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In the bank: A conversation with Johnny B. Moore Jr., Part 2

You have to start saving and saving early. One of the things our people need to understand is as soon as you become employed and eligible, join a 401k of the company. 
 Carlee McCullough

Johnny B. Moore Jr. is the president and CEO of SunTrust Bank-Memphis. When he took on that position on June 1, 2009, he became the first African American to reach that level at SunTrust. Last week, Moore shared reflections on his rise to a significant leadership position within SunTrust. In the conclusion of our conversation, he talks about how to build wealth in our community

Community and wealth building

Carlee McCullough: Many economic forecasters believe we are moving toward an economic turnaround within the next year. Taking this into account, what can business owners do in preparing their financial structure to respond to future growth?

Johnny B. Moore Jr.: Not understanding cash flow hurts many businesses. That is deliver a product or service, then give your clients terms, and then pay all your related expenses like your employees and payroll so that your inflows and outflows match up to make sure your business is always solvent. We really focus on our small businesses by helping them understand their cash flow and putting credit facilities in place to help facilitate that process. As you grow you need the proper capital structure in place in terms of debt and equity to support your future growth. If you don’t, then when you get these big contracts, you don’t have the cash flow to support, which causes another set of problems.

C.M.:  From a banker’s perspective, how do we build wealth?

 Johnny B. Moore Jr.

Number one, you have to start saving and saving early. One of the things our people need to understand is as soon as you become employed and eligible, join a 401k of the company. You put in just enough to get the corporate match. Typically, companies will match 5 percent of what you put in or .50 on a dollar of what you put in up to the first 3 percent. That’s free money and you need to take advantage of it. The earlier you start, the better off you are going to be because of the compounding factor of money.

Aside from saving money, housing use to be a way to create wealth because of the equity built over time. But right now the market is down and historically we have raided the equity in our homes to do all the things we probably didn’t need to do. The equity was the source of capital for the vacations and cars. We have to have more discipline once we create equity in something and start investing in assets that appreciate in value instead of depreciating in value. Any type of assets that appreciate in value over time is what we need because that’s how you create wealth.

C.M.:  How do we pass wealth on to the next generation?

J.M.: Somebody has to make the sacrifice and start saving money. Say you save money to give to your kids if they don’t get a scholarship to college.  By the parents paying their way through college, when the kids graduate they don’t have debt. Instead of $20,000 or $30,000 in debt, the kids graduate from college, get a good job and start saving from day one.

Next, parents should try to pay off their house.  Later, when they’re deceased, the kids inherent a house with no mortgage. That’s wealth building because you have equity in the house. Wealth gets created by transferring assets with equity. Additional wealth is created when people just flat out save and gift their money to their kids annually based on what they can give at a tax-free basis. If you are doing that every year to create a savings for them tax free, that’s how you create wealth.

Outside of winning the lottery, another way of building wealth is to own your own business; build the business up where the value increases over time; and transfer the business to your kids in the company.  

C.M.: Any closing remarks?

J.M.: I think SunTrust is a great bank and we are a great corporate citizen. We would love to earn the right to bank with everybody in the community.

(Please send your questions to Carlee McCullough, Esq., Contract Compliance Officer, City of Memphis-Office of Contract Compliance, 125 N. Main St., Suite 546, Memphis, TN 38103 or e-mail: This email address is being protected from spambots. You need JavaScript enabled to view it. .)

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