Why Black Wealth Matters in White America 2
July 2, 2020
… and what blacks must learn to survive this new economy
To bring this lesson home, a person who earns $100,000 per year and spends $100,000 per year will prosper far less than a person who earns $40,000 per year and spends only $20,000 per year. The latter person is on the path towards building wealth, whereas the prior person is spinning his or her wheels and making no progress towards achieving wealth. In fact, bankruptcy could be in his or her future if there is an abrupt loss of income. You now have the idea. Wealth is the result of applied knowledge, discipline, behavioral patterns, and time, more than it is about a specific income. The higher the income, the more opportunities to save and invest, but behavior, values and discipline are the ultimate deciding factors.
Flash Does Not Equal Cash – It Mostly Equals Broke
Now let's take a look at Black American money habits and the value we have brought to this country's economy. In recent decades, Black Americans' value to corporations has largely been in the volume of goods they consume, which is greater than the average American. With a handful of exceptions, we have traditionally been consumers rather than creators. According to the Selig Center for Economic Growth at the University of Georgia, “black buying power will rise from $1.3 trillion in 2017 up to $1.54 trillion by 2022. This estimate for 2022 reflects a 5.4% increase over a five-year estimate and reaching $1.46 trillion by 2021. The 108% increase in black buying power between 2000 and 2017 outperformed the 87% rise in white buying power and the 97% increase in total buying power (all races combined) during the same time period.”
Based on anecdotal evidence that I have observed, Black Americans are the largest consumers. We have been emotionally conditioned to believe that acquiring material things makes us wealthy, rather than producing, saving, and investing. Great for corporations, bad for black wealth.
If you look at money as energy and the exchange of energy, that is a lot of energy that is being freely handed over by black people in this country. Black people have been all too eager to relinquish their resources, aka their wealth building tools, in exchange for the next newest, greatest thing being marketed to them. Things like shoes, clothes, leased luxury cars, handbags and other flashy accoutrements will never make you wealthy, because they are not income producing assets.
The wealthy are not consumers. Yes, we all consume to some degree, but the wealthy are measured and strategic with how, when, and why they make a purchase. Their bank accounts' bottom line is far more important to them than the visual appearance of wealth. Once they have obtained some wealth and they do decide to make purchases within the luxury market, it is measured and typically amounts to a small percentage of their total net worth. The ultra-wealthy (think multi-millionaires or billionaires) do have the ability to purchase the highest-end luxury items that amount to a small percentage of their total net worth.