Black Men: the Death and Rebirth of the Financial Role Model

Only 17% of Black men have a bachelor’s degree. We have to change that drastically. African American males, ages 16 to 64 have a lower participation rate in the labor force (67% compared to ‘all males’ 80%).

It has gotten so bad that over 20% of work-eligible black men did not work for all of 2016. The usual reaction to this is, “Not me”. I’m not here for the emotional vanity so please check your unfettered femininity at home. It might not be you. This is the reality for a lot of people that you don’t run into or communicate with, on your normal work-to-home commute. The people we actively avoid on our road to success. The people we forgot along the way. Too many black boys are in the structural unemployment pipeline.

Most won’t break a salary income of $40,000 per year. We have work to do.

Table of Contents

Underpaid, Under-prepared and Underemployed

Black Millennials, specifically Black men are simply under-prepared. To date, we are the most educated generation (scholastically speaking). We have access to more information than excuses. I would even argue that we are in the best position to usher in a financial revolution. Black men’s role often defines the direction of the Black community. Working side by side with our significant others, we can stand against and ahead of the fight. Black men are often expected to lead even though we were never formally taught about the rules, the tools, and our purpose. Given the current direction of the Black community, it’s time to rely on our individual strength and learn as we go. This article will paint an overview of the issues affecting Black men while providing solutions.

From the Road to Zero Wealth Report by ProsperityNow and the Institute for Policy Studies. “By 2053, Black households will have a median wealth of ZERO.“

Having grown up during the era of global athletic superstars, infamous rappers, and major power players like Jay-Z, Puff Daddy, Kanye West, LeBron James, Michael Jordan, etc., it’s no wonder that we deviated from any concept of family and any semblance of normative working careers. The Emergence of the Black Athlete in America has fabricated a limited predetermined destination for a vast majority of black boys leading to the prosperity of a select few and the detriment of the community. These mistakes are costing and dividing us.

There are families banking on sports as the great equalizer, but here are some facts:

Basketball. High school seniors that go on to play in the NCAA is less than 1 in 35 (or 2.9 percent). NCAA senior players drafted by an NBA team: less than 1 in 75 (or 1.3 percent). High school seniors eventually drafted by an NBA team: About 3 in 10,000 (or 0.03 percent). That’s roughly the chance of getting four of a kind in the first round of draw poker.

Football. High school seniors who go on to play NCAA men’s football: About 1 in 17 (or 5.8 percent). NCAA seniors drafted by an NFL team: About 1 in 50 (or 2.0 percent). High school seniors eventually drafted by an NFL team: About nine in 10,000 (or 0.09 percent). That’s about the chance you have to have an IQ above 150, as measured by the Stanford-Binet test. The average IQ of Ph.D. students is 130. NCAA Research, and the Josephson Institute’s PVWH Sportsmanship Newsletter, Feb. 2005

The odds are too great not to diversify our approach and broaden our definition of success.

In order to grow richer, it is time to understand the information and the reports as they are presented.

It’s important to note that wealth in America looks very different for white and black families; largely because black families have been historically shut out of wealth opportunities due to discrimination and a lack of investment by policymakers on both sides of the aisle over several generations.

“Most of the racial wealth gaps that exist are a result of the lack of inter-generational wealth transfers available for Black families based on a host of different reasons ranging from Federal Housing Administration policy, slavery, Jim Crowe laws, employment discrimination, denial of access to capital, and the list goes on and on.” Broken Dreams And Financial Illusions: The Secret Depression of Black Men by Dr. Marcus Bright

Here is a list of financial stats associated with “Being Black in America”, as of 2019 with Links Provided:

*As always, I’m just living on this earth too so don’t blame the messenger just look at the stats, and start generating solutions if you feel strongly about them.

While African Americans account for just 14% of the US population, we bolster over $1.2+ trillion in spending power. It has long been my belief that the spending of Blacks and other people of color in America pulled America (and the world) out of the recent Recession. We were likely the only group prioritizing spending over savings and investments. When the investment tides raised all ships, we were not on board. We were at a bar in Fort Lauderdale, or in DC at brunch. Straight Missing in Action (MIA).

As of the 2010 U.S. Census, there were 42 million black people in America (including multiracial African Americans). $1.2 trillion is about $29,000 in spending power per person. We have access to money. How are we using it to generate wealth?

Hyper Black Spending

Average time spent on social media for the week: 15+ hours. Average time spent reading: 2 hours. According to the Nielsen report, African-Americans watch 37 percent more television than any other demographic, and their consumption proclivities are equally influential.

While the African American household earns less than the market average, their annual retail spending accounts for 87 percent of total market retail spending, demonstrating what the industry dubs as “hyper vitality and extreme resiliency.”

Black Exceptionalism and Debt

Billionaire Robert F. Smith’s recent historic promise to pay off approximately $40 million in student loans incurred by 2019 graduates of Morehouse College will be a game-changer for the 396 graduates. This breaks down to an average debt of $100,000 per student. This brings to question how much do you owe? And did that number balloon in deferment. *As of Sept 2019, the total amount has been updated to $34 million for 400 graduates. A staggering $85,000 average per student.

Black students borrowed nearly $29,344 on average for a bachelor’s degree at a public university in 2012, $3,500 more than the average white student.

Black Indebtedness and Little to Show for it

1 in 5 Americans (21%) have NO retirement savings at all. What’s worst, is that when we pass away we leave the financial burden to the ones we love.

1 in 3 Baby Boomers (33%) have around $0 – $25,000 in their retirement savings. The next 20 years set up the sandwich effect, a retirement disaster the community is ill-equipped to handle.

According to the Federal Reserve’s Survey of Consumer Finances, in 2013, the median white household had $13 in net wealth for every $1 in net wealth of the median black household.

The median wealth of a young debt-free black household was just $4,500 more than that of young indebted white households. More than 85% said student loan debt was a major source of stress, and one in three said such debt is the biggest stress in their lives.

The average white family had more than $130,000 in liquid retirement savings (cash in accounts such as 401(k)s, 403(b)s and IRAs) vs. $19,000 for the average African American family in 2013.

The mean of black household wealth is $138,200—for whites, that number is $933,700.

1 in 10 African Americans works with a financial professional compared with one in four white Americans. Outside of company retirement accounts, only 37% of African Americans own wealth-building products such as stocks and mutual funds.

Eighty-three percent of African Americans lack the retirement assets they need to last the remainder of their lifetime. African Americans (age 62-70) have a median net worth of $46,200 as compared to $331,700 for whites.

According to the Federal Reserve, the average balance of African Americans 401(k)s is only $23,000. And Social Security and the Racial Gap in Retirement Wealth found the average balance for African Americans in pensions and IRAs is $10,300, vs. $105,600 for white Americans.

Over Reliance on Government to Better Black Wealth

Forty-six percent of African American seniors rely on Social Security for at least 90 percent of their income, compared to 35 percent of Whites.

Only 42 percent of African Americans owned a home, compared to 68 percent of Whites. African American homeowners are 86 percent more likely than Whites to have an underwater mortgage.

Average American weddings cost over $33,000; a sunk cost for less than 10 hours which threatens to torpedo any fledgling young marriage in the first 3 years.

Only 54.3 percent of African American workers have employers who offer a retirement plan. Of the African Americans with access to an employer-sponsored retirement plan, only 81 percent participate (Missing out on around $70,000+ of matching contributions over 30-years before any market growth at 8% annually).

A member of a white family is twice as likely to receive an inheritance in comparison to a black family member, and the inheritance received is usually three times larger.

For every dollar of wealth owned by a typical white family, the median black family owns just five cents.

The Critical State of Black Men and Access

The most sobering news, derived from the 2017 US Census Bureau in collaboration with Univesity of Illinois at Chicago’s Great Cities Institute found that 45% of Black men in Chicago age 20-24 were neither working nor in school in 2017 (vs 5.7% of white young adults age 20-24). “In the District, D.C. Department of Employment Services statistics reveals that 5.7 percent of all African Americans are jobless compared to a white unemployment rate of 1.5 percent.” A disparity that Andre Perry, Scholar at the Brooking Institution, says extends throughout the country. “The unemployment rate is 15.8 percent in Newark, is an alarming 17.4 percent in Detroit, and in Flint, more than a quarter of the population is unemployed.”

The Federal Reserve published a June 2017 paper which found that black and Hispanic men are more likely to lose jobs than white men. Most remain temporarily unemployed for a longer period of time.

Many are merely ignoring their responsibilities, hoping it will get better. …It doesn’t. The situation improves when and where we decide that it does.

The Takeaways

It’s time to accept the concept of growing up and step into positions that we ourselves wanted to see.

Instead of having the conversation about who is better, Michael Jordan, Kobe Bryant, or LeBron (for more than 30+ years) start having a conversation about how these men established a new legacy for their families. Instead of debating who is the greatest rapper of all time, focus on being the greatest cheerleader and contributor in your relationship with your significant other, your family, and your community. Discuss how others started to “buy back the block”, instead of repping the block. Better yet, if that is too abstract, use your spare time to train up a future generation of athletes who are also scholars like Shaquille O’Neal, Magic Johnson, and Myron Rolle. Start a discussion about Swiss Beatz, who graduated from Harvard.

Let’s dissect the game unapologetically. And for God’s sake, get off the couch and go get this money. Budget, save, invest, and leave it behind when you are dead, for the next generation. Let me repeat that for those in the back. Budget by priorities. Save at least 20% of what is earned. Invest your money beyond your local bank’s Certificate of Deficits (CDs), this includes stocks, real estates, and businesses. Use what you need and leave the rest to enhance the next generation. It can be done.

Cut the BS, we are men. Stop with the Post to Flex. Too many guys spend too much time and way too much money, trying to look prettier than women. We are solution drivers. We are fixers. If it squeaks, we fix it. This is what we were born to do.

We need more doctors, lawyers, engineers, black male educators, police officers, judges, pilots, farmers, horticultural experts, nurses, etc… A critical push for modern financial soldiers. We need homeowners. A space for legitimate investors. We need fathers in households.

Ultimately, we need each other. We need to hold ourselves accountable for we cannot be a man with no personal agency, no priorities, and no dominion. Our women need us now more than ever. We don’t need any more brunches. It’s time to learn to cook full meals that nurture and foster growth.

Darkness cannot drive out darkness; only light can do that. Hate cannot drive out hate; only love can do that. MLK

The Rebirth of the Unapologetic Black Financial Role Model

It is not all doom and gloom. There are fighters trailblazing a new path. Equipped with the strength of conviction, indomitable will, and courage; you really need to tune in.

More than just talking points. Paychecks & Balances is a fun-formative podcast for millennials interested in making money, saving money, and getting out of debt.

Rich @IamRichJones and Marcus @TheMarcusGarrett leverage their experiences to provide entertaining insights and helpful tips on money management, professional growth, and other topics relevant to 20 and 30-somethings trying to get ahead.

Opening new spaces. The Gentlemen’s Factory is one of the very few spaces in New York City exclusively for men of color, a middle ground between work and home for men who need a venue for networking and socializing.

Upon entering, they find a lounge, complete with couches, a barber chair, and books on finance. The spiral staircase leads to an area with workstations. “They’re going through a divorce, or they have mental health challenges, or they’re going on an interview but they don’t know how to ask for a salary increase,” said Jeff Lindor, the club’s founder in the New York Times article. “There wasn’t an outlet for them to be.” They are breaking new ground, dispelling myths, and expanding the idea of the well-rounded Black Men.

His and Her Money. Talaat & Tai McNeely are the founders of HisandHerMoney.com and authors of the book Money Talks: The Ultimate Couple’s Guide To Communicating About Money.

They strengthen couples in the area of personal finance. Talaat is a father and provider. Always seeking the best for his family, he never shies away from having great connecting conversations primarily for couples. He desires to see couples come together on one accord with their money, achieve financial freedom, and to build wealth.

Keepin’ it Popping Financially. Chris Downing is the creator and host of the Popcorn Finance Podcast! During the day, he works as an Analyst trying to make use of his Finance degree. But at night, he hops on the microphone to share my passion for teaching and discussing personal finance.

Being more than Rich and REGULAR. It’s a blog, a mindset, a voice, and a wake-up call to name a few. It’s their love story. Reversing trends, empowering families, and changing lives for the better. Julien met Kiersten as co-workers in 2012 and clicked.

With no blueprint to follow, they somehow gained the courage to tackle some really difficult conversations about money. The outcome was a multi-year plan to eliminate debt from our lives and to build real sustainable wealth. Together, they paid off $200k in debt.

It’s all about legacy. Joseph (Joe Danso, on the left with his father) started the DanaBen Financial Group, LLC with the vision to become the backbone of the people through valuable financial education.

His mission is to build and protect our legacy while providing a road map to success through financial solutions that give you peace of mind. He is making wealth accessible through his Facebook and Youtube channel.

There is a time and place to learn and invest. And that time is now.

Solutions to get you started ASAP

To help get you on the right path to financial independence, Lawrence Gonzalez, Financial Literacy Educator offers this advice:

1. Financial Education

It’s imperative to have a savings and spending plan, allowing you to tell your money where to go and keep track of it. Grab the Net/Max Financial Plan. There is one For Singles, For single parents, and finally For Couple with/or without kids. You can have a great life so don’t limit it with time at the club or the mall down the street. There is a world of opportunity waiting for you.

Free resource: Money Management estimator

2. Financial Planning and Execution

Know your numbers. Know your risk tolerance. When it comes to achieving wealth-building goals, eliminate high-interest debt, reduce debt, and establish a savings fund. Reduce unnecessary expenses so you can do what you absolutely love to do in life. Avoid unknown scope creep and cost creep. I ended up adding $10k to my student loans in 6 months through “deferment”. Monitor the investment and its performance regularly. Meal Prep is life. Brunch is the death of finances. And lean off using the credit card. Another quick fix is Warren Buffet’s 5/25 rule. Make a list of the top 25 things you want to do. Then pick the top 5 things. Now ignore the rest of the remaining 20. Those are your distractions from greatness. They aren’t important. Toss them out and make fav five work for you.

3. Professional Help

Seek advice from a financial professional equipped to help you establish and reach your financial goals. Check out their background, references, and makes sure they are licensed in the state they work in. And, Start learning as much as you can about finances. The most powerful device is in your hand for at least 15hrs a day. Use your cell phone, Google. Or Watch quality content on YouTube. The same way you can retain sports’ stats or the same way you can critique who is the best rapper for hours; you can write entire novels with that same energy. Who knows, you could probably write a best’s seller with barbershop material alone.

4. Don’t Choose

Take it from a Marine, unlearn what you think you know. Be unrestricted in your pursuit of life. You don’t have to just be the rapper or the lawyer. Be the Lawyer that can rap (part-time). You don’t have to be the Accountant or the musician. Do both. You don’t have to be an entrepreneur. It’s not for everyone. You can work a 9-5 and still earn a great paycheck and live an exceptional life. You don’t have to choose one over the other. It might not be you. You might be a baker, a cook, an electrician, a plumber, or a medic. You can be so much more.

5. Step-up and Lead

Although this article is based and conducted out of a love for brotherhood; most men would attest that they couldn’t have ever reached this stage without their rock and greatest supporter, their partner. Cheers to the Ladies. They are expecting us to lead. They believe in us even when we don’t quite see it in ourselves. So step-up and lead.

I was asked, “How do we go about legacy building? The answer is simple and will always remain simple. Correct your personal finances. Marry a likeminded person who also corrected their issues. Raise kids with balanced values and Grow your net worth.

Written by Lawrence Gonzalez. Reviewed and Edited By Ecclesiaste Guerrier, Events Engineer and University Operations Administrator. Also Featured on TheMogulMillennial.com.