3 Sad Truths Why Minorities Struggle Financially – Reversing the Trend
When I finally got my first full-time job at age 17, I wondered why I found myself a few years later in my early twenties, broke, and struggling to make ends meet. After all, making more money while moving up the “food chain” would solve my problems, right?
Why did I shortly find myself living paycheck to paycheck? Most likely… it had to do with my upbringing and ethnic culture.
Does it really matter if you are a minority in the US when it comes to your level of financial literacy and your ability to make smart money decisions? Does it really matter to be raised on the “other side of the tracks”?
According to various reports, it absolutely does.
1) Lack of Financial Education and Awareness
In the late 90’s, I was in the midst of my second enlistment serving on active duty in the United States Marine Corps. Returning from an anti-drug deployment to the Bahamas, I walked into my home located in military housing at Marine Corps Air Station El Toro and found a stack of credit card bills. oh happy
My wife at the time had charged over $15,000 between 3 credit cards. As a corporal, this was close to a year’s worth of annual salary. Needless to say, this was a major area of argument between us that ultimately led to our divorce and two years of child custody battles. (An inside military joke, but not really, is that you can’t leave active duty without getting married, having a child…and then getting divorced. Ask, it’s sadly true.)
What was my attempt to obtain financial aid? I would ask other Marines, senior leaders who happened to be Black and Hispanic, only to find that they too faced the same financial struggles just on different levels. In short, they had no answer. It was the blind leading the blind.
I learned my first rule in personal finance… stop asking your broke friends (and even your family) for financial help.
If it hadn’t been for retired Sergeant Major Carleton Enloe, whom I met in the bathroom of a Best Buy in Laguna Hills (don’t laugh), I never would have started a journey to learn how to win the money game. He worked at a financial firm that opened my eyes and took me under his wing.
My solution beforehand to get out of the financial pit was simply to find ways to make more money in the city, off duty, as a technician at the Jiffy Lube hood and a bartender at the Officer’s Club on base.
When I share this story at financial conferences and even at our weekly financial workshops, I find that this scenario hits just about everyone in the room…even non-minority Caucasians who also grew up on the same side of the tracks. that I.
2) Neglected, abandoned and biased by the financial services industry
The fact is, if you are African-American and Hispanic, you are sorely neglected by the financial services industry. Most financial firms won’t even extend a conversation to help a potential client unless they have at least $250,000 of investable liquid assets or don’t have the $500 one-time planning fee (some as much as $5,000) to pay for an advisor. investment manager/certified financial planner only to tell you that you… “are broke!”
I spoke at a Women’s Diversity Conference and became friends with a financial planner who was the ONLY black financial professional in the ENTIRE state of Illinois for his national company. And yet his office was in the suburbs…not near the city.
Do you think you can find a minority financial professional who you can relate to and understand your cultural struggle and desire to get out of the financial rat race? They are not very common. The American Council of Insurers exposes a significant gap in pass rates just for minorities who pass a simple life insurance exam as a point of entry into the financial services industry.
3) Educational and Cultural Financial Ignorance
Does it have to do with cultural trends and the education of parents to manage their personal finances? Comedian Kevin Hart threw credit score jokes at dark-skinned women, for which he later apologized, in connection with a common characteristic of bad credit.
Sure, it’s comedy, but could it be true? When was the last memory of your parents teaching you the value of credit and how to build your credit score on the kitchen table?
You know the answer.
Like me, you’ve had past experiences holding your breath while eating with friends hoping the waiter won’t come back asking for another form of payment.
Over the past two years, I have been proud to help build a financial movement where we have recruited and trained a new generation of financial professionals entering the money business.
The level of connection with our audience, regarding their financial struggles and finding solutions to transform their financial lives, has been nothing short of transformational.
We’re helping close the sizable $100,000 per year minority earning gap, where today less than 5.9% of six-figure earners are Asian, 5.6% are Hispanic, and 5.5% % are black. (Source: Wikipedia.com)
Of the 43 financial professionals I have mentored as a marketing consultant and trainer, 35 are Black, Hispanic, or Asian. 8 are biracial couples raising biracial children. We already have a Hispanic woman with a six-figure income and a retired Filipina nurse whose cash flowed more than $13,000 last month.
My advice? He continues to love his friends and family, but unfortunately, the facts indicate that they are not the ones who will help him lead the way to financial freedom.
From what you learn about money, bring that back into your community and be that change agent within your family…regardless of their negative views of you. Stay strong, stay grounded, stay focused, stay disciplined.
Come closer, search and gain mentoring and associating people who want to have more, be more, and be willing to DO more. Look beyond the color of your skin. After all, money has a color and a desire to hang out with those who know how to take care of it.
Your children, grandchildren, and even great-grandchildren will be glad you did.