In our defense, African Americans are playing catch up on several disadvantages. For centuries we have been victims of segregation to many wealthy practices of our white counterparts. We have been denied adequate educational opportunities, which has given us a dismal understanding our how money works, and how important economic independence is for the black community. This may lead to a call for us to educate our own children or at least supplement their pre-existing educational protocol with something that will help them survive in a capitalist society.
This divisive agenda has kept us in the dark about how to truly get ahead in our country and strengthen the black community. Somehow, we find it elusive to put our money into the American pie, and reap the rewards of a booming economy. Unfortunately, we are conditioned to spend rather than invest, and because of our spending, the investors are the ones making all the money.
Author, Glenn C. Loury shared his interesting perspective in The New York Times Sunday Magazine ‘Why More Blacks Don’t Invest.’ He explores the ideals of his Uncle Moonie who had accumulated wealth but did not invest his money. Instead, he put his riches into tin cans and stored them in a closet where they sat, never gaining interest. Here is a excerpt of the article.
He says, “But, as a child of the Depression and a veteran of the pre-civil rights racial climate, my uncle had some rather peculiar ideas about investing. Year after year, he stuffed the accumulated profits from his small business into dozens of old fruit juice cans, kept under lock and key in his bedroom closet. Once, when I questioned this strategy, he informed me flatly that he didn’t “believe in” banks, nor in the “white folks” who ran them.
Luckily, fortune smiled on our family. No burglar, or fire, ever found those precious cans. But then, neither did the fruit of Uncle Moonie’s labors ever find its way into the financial mainstream. My uncle’s alienation reflected the racially segregated economy of his day. But the effects of that bygone era continue to distort the economic experience of blacks. For example, among a sample of married-couple households surveyed by the Panel Study on Income Dynamics at the University of Michigan, only 14 percent of blacks owned some stocks or mutual fund shares in 1994. The white rate was 45. Another striking finding: More than half of African Americans households had no balances in either a checking or a savings account, compared with just one sixth of whites.”
The mentality of Uncle Moonie plagues a lot of black people and this keeps us from progressing. Unfortunately, for many the concept of investing seems like something that “white people” do, rather then perceiving it as a great American financial option.
READ MORE HERE: http://www.bu.edu/irsd/articles/whyinvest.htm
Financial Juneteenth lessons from this story:
1) Black people are not less intelligent than whites, we’ve just had a different experience. Also, the wealth gap is often explained by presuming that black people are less financially responsible than whites. This really isn’t the case either. The wealth gap exists because our ancestors had their financial and physical survival threatened nearly every day of their lives. Many strong black businesses were built, but taken away by whites. This is why we deserve reparations for what was lost.
2) The past is real and we must understand our history. But it is equally important to determine our future. Our future doesn’t have to be handcuffed by our past, and through a commitment to financial literacy, we can create better opportunities for our children. Start small by reading on investing on the Internet, saving a little money here and there, and before long, you’ll be on your way to financial freedom.