Commentary – How African-Americans Can Break the Cycle of Inherited Poverty: Part 1
This article is a commentary piece written to add viable solutions to Jazz Keye’s article “How African-Americans Can Break the Cycle of Inherited Poverty”. Before reading my article, I encourage you to read the original piece or you will be completely lost.
As I scrolled through my Facebook timeline, I came across a title that intrigued me labeled “How African-Americans Can Break the Cycle of Inherited Poverty”. After reading the article I did what almost every person that finds something online interesting does, I shared it. Now, normally when I share an article I don’t expect to get much feedback, but this time I felt it would be different. As I read through each paragraph, my mind became more curious in knowing what other people felt on the issue. I shared the article on a Facebook group I created that helps millennials build wealth and boy did I get a response.
After reading everyone’s comments I pondered the idea of adding some color since the article raised some key issues my community faces. If there’s one thing we can all agree on it’s the Black community has not had the best economic experience. There are several reasons why this happens and it doesn’t look like we’ll receive any aid from our education system. With that being said, challenges also present opportunity.
Please be mindful that my response for each point is not the only answer. However, it is a starting point for those looking to better their situation. Before I start, here’s my definition of what wealth is. The “wikipedia” term for wealth is, “the abundance of valuable resources or valuable material possessions.” Very descriptive right? Here’s my definition. Wealth is the accumulation of assets (money, investments, real estate, insurance, businesses, or human capital) used to produce income and influence your community. Every explanation below has a single purpose, and that’s helping you build wealth. Let’s start off with the first point mentioned on financial literacy.
“Become Financially literate”
This is by far the most important point and it can be explained by a simple proverb that we all know. “Give a man a fish, and you feed him for a day. Teach a man to fish, and you feed him for a lifetime”. There’s only one of two ways in my opinion you are taught how money works. Either someone taught you OR you taught yourself, point. blank. period. Unfortunately, many black millennials did not have someone in their life to instill these values for various reasons. Which leaves the second option, here’s an article you should check out to get your mind right. Financial literacy can get pretty dense and starting here will make things a whole lot easier. Becoming financially literate also makes it easier to make more money.
“Have more than a single stream of income”
I want this to sink in. If you want to be a millionaire, you must have multiple sources of income! Not many employers pay million dollar salaries, I’m sorry to break it to you. One of the passive avenues in creating a separate stream of income is through investing in the stock market. I know you’re probably dreading I said that but it’s true. Why? Because, once you understand how to invest you can literally sit at home, click your mouse several times and make money. As of now, I’m making over $50 in dividends a year not doing anything but buying stocks. As my investment grows, $50 will turn to $100 and $100 to $200, eventually.
I’m assuming making an extra $50 a year doesn’t meet your definition of “multiple streams of income”. The next viable option is getting a second job, and working your butt off. Put the extra money into an investment that you do not have to work a 9-5 to generate income. Pick a side hustle you are passionate about so putting in extra work after your day job isn’t that bad. It’s going to take some hard work and dedication for you to become a millionaire, and money does not grow on trees. Working a side hustle and investing alone puts you at 3 streams of income! Just make sure your family is covered with life insurance.
“Invest in Life Insurance and a retirement plan”
We all know we can’t take our Bentley’s, houses, and money to heaven with us. However, that doesn’t mean we shouldn’t have a plan in place for our loved ones left on earth. In a nutshell, life insurance provides death benefits (money) to your loved ones if you were to die. Since we are all going to die at some point, it would be wise to look into life insurance. Typically payments are lower the younger you start a policy versus being older (the younger you are the less likely you are to pass away). Investing in life insurance provides your loved one’s financial protection and you can rest easy knowing they are financially stable.
Done reading Part 1? Click here for Part 2