Building generational wealth – The Voice Online
EQUALITY CAMPAIGNERS have long pointed out that the seemingly ever-widening differences in income and wealth between black people and other communities invariably translate into similar disparities in political power and influence.
That debate has also focused on how black communities create generational wealth through passing down assets such as property, businesses and investment.
Building generational wealth is no easy task but it’s an especially uphill battle for Black Britons when you take into account the fact that on average, have less family wealth.
According to a December 2020 report by think tank Resolution Foundation people of African heritage typically hold the lowest wealth (a median figure of £24,000 family wealth per adult), which amounts to less than one eighth of the typical wealth held by a person of White British ethnicity (£197,000 family wealth per adult).
So, how do we go about building wealth that can lasts for generations to come?
While societal changes are needed to address wider issues such as the ethnicity pay gap and employment rates The Voice’s panel of experts say there are steps that can be taken right now to start building wealth.
These involve being informed, good planning well and no small amount of persistent effort.
WHY BUYING PROPERTY MAKES SENSE
STRATEGY: Melissa Lewis says we should take the long-term view
INVESTING IN property is often cited as one of the most lucrative ways of building generational wealth. If you look at the investments of most wealthy families, it almost always includes real estate in one form or another. It is an asset that not only creates cash flow now, but increases in value over time.
However, it may be hard for many black Britons to see themselves as property investors, especially if they are struggling to get on the property ladder in the first place.
According to a June 2017 House of Commons briefing paper black people are much less likely to be property owners than their white or Asian counterparts.
However Essex-based property entrepreneur Melissa Lewis is passionate about encouraging more people from the community to become property investors and achieve the kind of financial independence that comes from running a successful property portfolio.
She says a change of mindset is critical for people who want to invest but are hesitant.
“Property is an investment strategy so you need to take a long term view, say over a 10 or 15 year period” Lewis says. “So whatever money you have available, whether it’s say £20,000, whether it’s less, whether it’s more, you are not going to see your return straightaway.”