'My Grandmother Turned $200 Into a Family Legacy'

Whenever the topic of creating generational wealth comes up, people tend to envision John D. Rockefeller or Andrew Carnegie-type moguls amassing billions of dollars and passing their wealth on to the next generation, who in turn generate more wealth for the following generation and so on. Not me. I see the face of my grandmother, Louise Roach, and while she was as hard-working as the day was long, there was no mistaking her for some titan of industry or genius entrepreneur.

She was no rags-to-riches character either. She lived a tough life, frequently punctuated by tribulation and grief. Yet without need of divine intervention or a winning lottery ticket, she managed to create the makings of several generations of wealth.

Grandma was pregnant and gave birth to my mother, her first child, at age 16. She never finished high school and my grandfather was a moonshiner and rolling stone with no intention of being a family man. Unable to raise my mother on her own, Grandma left my mom behind in Danville, Virginia, with her own mother, and moved to 1950's Harlem to seek a better life. Grandma soon found a job working at a cleaner's for $200 per month, the inflation-adjusted equivalent of about $2,200 per month today.

So how did Grandma manage to create generational wealth, all while living on less than what Carnegie probably spent on cigars? It had nothing to do with a huge bag of money or attending financial literacy seminars.

My grandmother saved enough money on that meager salary to put a down-payment on a modest, $25,000 two-family house in the Laconia Section of the Bronx, even though the sale price was the equivalent of more than 10 years of her salary.

I don't know how much of a mortgage she was able to get when she bought it or if she was turned down like so many African Americans back then. What I do know is that she never missed a payment on it and by the time of her passing, that house was fully paid off. Her Volkswagen Jetta was, too.

She lived below her means and made sure to save a portion of every paycheck. From my memories of her, she was extremely frugal and money-conscious. She had no credit card debt, tax liens, or debt of any kind and she'd even managed to save an additional $43,000.

I would estimate that this, combined with the value of her car and house at the time, meant she had a net worth of well over $110,000, the equivalent of $226,631 today. All this wealth built by a woman who worked at a dry cleaner's her whole life.

Tragically, we lost my mom at the young age of 51 to breast cancer, so when Grandma eventually passed, she left the house to her then-husband. She allocated $13,000 of her savings for her funeral expenses and willed the remainder of her money in equal $10,000 proportions to her three grandchildren; me, my brother John, and my sister Karla. We also got a bunch of silver Kennedy half-dollar coins which Grandma had dutifully saved.

James Baldwin wrote that, "Children have never been very good at listening to their elders, but they have never failed to imitate them." Fittingly, in the movie of my life there is no scene of Grandma sitting us down and explaining how to build wealth through savings and investment. There is only the shining example she set of how to think and behave like a millionaire or billionaire even when you were starting from the bottom.

In many families, her inspiring story of wealth-building would have ended right there. The next generation would go on to squander their inheritance on things that maintain no long-term value, leaving little or nothing to pass on to the next generation, and resetting the wealth created by the previous generation back to zero. Especially in today's landscape, when some 60 percent of millennials earning over $100,000 a year say that they're living paycheck to paycheck.

But my grandmother passed on her millionaire's mindset. She understood that where she was in life wasn't her fault, but it was her responsibility to fix it. She never looked at money as a toy to be spent on things that don't hold any value or generate income. She saw it as a tool to invest in her family's future, and she taught us her money values through example.

I used the $10,000 legacy my grandma left me to open a Charles Schwab account in 1993 and began to invest that money in stocks. As my stock portfolio began to dramatically grow my net worth, I started investing in real estate. I also started my own business and invested the profits from that business into multi-family and commercial real estate properties.

Many years later, I became an angel and private equity investor. I even bought my grandmother's house out of the $245,000 reverse mortgage that her husband had set up to fund his retirement before his death. I still own that house today, though it's now worth over $700,000.

I continue to pass on to my own kids the example and lessons handed down from my grandmother so that when I'm gone, they'll have more wealth than I, as well as the tools to keep it growing and eventually pass it on to their children. If ever they should require a reminder of that priceless legacy, they need look no further than the stack of silver Kennedy half-dollar coins that still hold pride of place at my bedside.

Cedric Nash is an entrepreneur and investor and founder of The Black Wealth Summit. He is also the author of Why Should White Guys Have All the Wealth? How You Can Become a Millionaire Starting from the Bottom, which is out now.

All views expressed in this article are the author's own.

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