What Business Ownership Taught Me About Generational Wealth
By: Tameka Bazile @tamekabazile.co
Photo: Tameka Bazile
Despite being the most educated demographic of people, african american women continue to earn less money at work, in entrepreneurship, and in venture capital that other demographics. I should know. I am the proud owner of two accredited University degrees, one in Criminal Justice, Pre-Law Studies and the other in College Student Affairs (Higher Education Administration). Yet, I have never seen the light of generational wealth begin to filter through the lens of my future until I started making significant income in my business.
A business I run alongside my 9-5 job. That’s a 60+ hour work week I commit to on a regular basis -- a time commitment that many people of color, especially those with families, chronic illnesses, lesser education, etc. cannot afford to commit to.
So how do people of color, especially african american people, reasonably begin to build generational wealth?
Generational wealth is money passed down from generation to generation. It doesn’t have to be physical cash, as most people assume. Generational wealth is most often built on assets: property ownership, investments, and retirement accounts. At least, that’s how most white people have built there own generational wealth in America. These types of assets, when passed down to your children, allow them to built their own wealth on top of that and so on and so forth until your lineage is ultimately and finitely financially secure.
The quickest path to generational wealth is usually through having enough disposable income to place elsewhere or good enough credit to purchase a home or land, and that’s income that you do not plan on spending while in retirement. Most full-time jobs barely offer enough to make ends meet, forcing people of color to disproportionately rely on credit, loans, and other unreliable sources so starting can seem almost impossible.
1. INVEST SMALL AMOUNTS OF MONEY ONGOINGLY
A big myth with investing is that you need large amounts of money to do so. That couldn’t be further from the truth. If you’re ready to begin learning how to invest and can start immediately, join some investment-related Facebook groups and download the Robinhood app. Begin putting away small amounts of money ($50 or less per month) in plausible investments and let them grow. These investments can be the foundation of your retirement plan or even your lifesaver in an emergency, but I implore you to let it sit as long as possible. Your return will surprise you.
2. INVEST IN REAL ESTATE
For most people, this means buying a house, but homeownership isn’t always a possibility. If that’s the case, invest in real estate mutual funds. Mutual funds are investments from multiple sources pooled together and overseen by an investment manager.
3. START YOUR OWN BUSINESS
If there’s anything I’ve learned from owning my own business, it’s that we are sincerely being unpaid for the amount of skill we have. The ability to set your own prices for your services is unmatched. Currently, I have matched my full-time income with my business revenue, but in this area time = money. You’ll need extra time to manage your business’ needs and with a full-time job, a family or any other responsibilities, many can committing to this impossible -- and understandable deterrent.
Click here to see my viral post on why I chose to supplement my income with business ownership before expanding to these other options for generational wealth.
4. GET A LIFE INSURANCE POLICY ASAP
Whole life insurance is a sum of money your family or allotted beneficiaries receive in the event of your death. Without your income, your family may struggle to make ends meet after you’re gone.
Most people think they are covered fully by the life insurance their jobs provide them. In reality, your best bet is to get your own life insurance policy outside of your work so that it’s existence doesn’t rely solely on your work status.
BONUS TIP: The earlier you invest in life insurance for yourself and your children, the less costly your premiums will be. The more you age, the higher your chances of getting ill and being closer to death. Get your children a life insurance policy early on in their lives to avoid high rates!