GROW - Generational Wealth Building: Strategies for Lasting Financial Legacy

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Issue #79 - April 8, 2025

Welcome to G.R.O.W. (Guidance Redefines Our Way)!

What's up, GROW family! Did you know that 70% of families lose wealth by the second generation? Financial literacy isn't just a nice-to-have—it's a legacy issue. And this month, we’re changing the game.

As we continue our journey through Financial Literacy Month, I want to remind you that financial empowerment isn't just a topic we cover occasionally—it's embedded in the DNA of A Few Good MENtors. Finance is one of AFGM's core values because we understand that true community transformation requires economic stability and growth.

Last week, we explored creative approaches to wealth-building and risk-taking. This week, we're going deeper. While building personal wealth is necessary, the real game-changer for our communities is generational wealth—assets, knowledge, and opportunities that transcend our lifespans and uplift future generations.

With tax season reaching its peak (there is just one week until the deadline, folks!), now is the perfect time to think beyond the annual paperwork shuffle and focus on building financial legacies that will echo through generations.

As the African proverb reminds us, "The best time to plant a tree was 20 years ago. The second-best time is now." The same wisdom applies to generational wealth—regardless of your current financial situation, the seeds you plant today can grow into forests of opportunity for those who come after you.

Let's go!

Growth Spotlight: Beyond Tax Season: Building Your Financial Legacy

Tax season often feels like a financial checkup—we review our income, evaluate our investments, and take stock of our financial health. But what if we viewed it as something more? What if tax season became an annual opportunity to strengthen our financial legacy?

I've been studying the work of Dr. William Darity Jr., a professor of economics at Duke University and co-author of "From Here to Equality: Reparations for Black Americans in the Twenty-First Century." I hope to interview him for this newsletter in the future. His research on wealth disparities and economic inequality offers powerful insights that could transform how we approach generational wealth building.

In his writings, Dr. Darity emphasizes that generational wealth isn't just about transferring assets. It's about transferring financial literacy, entrepreneurial mindsets, and access to opportunities for many communities.

This perspective shifts our focus from accumulating assets to building comprehensive wealth strategies that withstand economic fluctuations and social challenges across generations.

But what does this look like in practice? Let's break it down:

1. Beyond the Bank Account: The Three Pillars of Generational Wealth

Generational wealth stands on three pillars:

• Assets: Property, investments, businesses, and cash that can be transferred to the next generation.

• Knowledge: Financial literacy, entrepreneurial skills, and professional expertise.

• Networks: Connections to opportunity structures, mentors, and resources.

Most financial advice focuses exclusively on the first pillar while neglecting the second and third. Yet without knowledge and networks, assets often dissolve within a generation.

A great example comes from The Williams Group wealth consultancy, which found that 70% of wealthy families lose their wealth by the second generation and 90% by the third. The primary causes weren't bad investments or economic downturns—a lack of communication and trust within families, and heirs being unprepared to manage wealth.

2. The Tax-Time Legacy Opportunity

As you prepare your taxes this year, consider using this process as a guide for legacy planning:

• Audit Your Assets: Beyond calculating their value for tax purposes, evaluate how accessible and transferable they are. Are they structured to minimize transfer taxes? Are they diversified enough to withstand economic fluctuations?

• Knowledge Transfer Check: Have you documented your financial strategies, contacts, and processes? Are you actively teaching financial literacy to your children or mentees?

• Network Expansion: How are you leveraging your professional and personal connections to create opportunities for others in your family or community?

3. The "Legacy Letter" Exercise

One powerful tool I would like to start using is the "Legacy Letter"—a document that accompanies my will and other legal papers but speaks more personally to my values, hopes, and financial wisdom.

A Legacy Letter typically includes:

• Your money story (lessons learned, mistakes made, victories won)

• Your financial values and philosophy

• Specific guidance for handling inherited assets

• Hopes for how your legacy might impact future generations

Unlike legal documents, the Legacy Letter communicates the "why" behind your financial decisions and provides context that numbers alone cannot convey.

4. Community Legacy Structures

Individual financial legacies matter, but community-based resources can amplify their impact. Consider these models:

• Family Investment Clubs: I'm interested in starting one within our AFGM network and with my family. These clubs would allow families to pool resources, share knowledge, and make collective investments. Beyond the financial benefits, they provide practical financial education while building generational assets and strengthening community bonds.

• Community Development Financial Institutions (CDFIs): These specialized organizations provide financial services in underserved communities. By directing some of your investments or philanthropy toward CDFIs, you help build community wealth ecosystems.

• Giving Circles: These collaborative philanthropy models allow groups to pool donations and collectively decide where to allocate funds, often focusing on addressing the root causes of economic inequality.

As we approach the tax deadline, I challenge you to see beyond the immediate paperwork. Use this time to evaluate your current financial position and the legacy you're building. Remember, your financial decisions today echo far beyond your lifetime—they help shape the economic reality of unborn generations.

What steps are you taking to ensure your financial wisdom and resources outlive you?

Download “My Legacy Checklist here.”

Professional Growth Gateway: Long-term Financial Planning

Let's get practical about creating financial plans that span generations. While estate planning is a critical component (we'll touch on that), generational wealth strategies require a more comprehensive approach.

Here's my framework for professionals at various career stages that I’ve learned:

1. Early Career Professionals (20s-30s): Foundation Building

This stage is about establishing habits and structures that will compound over decades:

• Maximize Tax-Advantaged Accounts: Beyond traditional advice to contribute to retirement accounts, consider opening a 529 plan even before having children. These education savings accounts grow tax-free; you can change the beneficiary later.

• Build Your Human Capital: Your earning potential is a wealth engine. The McKinsey Global Institute found that investing in specialized skills can yield returns of 10-20% annually, far outpacing most financial investments. Identify skills with long-term market value and invest in developing them.

• Start Small with Legacy Thinking: Create a will, even if you don't have much to leave. This establishes the discipline of legacy planning that will serve you throughout life.

2. Mid-Career Professionals (40s-50s): Acceleration and Protection

At this stage, your focus shifts to accelerating wealth accumulation while protecting against potential setbacks:

• Strategic Tax Planning: Work with a tax professional to identify strategies beyond basic deductions. According to the Tax Foundation, Americans overpay their taxes by an estimated $30 billion annually due to unclaimed deductions and credits.

• Risk Management Audit: Review insurance coverage (life, disability, liability) to ensure unexpected events don't derail your wealth-building. Consider umbrella policies that provide additional liability coverage beyond standard policies.

• Formalize Knowledge Transfer: Begin documenting your financial systems and teaching them to the next generation. Create a "financial operations manual" for your family that explains your accounts, strategies, and contacts.

3. Late Career and Retirement (60s+): Legacy Implementation

This stage focuses on optimizing the transfer of both financial and intellectual capital:

• Tax-Efficient Transfer Strategies: Explore strategies like installment sales, family limited partnerships, or charitable remainder trusts that can reduce transfer taxes.

• Structured Inheritance Planning: Consider using incentive trusts that encourage beneficiaries to pursue education, entrepreneurship, or charitable work rather than simply providing lump sums.

• Knowledge Preservation: Document your life's financial lessons in formats accessible to future generations. Video interviews, written memoirs, or regular family financial discussions can preserve wisdom that might otherwise be lost.

The Intergenerational Financial Meeting

One practice I believe could be beneficial is the annual intergenerational financial meeting. This structured conversation brings together family members across generations to discuss:

• The family's overall financial position and goals

• Major decisions or changes in the coming year

• Educational opportunities for younger members

• Philanthropic goals and activities

• Celebration of financial milestones and achievements

These meetings normalize financial conversations, prevent surprises, and ensure that your financial values and knowledge transfer alongside your assets.

What legacy planning steps will you implement before this year's tax deadline?

Success Spotlight: Wealth Advisors from Underrepresented Communities

While building generational wealth starts with individual decisions, professional guidance can make a tremendous difference. This week, I want to highlight three exceptional wealth advisors from historically underrepresented communities who are helping clients build powerful financial legacies.

Lazetta Rainey Braxton: Democratizing Financial Planning

Lazetta Rainey Braxton, MBA, CFP®, is the co-CEO of 2050 Wealth Partners, a financial planning firm designed to serve diverse professionals balancing current financial needs with long-term legacy goals.

What sets Braxton apart is her "financial wellness for all" approach. While many advisors focus exclusively on high-net-worth clients, Braxton has developed service models that make quality financial planning accessible across income levels.

"Building generational wealth isn't just for the already-wealthy," Braxton explains. "It starts with financial stability, grows through consistent investing, and multiplies through strategic planning and education."

Her signature strategy includes creating "wealth pods"—small groups of family members or close friends who meet regularly with her to learn wealth-building strategies together, thereby reducing costs and building community accountability.

Nicolas Abrams: Real Estate as a Legacy Vehicle

Nicolas Abrams, founder of AVO Financial and a specialist in real estate investment strategies, helps clients use property as a cornerstone of generational wealth planning.

"For many families, especially in communities of color, real estate has been the most accessible and sustained wealth-building tool," Abrams notes. "But the strategy needs to evolve beyond simply buying a home to strategic property investments."

Abrams has pioneered what he calls the "3-5-7 Property Ladder"—a structured approach where clients:

1. Purchase their primary residence

2. After 3 years, they acquire their first investment property

3. After 5 years, scale to multiple properties

4. After 7 years, diversify into commercial real estate

This methodical approach has helped dozens of his clients build real estate portfolios that generate passive income and appreciate over time, creating transferable assets for future generations.

Maya Rodriguez: Entrepreneurial Legacy Planning

Maya Rodriguez specializes in helping entrepreneurs build businesses designed for generational transfer or sale. As a certified exit planning advisor, she focuses on the unique challenges business owners face in converting their life's work into transferable wealth.

"Many successful entrepreneurs build businesses that die with them," Rodriguez explains. "They create jobs and income, but not transferable assets. My work focuses on transforming successful businesses into enduring enterprises."

Rodriguez's approach integrates:

• Business valuation and enhancement strategies

• Leadership succession planning

• Tax-efficient exit options

• Knowledge transfer systems

Her client's success story, which most impressed me, involves a family-owned construction company that nearly collapsed when the founder passed away unexpectedly. After working with Rodriguez, the company implemented a comprehensive succession plan that has enabled it to thrive into its third generation of family leadership.

The Common Thread: Holistic Approaches

What unites these three advisors is their holistic view of wealth. All three emphasize that generational wealth requires more than financial assets—it demands financial education, strong governance structures, and values alignment across generations.

They also share a commitment to serving communities historically excluded from wealth-building conversations. By bringing diverse perspectives to financial planning, they're helping clients navigate unique cultural, historical, and structural barriers to building lasting wealth.

If you're looking for professional guidance on your generational wealth journey, consider advisors who understand the specific challenges and opportunities within your community context. The right advisor doesn't just help you manage money—they help you transform it into a legacy that can uplift generations.

Community Corner: Financial Literacy Zoom Call Proposal

As we continue focusing on financial literacy this month, I'm excited to propose a special virtual event designed to bring practical financial knowledge directly to our community.

Financial Literacy Zoom Call

• Date: April 24, 2025

• Time: 7:30 PM - 8:30 PM

• Location: Virtual (Zoom link will be provided upon registration)

• Focus: Practical strategies for building generational wealth

The vision for this call is to create an intimate, interactive session where participants can gain insights on financial planning, legacy building, and wealth preservation strategies directly applicable to our community's unique needs and challenges.

Call for Expertise

To make this event as valuable as possible, I'm actively searching for community members with specific expertise:

1. Financial Planning Professionals: Certified Financial Planners, financial advisors, or individuals with strong financial backgrounds who can share practical wisdom on building wealth strategies that work for our community.

2. Investment Club Experience: Individuals who have participated in or led successful investment clubs. Your firsthand experience would be invaluable as we explore starting family investment clubs within our AFGM network.

This is an opportunity to share your expertise while making a meaningful impact on our community's financial future. The format will be conversational and focused on practical takeaways rather than complex theory or sales pitches.

If you have expertise in either area or know someone who might be willing to contribute, don't hesitate to contact me directly at [email protected] with "Financial Literacy Call" in the subject line.

Even if you're not an expert interested in financial literacy and wealth building, I encourage you to mark your calendar for this event. Sometimes the most valuable insights come from shared experiences and collaborative problem-solving.

As James Baldwin reminded us, "Not everything that is faced can be changed, but nothing can be changed until it is faced." Together, let's face the financial challenges in our community and develop strategies to overcome them.

Registration details will be included in next week's newsletter. In the meantime, please reach out if you have questions or suggestions for topics you'd like to see covered during this session.

Michael's Hot Take: Fixed Mindsets Are Bankrupting Our Future

I just finished reading "Mindset: The New Psychology of Success" by Dr. Carol Dweck, and I've gotta say—if I'd read this book 30 years ago, I could have avoided about 15 years of banging my head against various walls.

Dweck's core concept is simple: People either have a "fixed mindset" (believing their qualities are carved in stone) or a "growth mindset" (understanding that abilities can be developed through dedication and hard work).

Now, here's where our financial legacy discussion gets interesting—this mindset difference doesn't just affect how we learn; it fundamentally shapes how we build, preserve, and transfer wealth.

Think about the people you know with serious money problems. How many of them say things like:

• "I'm just not good with numbers."

• "Financial planning isn't my thing."

• "Rich people understand money; regular folks like us don't."

This is classic fixed-mindset talk. And we're passing this financial advice to the next generation.

Looking at the mentoring work at AFGM, I realize our most important contribution isn't teaching specific financial tactics (though those matter). Our real value is dismantling these fixed mindsets around money.

Let me break it down further for you. Society has created this bizarre mythology around wealth—that some people are just "natural" at money while others aren't. It is as if financial literacy is like being tall or having a perfect singing voice. "Oh, sorry, Jimmy can't balance a checkbook. He didn't get the money gene."

Give me a break.

The financial industry loves this narrative because it keeps regular folks intimidated and dependent on "experts." Meanwhile, I've watched brilliant financial people emerge from communities where no one had two nickels to rub together—not because they discovered some secret money gene, but because someone challenged their fixed mindset about wealth.

Dr. Dweck's research shows that praise focused on intelligence ("You're so smart with money!") undermines achievement. In contrast, praise focused on effort and strategy ("I notice how you researched before making that investment decision") builds resilience and growth.

This hit me hard when thinking about how I mentor. How often have I praised someone for being "naturally good with something" instead of highlighting their disciplined approach to learning new concepts?

The real wealth gap in America isn't just about dollars—it's about mindsets. When we mentor young people, especially from underserved communities, the most valuable gift we can give them is the conviction that financial intelligence isn't innate—it's built through curiosity, effort, and resilience.

Consider this: if a young man comes into our program believing money management is "for other people" and leaves understanding that wealth building is a learnable skill, just like basketball, cooking, or anything else worth doing well, it can impact an entire generation.

So here's my challenge to all of us building generational wealth: Examine the financial mindset you're passing on. Are you transferring a fixed view ("Our family has always struggled with money") or a growth perspective ("We're building our financial muscles together")?

Because the truth is, you can transfer all the assets in the world, but if you don't transfer a growth mindset about managing them, that wealth has about as much staying power as a snowball in August.

What financial mindset are you transferring to those you mentor? I'd love to hear your thoughts. My email is [email protected]

Also, if you haven't read Dweck's book, get it. It will change how you think about learning, parenting, leading, and, yes, building wealth, too.

What’s one fixed mindset belief about money you’re still holding onto?”

Until next Tuesday, be safe, thankful, and intentional about your legacy.

Upcoming Events

Financial Literacy Initiative Planning Meeting

• Date: April 24, 2025

• Time: 7:30 PM

• Location: Virtual (Zoom)

• For: Anyone interested in helping develop youth financial literacy programming

Echo of Freedom Tour

• Date: July 2025

• Duration: 4 hours

• Registration opens: May 1, 2025

New Mentor Training Course (NMTC 25-03)

• Applications open: Coming Soon

• Open to both new and experienced AFGM Mentors