How to Achieve Black Wealth through 10 Financial Articles

The Neighborhood Finance Guy writes about financial literacy topics, main ideas, investment strategies, and retirement tips to help you make effective decisions and set S.M.A.R.T goals with your money. The information is FREE but the struggle is not sold separately. By that, I mean that sustainable wealth is earned.

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Table of Contents

Is Black Wealth Even Attainable?

In the 2021 McKinsey & Company conducted a study on The economic state of Black America: What is and what could be. The report found that an estimated 3.5 million Black American families, have a negative net worth because of a history of discriminatory policies from the government and private industry that has hindered their accumulation of wealth for generations. Here are some sobering stats:

Black workers make up 12.9% of the nation’s labor force, but earn only 9.6% of total US wages,
43% of Black workers are in jobs that pay less than $30,000 annually,
2.7 Million Black Americans live in wealth “deserts,” which lack vital services, and
The average black student loan borrower owes about $34,000 compared with about $30,000 for white student borrowers. With nearly 38 percent of all black students who entered college in 2004 had defaulted on their student loans within 12 years, according to the Brooking Institution.

In comparison, just 8% of White households have a negative net worth while 4.3 million Black households have a net worth of less than $10,000.

How do we address wealth parity?

Adjust for 30% higher income for Black American households struggling with unemployment, underemployment, and structural unemployment. The focus is in divesting from low paying fields while shifting into STEMs and in-demand fields.
Decreasing Debt and increasing investments to add 2 Million Black Americans household to the middle class. On average, Black millennials are entering marriages with at least $45,000 in debt with no assets.
Revitalizing communities and Business capital to more than 615,000 Black-owned enterprises. Tapping into over $1.25 Billion dollars of Community Development Funding such as the Rapid Response Program and the Emergency Capital Investment Program.

Beyond the stats, social media has helped to spread the message that Black wealth is still POSSIBLE. To that end, I would like to thank publications like the Business Insider and CNBC Making It; podcasts like His and Her Money and Paychecks and Balances for spreading the word that we aren’t going down quietly.

“We have to define what wealth looks like for ourselves and go after that.”
Generational Wealth: How to Build It For Your Family [w/ Anne-Lyse Wealth]

Black Wealth Articles and Top Tips to Use.

1. How to retire early: COVID fails to dent FIRE community’s determination to retire before state pension age

The problem affecting Black wealth is global. We can take that in two ways. We can opt to give up globally or find kinship in the struggle to truly figuring out Financial literacy.

The Humble Penny is a Personal Finance site with the mission of helping you Create Financial Independence and Money Joy in your life

Have you started thinking seriously about your retirement? Figures from the Office for National Statistics suggest just over half of adults are paying into a retirement plan. The coronavirus pandemic hasn’t helped.

Nevertheless, there is an online movement determined to retire early. The Financial Independence, Retire Early (Fire) community is growing in popularity in spite of the stock market swings that have taken place this year.

The biggest takeaways from Ken Okoroafor and his family’s success are attributed to:

Time in the market (investing sooner than later);
The 4% rule (calculating future withdraws);
Creating a passive income stream; and
Planning for the future.

RJ and Anjie, a millennial couple started their student loan payoff journey just a month after they got married. Fourteen months later, in April 2018, they paid off their full $123,000 of student loans.

To do it quickly and have more money to put towards their payoff, the couple made some stringent lifestyle changes. They stopped dining out and spending money on entertainment, and started to talk about paying off their debt almost every day.

Additionally, they took on side hustles, reduced their expenses, and negotiated for raises at work.

3. 6 ways Black Americans can start building wealth today

According to The Brookings Institution, the net worth of a typical white family ($171,000) is nearly ten times greater than that of a Black family ($17,150). This staggering gap in wealth reveals the effects of accumulated inequality and discrimination, as well as differences in power and opportunity.

Kristi Martin Rodriguez writes that although the racial wealth gap between Black and white Americans is staggering, there are steps Black Americans can take to bridge that gap in their own finances.

Here are six steps that she thinks Black Americans can take to prioritize wealth building in their own lives:

Talk about money,
Live within your means,
Start saving and investing,
Prioritize your health,
Make a long-term care plan, and
Consider life and long-term disability insurance.

4. A 28-year-old single mom who started a $2 million business says she relies on 5 strategies to build more wealth for the future

In 2020, Ellie Diop was newly divorced with four children. To make matter worse, she was laid off from her corporate job. With little savings, she had to get a better handle on money.

A year after starting her online coaching business, and Diop’s business generated over $2 million in revenue.

The main takeaways from her meteoric rise:

Keep your expenses low;
Increase your savings rate and improve how you organize your finances;
Keep a close eye on the budget;
Invest for retirement and earn as much as you can; and,
Seek help from experts to help grow your wealth.

5. 3 habits a couple used to save over $500,000 in 2 years

Jhanilka and Anthony Hartzog, a therapist and IT professional tackled debt first.

With $114,000 worth of student loans, car loans, and credit card debt; the couple side hustled their way to wealth.

After 23 months, they became debt-free. Over the next two years, they used the extra cash flow to build up a savings and investment portfolio worth over $500,000.

Reroute cash towards saving;
Focus on earning more instead of simply spending less; and
Schedule a monthly budget meeting or money dates.

6. How to better understand your partner’s ‘money personality’

Because of the emotional attachment to money, it’s important for couples to talk about finances. Couples on average have 1 money fight per week. Either extremely caustic or silent, it eats away at relationships.

Financial blogging couple, Julien and Kiersten Saunders figured out the magic number of conversations you’ll need to have “over 10 discussions with your spouse or partner to understand their underlying money beliefs.”

Talk about your feelings towards money;
Create a budget;
Gather in abundance; and
Have a savings plan.

7. A millennial couple increased their net worth from zero to $500,000 in 4 years by making 5 strategic money decisions

In 2017, Doreen and Lawrence Delva-Gonzalez had a net worth of zero dollars. Four years later, the couple ballooned to +$500,000. They’ve also designed the Net Max Financial plan to reach millionaire status. The goal is to live a better life while making the most opportunities today.

While others perceived it to be a sacrifice, the couple love to dine out in DC and even travel. In 2019, they flew and visited 12 countries in 14 days.

Change your mindset about money to start setting S.M.A.R.T goals;
Use FREE apps to track their cash flow i.e. Personal Capital ($20 for $20 referral link) or Mint.com and use Investment apps such as M1 Finance (Limited time $50 for $50 referral link, normally $10 for $10);
Invest as much as possible, in yourself, your relationships, your work, rental property; and
Live your authentic life beyond earning, spending and social media.

8. A couple who paid off $224,000 in less than 3 years shares the exact strategy they used to get out of debt

When Leo Jean-Louis, an occupational therapist, and his now-wife Faith Jean-Louis, a pediatric nurse practitioner, got married, they not only combined their lives but their debt, too.

In total, they had $211,000 of debt (student loans and credit cards). Unfortunately, the accumulating interest fees added it up to $224,000.

Allocating $2,200 a month towards their debt, would take them 15 years. The additional cost was another $125,000 in interest. Leo and Faith wanted to start building generational wealth for their children. They did it by getting out of debt sooner. Tips learned along the way:

Celebrate financial milestones;
Share the journey through social media;
Generate content for more passive income; and,
Continuously set up a generational game plan.

9. 3 steps a millennial couple took to pay off $118,000 of student-loan debt in just one year

Karen and Sylvester Akpan ended 2020 on a high note. For their Black wealth story, they paid off $118,000 of student debt however they also did something surprising. They downsized into an RV.

They started a lifestyle and parenting blog called The Mom Trotter which provides them with passive income. Akpan told Insider she was inspired by Dave Ramsey’s “gazelle intensity” method. They took 3 steps: selling their house to buy an RV, creating a budget, and increasing their income.

10. A millennial couple paid off their mortgage 21 years early thanks to 2 straightforward strategies

Bloggers Marques and Shyra bought their home near Sacramento in 2009. By 2017, they’d paid off their 30-year mortgage. They are now focused on investing in real estate and earning passive income.

To pay off their home and shave years and interest off their mortgage:

They made 2 extra payments each year, and
Took on any side hustles they could, and
Avoided lifestyle creep.

Bonus Feature

We Paid Off $235k of Debt in 19 Months!!! | 5 Sacrifices We Made

In this video, they discuss five of the sacrifices that they made in order to payoff $235k of debt in 19 months, making them debt free!

No student loans or forgiveness programs, NO auto loans, NO personal loans, NO credit cards, NOTHING! This is their second attempt at becoming debt free. Which is a critic of the movement since debt-freedom is subjective and often only ending for most in retirement.

With the financial shackles broken, they made a choice to change their family tree by deciding against living “The American Nightmare”. This family attributes their success to the Heavenly Father, Anthony Oneal @anthonyoneal, and Chris Hogan @chrishogan360. The main take aways:

Determining your own faith/fate;
Focusing on shared goals when it comes to family and health; and
Making use misunderstood opportunities i.e. Military.

Disclosure: This post is brought to you by the Neighborhood Finance Guy. We highlight financial literacy information, resources, and more on your way to money management goals and personal wealth. Our goal is to help you make S.M.A.R.T decisions with our money. We do not give investment advice or encourage you to adopt a certain investment strategy. Your personal finance is up to you. If you take action based on one of our recommendations, we don’t earn a dime as of 5.2021. We operate independently.

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