There also are some basic economic issues, says Margaret C. Simms, senior fellow at the Urban Institute in Washington, D.C. and member of the Black Enterprise Board of Economists. “Among African Americans you have to look at factors that put them at a disadvantage relative to white Americans when it comes being able to build assets.”
African Americans tend to have lower wages and higher rates of unemployment—making income stability a factor. “When you lose your job, you draw down your savings, Simms says. If you have a job, you might have a relative who is unemployed whom you are trying to help out financially, she adds.
The failure of more African Americans to launch businesses also has helped to widen the wealth gap, says David Hinson, president of Wealth Management Network in New York City. “Wealth creation comes from business ownership,” he says.
Supporting the creation of minority-owned businesses is also one of the primary principles of Black Enterprise’s Wealth for Life. Lui adds there is a payoff when people patronize black businesses, which employee African Americans. “We need to target dollars back into those local businesses and communities which have been hardest hit. By investing in your community you’re investing in yourself.”
Further Reading: Wealth For Life Principles
1. I Will Live Within My Means
2. I Will Maximize My Income Potential Through Education and Training
3. I Will Effectively Manage My Budget, Credit, Debt, and Tax Obligations
4. I Will Save At Least 10% of My Income
5. I Will Use Homeownership as a Foundation For Building Wealth
6. I Will Devise An Investment Plan For My Retirement Needs And Childrens’ Education
7. I Will Ensure That My Entire Family Adheres To Sensible Money Management Principles
8. I Will Support the Creation and Growth of Minority-Owned Businesses
9. I Will Guarantee My Wealth Is Passed On To Future Generations Through Proper Insurance And Estate Planning
10. I Will Strengthen My Community Through Philanthropy