Wealth Gap Significantly Increasing: Here’s How African Americans Can Change The Cycle in 2018

While sitting in a church hair salon watching my mother curl hair and talking about how life would be if we won the $300 million dollar lottery, I asked my moms client; “If I was to write you a check for $100,000, what would you do with it?” She answered; “Put some away in savings, keep working my job and give the rest to my church, because I know the church will do some good with it”.

I paused, and asked myself is she serious? I then thought to myself; why wouldn’t she strategically invest the money, generate cash flow and then make contributions to her church or charity from her profits rather then giving all the money away and saving some?

For the record, I am a strong believer in giving to the local church and charity, which plays a significant role in the spiritual development of many urban communities and families who struggle with everyday challenges of life.

Sadly to say, I wasn’t too surprised at her answer considering my experience growing up in a prosperity teaching church, and asking a few other people the same question. I've discovered most people aren't prepared for financial increase if it was to suddenly show up at their front door. Maybe this is why black churches receive over $17 billion dollars per year in contributions. Maybe this is why there’s practically a church on every corner when you drive through most African American based communities.

Could this mentality play an important part within the systematic reasoning of why urban communities and families continue to struggle financially?

I then thought to myself:

1. What if the churches came together and became the new industry leaders in teaching African American communities on financial literacy and ownership through their influence rather than just encouraging people to give into their cause and save money?

2. What if churches got more involved in buying multi-unit apartment buildings, senior housing and residential housing in urban communities, along with using a portion of the contributions they receive to invest in small business acquisitions and start-ups?

This would significantly create more opportunities for African American communities to succeed financially, and possibly close the wealth gap from 228 years to maybe less than half within just a short matter of time.

Here’s a few facts to consider:

  • African Americans are today’s fastest growing and influential people groups amongst any other race.

  • Study’s has shown that 40% of Blacks considered them selves to be spenders, 51% savers, and only 9% of African Americans actually invest.

  • Blacks only possess 5% of America’s wealth, oppose to Whites that own 61%, Asians 28%, and Hispanics 6%.

  • African Americans makes up more then 13% of US population and have the most buying power, which is projected to reach 1.4 Trillion Dollars by 2019 according to the University of Georgia’s Selig Center for Economic Growth.

  • African Americans consumes more media and watch 37% more television than any other race, which is why advertisements agencies spend more than $75 Billion dollars per year on targeted TV ads and using influential entertainers and athletes to promote their products or services.

  • Lastly, African Americans shop more frequently, averaging 156 shopping trips per year and are considered to be the biggest spending group out of any other race.

So, has African Americans been outsmarted over time? It possible to make learning about the importance of good credit, credit repair strategies, entrepreneurship and financial literacy a popular thing amongst todays African American communities who admire rap artist, professional athletes, pastors, social media and TV entertainers?

“Yes! I believe so, but it may take some time”. Says’ Tony. The only way it can be done is with the collaborated efforts of African Americans by African Americans who are united and wants to make black ownership the new popular trend.

Historically speaking, business ownership has been the best way to generate strong monthly income and homeownership has been the best way to build wealth by far. Unfortunately, African Americans have not adapted the secret strategy to homeownership as other cultures have done over time.

If you don’t know what this secret is, write this down:

“Real Estate can be both an Asset and Liability. Assets simply put money in your pocket monthly. Liabilities simply take money out of your pocket monthly."
"Focus only on Strategically Buying Real Estate Assets for wealth (equity) building, and Business Acquisitions for monthly cash flow."

Tony offers this advice:

“Rent where you want to live, and only buy where others want to live. Its called, wealth building and maintaining flexibility” – Tony Williams

Unfortunately, experts have predicted that African American homeownership compared to other races will get worse before getting better, considering many African Americans got hit harder by the housing crisis than other groups. Many African American communities purchased homes at the peak of the bubble at higher interest rates on subprime loans even when they qualified for prime loans with lower interest rates. Not to mention, most young adults aren’t talking much about owning homes or business acquisitions.

Makes me wonder, could this have possibly been another systematic attack on the African American communities?

Tony says, “The African American homeownership problem may be deep rooted, but every problem has a solution. Building good credit, self-educating ourselves and learning financial literacy along with strategic buying real estate assets and cash flowing businesses is a simple solution to such complicated generational problem”.

Tony offers this advise: If you have a career with a 401K savings, don’t be afraid to leverage your 401K saving to Strategically Invest in Equity Real Estate, which can produce monthly cash flow, better tax advantages and far greater returns on your investment. After doing so, just simply repeat the process a few more times and establish a trust account to protect your assets and minimize your risk. Be sure to speak to a financial advisor who can further assist you in setting up accounts and planning for the long term.

“Although, we may have been systematically forced into the “mindset of poverty” which has effected generations after generations, it doesn’t mean we can’t force ourselves out of that mindset, change the narrative and leave an inheritance for future generations to have a better start in life ”.

If you are a beginner or an expert real estate investor in multi-unit and residential rental properties, The Lease Collection offers Professional Property Management and Tenant Placement Services in Washington D.C., Maryland and Virginia. Contact The Lease Collection Today for a Free Rental Estimate Report and find out how much you can rent your property for. Visit LeaseCollection.com for more information.

If you agree or disagree to this article, we invite you to respectfully leave your comments or questions below.

Tell us, are you interested in buying rental properties? How have investing in residential or multi unit properties changed your financial life?

About The Author: Tony Williams is a lifestyle philosopher, influencer, personal development and business educator. He is also a senior managing consultant for The Lease Collection, which provides Professional Property Management and Tenant Placement Services for multi-unit and residential properties in Washington DC, Maryland and Virginia. His passion for personal development inspired him to create the Instagram, @Life.Algorithms, which has amassed over 30K followers. Along with his Blog, these platforms are his way of inspiring, motivating, educating and connecting with thoughtful, creative, like-minded and ambitious people just like you.

Contact Info: Awilliams@LeaseCollection.com

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