Don't leave your kids in the gutter

by Dr Boyce Watkins

After spending 30 years teaching finance, some things that are glaringly clear to me may not be so clear to everyone else. I understand that, so forgive me if I sound frustrated when I share this message.

The message is simple: Your kids must own property if they are going to get out of this economic struggle.

It is your job to not only invest for your child while they are young (I show you how to make them wealthy by investing just $5 a day in this free ebook ), but it's also your job to ensure that they understand that the stakes are high if they do not buy property as soon as t hey can.

Those who rent from property owners are effectively buying a home for somebody else.?I find it fascinating that there are people who claim they can’t afford to buy a home, yet they pay an amount of rent that is higher than their landlord’s mortgage! ?

You can’t completely blame the renter for the imbalance I mentioned above.?Banks often refuse to loan the money that the buyer needs for a down payment on a house.?I personally believe that this could be by design, since capitalism doesn’t work very well if everyone is given the same access to capital provided to owners.?

It is also a form of structural racism that whites can access capital much easier than black people.?Imagine how many black homeowners we would have in this country if every black person who could afford a mortgage was able to get one??

Most of the obstacle in real estate ownership occurs in two forms:?Time and knowledge.?Time comes into play because it takes time to save up for a down payment.?So, while a renter paying $1,000 per month will eventually give away $24,000 over a two-year period, it is very difficult for that person to raise $24,000 all at one time.

But the solution to the time problem comes from family.?If you start investing for your child when they are young, you can easily help them secure the down payment by the time they are 21 years old.?This tiny little decision of LITERALLY putting $30 - $50 per week in the stock market for your child (and never selling the assets) can make the difference between your child buying a home for himself vs buying a home for his landlord.

This difference is magnified by the fact that being a home owner doesn’t just give you the asset, it also gives you access to the growth in the asset’s value, as well as all tax benefits that come along with owning property.?In other words, owning a home allows your kids to play the rich man’s game of POWERNOMICS instead of the poor man’s game of STRUGGLENOMICS.

Knowledge serves as a barrier to asset ownership largely because many of our families don’t have conversations about economics or wealth. ?When you talk to you kids about one day “getting a job and renting an apartment,” you are setting an economic standard that will likely lead to them becoming one of the mules of capitalism.?

Rather than your child building wealth for herself, she will be engaging in hard work on behalf of other people. ?

So, it’s very important that you talk to your kids early about the importance of owning property as early as possible. Studies show that those who own their own homes are far less likely to end up poor.?Those who own their own homes AND a substantial number of stocks typically have more wealth than most people.?

This is an excerpt from the forthcoming book, "The 10 Commandments of Black Economic Power." You can learn more about Dr Watkins by visiting BoyceWatkins.com