Speaker 1: Welcome The Money in Wealth with John Hobryant, a production
Speaker 1: of the Black Effect Podcast Network and iHeartRadio. Hey, Hey, Hey,
Speaker 1: this is John Hope Bryant and this is the Money
Speaker 1: in Wealth podcast series coming to you every Thursday on
Speaker 1: the Black Effect Network and iHeart Radio. This is my
Speaker 1: weekly ministry of finance, coming to you with a message
Speaker 1: that will uplift your life and empower you to make
Speaker 1: your own decisions. It is possible, to quote a friend
Speaker 1: Chris Gorman, who's the CEO of Key Bank, which is
Speaker 1: with him a few weeks ago in Cleveland, Ohio, It's
Speaker 1: possible that the only true freedom is financial freedom because
Speaker 1: every other form of freedom can be taken from you.
Speaker 1: Think about that. Think about political freedom, more religious freedom,
Speaker 1: more societal freedoms. Even the right to vote has been
Speaker 1: threatened recently for some. So once you have financial freedom,
Speaker 1: unless you screw it up, no one can take that
Speaker 1: from you. It is yours. You are free to be.
Speaker 1: All money is is freedom, that's all it is. And
Speaker 1: you are buying your own freedom, you are paying for it,
Speaker 1: you are ensuring it in the future. This podcast this
Speaker 1: week is around creating a legacy of generational wealth that's
Speaker 1: right a legacy of generational wealth. I'm gonna give you
Speaker 1: three strategies to build at least a million dollar net worth.
Speaker 1: I'm gonna start with kids, and if we have some time,
Speaker 1: I'm gonna give you a bonus track that I think
Speaker 1: will also excite you. So let's see how we go.
Speaker 1: Here we go. If you have a child, or when
Speaker 1: you have a child and don't be in any rush
Speaker 1: to have a child, your life will change. Once that happens.
Speaker 1: Your priorities, if you're a good parent, becomes theirs. Okay, so,
Speaker 1: but if you have a child already, congratulations, you're doing
Speaker 1: one of the most important jobs in the world, giving
Speaker 1: life and creating a world changer, potentially a world changer.
Speaker 1: But you're going to need to put that person in
Speaker 1: a position to be a transformational force in this world,
Speaker 1: which means they should have resources. As you've heard me say,
Speaker 1: if you hang around nine bro people, you'll be the tenth.
Speaker 1: You don't want to be the two guys. This is
Speaker 1: a Reverend Jesse Jackson joke. You told me you don't
Speaker 1: want to be the two guys. The two hobos sitting
Speaker 1: at the train track. They've been kicked off the train
Speaker 1: for nonpayment, and they're upset. And one of the hobo
Speaker 1: looks at the other hobo and says, you know, I'm
Speaker 1: really upset. We were kicked off this train and people
Speaker 1: were rude to me, and I'm not gonna take it.
Speaker 1: I'm so upset. I'm gonna buy this here train system,
Speaker 1: this whole train set up, the train network, the train company.
Speaker 1: I'm gonna buy it, you know. The hobo turns to him,
Speaker 1: looks at him and says, you know, I'm upset too.
Speaker 1: I'm so upset, I'm gonna sell it to you. And
Speaker 1: both of them are so broke they can't pay attention,
Speaker 1: so poor they can't afford the Oh, are all right?
Speaker 1: I don't want you to be that guy, right are
Speaker 1: those guys? I don't want your children to even get
Speaker 1: anywhere close to that conversation. I want them to hit.
Speaker 1: I want you to be able to hit somebody with
Speaker 1: your American Express black car without putting, without physically touching them,
Speaker 1: just put it down on the table or whatever credit
Speaker 1: card you use. But in this example, I think you
Speaker 1: understand people understand and emerg spress black card knock somebody out.
Speaker 1: You don't you don't you don't need to argue with them,
Speaker 1: Just just don't. Don't argue with the weight or the restaurant.
Speaker 1: Buy the restaurant. If that is your preference, I can
Speaker 1: do it if I want to. If somebody was rude
Speaker 1: to me, I could buy the business, uh and put
Speaker 1: them out of business and run my own business, assuming
Speaker 1: the business was for sale or sellable. But resources is not,
Speaker 1: are not the issue? Isn't that a wonderful place to be.
Speaker 1: Let's put your child now, right now, in a position
Speaker 1: to be that person by the time they become an adult.
Speaker 1: So let's run through the numbers. I like math because
Speaker 1: of that doesn't have an opinion. Example number one, put
Speaker 1: your pen, take your pens out and pencils out, your
Speaker 1: pieces of paper or your digital device, and let's jot
Speaker 1: this down. So if a child invest two hundred dollars
Speaker 1: a month, starting in this example at age two, by
Speaker 1: the age of about forty, with a seven percent return annually,
Speaker 1: they'll reach a million dollars. So by the time they
Speaker 1: get married and are beginning their family, because of the
Speaker 1: setup that you've put in place at an early age,
Speaker 1: they're going to get the payoff of becoming a millionaire.
Speaker 1: For life that'll have a million dollars in principle, and
Speaker 1: not not any to do with the income that they make,
Speaker 1: the future income or other things that they do other investments.
Speaker 1: I'm talking about the efforts that you make. In this example,
Speaker 1: when they're two years old, you're going to invest for
Speaker 1: them two hundred dollars a month. I mean, you spend
Speaker 1: that on you know, Starbucks and cigarettes or you know,
Speaker 1: probably just a Starbucks budget. Right, Just think about the
Speaker 1: things you spend in a month two hundred dollars on.
Speaker 1: So you're going to invest two hundred dollars a month
Speaker 1: in the stock market on a conservative basis, and you're
Speaker 1: going to do that over a forty year period. Well,
Speaker 1: you're going to do the first part. Then you'll hopefully
Speaker 1: to raise a child who can finish that on their own,
Speaker 1: or if you're just really benevolent, you set them up
Speaker 1: on auto pay. Right. But by the time in this
Speaker 1: example that you started to and by the time they
Speaker 1: are forty to forty five years of age, they're worth
Speaker 1: a million dollars at an your return of seven percent.
Speaker 1: By the way, Operation Hope, the organization I found it
Speaker 1: now has an account, a bank account, a Hope Child
Speaker 1: Savings Account thanks to the leadership of Mayor Keisha Lance
Speaker 1: Bottoms when she was in office and now Mayor Andre
Speaker 1: Dickens and his administration, who's really amplified this and made
Speaker 1: it truly successful in the City of Atlanta City Council
Speaker 1: and the Atlanta Public Schools because of these working together
Speaker 1: institutions working together, who initially funded two million dollars into
Speaker 1: the Future of Kids, Operation Hope in partnership with the
Speaker 1: bank that domiciles our account, City Group, we now have
Speaker 1: a bank account for every kid in kindergarten in Atlanta
Speaker 1: Public Schools, and statistics have shown that if you give
Speaker 1: a kid an account in kindergarten and put a modest
Speaker 1: amount of money in that account, there's seventy five percent
Speaker 1: more likely to graduate from college. Did you hear that?
Speaker 1: Seventy five percent more likely to graduate from college. So
Speaker 1: we're setting them up to connect education back to aspiration.
Speaker 1: The light is on in the kid's head. They now
Speaker 1: plugged the socket in the back of the wall that
Speaker 1: connects education with aspiration. They got the memo on free enterprise,
Speaker 1: capitalist and economics and ownership at a young age, and
Speaker 1: they understand why they're being asked and inspired and told
Speaker 1: to go to school. So in this one example I'm
Speaker 1: giving you, I want you to think about opening this
Speaker 1: account at two years old or five years old, ten
Speaker 1: years old. Okay, So you say you started when the
Speaker 1: kids ten years of age. You're going to put two
Speaker 1: hundred dollars a month in that account, right, and by
Speaker 1: the age and you know, they get married whatever, let's
Speaker 1: say it's thirty right, Uh, they'll they'll be halfway to
Speaker 1: their mark by that time, maybe even more if the
Speaker 1: markets do better certain years. Right, but let's just say
Speaker 1: an average seven percent return. And you and as a
Speaker 1: you know, as a gift to them, their wedding gift,
Speaker 1: you say, I'm going to I'm going to put you
Speaker 1: on auto pay right for you know, the time that
Speaker 1: you're raising your children, their children, or you arrange with
Speaker 1: your your children to continue that two hundred dollars a
Speaker 1: month investment through auto pay. Don't You shouldn't do it manually,
Speaker 1: just just come out of your paycheck or their paycheck
Speaker 1: on a regular basis. But if I were you, I
Speaker 1: would just set this account up and just have it happening.
Speaker 1: And then when I retire from my job, not me,
Speaker 1: but if you were working a job retired for your job,
Speaker 1: you would make sure that the folks handling your finances
Speaker 1: your money knew that two hundred dollars a month would go.
Speaker 1: You won't even notice it. We're go on auto pay
Speaker 1: into this stock account. It'll just keep compounding and compounding
Speaker 1: and compounding. You can start at birth, Okay, you can
Speaker 1: start at the year two, you start a year five,
Speaker 1: year ten. Yes, you can start at year twenty. Yes,
Speaker 1: you can start when the kid is twenty years of age.
Speaker 1: Two hundred dollars a month it will be about sixty
Speaker 1: three years of age when they become a millionaire in
Speaker 1: that particular case. So that's why I'm suggesting do it early,
Speaker 1: because you want to give them the majority of their
Speaker 1: mature life. People are now living to eighty years of age.
Speaker 1: If you're and better, if you're in good health, you're
Speaker 1: giving them really the second half of their life to
Speaker 1: absolutely transform their life with these resources. We had a
Speaker 1: kid that went through our financial literacy program in Detroit.
Speaker 1: His name was Derek, and the program back then was
Speaker 1: called Banking on Our Future and as part of what
Speaker 1: we now call Hope Inside for Kids, where we taught
Speaker 1: financial literacy as you money. Many of you know. I've
Speaker 1: got my first financial literacy course when I was nine
Speaker 1: years old in Compton, California. Banker came to my classroom
Speaker 1: and taught me financial literacy. And I remember asking the
Speaker 1: banker what do you do for a living and how
Speaker 1: did you get rich legally? And I was dead serious.
Speaker 1: The banker had a red tie and a white shirt
Speaker 1: in a blue suit. Six ' to two issue was
Speaker 1: with the banker was from Bank of America. I remember
Speaker 1: all that, and they didn't want to be there. We
Speaker 1: didn't want them there, right, but their employer sent them in.
Speaker 1: It's part of the Community Reinvestment Act federal legislation that
Speaker 1: requires banks to reinvest in communities, which, by the way,
Speaker 1: I opporation. He participates in CRA today as so it's
Speaker 1: full circle for me. Anyway, banker comes to our classroom
Speaker 1: once a week for four weeks, six weeks. I'm sorry
Speaker 1: for forty five minutes each. First week, we didn't want
Speaker 1: him there. He didn't want to be there. We made
Speaker 1: it clear, he made it clear. The energy was like
Speaker 1: not was not positive. Second week, you're like, you know,
Speaker 1: you can't sort of remind me of my children you're
Speaker 1: not so bad. You're not so bad for a white guy.
Speaker 1: So we started a conversation and built a relationship. And
Speaker 1: I'm like, well, look, you got a suit on. But
Speaker 1: every only the person I know who's white with a
Speaker 1: suit on before you as a detective. And it wasn't
Speaker 1: a good suit. It was polyester. Your suit is Italian design,
Speaker 1: It's got a nice, beautiful stitching. Your Egyptian cotton is
Speaker 1: your shirt. You know. I didn't say that then, I
Speaker 1: know it now. I mean, it's just beautiful. You have
Speaker 1: a car in the garage in the parking lot. It's
Speaker 1: got tags on it. It's legal. No one's chasing you.
Speaker 1: You have a business card that says sixteenth floor on it.
Speaker 1: There's nothing in compton Y on the sixth or eighth floor.
Speaker 1: That's the courthouse. Everything else is one or two floors.
Speaker 1: So where did you come from? And you're in the
Speaker 1: middle here in the middle of the day. My mother
Speaker 1: could not show him in the middle of the day
Speaker 1: because she worked an hourly job with two fifteen minute breaks.
Speaker 1: One Nita Smith, who died a millionaire by the way,
Speaker 1: passed away a millionaire millionaire net worth when she passed
Speaker 1: away a year ago. Last month, she's been promoted and
Speaker 1: had died with a credit score of eight fifty four
Speaker 1: last time when we pulled their credit So she wasn't black,
Speaker 1: she was green. When she went to the computer, the
Speaker 1: computer just said yes. So this banker you know, was
Speaker 1: there in the middle of the day and they were
Speaker 1: on a salary. I didn't know what a salary was,
Speaker 1: and they had a business card. Sixteen floor, sixteen floors,
Speaker 1: Like I met a Marsham. Who are you? Where'd you
Speaker 1: come from? Like? What do you do for a living? Again?
Speaker 1: And how'd you get rich? Legally? He said, I'm a
Speaker 1: banker and I finance entrepreneurs. I said, sir, I don't
Speaker 1: know what an entrepreneur is, but if it's legal and
Speaker 1: you're financing it, I'm going to be you know. I've
Speaker 1: told the story in other ways. You can read in
Speaker 1: my book Financial Literacy for All, which by the way,
Speaker 1: is number one continues to be the number one business
Speaker 1: finance book in the country eight months in a running.
Speaker 1: So everybody who bought the book, thank you. If you
Speaker 1: bought the book, signed the book, well mark it up,
Speaker 1: underline scratch. You use it as a work book for
Speaker 1: your family to co ovid. The plan I've given you
Speaker 1: now and the plan we continue to give you in
Speaker 1: this weekly podcast. And when you're finished with the book
Speaker 1: or buy an extra book, put your family name in
Speaker 1: the book and donate that book to a title I school,
Speaker 1: a struggling school in your a resource struggling school in
Speaker 1: your neighborhood, and or the public libraries. And then go
Speaker 1: in and teach financial literacy after making a Hope commitment
Speaker 1: on the website for Operation Hope to show us so
Speaker 1: we can brag on you in the world that you're
Speaker 1: in your community making a difference. Register that Hope commitment
Speaker 1: with us. Back to the story. So I'm in the class,
Speaker 1: and this banker's inspired me to become an entrepreneur, teaching
Speaker 1: me financial literacy. And I started my first business at
Speaker 1: ten years of age, neighborhood candy house. Again, it's in
Speaker 1: the book Financial Literacy for all this whole story, so
Speaker 1: I won't tell it now, and I do well. I
Speaker 1: made three hundred dollars a week on a forty dollars investment,
Speaker 1: put the liquor storeut of the candy business. Found girls
Speaker 1: lost a business recurring theme in my life. But I'm
Speaker 1: married changed for but it changed my life. This whole
Speaker 1: mindset shift changed my life. Then I asked this banker,
Speaker 1: going back to the class, excuse me, so are there
Speaker 1: any more like you? Like? Just are you the only banker?
Speaker 1: And he said, well, of course not there. You know,
Speaker 1: there are a couple hundred thousand bankers at Bank of
Speaker 1: America alone. And I said, wait a minute. Your job
Speaker 1: is to lend poor people money, and all I have
Speaker 1: to do is prove to you I can pay you
Speaker 1: back based on the stuff you've been teaching me the
Speaker 1: last six weeks in this financial literacy course. He says, yeah,
Speaker 1: that's right, and I don't get dead if I don't
Speaker 1: pay you back. Excuse me, yes, you know, you go
Speaker 1: on the street behind me and get that and get
Speaker 1: a loan from Pooky and them. You don't pay that back,
Speaker 1: you'd be dead. Our neighbor was prison, probation, parole, and death.
Speaker 1: Those were your alternatives if things went wrong. And he said, no,
Speaker 1: young man, I'm not gonna No one's gonna harm you.
Speaker 1: You're going to notice a default. I said, wait a minute,
Speaker 1: to slow down. You're gonna send me a piece of paper, right.
Speaker 1: I didn't realize the credit score. These were so important things.
Speaker 1: You don't want to default on obligations. Clearly you want
Speaker 1: to honor them and follow you for the rest of
Speaker 1: your life. But I was a kid, I'm like, wait
Speaker 1: a minute, I'm using people dying around me. I saw
Speaker 1: two murders before I was nine years old. The worst
Speaker 1: thing's gonna happen to me is you're gonna put something
Speaker 1: on my record. Yes, okay, I now would have to
Speaker 1: know what I'm gonna do for the rest of my life.
Speaker 1: I'm gonna become an entrepreneur, and I now know ultimately
Speaker 1: what I'm gonna do for the rest of everybody else's life.
Speaker 1: I'm gonna teach them how this game works by making
Speaker 1: them bank qualified, showing them financial literacy, showing how to
Speaker 1: get access to credited prime rates. And I didn't really
Speaker 1: at ten years of age, had already preordained my destiny
Speaker 1: of what I was going to be could be my
Speaker 1: contribution to society, which is Operation to Hope. Today, we're
Speaker 1: the larges on the ground delivery system for financial literacy
Speaker 1: in America, fifteen hundred offices forty two states for to
Speaker 1: have billion dollars invested in underserved communities, millions of clients,
Speaker 1: countless impacts that started when I was ten years old,
Speaker 1: nine years old in that classroom, and one of those
Speaker 1: impacts with this young man Derek in Detroit Public Schools.
Speaker 1: And so Mary Haggarty, now Mary Ayerson, who's our president
Speaker 1: for partnerships back then, was I think in charge of programs.
Speaker 1: We land Strigs runs programs. Today. We were in this classroom,
Speaker 1: We're in the school and the young man Derek, and
Speaker 1: this is really Mary's story, but I'm going to put
Speaker 1: myself into this story because I'm the storyteller here. Same thing,
Speaker 1: marry me saying, opreat show, same thing. We're there in
Speaker 1: this classroom, teaching financial literacy, and Derek is coming out
Speaker 1: of the classroom. He's wearing a suit just like me.
Speaker 1: And Derek's you know, you know, applauded for being taught
Speaker 1: financial literacy and paying attention and modeling the volunteer banker.
Speaker 1: He's been modeling this banker banker every once a week
Speaker 1: for weeks, just like I did. And as he's walking
Speaker 1: out the classroom, his friends quotation marks Dart teasing him, Man, Derek,
Speaker 1: while you're wearing that dumb suit. That's a dumb suit.
Speaker 1: Why would you wear what you're looking like that banker.
Speaker 1: You need to come over here, and you need to
Speaker 1: dress like us. You need to hang out like us.
Speaker 1: And so we go over and say to Derek, in
Speaker 1: the midst of him being sort of emotionally jumped on
Speaker 1: the bully, look, you need to take this seventy dollars
Speaker 1: to make a decision about Nike. You and your boys.
Speaker 1: We're going to give you all a chance to make
Speaker 1: a decision about Nike. And mind you, this is a
Speaker 1: long time ago. This, you know, probably twenty years ago. Okay,
Speaker 1: so you know, make a decision about mikey here, Nike
Speaker 1: here seventy dollars, which back then would have brought you
Speaker 1: a share of Nike. So, Derek, you know this is great.
Speaker 1: I want to buy a share of Nike stock. The
Speaker 1: friends say, oh, man, what are you doing. That's stupid. Well,
Speaker 1: here's another stupid thing you're doing. Heck, would you want
Speaker 1: to buy some stupid stock? You want to buy you
Speaker 1: some Air Jordans. That's right, everybody know air Jordan's. Look
Speaker 1: look around, there's folks with future air Jordans on even leather,
Speaker 1: air Jordans, canvas, air Jordans, black, brown tan Air Jordan's
Speaker 1: multi colored air Jordan's special limited edition Air Jordans. Don't
Speaker 1: weren't you at the store with us when everybody's walking
Speaker 1: around standing around the corner and get there the latest
Speaker 1: edition air Jordan's. You need to get you some air Jordans.
Speaker 1: You're not coolest, you've got some Air Jordans. They're just
Speaker 1: pololing this kid with their information with sometimes with friends
Speaker 1: like this, who needs enemies? So we stop them, Hey, hey, hey, hey,
Speaker 1: we go to defend Derek's honor. And Derek says, no, no, no,
Speaker 1: no, no no no no no no no, it's cool. I
Speaker 1: want them to buy those shoes because when they do,
Speaker 1: they're making me money. Boom, drop the mic. So Derek
Speaker 1: got the memo. Derek understood that he's a shareholder. Do
Speaker 1: you know that Black America, as an example, is one
Speaker 1: of the largest consumer spending forces in the world one
Speaker 1: point six give or take trillion dollars, But ninety plus
Speaker 1: percent of that is consumer spending consumption, not consumer spending.
Speaker 1: Consumption is not going in. Anything that renews itself or
Speaker 1: investment itself is consumption. Right, We're just feeding the beast, right,
Speaker 1: And ninety six percent I believe it is off my
Speaker 1: memory of all black businesses are sole proprietorships. Right, you're
Speaker 1: not compounding, not building that, You're just a self employment project. Right.
Speaker 1: We're not dumb and we're not stupid. Is when the
Speaker 1: rules of publishing plain fuels level, we kill it. We
Speaker 1: become experts. And where's that happened? Professional sports and the arts,
Speaker 1: faith in community, faith, church politics were the rules of
Speaker 1: publishing the plainfields level. We absolutely kill it. We succeed,
Speaker 1: but no one taught us the lessons of free enterprise,
Speaker 1: capitalism's economics and opportunity. And Derek Young, Derek may be broke,
Speaker 1: but he'll never be poor. There's a difference between being
Speaker 1: broken being poor. Being broke as economic. Being poor is
Speaker 1: a disabling frame of mind, a depressed condition of your spirit.
Speaker 1: You must vow never ever, ever to be poor again.
Speaker 1: It's okay if you don't like me, I like me,
Speaker 1: I really respect me, and learn to like me. Then
Speaker 1: like me and never respect me. Or as Quincy Jones
Speaker 1: once told me, not went out to My self esteem
Speaker 1: depends on your acceptance of me. Derek is an eagle,
Speaker 1: even if he's surrounded our buzzers and turkeys. He may
Speaker 1: be broke occasionally, that happens in life, but he will
Speaker 1: never be poor because he's been empowered with the civil
Speaker 1: rights issue of this generation financial literacy. Now he's become
Speaker 1: a stockholder. Do you know when you own one share
Speaker 1: of stock of any publicly traded company, please listen to me. Now,
Speaker 1: one share stock of any publicly traded company, you have
Speaker 1: the right to get financials and all the inside information
Speaker 1: from that company. One share of stock. So now we're
Speaker 1: gonna switch switch from the story of Derek and the
Speaker 1: story of the kid who has become who started as
Speaker 1: a as a young investor with the help of their
Speaker 1: parents and maybe their part time job, and became by
Speaker 1: middle age a millionaire. And if, by the way, if
Speaker 1: you want to double it up and put four hundred
Speaker 1: dollars a month in compounding seven percent, you can cut
Speaker 1: the time in half that that young kid of yours
Speaker 1: becomes a millionaire. But four hundred dollars a month is
Speaker 1: probably a heavy clip that's a car note for somebody,
Speaker 1: or a part of a car note. So I'm trying
Speaker 1: to be sensitive to the fact that he's are working families.
Speaker 1: So two hundred dollars a month is probably something you
Speaker 1: could probably do. Let's now switch to a working class family.
Speaker 1: Then I'm gonna now switch to the big baller option
Speaker 1: to build real wealth before we re stop this podcast episode. So,
Speaker 1: now you're a working class person, right. The family makes
Speaker 1: fifty thousand dollars a year, and there's somebody in your
Speaker 1: family that you get along with who makes thirty five
Speaker 1: thousand and thirty eight thousand dollars a year with three kids. Okay,
Speaker 1: so slow down. This is the average family, by the way. Okay,
Speaker 1: working class family. So you make fifty thousand dollars a year.
Speaker 1: I'm going to show you how to become a millionaire
Speaker 1: in about five to eight years. Okay, So I want
Speaker 1: you to do what my mother did. My mother died
Speaker 1: got wrestler, so a millionaire when she passed away. She
Speaker 1: had worked an hourly job when he dismissed. She's in
Speaker 1: the book for the Introlusory for All read about her
Speaker 1: high school education, got her high school equivalency when she
Speaker 1: was sixty plus years of age, walked with those with
Speaker 1: cap and gown in eighteen years of age, just to
Speaker 1: prove she could do it. This is a bad woman.
Speaker 1: Credit Grady fifty four okay, hourly job Now, So I
Speaker 1: want you to buy a home. Number one way you
Speaker 1: build wealth in America is home ownership. Don't buy a
Speaker 1: many man. She don't buy something fancy. So I'm trying
Speaker 1: to depress people. You don't know what money. You don't
Speaker 1: have to discuss it and brag it by things that
Speaker 1: don't matter. With people you have no clue if you'll
Speaker 1: ever see again, and it doesn't really care. It shouldn't
Speaker 1: matter to you whether you impress them or not. Right,
Speaker 1: I want you to buy a home, and I want
Speaker 1: you to live in it. Right, and after a couple
Speaker 1: of three years, I want you to take a modest
Speaker 1: line of credit out and buy another home in a
Speaker 1: working class neighborhood. I want you to buy the worst
Speaker 1: house on the best block. And now your cousin or
Speaker 1: sister or brother, somebody you know makes thirty eight thirty
Speaker 1: five thirty eight thousand dollars a year with three children,
Speaker 1: I want you to cut a deal with them and
Speaker 1: start a limited liability corporation. Document this business is not personal.
Speaker 1: Keep it business. You're going to say to them, do
Speaker 1: you know about the EITC. They're going to say, what's
Speaker 1: that you're going to say congratulations. You've just got to
Speaker 1: check because if you have never heard of EITC, and
Speaker 1: you make less than sixty thousand dollars sixty five thousand
Speaker 1: dollars a year, the government owes you a check for working.
Speaker 1: In this example, i'm hitting us sweet spot of thirty
Speaker 1: eight thousand dollars a year in income and three children.
Speaker 1: Thirty five thirty eight thousand dollars a year in income
Speaker 1: and three children, that person gets a check between six
Speaker 1: and seventy five hundred, six thousand and seventy five hundred
Speaker 1: dollars cash. It's called the Earned Income Tax Credit. My
Speaker 1: coaches at Operation Hope can help you through the VITA
Speaker 1: sites and through Operation Hope to amend or file your
Speaker 1: tax returns so you can get this payment and make
Speaker 1: sure it goes into a bank account, an FDIC insured bank. Okay,
Speaker 1: Now you turn to your cousin and you say, no,
Speaker 1: you never heard of EC before. Nope, never heard of it. Great, congratulations,
Speaker 1: because it's retroactive for three years, so if you've never filed,
Speaker 1: to get up to three years of that. So three
Speaker 1: years time. Let's keep a simple number, six thousand dollars
Speaker 1: that's eighteen thousand dollars rounded up to twenty thousand dollars,
Speaker 1: you know, just under twenty thousand dollars, and you're going
Speaker 1: to use that as a down payment for this house.
Speaker 1: In this South east region, you can buy a house
Speaker 1: that needs rehab for you know, sixty thousand dollars. Still,
Speaker 1: even if it's one hundred thousand dollars, you have more
Speaker 1: than ten percent to require for a down payment, you know,
Speaker 1: buy the house. You're gonna get a rehab loan hopefully.
Speaker 1: Are you going to use this earned income tax headed
Speaker 1: money for credit money I'm talking about, and there are
Speaker 1: other funds that are available to you that through financial
Speaker 1: livercy education you'll learn about when you talk to my coaches.
Speaker 1: You're gonna take this money and you're going to you're
Speaker 1: going to read in you and and members of your
Speaker 1: family hopefully on the weekend. Or you're gonna and or
Speaker 1: you're gonna get a proper construction loan and get vendors,
Speaker 1: proper vendors, not your cousin Jojo right, somebody who's qualified
Speaker 1: to rehab this property with minority vendors. So you're reinvesting,
Speaker 1: reinvesting in the neighborhood. You're going to rehabit and you're
Speaker 1: gonna rent it and make a long story short over
Speaker 1: a period of time six years in an example, you're
Speaker 1: gonna do that twice. You own your own home, and
Speaker 1: you're going to buy two properties in the worst house
Speaker 1: in the best block. You're going to rehabit and rent
Speaker 1: that property and hold it, do not sell, and you
Speaker 1: get a will. A one page will is a nice
Speaker 1: is a good place to start. And you can get
Speaker 1: a life insurance policy. As a young couple or a
Speaker 1: young person doing this, you get a life insurance policy
Speaker 1: if you're in decent health. For a term policy, you
Speaker 1: can get a whole life. But a term policy will
Speaker 1: cost you ten dollars twenty five dollars a month, even
Speaker 1: as much as a million dollar policy. You can get
Speaker 1: for less than hundred dollars a month, probably more like
Speaker 1: fifty dollars a month if you're in decent health. I've
Speaker 1: heard as low as twenty five dollars a month. Somebody
Speaker 1: and really young person in good health, and you don't
Speaker 1: know all long you're go on live, but you dang
Speaker 1: sure to know you're gonna die. What's the mystery? So
Speaker 1: you're gonna make a million times too, because you're gonna
Speaker 1: be a mid worth a million dollars of networth irrespective
Speaker 1: of the job you're working, based on the real estate value,
Speaker 1: the appreciation and net equity in the properties that you
Speaker 1: accumulate over time. Right, So within a decade, without question,
Speaker 1: you'll be a millionaire. And when you pass on the
Speaker 1: glory at some point, you will because you have a
Speaker 1: life insurance policy and a will you're going to bestow
Speaker 1: upon your children or those you love, a mother or
Speaker 1: whoever you're trying to hook up, life etc. A husband
Speaker 1: a million dollars of life insurance policy in this example,
Speaker 1: generational wealth. I've even gotten to the good part. So
Speaker 1: I've given you now two three strategies, right that are
Speaker 1: very practical. This is the power of financial literacy. Now
Speaker 1: here's the last one. And I want anybody who's really
Speaker 1: those who I really want to pay attention to this
Speaker 1: are the strivers, those who want to be small business owners,
Speaker 1: those who want to be entrepreneurs, those those with high
Speaker 1: ambitions to not just you know, have live a middle
Speaker 1: class life. They want to build. They want to write
Speaker 1: the check, not just cash it. Somebody making six figures
Speaker 1: who has been able to put a little bit aside.
Speaker 1: They don't want to work for the man anymore. Are
Speaker 1: the one man? Right? I want you to hear what
Speaker 1: I'm saying. There's a silver tsunami coming your way. Listen,
Speaker 1: now write this down, a silver tsunami. You've heard me
Speaker 1: talk about the silver rights movement, from the streets to
Speaker 1: the suites, from civil rights to silver rights. This is
Speaker 1: a different kind of silver. By the way, did you
Speaker 1: know that the first backer of currency in America was
Speaker 1: not gold? The first backing currency was silver. A little
Speaker 1: factoid for you. It went from silver to gold, and
Speaker 1: then it went We got off the gold standard, and
Speaker 1: now US currency is backed by the full faith in
Speaker 1: currency the US government, which means America, which is the
Speaker 1: only flight to quality currency in the world, is a
Speaker 1: big baller shot collar. Everybody wants to invest in America
Speaker 1: and have American currency. I don't care what anybody tells you.
Speaker 1: We are what China and Russia. Everybody's complaining about US.
Speaker 1: They want to be US, and they're buying. Once the
Speaker 1: TV cameras turn off, Putin and all those people are
Speaker 1: buying assets in America. And I want you to understand
Speaker 1: the value of the thing that everybody else once and
Speaker 1: we're looking right past. So here you go. Please write
Speaker 1: this down. I've written this extensively, about this extensively in
Speaker 1: the Business Plan for America. You can look it up online.
Speaker 1: All the statistical data is in there. You can download it.
Speaker 1: Read my Time magazine op ED where I talk about
Speaker 1: inclusive economics as a software upgrade on DEE and I
Speaker 1: here we go with it. Is generation you're going to
Speaker 1: have for the first time in history, a majority of
Speaker 1: individuals adults over the age of sixty five. It's never happened.
Speaker 1: These are baby boomers read white, wealthy and trying to retire.
Speaker 1: They're all heading out the door at the same time.
Speaker 1: They all want to go play golf and vacation at
Speaker 1: the same time. Seventy is seventy five million baby boomers
Speaker 1: are coming of age. They are tired, they're exhausted, they're
Speaker 1: worn out, They're just they want to change their scenery,
Speaker 1: change their mind. They may not want to retire, but
Speaker 1: they want to rewire. They want to go do something else.
Speaker 1: And those folks who the vast majority of those who
Speaker 1: created wealth and have high incomes who are retiring, all
Speaker 1: at the same time, in this demographic bomb that is
Speaker 1: about to go off in the next decade, This is
Speaker 1: happening in the next ten years. And also, I say
Speaker 1: in the Business Plan for America, forty percent of this
Speaker 1: country today as black and brown, and within ten years
Speaker 1: it'll be a majority of minorities. And if we want
Speaker 1: to continue to be the sole superpower in the world
Speaker 1: and the biggest economic force in the world, those two
Speaker 1: things have always gone together. By the way, you never
Speaker 1: had a superpower that wasn't the economic power in the
Speaker 1: history of the world. If we want that to happen,
Speaker 1: then our rich friends need make sure that our poor
Speaker 1: friends that don't do better if only this stay rich.
Speaker 1: I said that in my book How the Poor Can
Speaker 1: Save Capitalism. I think that was my third book. My
Speaker 1: rich friends need my poor friends to do better if
Speaker 1: only to stay rich. I'll go one step further. The
Speaker 1: racist even needs black people to succeed, if only because
Speaker 1: GDP grows, domestic product rises, lifts all boats. Even the
Speaker 1: racist benefits and wins when black people succeed. So why
Speaker 1: is that important? Because this demographic shift is happening in
Speaker 1: a way and at a time where everybody who's built
Speaker 1: wealth and it's created great incomes. Are sort of walking
Speaker 1: off the stage at the same time, and the people
Speaker 1: coming on the stage haven't been given the memo on
Speaker 1: money and wealth creation. You make money during the day,
Speaker 1: you build wealth in your sleep. Have not been taught
Speaker 1: financial literacy, the civil rights issue of this generation, have
Speaker 1: not been given the tools to go from the streets
Speaker 1: to the suites, have not been empowered to become owners
Speaker 1: of things that actually generate real wealth. You can make
Speaker 1: more money on money than you can ever make on labor.
Speaker 1: That's a word, as my friend t I would say
Speaker 1: say less. You can make more money on money you
Speaker 1: can ever make on your labor. So that's a podcast
Speaker 1: for another time, when I will appeel that back. The
Speaker 1: silver tsunami is this. Please tell all your friends, please
Speaker 1: write this down. Seventy to seventy five million millennials retiring
Speaker 1: all the same time. The America has about one hundred
Speaker 1: and fifty trillion dollars of combined wealth, more wealth than
Speaker 1: any place in the world. One hundred and fifty trillion,
Speaker 1: fifty traine of that created in the last twenty years.
Speaker 1: Please listen to me. So in the history of America,
Speaker 1: one hundred and fifty trillion dollars of combined assets of equity,
Speaker 1: of net worth of wealth. Okay, one hundred and fifty
Speaker 1: trillion dollars of wealth, and fifty training of that one
Speaker 1: hundred and fifty trillion was created since the year two thousand,
Speaker 1: so the last twenty four years a massive increase. And
Speaker 1: at the same time, you've had this huge wave of
Speaker 1: millennials who are reaching the age of sixty five years
Speaker 1: of age and they're about to walk off the stage
Speaker 1: at the same time, and it's going to be a
Speaker 1: tsunami of sixty eight trillion to one hundred trillion dollars
Speaker 1: of wealth transfer in the next decade. When that happens,
Speaker 1: those who own this wealth, who hold it, my guess is,
Speaker 1: are going to bestow through inheritance the house or homes,
Speaker 1: the stocks, the bonds, the cash, and to give it
Speaker 1: to those that they love. When they turn around to
Speaker 1: say and here's our business, the kids are gonna say, no, no, no,
Speaker 1: we're good. We don't want that. That's work. It's an
Speaker 1: old saying that applies. First generation makes it, second generation
Speaker 1: spends it, third generation loses it. This is the second
Speaker 1: generation and they want to spend it. They don't want
Speaker 1: to work. I'm not saying they're lazy. I'm saying they
Speaker 1: want to benefit from their parents' activities. They want to
Speaker 1: enjoy their lives. Most of them are not going to
Speaker 1: want to run these businesses. Occasionally they will, but that's
Speaker 1: going to be fifteen to twenty percent. Please listen to me,
Speaker 1: This is a gold mine. Fifteen to twenty percent of
Speaker 1: this tsunami of one hundred trillion dollars, just put the
Speaker 1: number right in the middle. Are going to be businesses
Speaker 1: that are going to transfer, that want to transfer, and
Speaker 1: there's no place to transfer them. To listen to me. Now,
Speaker 1: they have cash flow, they are profitable, they have employees,
Speaker 1: they have a customer lists. Many of them own real estate.
Speaker 1: They have inventories, they have distribution networks, they've got patents,
Speaker 1: they've got intellectual property rights. The get excited. They have
Speaker 1: a brand for the company they exist. It's a million
Speaker 1: dollar business, a five million dollar business, a twenty million
Speaker 1: dollar business, a two hundred million dollar business. Occasionally there'll
Speaker 1: be a billion or two billion dollar privately owned business,
Speaker 1: and the kids don't want it. They have got to
Speaker 1: provide liquidity for their inheritance so they can go play off.
Speaker 1: They're gonna have to sell that business and it is
Speaker 1: much easier. Please listen to me, right. My people at
Speaker 1: one Million Black Business Initiative can help you with this.
Speaker 1: My people with HOP inside our business Hope and Side locations.
Speaker 1: We have fifteen hundred locations across the country. My Hope
Speaker 1: financial coaches can help you with this. The US Small
Speaker 1: Business Administration, our partner can help you with this. There.
Speaker 1: Actually they'll be part of the financing. And I'm talking
Speaker 1: about here in a minute. But you want to buy
Speaker 1: these businesses. If you're a black business owner, as I
Speaker 1: said earlier, ninety six percent of all your businesses don't
Speaker 1: have an employee. It's hard to finance that. I'm not
Speaker 1: saying give up on that business. Please hear me. I'm
Speaker 1: not saying don't start a business. I've started businesses. I
Speaker 1: get it. If you want to start a business, then
Speaker 1: you go and start. You want to be a startup entrepreneur,
Speaker 1: then you go do that. You want to be a
Speaker 1: start off small business owner, you go do that. Yes,
Speaker 1: there's a difference between a business owner and an entrepreneur.
Speaker 1: A business owner has an existing business plan like a franchise.
Speaker 1: They're modeling an existing business plan. An entrepreneur is a
Speaker 1: crazy person like me doing something extraordinary and different, out
Speaker 1: of the box and normally fresh and new, creating value
Speaker 1: out of nothing. It's a French word built something out
Speaker 1: of nothing. That's the word I learned when I was
Speaker 1: nine years old in financial literacy class in Compton, California,
Speaker 1: at Elsagondo and Colin B. Kelly Elementary School. With that banker,
Speaker 1: please hear me. It's much less risky, multiple times less
Speaker 1: risky to buy an existing business than it is to
Speaker 1: start a new one. Okay, if I haven't gotten your
Speaker 1: attention yet, please listen to me. It is really hard
Speaker 1: to get somebody to fund a two hundred thousand dollars dream.
Speaker 1: You may have to use your own savings for that
Speaker 1: startup or that restaurant or that business, or whatever it
Speaker 1: is you want to do. I'm not saying don't do it.
Speaker 1: I'm saying it is multiple times harder to get financing
Speaker 1: a support for a two hundred thousand dollar business or
Speaker 1: a twenty thousand dollar business even than it is to
Speaker 1: buy a existing, profitable, twenty million dollar business. Yes, I
Speaker 1: said it. Let's make it let's put it. Let's make
Speaker 1: it even more relatable too. Maybe that brings dream was
Speaker 1: too big for you. Listen to me. There's a two
Speaker 1: million dollar gas station, a two million dollar convenience store,
Speaker 1: a two million dollar restaurant, a two million dollar distribution
Speaker 1: center business in your neighborhood. It'll be for sale two
Speaker 1: million dollars okay. And if it has as I mentioned
Speaker 1: in a recent podcast with one of my new friends
Speaker 1: who's an investment banker or private banker, a private equity guy,
Speaker 1: if the business has a million dollars in revenue, then
Speaker 1: you make an offer for it by that business for
Speaker 1: nine hundred thousand or a million dollars. Give you some
Speaker 1: quick rules of thumb. If the business has a one
Speaker 1: hundred thousand dollars of net profit, net profit, net of
Speaker 1: ebadot anyway net profit, you might offer up to ten
Speaker 1: times net cash flow to buy that business. But that's
Speaker 1: getting into the weeds. An investment bank or a broker
Speaker 1: or business broker my team can help you figure out
Speaker 1: what's the best way to figure out the purchase price
Speaker 1: for a business. But the seller is going to tell
Speaker 1: you what they want for the business. The sellers running
Speaker 1: the business they've gotten advice and accountant from their accountants.
Speaker 1: They know what they want. But whatever that number is,
Speaker 1: if it's a reasonable number, and certainly if you can
Speaker 1: discount the number a little bit ten fifteen percent off,
Speaker 1: you can get off that purchase price off of the
Speaker 1: appraise value or the estimated value that business. And you
Speaker 1: go to a private equity firm, you go to a
Speaker 1: venture capital backer, a venture backer. They maybe even I
Speaker 1: will back you inquiring that business on non recourse debt,
Speaker 1: meaning you don't personally guarantee it. If you start that
Speaker 1: twenty thousand dollars business two hundred thousand dollars startup business,
Speaker 1: that's your cash, that's your If you get a loan,
Speaker 1: it's personally guaranteed. I'm telling you, I'm not telling you
Speaker 1: not to do it, and you may lose everything. I'm
Speaker 1: not telling you not to do it. I'm telling you
Speaker 1: that all this existing stuff is about to hit A
Speaker 1: tsunami of opportunity is about to hit the market, all
Speaker 1: at the same time, with no place to go, no buyers,
Speaker 1: the kids don't want it, and they're profitable businesses in
Speaker 1: Wall Street will finance it. This is where I tell
Speaker 1: you about your credit score right. If you have a
Speaker 1: great credit score, you've got great The word credit comes
Speaker 1: on the lot of with word credito. Credibility is what
Speaker 1: it means. That's when it comes credit credit. If you
Speaker 1: have credibility, you have good credit. Right, folks will we'll
Speaker 1: back you. If you have good reputation, good credit. Right,
Speaker 1: you understand capitalism, which comes from the Latin root word
Speaker 1: copy toask knowledge in the head, that's where it comes from,
Speaker 1: then they will trust you with their capital. Banking is
Speaker 1: a trust business, so if you have good credit, you
Speaker 1: can tap capital by showing that you understand capitalism and
Speaker 1: free enterprise financial literacy, then capital sources will then trust you.
Speaker 1: And you show that you're a good manager and you
Speaker 1: can lead an enterprise, they will trust you. Put you
Speaker 1: right at the top of an existing business acquire that business,
Speaker 1: which you then own. If you're interested in this, you
Speaker 1: can check out resources like biz Buy Sale and other
Speaker 1: industry specific brokers of businesses definement your businesses for sale.
Speaker 1: You can you can look at financing through the United
Speaker 1: States Small Business Administration. My friend Administrator Guzman who just
Speaker 1: saw this week, who is fantastic and her team at
Speaker 1: the SBA. You can look at CDFI's community development financialitutions
Speaker 1: in your neighborhood who might finance acquisitions like this, and
Speaker 1: private equity partners and private equity firms like my company
Speaker 1: and others. I'm not telling you to come to me.
Speaker 1: I tend to finance my own stuff. I'm telling you,
Speaker 1: I'm saying that if you want understand what I do,
Speaker 1: it's private equity, all right, Just tend to happen to
Speaker 1: back my own things and my own businesses. And then
Speaker 1: of course I backed Operation Hope, which is a nonprofit
Speaker 1: and make sure you get your get into a mentoring
Speaker 1: program engaged with minority business development organizations like Operation Hope,
Speaker 1: like the SBA SCORE program for guidance conduct due diligence,
Speaker 1: meaning check out this and do proper analysis on the
Speaker 1: business that you're thinking about buying. Uh, and never give up.
Speaker 1: Now I'm going to drop the mic. I'm going to
Speaker 1: stop here. I've given you a half dozen strategies now
Speaker 1: on how you can build wealth. Practically, I laid it
Speaker 1: all out for you, but it star all starts it
Speaker 1: with financial financial literacy. Financial literacy is a civil rights
Speaker 1: issue of this generation. When you know better, you do better,
Speaker 1: and when you don't know better, you can't do better.
Speaker 1: We're not dumb and we're not stupid. It's what we
Speaker 1: don't know that we don't know this killing is. What
Speaker 1: we think we know is an old Southern saying. If
Speaker 1: you don't have wisdom, then all I can give you
Speaker 1: is my own ignorance. Out of love, we pass down
Speaker 1: bad habits from generation to generation. Is what we don't know.
Speaker 1: That we don't know this killing is, but we think
Speaker 1: we know. So let's get in the know. Let's empower
Speaker 1: ourselves to transform our lives through wealth accumulation, wealth creation
Speaker 1: that Let's get money and have our freedom turn that
Speaker 1: money into wealth, sustainable wealth. Let's master this game. Evil.
Speaker 1: Money is not evil. It's the love of money that's evil.
Speaker 1: The money is mentioned two thousand plus times in the Bible.
Speaker 1: I think it's evil about this. You got to understand
Speaker 1: this because even if you want to distribute money like
Speaker 1: a socialist, like a do gooder, which is great first
Speaker 1: collected like a capitalist. Drop the mic. John O'Bryant, This
Speaker 1: is Money and Wealth on the Black Effect Network podcast
Speaker 1: series on iHeartRadio, and I encourage you to tell your
Speaker 1: friends to follow this podcast. I encourage you to buy
Speaker 1: the book Financial Literacy for All. I encourage you to
Speaker 1: call Operation Hope or download the Hope and Hand app
Speaker 1: and tell them that I sent you, and get your
Speaker 1: one thousand dollars scholarship for initial coaching and counseling through
Speaker 1: one of my whole financial coaches. Tell them that I
Speaker 1: sent you. I encourage you to open a bank account
Speaker 1: for your child as early as you can. And don't
Speaker 1: just buy them a toy they're gonna break at birthdays
Speaker 1: and Christmas. Buy them a share of stock. There are
Speaker 1: companies that actually print a share of stock and you
Speaker 1: can put it up on your wall, on the kids wall.
Speaker 1: It's not a painting, is not a folk it's a
Speaker 1: real stock certificate that represents the stock that they own.
Speaker 1: You can buy them a share of stock through this company,
Speaker 1: through companies like you know, these companies that gift. We
Speaker 1: can give a share of stock to a kid and
Speaker 1: they will send you a frame stock certificate for their wall,
Speaker 1: and that stock certificate then gives that kid a in
Speaker 1: you rights to all the financial information information for that
Speaker 1: company publicly traded company. Think about how that empowers that
Speaker 1: kid and that stock which the kid now can can
Speaker 1: can Yeah, they can trade and sell it, but they
Speaker 1: can also track it for the rest of their life
Speaker 1: and use that as a baseline of conversation for financial literacy.
Speaker 1: All right, So I hope that you've enjoyed this. This
Speaker 1: has been a blast. I've been honored to share a
Speaker 1: little bit of my knowledge with you, and I've got
Speaker 1: some special stuff coming up in the next couple episodes.
Speaker 1: So tell all your friends about this. Get the book
Speaker 1: Financial Literacy for All, and let's start a movement that
Speaker 1: started in the streets with civil rights and ends up
Speaker 1: in the business suites cutting deals with silver rights. The
Speaker 1: new colors not black or white, red or blue, It's green.
Speaker 1: I want you to have some. I'm out. Money and
Speaker 1: Wealth with John O'Brien is a production of the Black
Speaker 1: Effect Podcast Network. For more podcasts from the Black Effect
Speaker 1: Podcast Network, visit the iHeartRadio app, Apple Podcasts, or wherever
Speaker 1: you listen to your favorite shows. The Potatotempt