Building a Family Legacy Requires Proper Planning | Financial Facts

Mickey Factz opens up about the importance of insurance and estate planning to build wealth that will last generations in the final chapter of Financial Facts.

Mickey Factz Fiscal Planning Lead
Complex Original

Image via Candyce Fabre

Mickey Factz Fiscal Planning Lead

Oftentimes when life insurance or estate planning is mentioned to those under the age of 50, people will shut down, turn away, or plain ignore the conversation altogether. It’s a scary subject for most because it is so closely linked to the end of one’s life, and making a plan to ensure that the next generation is taken care of. But, according to Mickey Factz, it is a rough, yet much-needed conversation to have if one wants to build multi-generational wealth.

According to a 2020 industry-funded survey by groups like LIMRA and Life Happens, 37% of Black Americans believe the purpose of life insurance is to shield their families from unpaid debt, compared with 64% for white Americans. Mickey argues that members of his community should follow the example of other communities that have used the practice of life insurance and estate planning to improve their families’ lives for decades.

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Insurance Barometer reported that overall burial costs and final expenses rank as the top reason that Americans own life insurance, with transferring wealth as the number two reason. While the life insurance industry doesn’t have the perfect record of dealing with issues of race and systemic racism, Mickey insists that having these conversations can help deter people from contributing to the diversity vacuum.

In this final edition of our four-part Financial Facts series, Mickey offers up a few facts to help maintain your own fiscal growth and advice on how to empower yourself and others to talk real about investing and estate planning.

Complex: Conversations surrounding money and estate planning can be hard to do. How do you suggest broaching the topic and empowering everyone in the process?

Man, in the Black community, estate planning, investing, and life insurance are all important. Along with learning about credit and budgeting, these are top-tier topics that cannot be ignored. We’ve all had people in our family who have passed away, and we’ve seen how crazy people act when there’s no will, a lot of money is on the table, and everybody wants a piece.

Stuff like that happens when there’s no estate and people can become instantly nasty. Discussing with family members who are open and that you trust—which is crazy that I even have to say that—is important because you would want both your or your family’s legacy to be upheld in a positive and fruitful light. I learned from my dad to have a will intact and appoint someone who will treat your legacy important. It’s not just money, too, but whatever it is if you’ve never left it in trusted hands then it can go to whomever!

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What are some insights about investing and estate planning that you wish you were told when you were younger?

MF: Thinking cash is king was something I wish someone would’ve given me insight about. Cash is not king, man. I also wish I would’ve known a bit more about credit at an earlier age. If I would’ve had knowledge about that and the stock market earlier in my life, say around 2009, 2010, then I think that I could’ve had a better financial foundation.

The formation of apps helped to build interest in investing, but I just didn’t know how. I didn’t know who to speak to or what amount of money I should have to start. I also wish that someone could’ve stressed how important patience is while investing in yourself. For whatever reason, we as Black people want that money back fast, and that’s not realistic. It needs to be stressed that it is okay to grow money over time.

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I. Get Insurance At 21:

When people turn 18, they want to take control of their destiny and the best way to do that is to get life insurance at a 30-year plan—at that age, it’ll accrue immensely. When you get even older and want to become an entrepreneur, or just travel around the country—you can go to your life insurance plan and borrow against it. They’ll give you the money because it’s your money!

II. Invest In Financial Technology:

Keep your eye on anything within the financial tech sector. That is the future! Cryptocurrency, the way people pay through social media apps like Facebook, and more—these are things that are important to know when putting together your 2022-23 fiscal plan.

III. Network & Connect With Money-Minded People:

Where I’m at in Atlanta, the Black community is making it a priority to help each other out. There is a healthy support system and I’ve been happy to see us working together to make things happen. With that said, people should try and intern in the financial sector, if they can, or get as close to successful people to learn a whole lot.

IV. Learn About Index Mutual Funds:

Investing in index mutual funds is important when you want to pass on a legacy. As a type of exchange-traded fund (ETF), these come with a portfolio that is constructed to track market indexes, such as the Standard & Poor’s 500 Index. These are great for those looking to have broad market exposure, low operating expenses, and a low portfolio turnover—that can be passed on to your beneficiaries.

V. Invest In Yourself:

To provide for yourself, your family, and your next generation, you need to put money into places where you know it’ll grow and accrue with interest later on. You’ve got to invest in yourself. It is imperative and a great feeling to have when you know your money is working for you in so many different places. I have money in so many places that I sometimes forget where all of it is [laughs]. If you want to have solid financial footing, it all crescendos with you believing and investing in yourself.

For more Financial Facts, be sure to check out part 1, part 2, and part 3.

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