By Catherine Pugh,
Special to the AFRO
“Train up a child in the way he should go and when he is old, he will not depart from it.” —Proverbs 22:6
Almost every day on an Urban One (formerly Radio One) media platform, you can hear a disc jockey ask listeners to patronize Black businesses. It is a mantra to which Cathy Hughes, founder and Board Chairperson of Urban One, is committed. Why is this so important?
It is a way of assisting the Black community in surviving and flourishing.
According to a study by the University of Georgia’s Selig Center for Economic Growth, financial transactions circulate one time within the African-American community, compared to six times in the Latino community, nine times in the Asian community, and an unlimited number of times within the White community.
While African Americans have an estimated $1.3 trillion gross national income, the Selig Center reports, only two percent is recirculated in the Black community.Now, more than ever, African-American families need to have conversations about smart financial decisions. Recirculating the Black dollar and building generational wealth begins with families and relatives having the “money talk.”
The “money talk” among families begins with understanding how to build wealth and not create dependency among family members. Creating generational wealth means being able to ensure that future generations can benefit from the wealth that is being created by families today.
More than 88 percent of millionaires today are first generation. Passing and building wealth through to the third generation almost guarantees future prosperity for a family. Some people rely on a certified public accountant to assist them with money management, while others look to investment companies or estate planners. Some people utilize all three.
Below are views from three different Black families — the Robinsons, the Hensons and Hughes— who share their experiences on building financial security that can also become known as generational wealth. From individuals who have successfully built family businesses or accumulated finances that can sustain them for a lifetime and leave a legacy for their future generations to continue to grow.
Among the commonalities in the information shared is educating children on the significance and importance of saving, investing, and securing a financial future. Instructing our children about financial literacy and the value of assets, including property, insurance, stocks and bonds, should be a part of those family discussions.
Charles Robinson establishes a financial legacy
Charles Robinson will be 98 years young this year. To meet him is to know a man who does not have a care in the world. That is because one thing that Charles Robinson has focused on is how to build wealth and not have to depend on anyone else, including his children who have taken care of him in his latter years. Indeed, Charles Robinson takes care of himself.
“Uncle Charles,” as he is fondly called, says he took his cues from his father and mother, both of whom were business minded when it came to taking care of the family. “I grew up in a small town in Kentucky and I was able to see how my parents operated. My mother sold everything, from the fruits she canned to making clothes for people in the community,” said Robinson.
“What I have learned over the years is that you can’t just tell our young people what to do to become financially independent — you have to show them,” he continued.
At one point Robinson had over 200 agents working for him in the insurance business. “I am still getting residuals from those agent’s sales today,” he noted.
“Buying real estate and managing properties was also another way of building wealth,” said Robinson. He currently lives in the Ashburton Community, which became accessible to Black Americans in the 1950s.
“I paid $18,000 for this house back then, and I paid it off in eight years,” said Robinson. “Buying a house is one of the greatest assets for building wealth. Property that is kept up only escalates in value. The average selling price for houses in the single-family homes in Ashburton can range from the high $200s to over $500,000,” he added. “I am surprised [at] the number of young people who don’t see the value in owning a home.”
There are lots of ways to build generational wealth, Robinson pointed out. It begins with helping our young people to understand the value of a dollar and how to save and invest their money. Planning for the future is important.
“Many people start their first business with the equity they accumulate in their homes. The way to build equity is by paying on the principal of your mortgage with any extra money you have,” said Robinson. “We want our children to live better than we do, but we really don’t make it easy for them when we just give them things. [We must] teach and show them how to earn, expand and build on the wealth that we can pass along.”
With unlimited wealth you can also create unlimited capital that can be used over the course of a lifetime.
“That’s what I’ve done. You don’t want to have to depend on anyone. I can live to be 150 years old, and I will be alright,” he laughed, adding, “It is all in the planning.”
Developing the Henson Development Company
Danny Henson celebrated 80 years of life with a crowd at Colin’s Restaurant, a Black-owned business in Baltimore, on April 4.
“I didn’t expect to be celebrating with all those people,” he said. “We go there once a month as a family.”
Henson then reflected on his journey to accumulate family wealth.
“I wanted to build wealth and independence for my family, but politics and public service also had its callings on my life,” he explained.
“My plan has always been for my children to join me in some entrepreneurial experience. Business ownership was frequently discussed at the dinner table. My daughter, Dana, was a natural in business,” he said. “She was smart. She graduated from high school in three years and college in three years. My thoughts were that she would go to business school.”
Dana felt differently; she wanted to go to work after finishing her undergraduate studies. She started out at IBM, and afterwards worked at Xerox. At both early tech powerhouses, she learned about being in business and understanding wealth building.
After public service, the senior Henson went to work with Struever Brothers, a real estate firm with a reputation of finding creative ways to reimagine urban properties. It wasn’t long that he formed the Henson Company, where his daughter would come to work. Though she had joined the family business, Henson said that at the time, she was not ready to take over operations. They partnered on projects with the Rouse Company, a leading real estate development and management firm, and built– among other facilities–the Legal Aid Building and the Columbus Center.
“It was not just about building wealth, but building our own independence and being in control,” Henson noted.
Dana left the Henson Company to work for Xerox in Miami, Fla., but she returned to Baltimore 12 years ago.
She was now ready to join her father at the Henson Development Company, the firm he started and expanded to Raleigh, N.C., Tampa, Fla., and Washington, D.C.
With Dana as the chief operating officer, the company’s focus today is on Baltimore.
Henson says that generational wealth building begins with engaging your children at an early age, “around the dinner table,” as he did and still does.
“Dana is a hustler and between her education, former employment, exposure to the family business — she is a natural business leader,” he said.
Henson believes that his next generation, his grandchildren–who are already being introduced to the business– will allow the company to continue to grow and give back to the community.
Building the nation’s leading Black media empire
Cathy Hughes built Radio One broadcasting into the Urban One media platform, with the help of her son Alfred C. Liggins, the largest Black-owned media company in the country. Under the direction of mother and son, the business is continuing to grow.
“To build generational wealth you must let your children grow up in the business,” Hughes said. “They may not ultimately want to join the business, but at the least they will understand its worth.”
Alfred grew up in the Hughes media empire.
“You can’t make excuses about not having time to help them understand the value of owning or taking over a business that you’ve started. If you wait too long,” she warned. “It could be too late.”
Hughes gives the example of John Johnson, owner of Ebony and Jet magazines. Following his founding of Johnson Publishing, and the Ebony Fashion Fair, Johnson was considered at one time to be in control of the most powerful Black media outlet in the country.
“Mr. Johnson had one of the brightest daughters I know [Linda Johnson], who could take over the business and lead it into the 21st century. But he stayed at the helm too long. By the time he turned it over to Linda, print media was transforming into the digital age,” said Hughes. She recalled a visit to Johnson’s offices in Chicago, when he said to her, “I hope you’re not going to turn your business over to someone you’ve given birth to.”
Hughes’ son, Alfred Liggins III, was eager to go to work and attended the University of Pennsylvania’s prestigious Wharton Business School with a probationary entrance.
“He graduated with honors because his classes were like recalling the applications he was using every day in our business,” said Hughes.
Alfred left the family business to go work for Barry Gordy at Motown. Nevertheless, Hughes said, “You can’t give up on them.” She didn’t. She would remind Alfred that “when Barry Gordy’s will would be read someday, Alfred’s name would not be included.”
“At the least,” she said, “they learn the worth of the business and if they were to decide to sell it, they would know its worth and what to ask for it.”
Among the most important things Hughes said she did in her pursuit of building generational wealth, was look for an outside consultant — more specifically, a psychologist/therapist.
“I found a Black woman therapist in Virginia. I was her only African-American client,” said Hughes. “This woman focuses on helping families build generational wealth in terms of passing leadership on to their children.”
“She helped us set boundaries and guidelines that we both had to agree to abide by, if my son, Alfred, was to become the chief operating officer of the company. Truth be told, the reason I ended up in Baltimore was so that Alfred could have a clear shot at running the company from its headquarters in Washington, D.C. – some of the older employees felt they could still come to me and not him if I remained in the D.C. office.”
“I remember saying to our therapist, ‘It is difficult to turn the combination to the safe over to someone, who as a child, lost the keys to the front door more than once,” said Hughes.
But she eventually relented. “I’ve made my share of mistakes in growing this company and I had to allow Alfred to make his own,” she said, concluding that “you have to put your ego aside. You must be open to new ideas and listen to their advice and recognize that your way may not always be the best way. What I have learned is that advice, creativity, and growth is not a one-way street.”
The post Lessons in generational wealth: three families share their stories appeared first on AFRO American Newspapers .
