**Disclaimer: This is not financial advice; it is financial education. Please do your own research and consult a financial professional before making any investment decisions.

Many people believe building generational wealth requires large sums of money, but the truth is, it all starts with small, consistent actions. The power of long-term investing and compound interest means that even the smallest amounts can grow into something significant over time. In this blog post, I’ll show you how you can start your wealth-building journey with just **$1**, commit to investing **$25 a month**, and create a legacy for your family worth over $50,000 in 30 years. Let’s break it down.

The Power of Compound Interest

Compound interest is often called the eighth wonder of the world. It allows your money to grow exponentially over time by earning interest not just on your initial investment, but also on the accumulated interest. When you invest consistently and allow time to do its work, even modest contributions can snowball into a significant sum.

Here’s an example:
– Start with an initial investment of $1.
– Add $25 every month to an investment in the S&P 500.
– With an average historical return of about 10% annually, your investment could grow to $51,588.53 in 30 years.

This might not seem like much compared to millions, but it’s a powerful starting point—especially when you consider the generational impact.

The Importance of Starting Small

You don’t need thousands of dollars to start building wealth. What you need is consistency, patience, and the willingness to start where you are. Starting small with $1 and investing $25 monthly might feel insignificant, but the habit of investing regularly creates a ripple effect. It’s a financial discipline that can be passed down through generations.

Teaching your children or family members the importance of investing early can multiply your efforts. Imagine if your children, inspired by your example, begin their own investing journey. Generational wealth isn’t just about money—it’s about mindset and habits.

Why the S&P 500?

The S&P 500 is a collection of 500 of the largest publicly traded companies in the U.S. It’s often considered one of the best benchmarks for the U.S. stock market and is an excellent choice for beginner investors due to its diversified exposure and consistent historical performance.

Investing in the S&P 500 is also accessible, with various funds and ETFs designed to make participation easy and affordable.

Here are 5 S&P 500 investments to consider for your wealth-building journey:
1. VOO (Vanguard S&P 500 ETF) – Known for its low expense ratio and strong performance, VOO is a favorite among investors.
2. SPY (SPDR S&P 500 ETF Trust) – One of the most widely traded ETFs, offering liquidity and reliability.
3. IVV (iShares Core S&P 500 ETF) – Perfect for long-term investors with competitive fees.
4. FXAIX (Fidelity 500 Index Fund) – A cost-effective mutual fund with a proven track record.
5. SWPPX (Schwab S&P 500 Index Fund) – Offers excellent value with no minimum investment requirements.

The Generational Impact

By starting small and staying consistent, you can leave a financial legacy that extends far beyond the numbers. Here’s how:
1. Break the cycle of financial instability: Even a modest sum can provide your family with a foundation to build upon.
2. Create a culture of wealth-building: When your family witnesses the results of your investing journey, they’re more likely to adopt the same habits.
3. Leverage compounding across generations: The earlier your family members start investing, the more exponential their wealth can grow.

The $51,588.53 you leave after 30 years isn’t just a dollar amount; it’s a stepping stone for the next generation. If they continue building on your foundation, the possibilities are limitless.

How to Get Started Today

1. Open a Brokerage Account: Choose a platform that allows for low or no minimum investments. Many options, like Fidelity or Schwab, are beginner-friendly.
2. Choose an S&P 500 Fund or ETF: Select from the list above or consult a financial advisor for advice tailored to your situation.
3. Automate Your Contributions: Set up an automatic transfer of $25 (or more, if possible) each month.
4. Be Patient: Investing is a long game. Stay consistent, ignore market fluctuations, and let time do its work.

Your Wealth-Building Journey Starts Now

Building generational wealth is more accessible than most people think. It’s not about how much you start with—it’s about starting. That $1 investment can become a legacy of financial stability and opportunity for your family.

The journey to generational wealth isn’t just about money—it’s about creating a mindset, fostering discipline, and passing down financial wisdom to the next generation. So, what are you waiting for? Start with $1 today, and let’s build a brighter future together.

Join the Movement:
What’s stopping you from starting your wealth-building journey? Share your thoughts in the comments, tag someone who needs to see this, and let’s spread the message: **Small steps lead to big legacies.**

#GenerationalWealth #FinancialEducation #Investing #FinancialFreedom #Legacy

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During a Recession

While it’s premature to declare the United States is in a full-blown recession, many say the writing’s on the wall. Should the US economy spiral into a recession, what are some things you can do to continue investing your money? Let’s take a look at some key strategies to keep in mind for your investments.

Invest in Essentials

There are many companies that sell and produce certain essential products, such as electricity and food, as well as certain household products, such as toilet paper and other necessary staples. If you take the time to invest in utility stocks or consumer staples, you’ll have your money invested in stocks that won’t be hit quite as hard during a recession. The reason for this is that everyone needs electricity, food, and toilet paper, so these stocks will not ebb and flow as much as the rest of the market. Cash is one of your best bets as well, so look into keeping a portion of your portfolio in cash or securities that are highly liquid. Money market mutual funds are perfect for this type of investment.

Be Smart, Buy Quality

One of the smartest things you can do when the economy takes a turn is continue to invest a fixed amount no matter what the market is doing. If you have committed to something small, perhaps $10 a week, stick to it, and don’t get discouraged. These tiny investments will grow over time, and that is the goal when building generational wealth.

You’ll also want to purchase quality investments, which are marked by low leverage, low beta, and high return. Look for companies with recurring high revenue—subscription-based business models are just such companies.

Be sure to avoid any growth stock during a recession. If your stocks are tied to a company that projects high growth, they will do much worse than stocks that pay dividends or investments that produce income.

Other Options

Consider dividend stocks. Even should the stock price of the company fall, it might continue to pay dividends. This will give your portfolio the cushion it needs through hard economic times. 

Another option is an actively managed fund. These funds outperform others by 4.5% to 6.1% each year within a recession—after certain adjustments are made for both expenses and risks.

Bonds are another attractive choice, as they also do well during an economic downturn. However, it is best to stick to investment-grade bonds to avoid rising defaults. 

Always Invest No Matter What

The best way to invest during a recession is to continue to do what you’ve been doing. No one can know the duration or the impact of a deflated economy, so it’s best to continue plodding on. A recession is not ideal for growing wealth, however the market overall continues to look forward as the years go on. Do not be swayed from investing due to a hiccup in the economy, rather, look toward building your future and continue to invest accordingly. 

To learn more about investing, closing the racial wealth gap, and growing generational wealth for Black and brown families, please visit Financial Joy School and become a part of our financial family.

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You may be considering investing, but you’re unsure of where to start. With so many different investment options available, it’s easy to get overwhelmed. Not to worry, we’ve done some research for you. Today we’ll take a look at an investment company that may strike your fancy. Meet: Ariel Investments.

Who Is Ariel Investments?

Ariel Investments was founded in 1983 by John W. Rogers, Jr. The company is based in Chicago, Illinois and claims the title of “largest minority-owned investment firm.” It specializes in small and mid-capitalized stocks based in the United States. With offices in New York City, Washington, D.C., and Sydney, it is a globally recognized firm.

Currently, John W. Rogers, Jr., serves as the chairman and Co-CEO along with Mellody Hobson, who is also the president of the company. There are 107 people employed by Ariel Investments and the employees and board members own 95% of the company. As of January 2021, the firm holds $15 billion in assets under management.

Types of Accounts

Ariel Investments offers several different types of accounts to investors. If you’re looking to save for retirement, you have the option of choosing either Traditional or Roth IRAs or you can choose to open a SEP IRA if you are self-employed. 

You can also select from one of the traditional investment accounts. For general investing, you can open an individual or joint account to serve your all-purpose investment needs. Personal trusts are also available. Want to invest on behalf of a business? Corporate investment accounts are also an option.

Ariel Investments provides options for investing on the behalf of minors as well. With the Coverdell Education Savings Account, you can set aside money for your child for education purposes. This type of account is specifically designed for preparing for the various educational costs that will come down the road. There are two other account types that allow for general investing for minors: the Uniform Gifts to Minors Act (UGMA) and the Uniform Transfers To Minors Act (UTMA).

How Much Does It Cost To Invest?

Pricing for opening an account varies based on the type of account you need. For Investor Class shares, the initial minimum investment is $1,000. If you’re looking to open an Institutional Class (Class I) share, the initial investment is $1 million. Once you’ve established your account, the minimum subsequent investment is $100. 

If you’re looking for a more hands-off approach, you should consider Ariel’s Automatic Investment Program. Simply decide how much you’d like to have transferred into your account each month. There is a $50 minimum for any fund you select. You have several funds to choose from: Ariel Fund, Ariel Appreciation Fund, Ariel Focus Fund, Ariel International Fund and Ariel Global Fund. You can find all the details about each different fund here. All you need to do is specify which bank account you’ll be paying from and the money is automatically deposited into your mutual fund account each month.

The Bottom Line

Investing can be a daunting process, especially if you are unfamiliar with the process. Luckily, Ariel Investments makes it easy to choose a fund type and invest with no hassle. This minority-owned investment fund has been going strong since the 1980s—it’s plain to see they won’t be going anywhere any time soon. 

To learn more about investing, closing the racial wealth gap, and growing generational wealth for Black and brown families, please visit Financial Joy School and become a part of our financial family.

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Should Consider

Exchange-traded funds, or ETFs, are like mutual funds, however they are different. Many investors prefer them. Like mutual funds, ETFs are a group of assets spread across various companies which diversify your portfolio. However unlike mutual funds, ETFs are more liquid, as they’re able to be bought or sold during open market hours. Let’s take a look at our top three picks for Black families and see what ETF might be right for you.

Vanguard S&P 500 ETF (VOO)

If you’re just getting your feet wet with regards to ETFs or investing in general, the world’s top investor, Mr. Warren Buffett, recommends you begin with a fund based on the S&P 500. Why? Because these funds include the highest-traded stocks in the country. ETFs in this category are a solid investment due to the longevity, reliability, and bankability of the companies within the fund. We’ve chosen Vanguard S&P 500 ETF, also known as VOO (a value ETF), as Vanguard is itself one of the most trusted brokerages in the world. For anyone looking to invest in a value ETF, this is an excellent place to start. This ETF won’t make you rich quick, but if you’re patient and play the long game, you’ll be so glad you bought this one to build your wealth. 

Schwab US Dividend Equity ETF (SCHD)

Schwab US Dividend Equity ETF, also known as SCHD, is an equity fund, which means it invests in solely stocks. This particular ETF follows the Dow Jones U.S. Dividend 100 Index which includes companies that have done well financially over time. This ETF is low cost, and its holdings include several companies with household names, including Coca Cola, Pfizer, and Verizon, that provide quality products and have proven their sustainable dividends. The expense ratio for this ETF is 0.06% and the dividend yield is 3.1%. Consider SCHD if you’re looking for an excellent equity fund.

The Invesco Solar ETF (TAN)

If you want a large-cap ETF, consider The Invesco Solar ETF, or TAN, which was rated as the top large-cap ETF on Nerdwallet.com. Its expense ratio is below 1% while its five-year performance rate is a whopping 288.35%! This fund bases itself on the MAC Global Solar Energy Index (Index), which, as you’ve probably guessed, is made up of various companies in the industry of solar energy. TAN is considered a “Strong Buy” as far as ETFs go for its risk tolerance that is above average, and its investment horizon of 90 days. This ETF is expected only to rise in the stock market which makes it a compelling buy if you haven’t considered investing in solar power. If large-cap ETFs interest you, take a look at TAN.

With literally thousands of ETFs in the market today, you’re sure to find an ETF that matches your investment goals, your personal convictions, and your financial needs. Our three picks are from differing categories, but there are so many more, including sustainable ETFs, currency ETFs, and specialty ETFs, just to name a few. Have a look and take your time choosing an ETF that’s right for you and your family.

To learn more about investing, closing the racial wealth gap, and growing generational wealth for Black and brown families, please visit Financial Joy School and become a part of our financial family.

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Black Families Should Consider

Mutual funds are an excellent way to invest and also diversify your portfolio out the gate. They’re excellent ways to grow your money over time and establish generational wealth. However, choosing mutual funds that are right for you and your family might be a daunting task. How might you know which fund to invest in and which fund to pass over? Here is a list of our three favorite mutual funds for Black families, and why you’ll want to take a closer look. 

Washington Mutual Investors Fund (WSHFX)

We have showcased the Washington Mutual Investors Fund, or WSHFX, previously on our blog, but it deserves a second mention. This fund has holdings in many well-known companies that you’ve heard of and are going strong, such as Microsoft, Comcast, Pfizer, and Home Depot. The risk, therefore, is low with this fund. The majority of its holdings are domestic stocks, with Europe holding only 5% of the fund and Canada only 1.5%.

This fund is currently open, which is good news, as many funds are closed to new investors. There is a minimum fee of $250, but to open an IRA, you’re only looking at $25. WSHFX was recently chosen by Forbes as the Best Large-Cap Blend Equity Fund of 2022.

Fidelity 500 Index Fund (FXAIX)

If you’re looking for a passively-managed mutual fund, the Fidelity 500 Index Fund, or FXAIX, is an excellent choice. This fund tracks the S&P 500, which is an index that encompasses 500 of the biggest companies in the United States. There are several other index funds that follow the S&P 500, but we chose Fidelity because of their trusted name in the investment world as well as their overall 5-star rating at trusted financial websites such as Forbes and NerdWallet.

Over the past decade and a half, the S&P 500 has beaten the large-cap stock mutual funds, outperforming a stunning 90% of them. Since this fund (and others like it) follow American business giants, it’s no wonder it does so well. Here at Financial Joy School, we have also recommended another S&P 500 fund, Vanguard’s VFIAX. Whether you choose Fidelity or Vanguard, your money is well-invested.

Dodge & Cox Stock Fund (DODGX)

Recommended as one of the 15 top-rated mutual funds on The Motley Fool, this fund is a value-oriented fund which makes an excellent choice to add to your portfolio. “Value investing” is a concept that is highly acclaimed by one of the best investors in the world, Mr. Warren Buffett himself. If you’re not familiar with value investing, it is a particular strategy that keeps its eye on under-appreciated stocks by the market and by other investors. This means if one of these companies takes off and becomes fabulously successful, then you’ll become fabulously wealthy. 

DODGX has a 10-year average gain of 12% and a low annual fee. The holdings within this fund include Capital One Financial and FedEx.

If you’re looking for a reliable fund, an outperforming fund, or a value-oriented fund, look no further than these, our top 3 recommendations for Black families.

To learn more about investing, closing the racial wealth gap, and growing generational wealth for Black and brown families, please visit Financial Joy School and become a part of our financial family.

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Mutual Funds for Black Families

If you’re ready to purchase mutual funds for your stock portfolio, or even if you’re merely curious about mutual funds, where do you purchase them? What are some trusted names among mutual fund brokers? How do you even get started? Thankfully we have a few suggestions of firms for you to help get you started on your investment journey. Let’s get started.

Fidelity

The leading brokerage of mutual funds today would have to be Fidelity. They are a powerhouse of an investment firm, holding several companies’ retirement accounts as well as the portfolios of millions of investors. Chances are if you’re thinking about investing, you’ve heard of Fidelity. This brokerage is popular due to its no-transaction-fee funds and no minimum investment requirement. They make it ridiculously easy to begin investing without already having a huge nest egg at your disposal.

Vanguard

Next on our list would have to be Vanguard, arguably just as popular as Fidelity in their scope and reach. Vanguard also holds millions of retirement accounts and is a well-known and trusted name in the investment world. One of the biggest draws of Vanguard is the fact that they make it easy to have a diversified portfolio without having to do the hard work yourself. If you’re new to investing, this is an amazing perk as you can purchase your mutual fund with minimal decision-making. As far as brokerages go, Vanguard and Fidelity are the big boys. 

E*TRADE

Another popular brokerage in the market today is E*TRADE. Their claim to fame is their boast of $0 on commissions trades for US stocks and ETFs. E*TRADE recently merged with another large and respected firm, Morgan Stanley, on October 2, 2020. All Morgan Stanley’s accounts are now managed by E*TRADE, making it a formidable contender with the other firms on this list.

J.P. Morgan

J.P. Morgan is another firm to consider, the brokerage firm of Chase Bank. If you bank with Chase, J.P. Morgan is incredibly easy to use as its investment website is built into their own website. J.P. Morgan is also committed to closing the racial wealth gap by offering black families more opportunity to become homeowners, become entrepreneurs, and enjoy financial health. If you’re looking for a brokerage that cares about black people, this is your firm.

Merrill

Merrill is another well-known brokerage for mutual funds and they’re an offshoot of Bank of America. As with J.P. Morgan and Chase Bank, Merrill is amazingly easy to use if you bank with BofA. They have $0 unlimited trades, which is an attractive perk for many. They also offer BofA Preferred Rewards and link your investing accounts with your bank accounts to make investing as easy and streamlined as possible.

All five of these companies are relatively inexpensive, trusted and reliable (with two of them able to be integrated into your personal banking), and are the perfect choices to begin diversifying your portfolio with mutual funds. Let’s get investing!

To learn more about investing, closing the racial wealth gap, and growing generational wealth for Black and brown families, please visit Financial Joy School and become a part of our financial family.

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