Wealth and Financial Literacy
Wealth Building: Do we care?10/26/2010
Cash, Rules, Everything, Around, Me/ C.R.E.A.M./ Get the money/ Dollar, dollar bill y'all ~Wu T...
Cash, Rules, Everything, Around, Me/ C.R.E.A.M./ Get the money/ Dollar, dollar bill y'all ~Wu Tang ClanThis maxim has been adopted by many African Americans; adopted with such ferocity that its bondage is inevitably passed from generation to generation. Over the past few weeks conversations have been had about the lack of economic stability within the black community. And the consensus among these 30 year old men and women is the same. While one young lady commented that to hear that her worth was less than a $100 was offensive, it was true. Single with no kids, she dwelled in an apartment, spent weekends shopping, days eating out, and saved minimum. The notion of being financially responsible eluded her because she had in her words, “no real responsibility.”
According to African Americans Revealed, in 2008 African Americans accounted for a 10% increase in population from 2008 versus 2000, while African-American buying power increased more than 55% during the same period to $913 billion. By the year 2013 black buying power will reach $1.2 trillion dollars, a whopping 35% increase versus 2008, according to BET. What’s even more baffling and quite the contradiction is the wealth gap between blacks and whites which hovers around 75K. This article does not serve to merely point fingers as to who’s to blame for the disparity but instead seeks to share ideas on how to build equity, security, and mobility within our community.
The fact still remains that while being a good servant, money is a poor master; contributing to the rise and fall of kingdoms, empires, nations, and people. Outside of quick riches many a man cannot fathom the idea of self-made wealth through such guiding principles as personal sacrifice and discipline.
Today African Americans represent approximately five percent of the 1.6 million people in the financial services industry and 8.6 percent of financial managers. This present “coloring” to the industry is a powerful commodity for blacks as we seek to receive sound advice from prudent individuals that are of the same descent.
The first step in building a solid financial house is realizing that it needs to be done and doing away with the desire to keep up appearances or keep up with the Joneses. The priority is to set financial goals and then put this plan into action thus setting a foundation for accumulating wealth. Learning to live within one’s means is critical otherwise the cycle of debt and borrowing continues. The 70/30 rule is possibly one of the fastest ways to build wealth according to a representative in the financial services industry who has a career spanning over 26 years. It’s where you save 30% of your income and live off the other 70% with daily living expenses. The 30% percent can be broken down to 10% for charity and 20% for savings. Saving is crucial and an added value as an emergency fund for the unexpected. Through it all, assets must be protected with insurance, especially if one has a dependent family.
We have the opportunity to turn the woes of poor money management and the lack of financial literacy around. My hope for us all is that we ascend to a place where we move from consumers to savers, from savers to investors, from investors to producers. Within this realm, it is the producers and investors that reap the greatest gains and in turn create generational wealth.
Skyy Banks is an author and freelance writer who is a native of Arkansas and now calls Atlanta, GA her home. Banks enjoys reading, writing, and traveling. Banks uses her writing as a platform to encourage her readers to explore taboo subjects and engage in dialogue to find solutions. She is a self-motivated woman and knows the world is waiting for her greatness. "The only limits are the ones I place upon myself; I don't have any."