ORLANDO, Fla. – When it comes to building wealth, it’s not about what you make, it’s about what you keep.
That’s the word from Lester Wade Jones, an Alabama-based investment advisor with more than 25 years of experience assisting clients and over $100 million in accumulated investment assets. This week on “Black Men Sundays,” Jones joins host Corie Murray to share the advice he finds most critical for the success of those who would one day like to see their bank balance become a seven-digit number.
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Specializing in retirement planning and wealth accumulation, Jones said he spends as much time as he can visiting places such as high schools and churches to teach young people about the importance of beginning to save money early in life.
“I wasn’t taught that as a child, I wasn’t exposed to those kind of concepts as a child, and even as a young adult when I got my first job working as a systems analyst... you know, all I thought was ‘Man, if I can just go get this good job, you know, and if I can make pretty good money, then, man, everything’s going to be great, I’m gonna be rolling,” Jones said. “The problem is, what I didn’t know is that it’s not about how much money that you make, it’s how much money that you’re able to keep, and then what you do with that money that you keep is what’s gonna determine what your future’s gonna look like down the road.”
It wasn’t until later when Jones said he was exposed to those financial concepts, which blew him away.
“One of the things I learned is that, man, until you learn to master money, money will always be your master,” Jones said.
The time value of money should be kept front of mind, and many people don’t understand what they lose throughout life simply by not grasping the concept of compound interest, Jones said. Mentioning his 22-year-old daughter, who he said he has been urging to invest as soon as possible, Jones shared an example of what can happen when someone starts filling a Roth IRA at age 22, and at age 30.
“Look, if she just starts doing $5,500 a year... just maxing out a Roth IRA starting at age 22... if she did that from 22 to age 29 and then just stopped, didn’t save another dime after that... their total investment quarry is only $44,000, at the end they would have over $2 million dollars, that’s $2,300,000 that they would have at the end at age 67 at retirement, but the person who waited until age 30 and then invested every year until age 67, they would end up with $1.8 million, but they put in over $209,000 and ended up with less money than the person that just did $5,500 from 22 to age 29,” Jones said.
And if you really want to get blown away, Jones suggested to imagine how much wealth that 29-year-old would go on to accumulate if they just kept saving. Better yet, imagine if that person was you.
“The time value of money is so critically important, so the earlier that you start, man, it just changes the whole game for a person in terms of accumulating wealth,” Jones said.
Black Men Sundays talks about building generational wealth. Check out every episode in the media player below: