As we gather to celebrate family reunions, we are reminded of the importance of legacy, especially after being separated from loved ones due to the pandemic. We may also be reminded of how important it is to build a financial legacy for our family today and into the next generation.
As Senior Managing Director for Wealth & Investment Management at Wells Fargo Advisors, I have a personal and professional understanding of the challenges Black families face trying to build wealth. Due to systemic inequality, some people in our communities have disproportionately lower incomes, less financial acumen and limited homeownership opportunities.
In fact, a recent Wells Fargo/Gallup poll stated that about one in six Black and African-American people reported that their current income equals their expenses. One in eight said that they are either drawing on their savings to make ends meet or falling into debt. This needs to change.
No matter your situation, you can create a wealth-building plan that helps you improve financial habits now and set clear goals for the future. Start with organizing your finances, finding ways to save and using that savings to grow your finances. Here are some key ways to build wealth:
Real Property Assets Owning your personal residence and/or other real estate can be a great foundation for building wealth because it typically appreciates in value overtime.
Retirement Plans If your workplace offers a 401(k) or other savings plan, these are effective savings tools that are usually deducted from your salary automatically, so you don’t even have to think about it.
Entrepreneurship Starting a business of your own could also help you build financial stability for your family now, as well as create a legacy that generates wealth for the future.
Getting on the path to wealth-building can seem overwhelming, but taking those first steps can make all the difference. Here is some advice on how to get started:
1. Start now. Don’t put it off. The sooner you start, the longer your wealth has time to grow.
2. Do your homework. Understand your financial situation. Seek out money management tools and resources. Research wealth-building opportunities.
3. Know your options. Take advantage of 401(k) plans, education funds and other saving opportunities offered within your workplace or union. You can also start a plan on your own.
4. Work with a trusted advisor. Find a professional you trust who can assess where you are now and help guide you on your path to financial growth.
So, as you reunite with family to celebrate your rich history, keep in mind the things you can do to help build wealth for their future. My team and I are committed to helping families in our community thrive and establish a lasting financial legacy.