Over time, however, discipline has come to be synonymous with punishment, with parents relying on shame, fear, and/or physical pain to curb undesirable behavior.
Teaching takes time, so nipping it in the bud in whatever fashion parents deem necessary (within reason) has become the norm. But is this what’s best for children? And when does it become less about curbing undesirable behavior and more about getting our licks back for offenses we feel our children should know better to do?
In my work as a parenting coach, I’ve often heard parents say, “I asked him nicely three times before spanking him. He didn’t stop doing it until I did, so clearly talking doesn’t work.”
And the parent isn’t wrong. Talking often doesn’t work the first, the third, or the even the 10th time. And the reason is directly tied to brain development.
Children cannot and do not process information the way an adult can. Auditory processing is not fully developed until a child is 14 or 15 years old. And even then, if a child has auditory processing delays or Auditory Processing Disorder (APD), they may always struggle with processing auditory commands. According to Susie S. Loraine, MA, CCC-SLP, the term auditory processing refers to how the brain perceives and interprets sound information. Several skills determine auditory processing ability—or listening success. They develop in a general four-step hierarchy, but all work together and are essential for daily listening.
Without this understanding, discipline can easily become revenge because parents will then view their child’s misdeeds as a personal slight. Instead of teaching them to do better, parents now want to show them the consequences of not doing better. This is why it's imperative for parents to discern between discipline and revenge to maintain healthy relationships with their children.
5 WAYS TO DISTINGUISH BETWEEN PARENTAL GUIDANCE AND RETALIATION:Â Â
​Understanding The Intent
Discipline is rooted in love and concern for the child's well-being. It focuses on teaching lessons and helping children understand the consequences of their actions. Conversely, revenge-driven actions stem from a desire to inflict pain or punishment as payback for perceived slights or disobedience. Parents should reflect on their motives before taking disciplinary actions. Ask yourself whether your intention is to help your child learn or to make them suffer for upsetting you.
Example: If a child accidentally breaks a valuable item, a disciplinary response would involve discussing the importance of being careful and working with the child to come up with a way to replace or fix what they’ve broken. On the other hand, a vengeful reaction might involve yelling, harsh punishment, or bringing up past mistakes to intensify guilt.
​Maintaining Emotional Regulation
Effective discipline requires parents to remain calm and composed, even in challenging situations. It's natural to feel upset or frustrated when children misbehave, but responding with anger or resentment can escalate the situation and blur the line between discipline and revenge. Before addressing the issue, take a moment to breathe and collect your thoughts.
Example: If a child cannot follow instructions, a disciplined response would involve calmly explaining why their cooperation is necessary in working with the child to accomplish the goal. Conversely, a retaliatory response might involve shouting, name-calling, or resorting to physical punishment out of anger.
​Promoting Growth and Learning
Discipline should always aim to promote growth and learning. It involves guiding children toward making better choices and understanding the impact of their actions on themselves and others. Effective discipline strategies include positive reinforcement, setting clear expectations, and providing opportunities for reflection and growth.
Example: If a child repeatedly forgets to complete their chores, a disciplinary approach would involve discussing the importance of responsibility and finding solutions together, such as creating a chore chart or setting reminders with Siri or Alexa. In contrast, a revenge-driven response might involve imposing overly harsh punishments or belittling the child, which can undermine their self-esteem and hinder their ability to learn from their mistakes.
Momo Productions/Getty
Building Trust and Communication
Trust and open communication are essential components of a healthy parent-child relationship. Discipline should strengthen this bond by fostering trust and encouraging children to confide in their parents without fear of judgment or retaliation. When children feel safe and supported, they're more likely to accept discipline as a form of guidance rather than punishment.
Example: If a child admits to breaking a rule or making a mistake, a disciplined response would involve listening to their perspective, discussing the consequences of their actions, and working together to find a solution. Conversely, a retaliatory response might involve accusations, blame, or shutting down communication, which can erode trust and damage the parent-child relationship.
Seeking Professional Guidance
Parenting is a learning journey, and, disciplining children is a delicate balance between guiding them toward responsible behavior and nurturing their growth. By understanding the intent behind our actions, maintaining emotional regulation, promoting growth and learning, building trust and communication, and seeking professional guidance when needed, as parents we can help our children built on love, respect, and understanding.
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