Overcoming: A financial love letter to Black women

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Deborah Owens, Founder of WealthyU (courtesy photo)

By Deborah Owens
Guest Editor

Every day, a Black woman reaches out to a financial services organization, but because she doesn’t have the foundational knowledge of how the financial markets work, or in many cases, enough assets, she will be pointed to a low-yield investment that will limit her ability to achieve financial security.

This was my opening statement in a pitch competition that I entered to get funding for a financial technology application. When I looked out at the panel of judges, I could see that my message did not resonate. In fact, to drive home the point, after the event, an elderly gentleman waited around to tell me, “Your presentation was one of the best, but you are rolling a boulder up a hill?” That was a real gut punch. What he was telling me was that this audience did not see it as a business opportunity.

If we don’t help each other, who will?

Some might say that my focus on Black women achieving economic wealth is financially limiting, but my heart tells me that It takes one to know one, and If not me, who will? I think about what my mother and aunts endured while working in the cotton fields in Pine Apple, Ala. Their sacrifice has uniquely prepared me for this battle as a financial freedom fighter.

It is my childhood memories of visiting their birthplace, and the legacy of Jim Crow, that have haunted me, exacerbated by the recent murder of George Floyd, the hangings in California and the recent killing of Black men in Georgia and across the country. The takeaway for me Is that we have to use our strength and abilities to help each other. Each one, teach one and each one, reach one has never been more important than now.

The urgency of now

My fight is with economic injustice, and how the pursuit of the American Dream has been denied because of the systemic economic barriers that have left Black women with empty purses.

My parents believed that their sacrifice and the passing of civil rights laws would give their children access to a life they only dreamed of.

The formula for financial success was simple to them: college, career, house, pension.

According to the 2017 Nielsen study, “Our Science, Her Magic,” Black women influence fashion, technology, art, and entertainment. We are outpacing our counterparts in educational attainment, business ownership, and our incomes have increased significantly in the past two decades. This proves that #blackgirlmagic is real, right?

Black girl magic: a myth or reality?

Despite the smoke and mirrors of success and progress, that brilliance and genius of Black girl magic has not translated into real wealth that can transfer to the next generation. Black women have a median net worth of less than $200, or less than 1% of our White counterparts. Over 62% of Black households have no investments in the stock market.

Could that be why the number of White households with a net worth of a million dollars has doubled in the past decade while Black households have remained unchanged? The statistics also show that even affluent Black families are more likely to have their assets in guaranteed or fixed income investments that result in lower overall return and growth of assets.

My mission, my message

I founded WealthyU to provide a financial blueprint for Black women to overcome the systemic barriers that create an economic disadvantage. The truth about wealth for Black women is that we have to play by a different set of rules than what our parents advised. Conventional wisdom does not produce the same outcomes for households headed by Black women.

In fact, if we don’t confront these myths, our children will repeat the same mistakes.

  • Myth #1: Student loans are good debt.
  • Myth #2: A corporate career equals financial success.
  • Myth #3: Homeownership builds wealth.
  • Myth# 4: Investing in stocks is high risk.

Don’t just earn, own

How do Black women translate their ambition and achievements into real wealth? The key to Black women’s wealth lies not in earning, but in owning.

Owning, not earning, looks something like this:

  • Be discriminating and strategic when investing in higher education. College debt is not good debt. Negotiate acceptance offers and look at all sources of education funding. Higher education has not paid a huge return on investment through increased income.
  • Be enterprising and flexible, and always have multiple streams of income. There are no lifetime careers. What unique value do you bring to the marketplace? Become an evolving expert and differentiate yourself in the marketplace to attract recruiters and employees.
  • A home is where you live and not a guaranteed pathway to wealth. Homeownership is a double-edged sword for Black women. We must be discerning about loan terms and make it a goal to pay off our mortgage. We must also avoid using our homes as collateral to take on additional debt or pay off other debt. Buying a large expensive home with a huge mortgage will not create wealth.
  • Be an investor, not a saver. Learn about the financial markets and how to research, analyze, and make sound investment decisions. Savings accounts will not keep up with inflation. Put the power of great companies to work for you. Shift from consuming products to sharing profits.

Master the art of investing

WealthyU is in the business of helping Black women increase their financial acumen and master the art of investing. We’ve created seven steps — a financial success blueprint for Black women to address their personal wealth gap.

  1. Focus on increasing your net worth
  2. Find and develop your superpower
  3. Increase your financial acumen
  4. Develop a goal focused action plan
  5. Balance risk and reward
  6. Leverage technology and create systems
  7. Protect and preserve your legacy
  8. Overcoming by working together

The truth is that Black women are inherently wired to invest, because we are trendsetters and innovators. We can use that same genius and intellect that influences trends into wealth-building muscle. The same goods and services that we purchase as consumers are potential investments for our portfolios. Black women simply need the right tools and knowledge, coupled with our unique insight into the financial marketplace, where ideas and innovation are rewarded. Overcoming our wealth gap and creating generational wealth no longer requires someone giving us access. The keys to entry and mastering the financial markets are courage and execution. So, as we take this pivotal moment in our nation’s history to think about our past and our future, we want to do our forefathers proud while also leaving our future generation a strong roadmap that leads to financial success and independence.