Why is it that we as African Americans struggle to understand the importance of building long term wealth? The first thing that comes to mind is our spending habits. A study conducted by NewMediaMetrics revealed that “African Americans have stronger emotional ties than whites to specific Japanese and German luxury cars, Google, the iPhone, Nike sports apparel and Microsoft.” There are a lot of theories as to why we tend to gravitate toward these more expensive brands. Most of which are based on African Americans having some sort of inferiority complex, but that’s a different topic for a different article. Primarily, the issue stems from our inability to grasp some key concepts. Not only do we struggle to understand the importance but many of us don’t even know where to start if we wanted to work to attain wealth. Many of us have adopted a mindset that more so focuses on the here and the now, rather than tomorrow.Our mentality is strongly shaped by our past experiences as well as lack of exposure to certain concepts and ideologies. And the shaping of our frame of thinking is generally a reflection of what our parents have taught us. As much as I respect the generations before me, they have to take on some of the blame.
J Cole said it best:
“How mama gonna teach you how to save your money
When she barely on the boat got stay afloat money
Blacks always broke cause we don’t know money
Spend it before we get it and could never hold money
No wallets, nah, n*gga we’d rather fold money
Money control n*ggas, white man control money”
In many cases mama either didn’t have it or if she did, she didn’t know what to do with it. We all know a few people into their 40s and 50s even, that have made the decision to buy a brand new luxury car but they’re still living in Section 8. Not at all knocking low income housing but someone who is concerned about building financial security would find an alternative such as taking the bus and applying that money to a mortgage instead of a car that will decrease in value as soon as it leaves the lot. As the lyrics suggests, a lot of Blacks from the boomer generation didn’t know any better themselves, so unfortunately their ignorance was passed along.
Now that we’ve identified the root of the issue how do we correct our thinking? First and foremost we need to understand that our material possessions do not make us. You would be surprised how many grown people think that they’re defined by their belongings. Secondly, Blacks must implement the concept of paying yourself. If you can pay your bills, you can pay yourself by putting away money each month. In my opinion, it should be the goal of any working person to have at least $5,000 in savings at any point in time, so that if any unforeseen circumstance arises, the financial burden will be less devastating. Lastly, let’s learn to invest. Saving will provide for financial stability but investing can lead to financial security.
Very well said, not many people think about tomorrow instead of now and what they need to be current. I hope many people read this article and take a step back and think about how their spending could be used for something that will last in the future
ReplyDeleteGreat article "Queen," a wise man in a bar once told me this, and yes he was intoxicated, "if you allow material items to make you a man, then you are not a man, you are a robot." Some people are too busy putting on a show for recognition from others than putting their money aside or investing it, to make it grow.
ReplyDeleteThanks for the comment Tara! It's funny that you say that. I actually want to do a study that shows people what that could invest In (house, car,business) if they reduce frivolous spending. So look out for that post some time in the future :)
ReplyDeleteThanks for the comment L. Even as an intoxicated man he makes some sense lol. I completely agree! If people focus their time, money and energy on building long term wealth rather than buying material things, they will be much happier in the long run.
ReplyDeleteThanks Jason! Look for my next post tomorrow. I'm really interested on your thoughts about my controversial "rule of thumb" lol
ReplyDeleteHow can individual save at 5,000 $? Should we use percentages from are various income? And what would be a good start(percentage).
ReplyDeleteHi Johnny! That's a great question. Most experts suggest that you start with saving at least 10% of each pay check. We all have different obligations, so some may be able to start a little higher than that. Either way it's a great start. Most jobs offer the option of direct deposit which allows you to set up payments that go directly to your savings. If you do that the hardest party is resisting the urge to dip in it. The idea is to have money to invest in larger purchases such as (a house or car) and also be prepared for any emergency that may cause financial strain. Just be consistent and you'll be there in no time :)
ReplyDelete[…] priorities got mixed up. Back in April of this year I touched on this topic in my article titled “Wealth” […]
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