Spreading the wealth in the community & at home

Nearly 20 years ago, Thrivent client Brandon Wilkes decided he was ready for a change in his career. Working for Procter & Gamble at the time, he felt passionate about building a multiethnic, multiracial church. In 2004, he took a significant pay cut to join Peoples Church Cincinnati, as the director of Adult Ministries.

Then, Brandon and his wife, Dorothy, were called to reach further into their community and started a business dedicated to helping others make an investment in themselves and build generational wealth for their families. Launched in 2018, the mission of Investing in Peoples is to buy homes, renovate them and sell them to members of their congregation who have taken a financial management class. 

“My wife and I started Investing in Peoples to help those within our church grow into homeownership to gain financial stability for their future,” says Brandon. “We saw a need, an opportunity within our community to help people purchase their first home and create generational wealth.”

Their Thrivent financial advisor has helped them plan how they can continue to help those buying their first homes. "Thrivent has been a friend, a partner and a teammate for us," he says.

Generational wealth refers to the financial assets that are passed from one generation of a family to the next. When you hear “wealth,” you probably think of cash, but assets also can include stocks and bonds, family businesses, real estate and other investments.

Homeownership is one of the best ways to build generational wealth. In fact, according to the U.S. Census Bureau’s “The Wealth of Households” report, home equity alone accounts for more than a quarter of a household’s wealth at 27.8%.

There are six ways homeownership creates financial benefits and contributes to generational wealth:

Equity is the difference between how much your home is worth and how much you owe on your mortgage, so with every mortgage payment you make, you’re increasing the percentage of your house that you own. With renting, on the other hand, every monthly rent payment goes to your landlord. To put this into perspective, the National Association of Realtors reports the net worth of a typical homeowner is about 40 times the net worth of a renter.

As the value of a home increases over time—whether through natural appreciation or forced appreciation, like home improvements—so does your equity. Over the last decade, the median-priced home has become worth about $190,000 more, says the National Association of Realtors.

When an heir inherits a home, the property value is brought up to fair market value on the date of the original owner’s death, a concept known as the stepped-up basis. Your heirs won’t have to pay any taxes on the property until they sell, at which point they’ll only owe capital gains taxes on the gains the home experienced since they inherited it. That means that if they choose to sell the property as soon as they inherit it, before it has the chance to appreciate further, they won’t pay any taxes.

If you want to keep your home, you must make your monthly mortgage payments, which, as stated earlier, increases your equity. This “forced savings account” is one of the best ways to pass on large amounts of money to the next generation without actually saving cash.

As long as you make your mortgage payments on time every month, homeownership will help you build a good credit score, enabling you to qualify for new loans and lines of credit with the lowest interest rates.

Homeownership may qualify you for tax deductions on home-related costs like mortgage interest, mortgage insurance, property taxes and home improvements. If you’re a first-time homebuyer, your state may offer tax credits to help you save on taxes. While a federal first-time homebuyer program has been introduced in Congress, it has yet to become law.

While homeownership comes with a host of financial benefits, it also highlights the racial wealth gap in the U.S. According to the National Association of Realtors, the homeownership rates for minorities at the end of 2022 was 44.9% for black Americans, 61.9% for Asian Americans and 48.5% for Hispanic American, compared to 74.5% for white Americans.

This circles back to why Brandon wanted to start Investing in Peoples. Through working at the church, which today has 32 different ethnicities represented, Brandon saw firsthand the need in his community for a program that would get longtime renters into their first homes.

“For people who came into our church, many were coming from a place of generational poverty. Their families rented or they just didn’t understand that homeownership was an option for someone who had a solid middle-class income,” says Brandon.

Brandon and others have used Thrivent Action Teams, a benefit to clients with membership that allows them to support the causes close to their hearts with resources and seed money, to help maintain the homes while getting them ready. They've done large yard work projects and painting projects.

Wilkes recalls Investing in Peoples’ first buyer, a single mom in their congregation. “It was a combination of excitement and relief to feel like we pulled it off,” he says. “We really felt like we were changing the trajectory of her future with this one asset—and it has. Her life has catapulted to another level since then.”

Generational wealth through homeownership doesn’t just create financial stability for yourself and your descendants—it also enables you to give more time and energy to other areas of your life, such as philanthropy, travel or family.

“It’s just a part of becoming all you can be,” says Brandon. “Not having financial stress in your life releases you to be able to do some of the greater things.”

For Brandon, that means spending as much time as possible with his wife, Dorothy, and their three kids—Brandon II, Isaiah and Keilah. He looks forward to grandkids and visiting them frequently, whether they live nearby or far away. With their Thrivent financial advisor, the Wilkeses have created a financial plan that will make this goal possible, as well as allow them to help their kids financially in the future, if needed.

“I think I set a pretty decent foundation to help my kids manage their financial future,” says Brandon, including saving, giving to the church, and earning what they need. “My prayer for them, and what I’ve hopefully taught them to do, is not steward their money with fear, but steward it with generosity and plan for the future as well. My goal for them, financially, is to have a healthy relationship with money.”

Financial lessons aside, Brandon also is teaching his kids to be generous and giving, leading by example through his work with Peoples Church and Investing in Peoples.

“I feel like my purpose is helping other people achieve their purpose,” says Brandon. “I help people to see that they're significant, that they're made with purpose. They’re not just an employee, a parent, a child, but someone who God loves, someone who the people within our church body and who I love. A lot of my work is helping people to realize their full potential of what God has called them to be.”

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Whether you’re purchasing your first home or your next home, these tips are beneficial for all buyers.

Before you even start looking at homes, you need to know how much you can afford for a down payment and how much you are comfortable spending on your mortgage each month. Beyond the price of the house itself, you also need to consider costs like taxes, insurance, utilities, trash, water and repairs, to name a few. You’ll also want to think about other financial goals and lifestyle choices to create a holistic budget. While you may qualify for a bigger loan, you might want to opt for a smaller one that enables you to use part of your income for other things that are important to you. Thrivent Credit Union’s Balanced Homebuying calculator ensures your mortgage leaves room for living, saving and giving

Once your price range is identified, meet with a lender who can start the prequalification process, which will give you an estimate of the amount you’re eligible to borrow. You’ll start exploring mortgage options and payment structures. First-time homebuyers may need as little as 3% of the purchase price for a down payment or may qualify for special programs. Your credit report also will be reviewed during prequalification. Lenders look at your credit score to determine how creditworthy you are, so it’s crucial to work toward the highest score possible (over 700 is ideal) by keeping debt low and making payments on time.  

A realtor will help find homes in your price range and be your advocate during the negotiation process. Take the time to interview realtors about their experience, availability and market knowledge. Consider enrolling in Thrivent Credit Union’s Home Rewards Program, a member benefit that matches you with a certified real estate agent familiar with your area, provides a realtor commission rebate and offers other discounted services, such as savings on moving trucks and home improvement retailers.

For more information on purchasing a home, download Thrivent Credit Union’s First-Time Homebuyers Guide.