Creating Generational Wealth

your own decisions. It is possible, to quote a friend Chris Gorman, who's the CEO of Key Bank, which is with him a few weeks ago in Cleveland, Ohio, It's possible that the only true freedom is financial freedom because every other form of freedom can be taken from you. Think about that. Think about political freedom, more religious freedom, more societal freedoms. Even the right to vote has been

threatened recently for some. So once you have financial freedom, unless you screw it up, no one can take that from you. It is yours. You are free to be. All money is is freedom, that's all it is. And you are buying your own freedom, you are paying for it, you are ensuring it in the future. This podcast this week is around creating a legacy of generational wealth that's right a legacy of generational wealth. I'm gonna give you three strategies to build at least a million dollar net worth.

I'm gonna start with kids, and if we have some time, I'm gonna give you a bonus track that I think will also excite you. So let's see how we go. Here we go. If you have a child, or when you have a child and don't be in any rush to have a child, your life will change. Once that happens.

Your priorities, if you're a good parent, becomes theirs. Okay, so, but if you have a child already, congratulations, you're doing one of the most important jobs in the world, giving life and creating a world changer, potentially a world changer. But you're going to need to put that person in a position to be a transformational force in this world, which means they should have resources. As you've heard me say, if you hang around nine bro people, you'll be the tenth.

You don't want to be the two guys. This is a Reverend Jesse Jackson joke. You told me you don't want to be the two guys. The two hobos sitting at the train track. They've been kicked off the train for nonpayment, and they're upset. And one of the hobo looks at the other hobo and says, you know, I'm really upset. We were kicked off this train and people were rude to me, and I'm not gonna take it.

I'm so upset. I'm gonna buy this here train system, this whole train set up, the train network, the train company. I'm gonna buy it, you know. The hobo turns to him, looks at him and says, you know, I'm upset too. I'm so upset, I'm gonna sell it to you. And both of them are so broke they can't pay attention, so poor they can't afford the Oh, are all right? I don't want you to be that guy, right are those guys? I don't want your children to even get

anywhere close to that conversation. I want them to hit. I want you to be able to hit somebody with your American Express black car without putting, without physically touching them, just put it down on the table or whatever credit card you use. But in this example, I think you understand people understand and emerg spress black card knock somebody out. You don't you don't you don't need to argue with them, Just just don't. Don't argue with the weight or the restaurant.

Buy the restaurant. If that is your preference, I can do it if I want to. If somebody was rude to me, I could buy the business, uh and put them out of business and run my own business, assuming the business was for sale or sellable. But resources is not, are not the issue? Isn't that a wonderful place to be. Let's put your child now, right now, in a position to be that person by the time they become an adult. So let's run through the numbers. I like math because

of that doesn't have an opinion. Example number one, put your pen, take your pens out and pencils out, your pieces of paper or your digital device, and let's jot this down. So if a child invest two hundred dollars a month, starting in this example at age two, by the age of about forty, with a seven percent return annually,

they'll reach a million dollars. So by the time they get married and are beginning their family, because of the setup that you've put in place at an early age, they're going to get the payoff of becoming a millionaire. For life that'll have a million dollars in principle, and not not any to do with the income that they make, the future income or other things that they do other investments.

I'm talking about the efforts that you make. In this example, when they're two years old, you're going to invest for them two hundred dollars a month. I mean, you spend that on you know, Starbucks and cigarettes or you know, probably just a Starbucks budget. Right, Just think about the things you spend in a month two hundred dollars on. So you're going to invest two hundred dollars a month in the stock market on a conservative basis, and you're going to do that over a forty year period. Well,

you're going to do the first part. Then you'll hopefully to raise a child who can finish that on their own, or if you're just really benevolent, you set them up on auto pay. Right. But by the time in this example that you started to and by the time they are forty to forty five years of age, they're worth a million dollars at an your return of seven percent.

By the way, Operation Hope, the organization I found it now has an account, a bank account, a Hope Child Savings Account thanks to the leadership of Mayor Keisha Lance Bottoms when she was in office and now Mayor Andre Dickens and his administration, who's really amplified this and made it truly successful in the City of Atlanta City Council and the Atlanta Public Schools because of these working together institutions working together, who initially funded two million dollars into

the Future of Kids, Operation Hope in partnership with the bank that domiciles our account, City Group, we now have a bank account for every kid in kindergarten in Atlanta Public Schools, and statistics have shown that if you give a kid an account in kindergarten and put a modest amount of money in that account, there's seventy five percent more likely to graduate from college. Did you hear that?

Seventy five percent more likely to graduate from college. So we're setting them up to connect education back to aspiration. The light is on in the kid's head. They now plugged the socket in the back of the wall that connects education with aspiration. They got the memo on free enterprise, capitalist and economics and ownership at a young age, and they understand why they're being asked and inspired and told

to go to school. So in this one example I'm giving you, I want you to think about opening this account at two years old or five years old, ten years old. Okay, So you say you started when the kids ten years of age. You're going to put two hundred dollars a month in that account, right, and by the age and you know, they get married whatever, let's say it's thirty right, Uh, they'll they'll be halfway to their mark by that time, maybe even more if the

markets do better certain years. Right, but let's just say an average seven percent return. And you and as a you know, as a gift to them, their wedding gift, you say, I'm going to I'm going to put you on auto pay right for you know, the time that you're raising your children, their children, or you arrange with your your children to continue that two hundred dollars a month investment through auto pay. Don't You shouldn't do it manually, just just come out of your paycheck or their paycheck

on a regular basis. But if I were you, I would just set this account up and just have it happening. And then when I retire from my job, not me, but if you were working a job retired for your job, you would make sure that the folks handling your finances your money knew that two hundred dollars a month would go. You won't even notice it. We're go on auto pay into this stock account. It'll just keep compounding and compounding

and compounding. You can start at birth, Okay, you can start at the year two, you start a year five, year ten. Yes, you can start at year twenty. Yes, you can start when the kid is twenty years of age. Two hundred dollars a month it will be about sixty three years of age when they become a millionaire in that particular case. So that's why I'm suggesting do it early, because you want to give them the majority of their mature life. People are now living to eighty years of age.

If you're and better, if you're in good health, you're giving them really the second half of their life to absolutely transform their life with these resources. We had a kid that went through our financial literacy program in Detroit. His name was Derek, and the program back then was called Banking on Our Future and as part of what we now call Hope Inside for Kids, where we taught financial literacy as you money. Many of you know. I've got my first financial literacy course when I was nine

years old in Compton, California. Banker came to my classroom and taught me financial literacy. And I remember asking the banker what do you do for a living and how did you get rich legally? And I was dead serious. The banker had a red tie and a white shirt in a blue suit. Six ' to two issue was with the banker was from Bank of America. I remember all that, and they didn't want to be there. We didn't want them there, right, but their employer sent them in.

It's part of the Community Reinvestment Act federal legislation that requires banks to reinvest in communities, which, by the way, I opporation. He participates in CRA today as so it's full circle for me. Anyway, banker comes to our classroom once a week for four weeks, six weeks. I'm sorry for forty five minutes each. First week, we didn't want him there. He didn't want to be there. We made it clear, he made it clear. The energy was like

not was not positive. Second week, you're like, you know, you can't sort of remind me of my children you're not so bad. You're not so bad for a white guy. So we started a conversation and built a relationship. And I'm like, well, look, you got a suit on. But every only the person I know who's white with a suit on before you as a detective. And it wasn't a good suit. It was polyester. Your suit is Italian design, It's got a nice, beautiful stitching. Your Egyptian cotton is

your shirt. You know. I didn't say that then, I know it now. I mean, it's just beautiful. You have a car in the garage in the parking lot. It's got tags on it. It's legal. No one's chasing you. You have a business card that says sixteenth floor on it. There's nothing in compton Y on the sixth or eighth floor. That's the courthouse. Everything else is one or two floors. So where did you come from? And you're in the

middle here in the middle of the day. My mother could not show him in the middle of the day because she worked an hourly job with two fifteen minute breaks. One Nita Smith, who died a millionaire by the way, passed away a millionaire millionaire net worth when she passed away a year ago. Last month, she's been promoted and had died with a credit score of eight fifty four last time when we pulled their credit So she wasn't black, she was green. When she went to the computer, the

computer just said yes. So this banker you know, was there in the middle of the day and they were on a salary. I didn't know what a salary was, and they had a business card. Sixteen floor, sixteen floors, Like I met a Marsham. Who are you? Where'd you come from? Like? What do you do for a living? Again? And how'd you get rich? Legally? He said, I'm a banker and I finance entrepreneurs. I said, sir, I don't know what an entrepreneur is, but if it's legal and

you're financing it, I'm going to be you know. I've told the story in other ways. You can read in my book Financial Literacy for All, which by the way, is number one continues to be the number one business finance book in the country eight months in a running. So everybody who bought the book, thank you. If you bought the book, signed the book, well mark it up, underline scratch. You use it as a work book for

your family to co ovid. The plan I've given you now and the plan we continue to give you in this weekly podcast. And when you're finished with the book or buy an extra book, put your family name in the book and donate that book to a title I school, a struggling school in your a resource struggling school in

your neighborhood, and or the public libraries. And then go in and teach financial literacy after making a Hope commitment on the website for Operation Hope to show us so we can brag on you in the world that you're in your community making a difference. Register that Hope commitment with us. Back to the story. So I'm in the class, and this banker's inspired me to become an entrepreneur, teaching me financial literacy. And I started my first business at

ten years of age, neighborhood candy house. Again, it's in the book Financial Literacy for all this whole story, so I won't tell it now, and I do well. I made three hundred dollars a week on a forty dollars investment, put the liquor storeut of the candy business. Found girls lost a business recurring theme in my life. But I'm married changed for but it changed my life. This whole mindset shift changed my life. Then I asked this banker, going back to the class, excuse me, so are there

any more like you? Like? Just are you the only banker? And he said, well, of course not there. You know, there are a couple hundred thousand bankers at Bank of America alone. And I said, wait a minute. Your job is to lend poor people money, and all I have to do is prove to you I can pay you back based on the stuff you've been teaching me the last six weeks in this financial literacy course. He says, yeah, that's right, and I don't get dead if I don't

pay you back. Excuse me, yes, you know, you go on the street behind me and get that and get a loan from Pooky and them. You don't pay that back, you'd be dead. Our neighbor was prison, probation, parole, and death. Those were your alternatives if things went wrong. And he said, no, young man, I'm not gonna No one's gonna harm you. You're going to notice a default. I said, wait a minute, to slow down. You're gonna send me a piece of paper, right.

I didn't realize the credit score. These were so important things. You don't want to default on obligations. Clearly you want to honor them and follow you for the rest of your life. But I was a kid, I'm like, wait a minute, I'm using people dying around me. I saw two murders before I was nine years old. The worst thing's gonna happen to me is you're gonna put something on my record. Yes, okay, I now would have to know what I'm gonna do for the rest of my life.

I'm gonna become an entrepreneur, and I now know ultimately what I'm gonna do for the rest of everybody else's life. I'm gonna teach them how this game works by making them bank qualified, showing them financial literacy, showing how to get access to credited prime rates. And I didn't really at ten years of age, had already preordained my destiny of what I was going to be could be my

contribution to society, which is Operation to Hope. Today, we're the larges on the ground delivery system for financial literacy in America, fifteen hundred offices forty two states for to have billion dollars invested in underserved communities, millions of clients, countless impacts that started when I was ten years old, nine years old in that classroom, and one of those impacts with this young man Derek in Detroit Public Schools.

And so Mary Haggarty, now Mary Ayerson, who's our president for partnerships back then, was I think in charge of programs. We land Strigs runs programs. Today. We were in this classroom, We're in the school and the young man Derek, and this is really Mary's story, but I'm going to put myself into this story because I'm the storyteller here. Same thing, marry me saying, opreat show, same thing. We're there in this classroom, teaching financial literacy, and Derek is coming out

of the classroom. He's wearing a suit just like me. And Derek's you know, you know, applauded for being taught financial literacy and paying attention and modeling the volunteer banker. He's been modeling this banker banker every once a week for weeks, just like I did. And as he's walking out the classroom, his friends quotation marks Dart teasing him, Man, Derek, while you're wearing that dumb suit. That's a dumb suit. Why would you wear what you're looking like that banker.

You need to come over here, and you need to dress like us. You need to hang out like us. And so we go over and say to Derek, in the midst of him being sort of emotionally jumped on the bully, look, you need to take this seventy dollars to make a decision about Nike. You and your boys. We're going to give you all a chance to make a decision about Nike. And mind you, this is a

long time ago. This, you know, probably twenty years ago. Okay, so you know, make a decision about mikey here, Nike here seventy dollars, which back then would have brought you a share of Nike. So, Derek, you know this is great. I want to buy a share of Nike stock. The friends say, oh, man, what are you doing. That's stupid. Well, here's another stupid thing you're doing. Heck, would you want to buy some stupid stock? You want to buy you

some Air Jordans. That's right, everybody know air Jordan's. Look look around, there's folks with future air Jordans on even leather, air Jordans, canvas, air Jordans, black, brown tan Air Jordan's multi colored air Jordan's special limited edition Air Jordans. Don't weren't you at the store with us when everybody's walking around standing around the corner and get there the latest edition air Jordan's. You need to get you some air Jordans.

You're not coolest, you've got some Air Jordans. They're just pololing this kid with their information with sometimes with friends like this, who needs enemies? So we stop them, Hey, hey, hey, hey, we go to defend Derek's honor. And Derek says, no, no, no, no, no no no no no no no, it's cool. I want them to buy those shoes because when they do, they're making me money. Boom, drop the mic. So Derek

got the memo. Derek understood that he's a shareholder. Do you know that Black America, as an example, is one of the largest consumer spending forces in the world one point six give or take trillion dollars, But ninety plus percent of that is consumer spending consumption, not consumer spending. Consumption is not going in. Anything that renews itself or investment itself is consumption. Right, We're just feeding the beast, right, And ninety six percent I believe it is off my

memory of all black businesses are sole proprietorships. Right, you're not compounding, not building that, You're just a self employment project. Right. We're not dumb and we're not stupid. Is when the rules of publishing plain fuels level, we kill it. We become experts. And where's that happened? Professional sports and the arts, faith in community, faith, church politics were the rules of

publishing the plainfields level. We absolutely kill it. We succeed, but no one taught us the lessons of free enterprise, capitalism's economics and opportunity. And Derek Young, Derek may be broke, but he'll never be poor. There's a difference between being broken being poor. Being broke as economic. Being poor is a disabling frame of mind, a depressed condition of your spirit. You must vow never ever, ever to be poor again. It's okay if you don't like me, I like me,

I really respect me, and learn to like me. Then like me and never respect me. Or as Quincy Jones once told me, not went out to My self esteem depends on your acceptance of me. Derek is an eagle, even if he's surrounded our buzzers and turkeys. He may be broke occasionally, that happens in life, but he will never be poor because he's been empowered with the civil rights issue of this generation financial literacy. Now he's become a stockholder. Do you know when you own one share

of stock of any publicly traded company, please listen to me. Now, one share stock of any publicly traded company, you have the right to get financials and all the inside information from that company. One share of stock. So now we're gonna switch switch from the story of Derek and the story of the kid who has become who started as a as a young investor with the help of their parents and maybe their part time job, and became by

middle age a millionaire. And if, by the way, if you want to double it up and put four hundred dollars a month in compounding seven percent, you can cut the time in half that that young kid of yours becomes a millionaire. But four hundred dollars a month is probably a heavy clip that's a car note for somebody, or a part of a car note. So I'm trying to be sensitive to the fact that he's are working families. So two hundred dollars a month is probably something you

could probably do. Let's now switch to a working class family. Then I'm gonna now switch to the big baller option to build real wealth before we re stop this podcast episode. So, now you're a working class person, right. The family makes fifty thousand dollars a year, and there's somebody in your family that you get along with who makes thirty five thousand and thirty eight thousand dollars a year with three kids. Okay, so slow down. This is the average family, by the way. Okay,

working class family. So you make fifty thousand dollars a year. I'm going to show you how to become a millionaire in about five to eight years. Okay, So I want you to do what my mother did. My mother died got wrestler, so a millionaire when she passed away. She

had worked an hourly job when he dismissed. She's in the book for the Introlusory for All read about her high school education, got her high school equivalency when she was sixty plus years of age, walked with those with cap and gown in eighteen years of age, just to prove she could do it. This is a bad woman. Credit Grady fifty four okay, hourly job Now, So I want you to buy a home. Number one way you build wealth in America is home ownership. Don't buy a

many man. She don't buy something fancy. So I'm trying to depress people. You don't know what money. You don't have to discuss it and brag it by things that don't matter. With people you have no clue if you'll ever see again, and it doesn't really care. It shouldn't matter to you whether you impress them or not. Right, I want you to buy a home, and I want you to live in it. Right, and after a couple of three years, I want you to take a modest line of credit out and buy another home in a

working class neighborhood. I want you to buy the worst house on the best block. And now your cousin or sister or brother, somebody you know makes thirty eight thirty five thirty eight thousand dollars a year with three children, I want you to cut a deal with them and start a limited liability corporation. Document this business is not personal. Keep it business. You're going to say to them, do you know about the EITC. They're going to say, what's

that you're going to say congratulations. You've just got to check because if you have never heard of EITC, and you make less than sixty thousand dollars sixty five thousand dollars a year, the government owes you a check for working. In this example, i'm hitting us sweet spot of thirty eight thousand dollars a year in income and three children.

Thirty five thirty eight thousand dollars a year in income and three children, that person gets a check between six and seventy five hundred, six thousand and seventy five hundred dollars cash. It's called the Earned Income Tax Credit. My coaches at Operation Hope can help you through the VITA sites and through Operation Hope to amend or file your tax returns so you can get this payment and make

sure it goes into a bank account, an FDIC insured bank. Okay, Now you turn to your cousin and you say, no, you never heard of EC before. Nope, never heard of it. Great, congratulations, because it's retroactive for three years, so if you've never filed, to get up to three years of that. So three

years time. Let's keep a simple number, six thousand dollars that's eighteen thousand dollars rounded up to twenty thousand dollars, you know, just under twenty thousand dollars, and you're going to use that as a down payment for this house. In this South east region, you can buy a house that needs rehab for you know, sixty thousand dollars. Still, even if it's one hundred thousand dollars, you have more than ten percent to require for a down payment, you know,

buy the house. You're gonna get a rehab loan hopefully. Are you going to use this earned income tax headed money for credit money I'm talking about, and there are other funds that are available to you that through financial livercy education you'll learn about when you talk to my coaches. You're gonna take this money and you're going to you're going to read in you and and members of your

family hopefully on the weekend. Or you're gonna and or you're gonna get a proper construction loan and get vendors, proper vendors, not your cousin Jojo right, somebody who's qualified to rehab this property with minority vendors. So you're reinvesting, reinvesting in the neighborhood. You're going to rehabit and you're gonna rent it and make a long story short over a period of time six years in an example, you're

gonna do that twice. You own your own home, and you're going to buy two properties in the worst house in the best block. You're going to rehabit and rent that property and hold it, do not sell, and you get a will. A one page will is a nice is a good place to start. And you can get a life insurance policy. As a young couple or a young person doing this, you get a life insurance policy if you're in decent health. For a term policy, you

can get a whole life. But a term policy will cost you ten dollars twenty five dollars a month, even as much as a million dollar policy. You can get for less than hundred dollars a month, probably more like fifty dollars a month if you're in decent health. I've heard as low as twenty five dollars a month. Somebody and really young person in good health, and you don't know all long you're go on live, but you dang

sure to know you're gonna die. What's the mystery? So you're gonna make a million times too, because you're gonna be a mid worth a million dollars of networth irrespective of the job you're working, based on the real estate value, the appreciation and net equity in the properties that you accumulate over time. Right, So within a decade, without question,

you'll be a millionaire. And when you pass on the glory at some point, you will because you have a life insurance policy and a will you're going to bestow upon your children or those you love, a mother or whoever you're trying to hook up, life etc. A husband a million dollars of life insurance policy in this example, generational wealth. I've even gotten to the good part. So I've given you now two three strategies, right that are very practical. This is the power of financial literacy. Now

here's the last one. And I want anybody who's really those who I really want to pay attention to this are the strivers, those who want to be small business owners, those who want to be entrepreneurs, those those with high ambitions to not just you know, have live a middle class life. They want to build. They want to write the check, not just cash it. Somebody making six figures who has been able to put a little bit aside. They don't want to work for the man anymore. Are

the one man? Right? I want you to hear what I'm saying. There's a silver tsunami coming your way. Listen, now write this down, a silver tsunami. You've heard me talk about the silver rights movement, from the streets to the suites, from civil rights to silver rights. This is a different kind of silver. By the way, did you know that the first backer of currency in America was not gold? The first backing currency was silver. A little

factoid for you. It went from silver to gold, and then it went We got off the gold standard, and now US currency is backed by the full faith in currency the US government, which means America, which is the only flight to quality currency in the world, is a big baller shot collar. Everybody wants to invest in America and have American currency. I don't care what anybody tells you. We are what China and Russia. Everybody's complaining about US.

They want to be US, and they're buying. Once the TV cameras turn off, Putin and all those people are buying assets in America. And I want you to understand the value of the thing that everybody else once and we're looking right past. So here you go. Please write this down. I've written this extensively, about this extensively in the Business Plan for America. You can look it up online. All the statistical data is in there. You can download it.

Read my Time magazine op ED where I talk about inclusive economics as a software upgrade on DEE and I here we go with it. Is generation you're going to have for the first time in history, a majority of individuals adults over the age of sixty five. It's never happened. These are baby boomers read white, wealthy and trying to retire. They're all heading out the door at the same time. They all want to go play golf and vacation at the same time. Seventy is seventy five million baby boomers

are coming of age. They are tired, they're exhausted, they're worn out, They're just they want to change their scenery, change their mind. They may not want to retire, but they want to rewire. They want to go do something else. And those folks who the vast majority of those who created wealth and have high incomes who are retiring, all at the same time, in this demographic bomb that is about to go off in the next decade, This is

happening in the next ten years. And also, I say in the Business Plan for America, forty percent of this country today as black and brown, and within ten years it'll be a majority of minorities. And if we want to continue to be the sole superpower in the world and the biggest economic force in the world, those two things have always gone together. By the way, you never had a superpower that wasn't the economic power in the

history of the world. If we want that to happen, then our rich friends need make sure that our poor friends that don't do better if only this stay rich. I said that in my book How the Poor Can Save Capitalism. I think that was my third book. My rich friends need my poor friends to do better if only to stay rich. I'll go one step further. The racist even needs black people to succeed, if only because GDP grows, domestic product rises, lifts all boats. Even the

racist benefits and wins when black people succeed. So why is that important? Because this demographic shift is happening in a way and at a time where everybody who's built wealth and it's created great incomes. Are sort of walking off the stage at the same time, and the people coming on the stage haven't been given the memo on money and wealth creation. You make money during the day,

you build wealth in your sleep. Have not been taught financial literacy, the civil rights issue of this generation, have not been given the tools to go from the streets to the suites, have not been empowered to become owners of things that actually generate real wealth. You can make more money on money than you can ever make on labor. That's a word, as my friend t I would say say less. You can make more money on money you can ever make on your labor. So that's a podcast

for another time, when I will appeel that back. The silver tsunami is this. Please tell all your friends, please write this down. Seventy to seventy five million millennials retiring all the same time. The America has about one hundred and fifty trillion dollars of combined wealth, more wealth than any place in the world. One hundred and fifty trillion, fifty traine of that created in the last twenty years.

Please listen to me. So in the history of America, one hundred and fifty trillion dollars of combined assets of equity, of net worth of wealth. Okay, one hundred and fifty trillion dollars of wealth, and fifty training of that one hundred and fifty trillion was created since the year two thousand,

so the last twenty four years a massive increase. And at the same time, you've had this huge wave of millennials who are reaching the age of sixty five years of age and they're about to walk off the stage at the same time, and it's going to be a tsunami of sixty eight trillion to one hundred trillion dollars

of wealth transfer in the next decade. When that happens, those who own this wealth, who hold it, my guess is, are going to bestow through inheritance the house or homes, the stocks, the bonds, the cash, and to give it to those that they love. When they turn around to say and here's our business, the kids are gonna say, no, no, no, we're good. We don't want that. That's work. It's an old saying that applies. First generation makes it, second generation

spends it, third generation loses it. This is the second generation and they want to spend it. They don't want to work. I'm not saying they're lazy. I'm saying they want to benefit from their parents' activities. They want to enjoy their lives. Most of them are not going to want to run these businesses. Occasionally they will, but that's going to be fifteen to twenty percent. Please listen to me,

This is a gold mine. Fifteen to twenty percent of this tsunami of one hundred trillion dollars, just put the number right in the middle. Are going to be businesses that are going to transfer, that want to transfer, and there's no place to transfer them. To listen to me. Now, they have cash flow, they are profitable, they have employees, they have a customer lists. Many of them own real estate. They have inventories, they have distribution networks, they've got patents,

they've got intellectual property rights. The get excited. They have a brand for the company they exist. It's a million dollar business, a five million dollar business, a twenty million dollar business, a two hundred million dollar business. Occasionally there'll be a billion or two billion dollar privately owned business, and the kids don't want it. They have got to provide liquidity for their inheritance so they can go play off. They're gonna have to sell that business and it is

much easier. Please listen to me, right. My people at one Million Black Business Initiative can help you with this. My people with HOP inside our business Hope and Side locations. We have fifteen hundred locations across the country. My Hope financial coaches can help you with this. The US Small Business Administration, our partner can help you with this. There. Actually they'll be part of the financing. And I'm talking about here in a minute. But you want to buy

these businesses. If you're a black business owner, as I said earlier, ninety six percent of all your businesses don't have an employee. It's hard to finance that. I'm not saying give up on that business. Please hear me. I'm not saying don't start a business. I've started businesses. I get it. If you want to start a business, then you go and start. You want to be a startup entrepreneur, then you go do that. You want to be a

start off small business owner, you go do that. Yes, there's a difference between a business owner and an entrepreneur. A business owner has an existing business plan like a franchise. They're modeling an existing business plan. An entrepreneur is a crazy person like me doing something extraordinary and different, out of the box and normally fresh and new, creating value out of nothing. It's a French word built something out

of nothing. That's the word I learned when I was nine years old in financial literacy class in Compton, California, at Elsagondo and Colin B. Kelly Elementary School. With that banker, please hear me. It's much less risky, multiple times less risky to buy an existing business than it is to start a new one. Okay, if I haven't gotten your attention yet, please listen to me. It is really hard to get somebody to fund a two hundred thousand dollars dream.

You may have to use your own savings for that startup or that restaurant or that business, or whatever it is you want to do. I'm not saying don't do it. I'm saying it is multiple times harder to get financing a support for a two hundred thousand dollar business or a twenty thousand dollar business even than it is to buy a existing, profitable, twenty million dollar business. Yes, I said it. Let's make it let's put it. Let's make it even more relatable too. Maybe that brings dream was

too big for you. Listen to me. There's a two million dollar gas station, a two million dollar convenience store, a two million dollar restaurant, a two million dollar distribution center business in your neighborhood. It'll be for sale two

million dollars okay. And if it has as I mentioned in a recent podcast with one of my new friends who's an investment banker or private banker, a private equity guy, if the business has a million dollars in revenue, then you make an offer for it by that business for nine hundred thousand or a million dollars. Give you some quick rules of thumb. If the business has a one hundred thousand dollars of net profit, net profit, net of ebadot anyway net profit, you might offer up to ten

times net cash flow to buy that business. But that's getting into the weeds. An investment bank or a broker or business broker my team can help you figure out what's the best way to figure out the purchase price for a business. But the seller is going to tell you what they want for the business. The sellers running the business they've gotten advice and accountant from their accountants.

They know what they want. But whatever that number is, if it's a reasonable number, and certainly if you can discount the number a little bit ten fifteen percent off, you can get off that purchase price off of the appraise value or the estimated value that business. And you go to a private equity firm, you go to a venture capital backer, a venture backer. They maybe even I will back you inquiring that business on non recourse debt,

meaning you don't personally guarantee it. If you start that twenty thousand dollars business two hundred thousand dollars startup business, that's your cash, that's your If you get a loan, it's personally guaranteed. I'm telling you, I'm not telling you not to do it, and you may lose everything. I'm

not telling you not to do it. I'm telling you that all this existing stuff is about to hit A tsunami of opportunity is about to hit the market, all at the same time, with no place to go, no buyers, the kids don't want it, and they're profitable businesses in Wall Street will finance it. This is where I tell you about your credit score right. If you have a great credit score, you've got great The word credit comes on the lot of with word credito. Credibility is what

it means. That's when it comes credit credit. If you have credibility, you have good credit. Right, folks will we'll back you. If you have good reputation, good credit. Right, you understand capitalism, which comes from the Latin root word copy toask knowledge in the head, that's where it comes from,

then they will trust you with their capital. Banking is a trust business, so if you have good credit, you can tap capital by showing that you understand capitalism and free enterprise financial literacy, then capital sources will then trust you. And you show that you're a good manager and you can lead an enterprise, they will trust you. Put you right at the top of an existing business acquire that business,

which you then own. If you're interested in this, you can check out resources like biz Buy Sale and other industry specific brokers of businesses definement your businesses for sale. You can you can look at financing through the United States Small Business Administration. My friend Administrator Guzman who just saw this week, who is fantastic and her team at

the SBA. You can look at CDFI's community development financialitutions in your neighborhood who might finance acquisitions like this, and private equity partners and private equity firms like my company and others. I'm not telling you to come to me. I tend to finance my own stuff. I'm telling you, I'm saying that if you want understand what I do, it's private equity, all right, Just tend to happen to

back my own things and my own businesses. And then of course I backed Operation Hope, which is a nonprofit and make sure you get your get into a mentoring program engaged with minority business development organizations like Operation Hope, like the SBA SCORE program for guidance conduct due diligence, meaning check out this and do proper analysis on the business that you're thinking about buying. Uh, and never give up. Now I'm going to drop the mic. I'm going to

stop here. I've given you a half dozen strategies now on how you can build wealth. Practically, I laid it all out for you, but it star all starts it with financial financial literacy. Financial literacy is a civil rights issue of this generation. When you know better, you do better, and when you don't know better, you can't do better. We're not dumb and we're not stupid. It's what we don't know that we don't know this killing is. What

we think we know is an old Southern saying. If you don't have wisdom, then all I can give you is my own ignorance. Out of love, we pass down bad habits from generation to generation. Is what we don't know. That we don't know this killing is, but we think we know. So let's get in the know. Let's empower ourselves to transform our lives through wealth accumulation, wealth creation that Let's get money and have our freedom turn that

money into wealth, sustainable wealth. Let's master this game. Evil. Money is not evil. It's the love of money that's evil. The money is mentioned two thousand plus times in the Bible. I think it's evil about this. You got to understand this because even if you want to distribute money like a socialist, like a do gooder, which is great first

collected like a capitalist. Drop the mic. John O'Bryant, This is Money and Wealth on the Black Effect Network podcast series on iHeartRadio, and I encourage you to tell your friends to follow this podcast. I encourage you to buy the book Financial Literacy for All. I encourage you to call Operation Hope or download the Hope and Hand app and tell them that I sent you, and get your one thousand dollars scholarship for initial coaching and counseling through

one of my whole financial coaches. Tell them that I sent you. I encourage you to open a bank account for your child as early as you can. And don't just buy them a toy they're gonna break at birthdays and Christmas. Buy them a share of stock. There are companies that actually print a share of stock and you can put it up on your wall, on the kids wall. It's not a painting, is not a folk it's a real stock certificate that represents the stock that they own.

You can buy them a share of stock through this company, through companies like you know, these companies that gift. We can give a share of stock to a kid and they will send you a frame stock certificate for their wall, and that stock certificate then gives that kid a in you rights to all the financial information information for that

company publicly traded company. Think about how that empowers that kid and that stock which the kid now can can can Yeah, they can trade and sell it, but they can also track it for the rest of their life and use that as a baseline of conversation for financial literacy. All right, So I hope that you've enjoyed this. This has been a blast. I've been honored to share a little bit of my knowledge with you, and I've got some special stuff coming up in the next couple episodes.

So tell all your friends about this. Get the book Financial Literacy for All, and let's start a movement that started in the streets with civil rights and ends up in the business suites cutting deals with silver rights. The new colors not black or white, red or blue, It's green. I want you to have some. I'm out. Money and Wealth with John O'Brien is a production of the Black

Effect Podcast Network. For more podcasts from the Black Effect Podcast Network, visit the iHeartRadio app, Apple Podcasts, or wherever you listen to your favorite shows. The Potatotempt