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Black Mom, Financial Educator Shares Wealth-Building Plan For Daughters

| Super User | Legacy

Anne-Lyse Wealth is mom to a 7-year-old girl and two 5-year-old girls. As a personal financial educator and author, she wants to increase family wealth.

Unfortunately, most families do not succeed in doing this. According to estimates, 90 percent of wealthy families lose their collected fortune by the third generation and 70 percent of well-off households lose it by the second.

Building generational wealth is especially harder for Black households. According to a report by the Institute for Policy Studies, by the year 2053, the median Black wealth is predicted to be zero.

Her long-term goal was to simply accumulate her own riches for the purpose of leaving it as an inheritance to her children. However, as she studied the obstacles of building permanent wealth, she adjusted her approach.

Wealth wishes to ingrain into her kids a strong work ethic, good morals, and financial literacy in addition to helping them live better lives and understanding the role that money plays in that. In order to create generational wealth for her children, she has seven plans and strategies:

1. Leave assets to heirs while still living.

Her father died recently, leaving her an inheritance. Despite being a CPA and personal finance educator, she felt unprepared.

Although the inheritance was a financial windfall, it also came at a time when she was still grieving my father's passing. Because of this, even though she’s aware of all the data regarding generational wealth and has the skills to develop a plan, she has found this to be a painful and frightening process.

Wealth could only imagine how difficult it would be for someone who isn’t money-savvy to navigate this situation and how simple it would be to act impulsively out of sadness and risk losing one’s inheritance.

This year's events were a teaching opportunity. By transferring her fortune to my children while still alive, she hopes to make that process far less traumatic for them.

2. Budget for emergencies.

She and her husband have a will because life is unpredictable. Having a will, life insurance, a revocable living trust, and other estate planning instruments helps them assure their kids' financial security.

3. Invest for them.

Since their children were born, Wealth and her husband have invested for them. They both know the benefits of starting adulthood debt-free and with a financial safety net.

They've used children's custodial investment accounts and 529 College savings accounts to achieve this goal.

Their 7-year-old can now help with business, so they started a custodial Roth IRA for her. She can deposit up to $6,000 every year. Her retirement savings will grow tax-free. They hope to do this with their younger children to assist them start investing.

4. Make real estate investments for them.

For ages, investing in real estate has been a reliable route to wealth. They not only own the family home but have just bought an investment property and have future plans to buy others.

Their objective is to involve their kids so they understand the appreciation, passive income, and tax benefits of real estate from a young age.

5. Impart financial knowledge to them.

Building wealth is difficult. Teaching their children financial literacy is important to them. They discuss money, taxes, interest, debt, and investments with their kids.

They talk to them and teach them at their level. Their kids have bank accounts and deposit money regularly.

Their daughters are young right now. However, the eldest is already expressing interest in some of those discussions and is very curious.

She takes financial literacy tests and learns how to budget and negotiate for a raise every year, crucial skills for creating money.

6. Instruct them on how to make money independently.

Teaching their children how to earn their own money goes hand in hand with financial literacy.

By giving their oldest daughter the tools to create and market children's products, they are educating her about business. They'll continue to support their children's entrepreneurial interests.

Even while not everyone should work as an entrepreneur full-time, they want to encourage their children to be owners because it has been shown to be a successful route to riches for many.

7. Hand down life experiences.

She believes wealth goes beyond material possessions. As a family, they value experiences.

They love traveling as a family and showing the kids new places. For example, they spent two months in Côte d'Ivoire and Cameroon this summer.

Their visits have been short, making it hard to understand the culture, but they plan to travel more often.

They want to expose their kids to other corners of the world and train them to adjust to changing environments. She wants their kids to have memories and experiences, but also perspective and gratitude.