The American Dream and The Exciting Future of African American Financial Competency

Brown skinned, brown eyed, kinky locks hidden underneath a wig of synthetic straight tresses, makeup on point (in my estimation) as I can make it and a dress and accessories to add to the professional image I have consciously crafted for myself in the business world. Being in the corporate space for the past 10 years, I have been practical in understanding my role in a country where the other players are largely Caucasian, and the client base is also largely Caucasian. Right now in America- African Americans are still struggling to realize the American dream, and some of us have gotten all of the consumer entrapments…a house, a car, maybe a husband or wife, some children and a steady income with a healthy credit limit (and maybe like many people not so healthy balances). However, where is the control that we have taken of our lives? Do we genuinely believe that we are equal? Are we simply following a roadmap that only works with stipulations? Even when we have attained “success”, are we truly members in this club of the United States of America? We must look at some events from the past to understand where we have been and where we must go to grow into a financially competent people. 

Ponder these words from Abraham Lincoln who said some things which did not make their way into my Social Studies class: 

“I will say then that I am not, nor ever have been in favor of bringing about in any way the social and political equality of the white and black races, [applause]…And inasmuch as they cannot so live, while they do remain together there must be the position of superior and inferior, and I as much as any other man am in favor of having the superior position assigned to the white race (Lincoln).

           This is the thought that has been passed down to that generation’s children, their children’s children and now we are here today with the remnants and it is rearing its ugly head. We cannot hide from the cell phones and body cams which record injustice and the laws which have been enacted and some just recently overthrown (lynching only became illegal in 2020) which have killed us either physically, financially or both.

           Owning a home as a widespread right of Americanism made its way into the nation’s consciousness through deliberate plans from the Wilson administration in 1917 in response to the Russian Revolution which gave rise to communism (Rothstein). Home ownership became the cornerstone of wealth building in our capitalistic society as a direct defiance of communism and input into American capitalistic society. However, home ownership has been systemically denied to black and brown people (and formerly immigrant Europeans but that has a different ending) through laws and regulation. According to Richard Rothstein in his book “The Color of Law”, Secretary of Commerce Herbert Hoover was behind many of the initiatives to keep African-Americans from home ownership and neighborhood integration. Government Better Homes representatives would tell Caucasian families across America that they would avoid strife with African Americans by moving into single family homes and out of the inner city (Rothstein). In the Better Homes Manual, it was published that apartments were the worst kind of housing and by living in restricted districts, home buyers would be protected from families they would not care to associate (Rothstein).

           To further compound the wealth gap crisis, 2020 alone will see that Americans may stand to inherit about $765 billion in gifts and bequests which are not taxed in many cases or have more favorable tax treatment depending on how they are structured (Batchelder). How many of these households will be African American? Statistics show in 2017 that the average wealth of White families ($919,000) was $700,000 higher than the average wealth of Black families (Dave Buchholz). This same study shows that as of 2016 only 6% of African Americans surveyed expected to receive an inheritance from their families. From 2016-2020 this number has probably not changed so we can only imagine that African Americans are only getting a small piece of the pie when it comes to inheritance from family members (102).

           Who can help African Americans and their families achieve and plan for the future? Financial, insurance planners and corporate and non-profit community educational initiatives. The industry needs to make a change in our financial firms. According to a 2017 study by the CFP Board Center for Financial Planning less than 3.5% of all 80,000 CFP (Certified Financial Planner) professionals in the United States are African American(CFP Board Center for Financial Planning). As people we naturally tend to work with people we know, like and trust and in many cases our own implicit bias causes us to work with people like us. To change the landscape and enable African Americans to have more financial intelligence and financial competency, there needs to be increased recruitment efforts and, in my estimation, more of a focus on community education which is accessible to our people. Companies need to show a commitment to building knowledge in disenfranchised communities with their dollars and recruitment efforts. Not just one or the other.

So, what can we do? African-Americans have been held back financially through discriminatory policies and laws that have been ingrained into our society which have historically and in many cases still- paint Black people as inferior. We have been held back from attaining the same financial status on a wide scale because of lack of representation in the financial industry, lack of interest in working with Black people from white and Black advisers due to both implicit and explicit bias. In addition, for so many average African Americans, there is ingrained and inherited ignorance which prevents financial change due to distrust of the system. However, we are in a wonderful era, a time when we have so much opportunity and can attain great heights. Those of us who have had the access to quality education and have attained stability have a duty to reach out and mentor even just one young person into our profession or to take a special interest by volunteering and showing those who are still living in economic disparities that they can rise above. The tables are turning and though we have an embittered past, we are in a time where we can take our power back. We can take the veil off our eyes that was placed there unknowingly by our parents, by society and reconstruct a version of ourselves that is whole. We must lean on our black therapists, our black financial advisors, our black educators, and those we look up to no matter their color and most of all we MUST advocate for ourselves. Further, when we advocate for ourselves, others will reach out and start to advocate for us. Each one of us has searching to do to change our narrative and tear down the stereotypes which plague our communities: both those biases we hold against ourselves and that others hold against us. We can, and we have the power to be, the CFO of our lives.

Leslie Tracey works with professional women, families and business owners to empower them to be the CFO of their lives through financial planning and education. She has been in the financial business since 2017. As a transplant from New York, she lives in North Andover, MA. She is an alumnus of Western Connecticut State University. In addition, she formerly served on the board of the United Way of the Dutchess County, NY and volunteered as Loaned Executive and Grant Reviewer. Leslie was also the 2018 recipient of Dutchess County 40 under 40 award. Her goal within the next five years is to develop consistent financial education for women and to mentor African-American young adults particularly female into the financial services profession throughout Boston and the Hudson Valley. When Leslie is not working with her clients, she is involved with music and youth ministry and loves to read, hike and travel. Give her a call! 845 902 8409 or [email protected].

References

Batchelder, Lily L. Leveling the Playing Field between Inherited Income and Income from Work through an Inheritance Tax. In Tackling the Tax Code: Efficient and Equitable Ways to Raise Revenue. Study. New York, January 28, 2020. Document. <https://www.hamiltonproject.org/assets/files/Batchelder_LO_FINAL.pdf>.

CFP Board Center for Financial Planning. "Racial Diversity in Financial Planning: Where We Are and Where We Must Go." 2017. Document. <https://www.cfp.net/-/media/files/cfp-board/knowledge/reports-and-research/racial-diversity-in-financial-planning/racial-diversity-in-financial-planning.pdf?la=en&hash=AF448519B74AFB8ED7C74FB4B511E36F>.

Dave Buchholz, Jeff Larrimore, Jeff Thompson. "Housing Finance Policy Center Lunctime Data Talk: Federal Reserve Surveys of the Economic Well-Being of US Households: SCF and SHED." Analysis. January 21, 2016. Document. <https://www.urban.org/sites/default/files/urban_institute_data_talk_scf_shed_combinedv2.pdf>.

Lincoln, Abraham. Complete Works of Abraham Lincoln . Vol. 3. Wildside Press, 2008. <https://quod.lib.umich.edu/l/lincoln/lincoln3/1:20.1?rgn=div2;view=fulltext>.

Rothstein, Richard. The Color of Law: A Forgotten History of Houw Our Government Segregated America. New York and London: Liveright Publishing Corporation, May 2, 2017. Book.