By Jessica Dortch
AFRO News Editor
From the AFRO archives
The wealth gap, among other disparities, is an issue gaining more attention due to the ongoing coronavirus pandemic. However, Anthony Woods and his team at Sunshine REIT are determined to give the Black community a financial education. Woods spoke with the AFRO about the significance of the Black dollar, consumerism and how to close the wealth gap.
AFRO: Why is it so important for African Americans specifically to actively participate in closing the wealth gap?
Anthony Woods: There are a couple of statistics that stuck out to me personally and in my company in general. The first one was a report from the National Institute of Public Policy in 2016. What is stated clearly was that if nothing changes, it will take African Americans 228 years to close the wealth gap as it currently stands now. We are so far behind the curve. The fact hat in the late 1800 post slavery Black America represented .5% of wealth in this country. In 2020, with the Oprah Winfreys, LeBron James’, and Michael Jordans [in the country] Black America only amounts for 1.5% of wealth in the country. So, 250 years after slavery and we only improved by 1%.
The most startling number, for us, was a Fortune Magazine article that stated by the year 2053, the average median net worth of Black American families will be zero. Now, it won’t be LeBron James and Oprah Winfrey, they will still have money, but collectively the net worth of African-American families will be zero. At the same time, the networth of White families in America will be $172,000. So, those statistics make it important for me as an individual and us as a company to change those numbers and make sure they are inaccurate.
AFRO: What are a few things people can do today to increase their personal wealth?
AW: Black America spends approximately $1.8 to $2 trillion a year in this country. We need to stop that. We need to cut that by 10%. That’s 180 billion dollars going into Black America for saving and investing. It is a simple number. We spend too much, we create too little and we save nothing. That is our first step: stop being consumers.
AFRO: What about the Black dollar? Is it a problem that we are consuming, or a problem that we are not consuming in our own communities?
AW: It is a combination of both. I’ve written an article for Blavity stating that specifically. If we can get Black America to stop spending by 10%, that is $180 billion, and invest that into Black banks that can lend to Black companies that can create industries in the Black community, now we have an avenue for the other $1.7 billion to go into Black communities. We can’t direct money into the Black community if we don’t direct money to the institutions to foster entrepreneurship in Black communities.
AFRO: What “money laws” or financial rules do you set for your company?
AW: What we set for our company is this: we try to purchase in the African-American communities. We try to promote a community type atmosphere in the properties we purchase because we grew up in an area where we knew it takes a village to raise a child and we try to create those villages in the properties we purchase. We specifically target properties for this reason. We realize that in order to change the plight of Black America in this country, we have to change the way that Black America views itself.
I grew up in a neighborhood where everybody knew my name. Everybody’s neighbor was accountable for everybody’s children in the neighborhood. It wasn’t just your parents that looked out for you, it was the entire neighborhood. We are trying to get back to that, that’s why we purchase these properties. We want people to know their neighbors, and to have a connection with their village. We think that is important. Financially, it allows us to create a space for people who work hard everyday that want a clean, comfortable place to live.
AFRO: What rules do you advise others to follow, especially in a crisis like the pandemic?
AW: We realize that it is difficult to save in a pandemic, but we have to adhere to the 10% rule. We have to save at least 10% of what we earn. That is imperative, but the problem with Black America is that we save that 10% in a bank. The bank pays us .01% interest on that money. Then, they turn around and take that money and lend it out at 5% or 6%. There are also negative interest rates which is when the bank charges you to have your money in the bank.
We need to understand finances as a people. We have been so left behind in financial literacy. That is a component of what our company does. We aim to teach financial literacy to let Black America know how finances work and how the banking system works. Most of Black America doesn’t know how the banking system works. They have no idea. For every dollar they put in the bank, the bank loans out $10. We need to make sure that we understand that as a people. We also need to make sure that we understand credit as a people. Credit has been keeping Black America out of wealth in this country for over 100 years. We have got to get our credit in order.
AFRO: What are your thoughts on student loan debt and how it affects people of color disproportionately?
AW: That is interesting because it goes back to homeownership. White America owns homes. When their child goes to college, they take out a home loan and pay for their college. So, they graduate from school without debt. That means that they can wait to find that great job without fear of having to pay this student debt.
Black America, since we are so low on the homeownership scale, we don’t have the luxury of home loans to pay for our child’s education. Black America comes out with excessive amounts of debt, which pressures them to take the first job they get offered because they have to pay back their student loans. We don’t have the ability to move about to better our careers. It starts with homeownership. If we can increase homeowners in Black America, we can increase education without the large amount of debt.
AFRO: What are some of your projections for the financial future of the Black community and what is your company doing to get us there?
AW: I think right now Black America is at a precipice. We have awakened the system to the inequities we have endured for the last 200 plus years. The system is ready to accept what we want to bring to it. They want to help us, but we have to bring to them something of viability.
That is why my company started with this rental property and real estate industry. Six years ago when we started this, my wife and I, we just started it to create a legacy to leave to our children. As we got going and learned more, we realized we can do more for other people as well. Our whole purpose became that of increasing the wealth of everyday Americans.
We believe it is important to bring the tax benefits and possibility of commercial real estate to average, everyday Americans and that’s what we do. We have created a wealth building program, which has been around since 1965, because Black America has not taken advantage of it. The methods that we use today were approved by Congress in 1965 and it was improved in 2016 under the Obama JOBS Act. So this program has been in place and allowed for us to basically pull money together to own property in America, but Black America has never utilized it. What we’ve done is taken this program and made it our company’s policy and model to bring together average American people to purchase these tax beneficial and profitable apartment complexes. We share the profits with our investors, creating something that they can leave for their children and grandchildren. As long as the property stands, they will get a check every quarter.
For more information about Anthony Woods and Sunshine REIT, email him at email@example.com, visit Sunshine REIT online at www.sunshinereit.com or call their offices at (951) 289 -7784. Keep up with the company on Facebook @Sunshine_REIT, Instagram @Sunshine_REIT and Twitter @REITSunshine.