It Never Too Late To Start Saving

It's never too late to start building wealth. First, you have to know how much it costs to be you. If you spend more than you make, then you have to look at your daily habits and create a budget. At least, 10% or more of your income should go into savings that you don't touch, and it's critical to have at least six months of living expenses saved up in case you lose your job.

Also, the first day you start a job, take out the max (in 2017, $18,000 per year, and $24,000 for 50 years of age and over) for your retirement account. By taking out the maximum amount, it could put you into a lower tax bracket, which could save you more money.

If you're self-employed, put at least 30% of what you earn away for taxes.

You could also speak to a financial advisor about setting up an SEP IRA. A Simplified Employee Pension Individual Retirement Account allows entrepreneurs or anyone with freelance income to open an account and make tax-deductible contributions. Like a traditional IRA, the money in a SEP IRA is not taxable until withdrawal and business owners can contribute up to 25% of income, or $53,000, whichever is less.

Educate Your Kids About Budgeting and Good Money Habits

We have to look at the conversations we have at home about money and what we are teaching our children. For example: giving a child as young as five years old a $5 weekly allowance can build their understanding of money. 1/3 of that money could go to a savings account, 1/3 could be for philanthropy, and 1/3 for spending....NO CANDY!

By taking a child into the bank, they understand this is an institution. An ATM does not leave that impression. Explain that if you buy something with a credit card today, a bill will be at your doorstep in 30 days, and if you don't pay on time there are late fees. You can also give them things to budget. For example: give them the amount of money you plan to use for back-to-school clothes and let them help make the list based on how much you have to spend.

Invest In Your Child's Future

Also, establish a 529 College Fund account when your child is born, and every birthday, Christmas, and holiday that your child gets money - at least 50% of it should go into a savings vehicle. If you have significant assets or a child with special needs, establishing a trust with the support of a qualified estate attorney can be a powerful way to foster the longevity of assets and/or protect the welfare of your child throughout their lifetime.

Multiple Streams of Income and Diversifying Investments

I always use the analogy that if you're in an elevator that has three cables and one of them breaks, the other two will still hold it up. It's the same with multiple streams of income. If one stream doesn't work, the others should help balance. It's also the strategy behind diversifying investments between three asset classes: stocks, bonds, and cash.

Stocks are the equity that you buy when a company is selling shares. You can buy one, two, or many. Bonds are considered fixed income. For instance, a company says if you give me $1,000, I will pay you 4 percent interest for the year. At the end of the year, I will give you back your $1,000 and you will have received $40 for letting us use your money.

Cash is the money you put in a bank that they pay you interest on. Interest rates for savings accounts are low now, but save anyway! You continue to earn because of the compounding effect of interest, which is interest on top of interest earned when you don't withdraw your money.

Property Investment

People often ask if buying a house is still a good investment. Yes. Because it allows you to build equity. You build equity in a house as you pay down your mortgage. The less you owe on the property, the more equity you have. When you have equity in your home, you can "borrow" money against it - we call that refinancing your home. The danger is mortgaging your home to its market value. You will then have no equity in your home. Property is one of the main assets that are passed from generation to generation.

Deeds And Setting Up A Will

A deed and a will are very important. A deed establishes ownership of a piece of property. If you and your partner buy a house, it's important that both names be on the deed so there are no issues when transferring the property to someone else. Because of the complexity of federal and state laws, we recommend working with a qualified estate attorney to draft your will to lessen the possibility of family conflict. Be specific in terms of what you want each child to have, even children you don't wish to leave anything so that your will won't be contested. For example: each child should be mentioned by name and left something, even if that sum is $1, so it is clear that the child was not forgotten, and he or she can't contest your will.

Study Wealth Building

One of the best ways to build the wealth you desire is research. Attend workshops, study online, find a mentor, etc. There's a great book called 50 Billion Dollar Boss: African American Women Sharing Stories of Success in Entrepreneurship and Leadership that I strongly recommend because it highlights how successful black women worked through the challenges of creating their businesses. When you look at generational wealth beyond dollars and cents, it's also our stories of resilience that we want to pass down to future generations.