- I worked for years as a trust administrator and the job taught me what it takes to build wealth: financial planning, investing, and estate planning.
- I realized there's no reason I and other black women can't take control of our finances, so I set out to learn as much as possible.
- By starting with an inventory of your own finances, you can then set goals and make plans to transfer wealth from generation to generation.
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Let me start by saying that, the majority of my life, I ignored my money. I spent it. I hid it from myself. I obtained thousands of dollars in student loans for two degrees during a recession, expecting the best. Instead, I ended up working in a field I never expected to work in.
For years, I worked as a trust administrator protecting money left in trust funds . Seeing millions of dollars daily was a regular occurrence for me. It wasn't until I saw 100 million dollars ($100,000,000) in one trust that my relationship with money changed forever.
Maybe the shift occurred because I knew the money belonged to a person who still went into his local branch to do his banking. It made me want to build my own wealth and empower other black women to do the same. If he could do it, why couldn't we?
Despite the degrees and experience I have, I didn't always feel 100% confident financially. This might be because I questioned whether I knew enough about money. But as I continued to work and research, I became more confident, and I learned that there are three basics steps to obtaining wealth:
Investing: I have never seen a trust that didn't have marketable securities and other investments. Additionally, trusts that included a business were usually the larger trusts. Investing is one way to ensure that your money grows.
Estate planning: Generational wealth and trusts are not possible without an estate plan. Money may transfer successfully to one generation, but rarely does the money continue on to a second or third generation.
Empowering a black woman through financial literacy usually results in improved financial health and well-being for her entire family. That's because black women are affected most by the racial wealth gap a gap that often leads to perpetual stress, anxiety, depression, unresolved trauma, and a situation that never gets better, from generation to generation.
Many minority groups have been unable to manage and create transformative wealth (wealth that builds more wealth). Preventing the racial wealth gap from widening by increasing the transfer of wealth is critical to improving the lives of future generations of black families.
Here is what you can do to stop this vicious cycle.
Black women need to be financially confident. We have to know that we can handle any financial situation that comes our way. We can't afford to live feeling guilty and condemned by past mistakes. Instead, we need to act with the confidence that will enable us to make the right decisions for our lives.
So how do you build financial confidence? Start by taking a self-inventory to discover your money strengths and weaknesses:
1. Write down your short-term and long-term goals and your "why"
Why you want to achieve something is important when trying to decide how to prioritize your goals.
For example, if your long-term goal is to buy a home that could later be passed down to your family (that's your "why"), you could end up with 10 or more short-term goals, including: checking your credit report and score , learning how to increase your score , finding a real estate agent, getting pre-approved by a lender , saving for the down payment and closing costs, and more.
After you set your goals, don't listen to the naysayers or your negative self-talk, saying, "It's not a good idea for you to do your own investing or to manage your money." You're the best person for the job.
2. Figure out how much money you have, how much you're earning, and where it's going
Is the money going to your stated goals?
3. Take time to learn how to fix any issues you see
Your self-inventory results will give you actionable insight on what you need to do to achieve financial confidence and self-sufficiency. Stop thinking about what you've been through and the mistakes you've made, and what you don't know or understand. Forgive yourself and move forward so you can get what you desire.
When I committed to reading more about the issues I had, I borrowed books from my local library. Now, if I want more information on accounting so that I can properly analyze a stock, I use Coursera.org. The site has thousands of online courses to help you build your skills. This is where you begin to take charge of your money.
Self-sufficiency doesn't mean you shouldn't ask for help, it just means you have to have some idea of what needs to be done i.e. saving, investing, taxes, retirement, estate planning and what is in your best interest based on your goals. Then you can consciously decide to delegate tasks to others, such as a financial adviser or attorney.
You want to ensure that it is hard to take advantage of you and that you can advocate for yourself should someone try to tell you that you are wrong about what you need.
When I went through the financial confidence inventory I described above, I realized I needed to understand investing. I had an employer-sponsored retirement account that had a -15% return. I was losing money.
I set out to learn the basics of investing. I read everything I could get my hands on, I asked questions, and I started having financial conversations.
When I started my financial confidence journey, I read, " Rich Dad Poor Dad " by Robert Kiyosaki, " Invested " by Phil and Danielle Town, " Becoming " by Michelle Obama, " Don't Settle for Safe " by Sarah Jakes Roberts, and " You Are a Badass at Making Money " by Jen Sincero, just to name a few.
More importantly, I took action to implement what I was reading. I studied my investment options and created a retirement investment plan. My account quickly changed to a positive 9.45% return.
I now understand why my account balance changed so fast. It was because my employer was initially investing the money I saved solely into their stock, and this strategy wasn't in my best interest based on my financial goals.
This isn't the worst you will face when it comes to investing. I've watched a very successful woman enter her favorite bank with a plan to take control of her finances and her investments, only to be told by her male financial adviser that he didn't recommend that she learn to invest and should just allow him to do it for her. Better yet, if she really wanted to manage her own accounts she could do so, but she would have to call him first so he could approve what she wanted to do with her money.
You have to be willing to learn what you are doing. No one cares about you and your success the way you care.
It is not enough to build wealth through saving and investing, we must also protect our wealth. Dying without an estate plan in place will turn your family's mourning period into a frenzy of fighting.
In an interview with black parenting blog Mater Mea , Lori Anne Douglass, an estate planning and probate attorney based in New York, estimated that 50% of black Americans die without and this is our only opportunity to efficiently create generational wealth.
Estate planning is deeper than who gets your money after you die. At some point, you will need help. An accident, old age, declining health, having a pet, or being out of the country could trigger the need for a proper estate plan if you are alive but unable to make financial decisions for yourself. If you have done your estate planning, your plan will spring into action and your designated representative will be able to act on your behalf.
If your goal during life was not to be taken advantage of, don't let it happen to you in death. Many families and charities never see the money they were promised if there is not an estate plan in place.
Women have historically been left out of financial planning and estate planning because it is a male-dominated industry, despite the fact that we often outlive our partners and women business owners account for more than 8.6 million businesses and control more than $14 trillion in assets. We are capable of advocating for ourselves, but the majority of us shrink when we feel like we don't understand money/finance because it's "complex."
When building your estate plan, consider who is capable of managing your money and where your money should go.
If you believe the people you want to leave money to can manage a lump sum, write your own will or have a full estate plan drafted by an attorney. If you want your money to go to a minor, a pet, a friend, or you have a business to protect, then you should consider having a trust drafted. And remember to update your estate-planning documents regularly.
Estate planning is for everyone, and your plan should be updated once a year at minimum to ensure that you are effectively controlling and protecting your legacy.
The more financial literacy women have, the better off we will be. As an attorney and certified financial adviser, I have made it my mission to teach financial literacy and estate planning in hopes that if you teach a person to fish they will eat for a lifetime and teach others what they have learned.
Jala Eaton is an optimist, estate planning attorney, and certified financial adviser with a mission to help black women build and protect their assets through learning to invest and creating an estate plan.
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