“My Grandmother Turned $200 Into a Family Inheritance”
Whenever it comes to creating generational wealth, people like to imagine John D. Rockefeller or Andrew Carnegie amassing billions of dollars and passing their wealth on to the next generation, who in turn creates more wealth for the next generation, and so on At. Not me. I see my grandmother’s face, Louise Roach, and though she was as industrious as the day was long, she could not be mistaken for an industrial titan or a genius entrepreneur.
She wasn’t a rags to riches type either. She lived a hard life, frequently punctuated by misery and sorrow. And yet, without divine intervention or winning a lottery ticket, she managed to set the stage for several generations of wealth.
Grandma was pregnant and gave birth to my mother, her first child, at the age of 16. She never finished high school and my grandfather was a moonshiner and Rolling Stone with no intention of being a family man. Unable to raise my mother on her own, Grandma left my mother in Danville, Virginia with her own mother and moved to 1950’s Harlem to seek a better life. Grandmother soon found a job in a cleaning company for $200 a month, which today is about $2,200 a month adjusted for inflation.
So how did Grandma manage to create generational wealth while also living on less than Carnegie probably spent on cigars? It had nothing to do with a huge purse or attending financial education seminars.
My grandmother saved enough money from that meager salary to pay a down payment on a modest $25,000 two-family home in the Laconia section of the Bronx, even though the selling price was more than 10 years of her salary.
I don’t know how much mortgage she got when she bought it, or if it was turned down like so many African Americans did back then. What I do know is that she never missed a payment and that the house was paid off in full by the time of her death. So was your Volkswagen Jetta.
Living below her means, she made sure to save a portion of every paycheck. From my memories of her, she was extremely frugal and money conscious. She had no credit card debt, tax liens, or debt of any kind and had even managed to save another $43,000.
I would estimate that combined with the value of her car and house at the time, meant she had a net worth well over $110,000, which is $226,631 today. All this wealth built by a woman who has worked in a dry cleaners her whole life.
Tragically, we lost my mother to breast cancer at the young age of 51. When Grandma finally died, she left the house to her then-husband. She donated $13,000 of her savings to her funeral expenses and left the rest of her money in equal parts of $10,000 to her three grandchildren; me, my brother John and my sister Karla. We were also given a bunch of silver Kennedy halfs that Grandma had dearly saved.
James Baldwin wrote, “Children have never been very good at listening to their elders, but they never failed to imitate them.” Fittingly, in the movie of my life, there isn’t a scene where Grandma sits us down and tells us how to get through Saving and investing builds wealth. There’s just the shining example she set of how to think and behave like a millionaire or billionaire, even if you start from the bottom.
In many families, their inspirational wealth-building story would have ended right there. The next generation would continue to squander their inheritance on things that retain no long-term value, leaving little or nothing to pass on to the next generation, and resetting the wealth created by the previous generation to zero. Especially in today’s landscape, where about 60 percent of millennials making over $100,000 a year say they live paycheck to paycheck.
But my grandmother passed on her way of thinking as a millionaire. She understood that where she was in life was not her fault, it was her responsibility to make it right. She never viewed money as a toy to be spent on things that have no value or generate no income. She saw it as a tool to invest in her family’s future and she taught us her monetary values by example.
I used my grandma’s $10,000 inheritance to open a Charles Schwab account in 1993 and began investing that money in stocks. As my stock portfolio began to dramatically increase my net worth, I began investing in real estate. I’ve also started my own business and invested the profits from that business in multi-family and commercial real estate.
Many years later I became an angel and private equity investor. I even bought my grandmother’s house from the $245,000 reverse mortgage her husband set up to fund his retirement before he died. I still own the house today, although it’s now worth over $700,000.
I continue to pass on my grandmother’s example and lessons to my own children so that when I’m gone they will have more wealth than I do, as well as the tools to grow it and eventually pass it on to their children. If they ever need a reminder of that priceless legacy, they need look no further than the stack of silver Kennedy halfs that still holds pride of place by my bedside.
Cedric Nash is an entrepreneur and investor and founder of The Black Wealth Summit. He is also the author of Why should whites have all the wealth? How to become a millionaire from the bottom up what is out now.
All views expressed in this article are the author’s own.
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https://www.newsweek.com/my-grandmother-generational-wealth-family-legacy-1778748 “My Grandmother Turned $200 Into a Family Inheritance”