Wealth Archives - SHOPPE BLACK

Published on January 27, 2023

4 mins read

10 Proven Strategies for Building Wealth and Achieving Financial Independence

Building wealth and achieving financial independence are two of the most important goals that anyone can set for themselves.

Whether you’re just starting out in your career or you’re well into your working years, there are a variety of strategies that you can use to build wealth and secure your financial future.

Here are 10 proven strategies for building wealth and achieving financial independence:

1. Start by setting clear financial goals

Before you can start building wealth, you need to know exactly what you’re working towards. Whether you want to save for a down payment on a house, build an emergency fund, or retire early, setting clear financial goals will help you stay focused and motivated.

2. Create a budget and stick to it

One of the most important steps in building wealth is learning to live within your means. By creating a budget and sticking to it, you’ll be able to save more money and invest more of your income.

3. Invest in your education and career

Investing in your education and career is one of the best ways to increase your earning potential over the long term. Whether you’re pursuing a higher degree or taking a class to develop a new skill, investing in yourself is an important step towards building wealth.

4. Start saving and investing early

The earlier you start saving and investing, the more time your money has to grow. Even small amounts of money invested early can grow into substantial sums over time.

5. Diversify your investments

Diversifying your investments is one of the most important steps you can take to minimize risk and maximize returns. By spreading your money across a variety of different investments, you can reduce the impact of any one investment that may not perform well.

6. Take advantage of tax-advantaged accounts

Tax-advantaged accounts like 401(k)s and IRAs can help you save money on taxes and grow your wealth more quickly. Be sure to take full advantage of these accounts and contribute as much as you can.

7. Be mindful of fees and expenses

High fees and expenses can eat away at your returns over time. Be mindful of the fees and expenses associated with your investments and try to minimize them as much as possible.

8. Stay informed and keep learning

Building wealth is an ongoing process that requires a commitment to learning and staying informed about the markets and the economy. Stay informed by reading financial news and books, and consulting with financial experts.

9. Take calculated risks

Building wealth often involves taking calculated risks. Carefully evaluate the potential risks and rewards of any investment before you make a decision.

10. Stay disciplined

Building wealth is a marathon, not a sprint. Stay disciplined and don’t let short-term setbacks discourage you. Remember, building wealth takes time and patience, but with a solid plan and the right mindset, you can achieve your financial goals.

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Published on February 7, 2022

5 mins read

5 Money Myths That Could Be Preventing You From Building Wealth

They say money can’t buy you happiness—and to a certain extent, that’s true. But poverty doesn’t bring happiness either, does it?

Let’s face it, there are a ton of money myths out there parading around as truth. But the real truth is that most of these myths are keeping hardworking people broke!

The Internet can be filled with financial “tips” that are more myth than fact. You must validate financial tips you find on YouTube, TikTok, Instagram, Reddit, or Facebook by doing your own research and speaking to a professional.

But don’t worry, to get you started, we’ve compiled a list below to call out “truths” as myths.

1) I can start saving later.

Savings is only for the rich, right? Well, not if you want to stop living paycheck to paycheck. Nearly one-quarter of Americans fail to save money every month.

However, the key to saving is to save the right thing. The rate of inflation reduces the purchasing power of your money but also increases the value of your assets, such as real estate or stocks. Rather than saving for the sake of saving, invest your hard-earned cash in assets that will pay you and keep pace with inflation.

2) All debt is bad debt.

This is one of the biggest myths of all. Having an outstanding balance on your credit card or a high-interest loan can cost significantly more than the sum you originally borrowed. However, not all debt is the same.

It is possible to acquire “good debt”—debt with a low-interest rate that builds wealth over time. Good debt will provide future value, like a mortgage or student loans.

But you must avoid overextending yourself, even with good debt: It can become a problem if you cannot afford the payments. The amount of debt you have will play a significant role in determining your credit score, which is used by lenders to assess your credit risk. The higher the score, the better the terms, which saves you money on interest.

3) You’re throwing away money by renting.

A house can be a good investment as equity will be built over time. However, becoming a homeowner is not always financially feasible because it requires you to pay the mortgage, property taxes, homeowners insurance, maintenance, and repairs—not to mention the upfront costs of buying a home.

If you are only planning on living in an area for a few years, renting could make more sense financially. It can also be a great way to save a lot of cash if you live below your means.

4) Credit cards should be avoided.

Credit cards are convenient, but they can easily become a burden if you’re not careful. However, that doesn’t mean you shouldn’t have one.

As long as you pay off your card balance in full each month to avoid interest, making purchases with credit can be worthwhile. In addition to being a great way to redeem points for cash, travel, electronics, or investing, it can also help increase your credit score, making it easier to buy a car or house in the future, with a lower interest rate.

5) You’ll spend less money during retirement.

Many people make the mistake of assuming they have plenty of time to save for retirement. In reality, it approaches faster than you think. And for some, their retirement lifestyle could be even more expensive than their working years.

Retirement looks different for everyone. For some, it may be a time for leisure and traveling. For others, it offers the chance to pursue a second career they’ve always dreamed of. Maybe you just want to leave a legacy for future generations of your family. No matter what it is, you can do it!

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Published on July 28, 2020January 13, 2022

10 mins read

Who wants to be a Millionaire? 5 Questions about Black Wealth Accumulation

Ayesha Selden, also known as EldRich Cleaver, Millie Holiday, Fidel Cashflow, Cicely Titles, and Dr. Julius Earning is a real state investor, coach, mentor, and author of the book “Mud 2 Millions.”

She has garnered a large online following no doubt due to amongst other things, her no holds barred, tough medicine style of preaching her message of “owning sh*t”.

Own some shit 🦍 pic.twitter.com/tgrkRQWVf9

— Ayesha Selden, CFP® (@AyeshaSelden) July 23, 2020

We caught up with her to find out her thoughts on the ways that wealth can be created within the Black community.

What does wealth mean to you?

Wealth is the freedom of not having to trade time for money. Wealth is having the cash flow from performing assets support a life you deem comfortable. Wealth is being able to drop everything on a Tuesday and go spend time with your mom on her birthday.

Has becoming wealthy always been a goal of yours?

I grew up in a poor neighborhood in South Philly during the crack era where the wealthiest people we saw were drug dealers. Not only did I aspire to have wealth, I always knew I’d get there (legally or otherwise lol).

As a kid, I wanted a briefcase more than I wanted dolls. I was entirely fascinated by tall buildings, offices, and movies like Wall Street. My mom used to drive us to Gladwyn, an affluent suburb of Philly, to show us how the wealthy lived.

In stark contrast to the row homes and blight I saw in our neighborhood, our drives to Gladwyn showed me castle looking houses with pool houses larger than the modest home we lived in.

It was important for my mom to show us that there was more out there than just our neighborhood. I am so grateful for those car rides because it let me imagine what was possible.

Ayesha Selden

You are very vocal on social media about all things ownership and wealth building. Why are you so passionate about this topic?

Folk: all you talk about is money.

Me: last time I checked, there were 9 million black people living below the poverty line. There’s clearly a lot to talk about. Tf.

— Ayesha Selden, CFP® (@AyeshaSelden) March 10, 2020

I believe that we are the only solution for our community. Help is not on the way. It is the responsibility of “self-made” black people who came out of poverty to then reach back and teach others how to do the same.

Group economics is our way out but, chile, Black flight is just as real as white flight. We “make it”, head for the hills and never look back at those we have left behind. We then fixate on changing the political landscape, as our solution, and forget how powerful we are as a people.

To be clear: we need entrepreneurs and asset owners. https://t.co/lXDSEwPnn5

— Ayesha Selden, CFP® (@AyeshaSelden) July 22, 2020

And it’s easier to look at “voting” as a solution because it doesn’t require us to go back to “the hood”. We get to wear “I Voted” buttons and feel good about ourselves. Every election cycle reminds me of The Great White Hope meets Ground Hog’s Day.

Same promises (from normally some old white guy) and not a damn thing changes. We rely on a government system that has shown us for centuries that it shouldn’t be trusted.

Millions of Black people lived in poverty before we had a Black president and millions of Black people continue to live in poverty after we had a Black president. The government is not the solution for poor people and it amazes me that we think this same system we don’t trust will radically implement public policy to redistribute the wealth.

If we want to see real change in our communities, building an economy that allows the Black dollar to circulate and flip in our community the same way it circulates in the Jewish or Asian communities is where we start.

We then lobby with our capital to get done what we need. We buy a voice in Washington which is the only thing this country understands. Until then, a large percentage of black people will stay in poverty, we will continue to be shot by the police and we will keep marching and singing.

What do you feel is the first step on the path to wealth accumulation?

Let me start by saying that Black people are not at fault for the current state of our wealth as a people. Hell, the fact that we have survived generations of trauma is a testament to our resilience. Our income, wealth, and asset ownership are fractions of white wealth.

Systemic racism and the effects of redlining, mass incarceration of black men, racist hiring policies, etc all have a huge impact on black wealth today. I read a study done by Pew Trust that says even in the year of our Lord 2020, in most states, Black and Hispanic communities are taxed at higher rates than comparable predominantly white communities.

““All the problems you think are social problems are economic problems with social consequences.” pic.twitter.com/Om5AD47sLL

— Ayesha Selden, CFP® (@AyeshaSelden) July 19, 2020

We now know that our communities are paying higher property taxes but also continue to see that our resources (schools, roads, sanitation departments, etc) are inferior to predominantly white communities. We are also overpoliced with our own tax money.

I can point out a million ways the playing field isn’t leveled and has never been. But where do we go from here?

I choose to normalize Black wealth because I don’t believe there is a politician or political party that will change this. The path of wealth accumulation is exactly why I wrote my book Mud 2 Millions. It was my journey to a million by 30.

Ayesha Selden

It sounds cliche but our mindset and our relationship with money are the genesis of wealth creation. We need a collective focus on changing the narrative in our communities. We need middle class and wealthy Blacks to come back and show those left behind how to build businesses and assets.

We also need some self-reflection about our individual relationships with money. Most of us weren’t left a penny of generational wealth. Most of us weren’t taught a thing about how to manage money. Most of what we were taught about money was a lie.

We need to completely deconstruct most of what we know about capital and how we feel about money and reframe with a mindset of building.

Once I change my mindset, where should I start on my wealth journey?

Your net worth builder is in that sweet spot between your income and expenses. We call the amount of money left over after all of your expenses are paid, “discretionary income”.

If you find yourself living paycheck to paycheck, there are generally two ways to tackle this:

Drastically cut expenses or generate additional income through a side hustle after your 9-5 and/or weekends. I prefer a combination of boffum–curbing expenses and a side hustle because I’m trying to get the bag expeditiously.

It’s important to look at where we are spending our money. Is it on things we need or are we overcompensating for being teased as kids for having trash sneakers?

In my book, I talk about a dozen or so side hustles to generate additional income (vending machines, real estate wholesaling, arbitrage online sales, trucking business, etc.).

If you can earn an extra $500 to $1,000/month in income, that could be all the difference in building wealth and leaving a legacy for generations.

Again, while where we are is not our fault, it is our responsibility to change the narrative for ourselves and future generations.

Why? Because no one else will. Peace.

Read the remaining wealth steps in Ayesha’s book, Mud 2 Millions.

Tony O. Lawson

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Published on April 8, 2018July 1, 2023

11 mins read

Tela Holcomb Retired At 29 After She Taught Herself How To Trade Stocks

From the outside looking in, you’d never know that Tela Holcomb has a net worth closely approaching the millions. She’s a happy mother and wife who lives below her means but made financial freedom a priority.

Not too long ago, Tela had a government job, worked a 9 to 5 and knew nothing about the stock world. But with diligence and practice, she was able to master her craft and earn over $1 million in four years from stocks and trading alone. With an industry like the stock market, it may take some time to get to terms with how it all works. But the more you know, the better it will be for you when you plan on making your first investment. It is definitely worth doing your research before making any moves.

And she’s here to help you do it too. In this interview with BAUCE, Tela shares what motivated her to get in stocks, the initial fears she overcame, and why she decided to build her own platform to help other women of color financially rise to the top as well.

Tela, I want to set the stage here. What was your 9-to-5 job before you got into stocks and trading?

Tela: So before I started trading, I was doing administrative work for the government. I was doing that for about seven years. What really made me want to start learning about stocks was this guy I worked with that was always talking about how he was going to retire early from trading on the stock market. He had this whole plan to RV the country and do all this crazy stuff. It made me curious.

I thought to myself if he can do it, I know I’m smart — I can figure this thing out. So that prompted me to just really start asking him questions because other than knowing the fact that the stock market existed and that there was a channel that talks about it all day, I didn’t really know anything else about it. And I didn’t have anyone growing up or around me at the time that I ever really talked to about trading outside of your 401k or investing. So that’s really what piqued my interest. I started asking him about what books to read, and what courses to take.

What resources helped you learn about the world of stocks when you were first starting out?

Tela: Honestly, it varied. A lot of the information goes completely over your head. So I had to Google a lot of stuff. I also went to Investopedia a lot and then I would also break things down for myself. Once I figured out what a term meant, I would find a way to figure out how it related to something I’m used to in everyday life so that it was easier to explain. Think about how you teach a child to tie a shoe.

You’re not telling them “rotate your strings 45 degrees and loop them around”. Instead, we say things like “the rabbit jumped over the log or make these bunny ears”. That’s how I truly mastered the stock game — by breaking through the lingo.

Did you have children when you started trading?

Tela: Yeah, I was a single mom at the time when I first started.

Having a side hustle while you have a job can be exhausting. How did you automate trading into your schedule? How did you find the time to learn all this information?

Tela Holcomb

Via Tela Holcomb

Tela: In the beginning, you have to allot time to it. I did it only because I was committed to having it replace my job. I was committed to having it generate income for me. But I didn’t want it to take all my time away from my family. What I did was find the time that I was already pretty much wasting — like all the time I was using to watch television — and reallocate it to learning about stocks.

So while I sat outside and watched my daughter play, I would be reading a book about the stock market. I would be looking at stock charts. When I was sitting at doctor’s appointments waiting to be seen, I would be scrolling through information about stocks on my phone. I chose to use the dead times in my day also to do more studying and more learning.

What was the first stock you ever purchased?

Tela: The first stock purchased was Coach [laughs] because I love purses. I was like, you know, what, if I can make the money to purchase the purse I want through the stock then I’ll get it. I will use it as a way to motivate me.

But when you purchased that first stock, did you know how soon you would get a return on it?

Tela: Uh, you know, at first I didn’t know. It was all practicing and that’s something I try to encourage people to do is use a practice account first before you use your real money. I lost money the first time around but I kept kind of trying to practice and figure it all out.

But then I started to learn that there are trends in stocks. Maybe they always go up during a certain time of year or they always go down during a certain time of year. So once I discovered that I started to find the trends and all these different stocks.

What practice accounts do you recommend for people starting out?

Tela: There’s two practice accounts that I would definitely recommend. One is through Investopedia. They actually have a practice simulator on their website that people can use to kind of play around and get a feel of things. There’s also thinkorswim by TD Ameritrade. I love their practice platform. It’s a little techy for most people, but it’s definitely powerful and I highly recommend it.

The biggest mistake is trying to get out there with your real money when you have no idea what’s going on. I get people all the time that put their money out there and then they don’t even know how to sell it. Take the time to practice and learn this. The stock market’s not going anywhere. All this money is still going to be there to be made.

You talk about stocks as a path to financial freedom. Do you think stocks are for everyone?

Tela: Yes. I believe everyone should have stocks as a part of their wealth building or their “legacy building”. Because we can’t pass down financial legacies if all we’re doing is saving and budgeting. So stocks, real estate, something of value — some type of investing needs to be a part of your wealth building plan so that you can start building a financial legacy within your family.

You have your own platform where you share these tips and jewels. What motivated you to start sharing these resources with other people, especially African Americans?

Tela: I decided to create my own platform to educate people and share my story because when I started there weren’t very many people trading stocks that looked like me. And so when I started that was a little discouraging for me. It also felt that no one was explaining it in a way that I needed to understand so all the information clicked. So I had to do that on my own.

I realized that there are more people out there that look just like me who probably are feeling the same way that I did when I started out. They may look around in the space and feel that they don’t think they have a chance to succeed in this. So it’s really for me to be out here and represent so that other black women (and men) can see what’s truly possible. As long as we are motivated and we take the time to put into the things we want — anything is possible.

Source: Bauce Mag

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Published on April 24, 2016April 9, 2020

24 mins read

Growing and Maintaining Black Wealth: Watch your Ass-ets

This is the second installment in our series around the topic of “Growing and Maintaining Black wealth through sound legal strategies and problem solving.” Let’s continue with a discussion about Assets.

Growing and Maintaining Black Wealth: Watch your Ass-ets

“Gator Boots, with the pimped out Gucci suit

Ain’t got no job, but I stay sharp

Can’t pay my rent, cause all my money’s spent

but thats OK, cause I’m still fly

Got a quarter tank gas in my new E-class

but that’s alright cause I’m gon’ ride

got everything in my mama’s name

but I’m hood rich da dada dada da”

tumblr_ls1xvauL0s1qiebmoo3_250 — Still Fly by Big Tymers

Even though this song came out in 2002, it’s still a club banger that many of us get excited about as soon as the first beat drops. And most of us will shout the lyrics at the top of our lungs because it’s just one of those songs that brings joy to our dancing hearts. Raise your hand if you started bobbing your head a little while reading the lyrics above. Some of us relate to those lyrics a lot. My friend, in a bid to save money, decided to change his car insurance to get the cheapest car insurance quote possible. Money Expert helped him out tremendously. But getting car insurance can be really expensive for people though, there are some deals out there which have been designed to help people when it comes to getting car insurance. For example, you could check out this cheap monthly car insurance with no deposit.

Big Tymers and many other rap artists brag about their wealth over hypnotic beats, easily impressing listeners with what they have. Chains that cost a condo. Expensive cars with even more expensive add-ons. Couture fashion. And there is some validity to what they’re doing. We all should be able to list out what we have, how much it is worth, and whether it is in line with our life goals and beyond.

Have you ever stopped to wonder what your list of assets would be if, per chance, you decided to rap about it or brag a little? Have you ever wondered while listening to the rappers bragging about their purported wealth, “how liquid is [insert bragging rapper’s name]” and, more importantly “how liquid am I”?

Knowing what you have and what it is worth could possibly impress others. However, in the context of growing your wealth and estate planning, it is critical that you are actually able to list your assets as fluidly as Lil Wayne, Jay-Z, and the rest. At a minimum, you should:

be able to list everything that make up your assets;
know the individual and total value of your assets and the type of ownership; and
know what will happen to each asset when you pass away.

If you know all of these things about your assets, you are positioned to maximize the power to make your assets do the most for you and for those you plan to give them to when you pass away. If you do not know what you have, what it is worth, and what will happen to it when you pass away, then you just might be wasting a lot of hard work and hard earned money.

The focus of this article is on creating an inventory that identifies the assets that make up your estate, their value, and whether you need to make some adjustments or additions to your assets in order for you to develop an estate that meets your needs during your lifetime and meets your goals for when you pass away. Although there is basic discussion on the different types of assets that can make up your estate, you should make the time to do additional research to get a full understanding of each of these. This includes doing research online but also meeting with professionals who have solid, reliable knowledge about different financial instruments and financial planning. One feature of financial planning that many people do not quite realise the importance of is equity release. Equity release is a financial product for people aged 55 to 95 which allows you to release some of the cash (equity) tied up in the value of your home. To release equity from your home, you need to get expert advice from a qualified equity release adviser. You can actually calculate your equity by using something like this equity release calculator, just to make sure your finances are in the state they should be.

You first want to list everything you own, how much each item is worth, and the beneficiaries of each item. Again, an estate is everything you own from real property (house) and personal property (cash, accounts, deejay collection, and etc.). To get you started on your inventory, we provide a worksheet you can download. Link

Most people’s estates also include a combination of some or all of the following:

Cash
Savings Accounts
Checking Account
Term Deposit Account
Life Insurance
Retirement Plans
Investments
Securities
Business Interests
Notes Receivable

Let’s take a more in-depth look at some of the financial vehicles above, because it is important to be clear on what you have and how it operates.

Term Deposit Account— This is a cash investment with a financial institution such as a bank that gives you an agreed rate of interest over a fixed period of time. A common term deposit account is a CD (certificate of deposit).

Life Insurance— Life insurance can be a significant part of an estate plan. Life insurance policies come in a variety of forms (e.g. term, whole, and universal), but the basic function of a life insurance policy is to provide a cash payment at the death of the life insured. This payment is known as a death benefit.

The death benefit from a life insurance policy has numerous advantages and it takes careful planning to ensure that your life insurance is doing for you what it is intended to do. A major benefit of life insurance is to provide liquidity for your beneficiaries. In other words, it gives your beneficiaries cash and often it is soon after your death, which can be very useful, if not essential, to a surviving spouse and children. The death benefit is typically not taxable as income to the beneficiaries and it is paid directly to the beneficiaries rather than being paid to the estate of the deceased, so long as beneficiaries are listed.

Other than a will, life insurance may be the best and only financial tool a person of modest means needs in their estate plan. Regardless of the policy owner’s means, it is critical to have a comprehensive understanding and strategy with your life insurance or the benefit can be lost.

Retirement Plans— As with life insurance, there are various types of retirement plans that you may have or that you will consider getting. Baby boomers and older generations often rely on Social Security, which is a government mandated plan, and pensions (an employer-sponsored plan profit sharing plan). Nowadays there are new, more robust retirement plans. For example, a 401(k) is an employer-sponsored retirement plan and most employers will match a percentage of what you contribute to your plan. Each year you can contribute up to $18,000 of your income before taxes are taken out, per federal law. Nonprofit and government employees usually have a 403(b) or 457 plan, respectively. You can also establish an Individual Retirement Plan (IRA or Roth IRA) on your own and there is a maximum amount that you can contribute each year. And if you leave your employer, you can roll your employer sponsored plan into your IRA.

Business Interests— Whether you have a side hustle as a deejay or your main gig is your own business, know what your business is worth. More specifically, know what your share of the business is worth. Also, have clear instructions for what happens to your business or share of the business when you pass away. Should it be dissolved? Do you want to leave it to someone? Ideally, any business interest should not be compromised by your death undermining the effort and money invested in it. If you have a business partner(s), you should maintain life insurance policies on each other’s life and have a buy-sell agreement, so your interest in the business is not compromised when your partner passes away.

Notes Receivable— This is a written promise to receive money from another person on or by a set date. The note formalizes a loan you make to someone and it is an asset. It is important to have any loan you make to someone put in writing and to use an attorney to draft this agreement to ensure your interests should the debtor file for bankruptcy, die, or disagree with the terms at a later date. Notes receivable can also be passed on to your heirs.

Next Steps

After you have listed and determined the value of your assets, add them up to see the total value. You might find yourself impressed with what you have or you might realize that you need to make some changes to either grow your estate or to make sure what you leave behind is suitable for the loved ones you leave behind. Liquidity comes to mind again. Liquidity is an important and often overlooked characteristic of one’s assets. A basic way to determine your liquidity is to find out how much easily accessible money you have in the form of cash and equivalents, which you can do on your own or you may to speak to financial professionals to get the number.

Also, take a look at your debt and ask similar questions about your debt obligations as you do for your assets. How much is each debt? What happens to the debt when I die? How does it affect my potential heirs and beneficiaries? Keep in mind the assets that will go directly to the beneficiaries you named such as life insurance. Also, certain student loan debt is forgiven when you pass away, i.e. it does not become a debt of your estate.

TIPS

Nominate beneficiaries. Many of the assets discussed in this article are set up so that you can nominate beneficiaries and alternate beneficiaries to receive the assets directly when you pass away. It is critical that you nominate beneficiaries, plus alternate beneficiaries, on any account that you allow you to do so. Not nominating beneficiaries plus alternate beneficiaries can and will likely undermine your entire estate plan. In most states, if you fail to or intentionally do not nominate beneficiaries, the asset will go to your estate and be used first to pay the costs of administering your estate and then your debts. Only after those obligations are paid for will the money be received by your loved ones.

Do not rely solely on employer-provided life insurance and retirement plans. These may not be sufficient for your family’s needs and they often do not continue after you leave a place of employment.

Do regular check-ups. Regularly check in on your assets to ensure that you have the coverage you need; that they are growing to meet your goals; and that the beneficiaries are who you need or want them to be. Annual check-ups and life milestones, such as family changes, retirement or changes in health, are good times to do a check-up too.

Develop a plan unique to your needs. It is not uncommon for people to follow the financial advice of their parents or friends. Although they can provide helpful advice, you must pay attention to your unique circumstances. Many baby boomers would advise putting your assets in a trust. Trusts are complicated and expensive. One of the greatest benefits of a trust is avoiding estate taxes and you currently need to have an estate close to $5 million to be concerned about estate taxes. Likewise, if you are single and have no children, your financial goals can be very different. Life insurance may not play a major role and the money you would use for life insurance premiums can be targeted to financial vehicles with greater growth potential than life insurance. You can also consider leaving your assets to your alma mater or a non-profit.

Don’t let debt undermine the value of your estate. Many people prioritize paying off their debt paid during their lifetime and when they pass away. Having no debt or keeping debt low certainly gives you more financial freedom. However, this is not a reality for most Americans, especially for people with student loan or mortgage debt. It is possible, though, to grow wealth in spite of debt. In order to do this, you need a plan and this plan involves a good estate planning attorney, a good CPA specializing in taxes, and good financial professionals. These professionals will help you build a strategy to grow wealth and sufficiently address debt to meet your individual needs.

A good estate planning attorney will assist you with creating an asset protecting estate plan. The cost for this is minimal compared to what you could lose to paying off your debt. A good CPA can assist you with tax planning strategies that allow you to put more of your income towards growth and reducing your tax obligations based on your debt repayment. Then financial professionals can address your specific circumstances and provide advice on financial vehicles that work for you.

Developing a team of professionals to aid you will likely require a lot of work on your part in getting referrals, interviewing people, and doing research. This effort is needed and in the long run, benefits are priceless. Just remember: your ultimate goal should be growing enough wealth to take care of yourself while you are living and to take care of you any loved ones you leave behind or building a legacy.

Consider inexpensive life insurance policies to cover some debt. Inexpensive life insurance policies can cover some of your debt at your death or the death of a co-borrower. Your car loan lender may offer a policy that pays off your vehicle loans. If you have student loan debt, find out what happens to your student loan debt when you die. It may make sense to get an inexpensive policy to pay off the debt if you have a co-borrower. For example, it may make sense for you and a co-borrower on student loans to get policies each other’s life to pay off the loans when one of you dies. The same holds true for business loans and home loans. With student loans, though, you and your co-borrower should also seek removal of the non-student co-borrower as soon as possible, which is usually a few years into repayment of the loans. Many lenders will not tell you that you can do that. You have to be proactive.

Balance your funeral wishes with transferring your wealth regardless of its size. Historically and presently, many people have “funeral insurance” which is either a standard life insurance policy for which the policy owner wants the death benefit used to pay for their funeral or it is a policy very similar to a life insurance policy that will direct the death benefit to the funeral service provider to pay for funeral expenses. The difference is that with the standard life insurance policy, the beneficiary is legally under no obligation to use the money to pay the funeral expenses. It is merely a promise. In either case, if you have or plan to have a life insurance policy to pay for your funeral expenses and even your debts, consider whether doing so is really helpful to those you leave behind. Traditional funerals are expensive. The average funeral is in the ballpark of $6,000. Could $6,000 make a difference in the lives of your loved ones if it could be used for something other than your funeral? There are many options less expensive than a traditional funeral. Some options are better for the wallet and the earth. Go green!

Conclusion

Hopefully by now you feel encouraged to take an in-depth look at your assets. The goal is not to be able to brag like the rappers or even to see if you have something to be proud about. Regardless of your asset level, whether it is modest or very high, it is important to know what you have, how it operates, how it will transfer on your death, who it will go to, and the various scenarios of what can happen with all that you have worked hard to earn.
At the very least, you need to have a basic understanding of the financial assets you may have. Then, try to take it one step further and find out if what you have meets your needs and goals. Do you have the right type of assets? Also, find out if your assets are set up to meet your goals (i.e., have you nominated beneficiaries and alternate beneficiaries on accounts that allow it?). And once you have taken a good look at your assets, work with your loved ones to do the same by sharing this article and even sharing what has worked for you.

– Contributed by Mavis Gragg

Mavis Gragg is an attorney at the Gragg Law Firm, PLLC in Durham, North Carolina where she specializes in estate planning and estate administration. She is very passionate about maintaining and growing Black wealth through sound legal strategies and problem solving. When she is not being a justice girl, she can be found at an art gallery, trotting the globe, or on the dance floor.

Published on March 12, 2016November 8, 2017

17 mins read

Growing and Maintaining Black Wealth: Estate Planning

This is the first installment in our series around the topic of “Growing and Maintaining Black wealth through sound legal strategies and problem solving.” Let’s begin with a discussion about Estate Planning.

Estate Planning

In October of 2015, retired NBA player Lamar Odom suffered several strokes and kidney failure at the young age of thirty-five, leaving many people shocked and shaken by the fact that someone so young and presumably healthy could possibly die.

Of course, given his position in the Kardashian realm, many were also enthralled by the latest drama in America’s most famous (for now) family. Yet, if we unpack that drama and look at it plain and simple, Lamar’s circumstances should be a lesson for us all.

At the age of 35, Lamar was in the final stage of divorce and a father of two minor children from a previous relationship when he experienced a life-altering medical event.

Those are the mind-numbing facts: 35 years old, estranged wife, father of two minor children—and a very uncertain future. While his medical crisis was extraordinary, the other key circumstances in Lamar’s life were not.

Amidst all of the sensational discussions surrounding Lamar’s unfortunate situation, there was little, if any discussion around whether or not he had legal documents appointing someone to handle his affairs, i.e. step into his shoes to make his medical and financial decisions.

Presumably he did not, because his estranged wife put a halt to their divorce, and under the authority of California law as his wife, became his decision-maker.

Thankfully, Lamar’s health has improved and he is still with us. However, imagine if someone in the exact same situation as Lamar passed away leaving an estranged wife, two minor children, and no legal documents to dictate what happens with whatever assets they have and how their affairs are settled.

Now ask yourself, if something happened to you today, who would step in? Who could legally step into your shoes? You may not know the answer to the last question. And you probably do not even like the question.

So, let’s consider this question instead: if you had the rare opportunity to become a secret agent on some James Bond-type mission but you had to pick a family member or friend to assume your identity and continue living your life until you came back, who would that person be?

Who is most likely to have your life intact when you come back? Who would be your agent? The person you would choose to be your agent and who the law chooses could and likely would vary greatly when you do not have the legal documents in place to effectuate your choices.

The solution is simple. Go to a knowledgeable estate planning attorney and create an estate plan.* If you don’t know who to use then you might want to check out someone like this new york estate attorney. However, there are loads that you could use. Many, in fact, most of us avoid estate planning. We think we do not have an “estate” or that lawyers are too expensive. We believe our loved ones will “take care of everything” because we trust them. We think we are too young. Most importantly, it is very unpleasant and scary to think about a time when we cannot take care of ourselves or when we die. If you have any questions about preparing your estate it is worth speaking to an estate planning lawyer as they might have the information needed to put your mind to rest and help you plan for the future.

So, consider the fact that you have a unique opportunity to put the law on your side. This power is especially important during a time when many of us have considerable doubts and questions about the laws of our nation and our states when it comes to issues such as policing, voting, and clean water—to say the least.

You have the power to create a plan and make decisions about how you are cared for in a time of need or transition. You have the power to create a plan for optimizing your assets for their use while you are living and when you pass away.

Take advantage of this opportunity! ??The first step is developing a basic understanding of estate planning, which is the purpose of this series of articles.

What is estate planning? Estate planning is making a plan in advance for what happens to you and your assets when you cannot take care of them yourself and for when you die. You get to make the decisions on the who, what, when, and how of your affairs rather than that determination being made by the law. A basic estate plan includes a will, a financial power of attorney, a healthcare power of attorney, and a healthcare directive (a “living will”).

What is an estate? Many people believe they do not have an “estate.” We all have an estate. An estate is everything you own from your collection of baseball cards or Chanel purses to your cash, retirement accounts, life insurance and vehicles. When it comes to real estate, find out more information through companies such as PFC Property Management, especially if you are looking to work in this particular industry. There’s a lot to learn, but it is quite interesting. I’m sure you’d rather know more now, than know nothing at all. Even if the cash value of your what you own is small, you have an estate.

What is a will? A will is a document that states your final wishes. In a will you appoint someone to settle your affairs: an executor. You state who gets your property, what property they get, and how much of it. You can even state when they get your property.

You can nominate guardians for your minor children. The court ultimately decides who the guardians will be, but a will provides very useful information in that determination. You can even provide instructions on paying your debts and on your funeral.

In most states, the property of someone dying without a will, leaving behind an estranged spouse and children from a previous relationship, would have to be divided between the estranged spouse and children. For most people, this scenario is not ideal, it’s a nightmare.

On the other hand, you could have circumstances that are not complex at all. Perhaps you are a single person with no children. Without a will, in most states, the person(s) eligible to manage your estate would be your parents. Does that work for you? If you do not have parents, the law looks to your siblings. Again, does that work for you? If you don’t have parents or siblings, then who?

A will is a critical document that can save relationships and money. It can also be a foundational element in your legacy. So, it is important to have a will and for it to be designed with a knowledgeable estate planning attorney.

What is a power of attorney? There are two types of power of attorney documents: financial power of attorney (also known as durable power of attorney) and health care power of attorney. Both allow you to appoint someone as your attorney-in-fact which means they can make the same actions you can make.

The types of activities the person operating under your power of attorney can do vary from speaking to financial institutions about your accounts, signing legal documents, such as contracts and deeds, to speaking with healthcare providers, including your doctor.

The power of attorney document can be very powerful, especially if you use a fill-in- the-blank type of document, instead of one tailored to your needs. If you use one that’s fill-in-the-blank, you could be unintentionally giving someone the ability to abuse the role you have given them.

In a customized power of attorney, you can set the conditions under which the attorney-in-fact can act, as well as limit the types of things they can do. For example, you can have a limited power of attorney for real estate that allows the attorney-in-fact to take actions related to a specific piece of property during a specific time or transaction.

Having either power of attorney, and preferably both, can give you peace of mind that the person you trust most will be able to help you when you are unable to take care of yourself.

If you are incapacitated and do not have power of attorney documents, it is extremely difficult and costly for someone to be able to help you.

The absence of power of attorney documents could even lead to litigation and destruction of relationships. Consider the scenarios discussed under the description of the will when thinking about what would happen.

Also, keep in mind, a power of attorney document does not replace a will. Many people mistakenly believe that the instructions in their power of attorney or in their loved one’s power of attorney carry over after a person dies. The power stops at death.

What is a living will? A living will is also known as an advanced directive and it is a document in which you give the medical personnel instructions for your end-of-life medical care. It comes into to play when your death is certain and gives instructions on things such as palliative care (easing pain and suffering), extraordinary measures, and nourishment.

The decisions you have to make in a living will are very difficult to think about but imagine if your spouse, child, or parent had to make those decisions for you. Having a living will is also a key part of your estate plan.

How do I get started on my estate plan? The first step is to find an attorney who specializes in estate planning. Many people believe they can do their estate planning themselves and want to do so to save money. Imagine your profession is a hair stylist, a bank manager, or a professional athlete.

You are very good at what you do. Your car needs new brakes and they are expensive. You can probably go on YouTube to find a video with instructions for putting new brakes on your car. Let’s say that technically you can put new brakes on your car and save a good deal of money.

Is this the best choice? Alternatively, you could save money by taking the car to the detail shop where you get your car cleaned and let the owner put brakes on your car. He takes good care of your car and he can save you money. Is he the best choice, though?

If your well being or the well being of those you love depended on it, are you or the detail shop guy the right choice for putting brakes on your car? Can you be reasonably sure that the condition of your car will be safe and it will not lose monetary value after you or the detail shop guy repair it?

Your life and your assets deserve the same level of consideration and you deserve to have a comprehensive estate plan done by an attorney who focuses on estate planning.

Attorneys charge by the hour or offer a flat fee for estate planning. A typical plan costs on average $600-$800 for a single person and around $1,000 for a couple. The costs depend on your circumstances. Many attorneys require a retainer.

A retainer is money delivered in advance to the attorney and held in trust for the client. They take the fees earned from that retainer. Many people balk at the request for a retainer. However, you should consider the retainer as incentive to you fulfilling your role in this process.

It is not uncommon for someone to start the process and then not complete it because they still have the fears around estate planning or simply do not prioritize it.

In the next articles we will discuss the financial components of your estate planning including life insurance, retirement accounts, and real and personal property. Stay tuned!

– Contributed by Mavis Gragg

Mavis Gragg is an attorney at the Gragg Law Firm, PLLC in Durham, North Carolina where she specializes in estate planning and estate administration. She is very passionate about maintaining and growing Black wealth through sound legal strategies and problem solving. When she is not being a justice girl, she can be found at an art gallery, trotting the globe, or on the dance floor.