Wealth vs Legacy

Are your assets and liabilities in harmony?

Wealth is a very touchy topic for many of us. In some communities, there are aspects about wealth that are not readily available or taught from generation to generation. As a millennial, or generation Y, we grew up on the rise of initial technology, i.e. broadband internet with the dial up connection, as dreadful as it was, then introduced to Wi-Fi connections, our saving grace! Google and Myspace soon came after that technology was developed. If you still have AOL email addresses, or now Yahoo, your age is broadcasted without you ever speaking a word. We grew up in the “Great Recession” that was not so great in 2008. We bore the brunt of high youth unemployment or underemployment, student debt that is still a battle royale today, and rising childcare costs that supersede our mortgage or rent payments. Because of these aspects, marriage and a large family became a thing of the past for many millennials and especially now with our generation Z coming up behind us. They too are trying to establish themselves by choosing self as the option. If we can’t take care of ourselves properly, how will we care for others and provide the lifestyle we feel we deserve? Great question! How do you set your life up for the long term that includes your current needs and provides an adequate lifestyle for a family?

Growing up, there were not many conversations about what you need to do with your income once you become employed. This is a very essential conversation families should have with the youth that not many of us were privy to growing up. If you or your family are not in rooms that discussed wealth options on the regular, this is the time to get into those rooms and have round tables with key stakeholders, your family. Your children need to be included as well so that they understand the importance of assets early on. We cannot shield them from these conversations as learning about finances in the home dictates how they perceive finances to be in the future. If they like to spend YOUR money, they also need to know the dedication and commitment it takes to earn said money and grow it into something more beneficial in the long run. It’s never too late to start making changes and decisions that will last beyond your generation. Conversations about employment benefits, wealth management, and ownership need to be had. There’s nothing wrong with being an earner versus an owner. Weigh the pros and cons of each and choose what works best for you, even if both are best for your situation. Let’s be honest, we’re not living in the time of one modest income like our Baby Boomer generation before us. Pensions are out of the window. Retirement funds are mostly self-funded dedications. Dad and Mom need to work, and in some cases, so do the teens and young adults to provide for the home. Is that putting more on them than they can bare? Maybe it is and if so, make adjustments. There’s no distinct right or wrong way to get things accomplished. The goal is to make moves that secure your family’s financial future.

How do you convert income from your job into a wealth building machine? First you need to educate your family roundtable on assets and liabilities. What are contributions and deductions? What is credit and your credit score? How do you and how often do you pull your national credit report? How do these items effect your future security? What employment benefits should you take advantage of when open enrollment is available annually or as a new hire at your job? What are taxes? What benefits are there in business ownership? How often should you monitor your family’s balance sheet? To answer these questions, you’ll need to evaluate whether you want to be an earner or an owner. Earner income is simple, non-complex. You earn a living, pay your bills and do your best to set aside money for later. Ownership is complex but manageable. Being an owner instead of an earner means having access to equity, more assets and passive income. Passive income is generally hands off; residual income made without the time restraints of punching a clock or universally coined money made in your sleep.

Ownership is very tedious in the initial stages but as your business develops, the reigns begin to relax. It can be uncomfortable at times behind the scenes due to decision making and other aspects. What sets owners apart from earners is their access to capital, equity outside of their primary residence, more time for family in some cases, unlimited income potential and other opportunities not always offered to earners. Although earners also have access to company stock options, crypto and bitcoin, owners have access to additional passive market engines that include, real estate investments, partnerships with other businesses through venture capital, and enterprise value by way of dividend profits through business ownership. Some may say income funds your lifestyle while ownership funds your future. Depending on your networking skills, your degrees, experience pathways and income streams, your lifestyle will always dictate your future regardless of how you position yourself as an earner or an owner.

Once you have made the decision between earner and owner, it’s time to put some moves into motion. When your income increases, don’t just impulsively go on a spending spree. Increase your asset portfolio before you upgrade your lifestyle, i.e. new home, new car, new wardrobe, new accessories, vacation.  Income is fuel that needs a destination, an engine. Don’t fuel consumption as it can and will disappear quickly. Everything you purchase that is liquid, i.e. food, entertainment, clothes, shoes eventually will either vanish upon consumption or go to waste because these things fade and break down over time. Fuel needs to be directed into an asset bearing engine that multiples and builds value as it ages. The question to you is, would you rather your fuel break down immediately or multiply in value?

Wealth builders are disciplined in saving for a rainy day. However, the rainy-day fund is what catches most families in a chokehold. Typically, each family should have at least six months to a year saved separately in case of emergencies. The current problem is that bills religiously outpace a lower or moderate income. Food and bills are literally taking 75% or more of the paychecks. That remaining 25% has to stretch for miscellaneous, emergencies and POSSIBLE savings. If you’re religious, 10% tithes comes off at the top and now you’re down to 15%. What can you do with a crumb of a check month to month? Per usual, make it work! Below are some articles to help you understand your net worth in conjunction with your income. The net worth calculation strategy below will help you to evaluate your status and chart your growth over time. The goal in net worth should always be green or positive! Your pot should always be flowing over not wading in the shallow pond! Financial freedom will always be the goal!

Figure out your net worth!

Total asset – total liabilities = net worth If your liabilities are equal to your assets, you break even. If your liabilities are less than your assets, you’re green and positive. If your liabilities are greater than your assets, you’re in the red and negative. In order to be in the green, you have to know your status. We all have made it into the red at some time or another. We know what to do! Sacrifice your desires for a while because we all need to be glowing green!

You will need to gather the following documents to get a full scope of your net worth. This is not a time to be shy! You want to know where you stand. The list below is not all inclusive but gives you a start.

Identify your asset balances

• Liquid cash – all online and store front bank and credit union accounts, includes checking and savings, and any funds on hand at home.
• Cash holding engines – Certificate of deposits, savings and other bonds
• Investment accounts – Balances in all stock market accounts Fidelity, Charles Schwab, Robin Hood, pulled investment funds
• Retirement accounts – Balances in all self-funded or employment funded accounts including 401k, 403b, IRA, annuity
• Physical assets – value of primary real estate, real estate escrow accounts, current car(s) through Kelly Blue Book or Black Book evaluations, antiques, paintings, etc.
• Insurance policies – life cash surrender value (available every year)
• Business equity – real estate investment homes, equity in real estate partnerships, equity in owned businesses, equity in business ventures
• Street debt family and friends owe to you

Identify your liability balances

• Any loan balances, i.e. mortgage, car, personal, student, payday/check cashing loans
• Credit card balances
• Street debt you owe to family and friends

If you’re financially free of debt, you’ve done well! If you happen to have some challenges ahead, don’t run from them. It’ll only get worse. Take in a second job if necessary to zero out some debt. Pay attention to and first resolve what is reporting with the main 3 national credit agencies, Transunion, Equifax, and Esperian. You should also pay attention to your LexisNexis report. Paying off debt will momentarily decrease your credit score, but positive credit payments will increase it back. Monitor your score and see how it is impacted often. If some items on your report look suspicious or incorrect contact the reporting agency for assistance.

Income disparities

Life is not fair when it comes to finances. Some need to work harder than others to leave a legacy for their families. According to a Lexington Law article and Survey of Consumer Finances (SCF) – Fed Communities (PDF – Federal Reserve Board Publication), below highlights the average net worth by races in the United States between 2022-2025.

• Asian – $500,000 plus, consistently
• White – $250,000 and $285,000
• Hispanic – $48,000 – $61,600
• Black – $24,000 – $44,100

Also check out this article by Lampados Financial Group What Is the Wealth of African American Families in 2025? It highlights disparities in income and the effects it has on multi-generations. Below are some key points.

According to the Federal Bank of St. Louis’s article The State of U.S. Household Wealth | St. Louis Fed published June 23, 2025, below highlights the average net worth by races in the US by 4^th quarter of 2024.

So in the end, ownership is what you make. Earnings are what you take. In both scenarios, you can create wealth strategically and with discipline. Don’t let the numbers deter your vision. Make plans often and adjust accordingly. Where do you fall in your financial harmony? Are you working for lifestyle or legacy?