Hitting the Money Spot: Creating Black Generational Wealth

 

Creating Black Generational Wealth

The history of Black people and money is a history filled with trauma and terror. If you want to know more about this history, please read the blog Black in Money Recovery. This blog focuses on awareness, acceptance and action as well, but from a behavioral perspective. Byron Allen states that Black people need access to capital which means a strong working relationship with banks.

The First Black Bank was established after the Civil War to serve the needs of the newly freed African Americans. The first Black bank was the Freedman’s Bank established on March 3, 1865. The bank faltered in 1874 and instead of the Federal Government shoring up the bank as it did many times for  banks that benefitted the White community, the all White Board decided to shut the bank down. The records which were kept and the idea of Black financial institutions serving the Black community had been planted and would live to grow again.

 

Black leaders  have advocated for Black banks to serve the needs of the Black Community  since  Emancipation. Most leaders recognized that Blacks would not have access to capital to grow business and achieve financial wellness in non-Black Banks  due to racism. Investing in the Black Community has been perceived as a poor risk for Blacks but not for others. The  Civil rights reforms of the 1960s and 1970’s were needed because systematic racism was proved to exist between the banks, insurance companies and real estate agents . 

 

Banks operated by Black people  help the Black community  build wealth, unimpeded by the prejudice and suspicion of white bankers. Black ownership would further ensure that profits made off of Black money would stay in the community.  Black banks  extend credit to borrowers that the big national banks may perceive as too risky owing to their modest means. Dr. Martin Luther King Jr. stated in the March on Washington that Black people lived on an Island of Poverty in the midst of an ocean of prosperity. Five years later  right before his assassination he encouraged Black people  to pull their money “out of the banks downtown” and deposit it in a Black-owned bank. “We want a ‘bank-in’ movement,” he said.

 

Dr. King stated that America had given Black people “a bad check”. 53 years later some banks are attempting to make that check cashable. One United Bank and Greenwood bank seemed to have taken the lead. There are a number of Black owned banks that are reaching out to the Black community. Many of the Black Credit Unions are building and investing in the Black Community. Some of the major players in the social media market are moving to put their funds in Black banks in order to support Black customers. The goal is to educate Black people regarding access to Capital to build the Black community.

 

 

 

Hitting the Money Spot: Creating Generational Black Wealth by Darleana McHenry Ed.D.

 

Creating Generational Black Wealth

Generational Wealth refers to any kind of asset that families pass down to their children or grandchildren, whether in the form of cash, investments, funds, stocks, real estate, property or even companies. Baby Boomers hold most of the wealth in the United States. White and Asian Baby Boomers have the most wealth which they pass on to their descendants. 

Historically, Black people have been excluded from wealth. We came to this hemisphere as currency for Europeans. We built this hemisphere with our blood, sweat and tears and yet we have never been able to enjoy the fruits of our labor. We are the only group of people who were not given land to settle and build communities. Even in Central America when we were given land, we were not given the resources to make communities, unlike the Spaniards, Portuguese and English who were given supplies and materials to make it happen. 

The end of slavery was suppose to bring about the Independence of Black people and yet Jim Crow proved to be as cruel during reconstruction. Black people were arrested and forced to work on White plantation and farms. Instead of starting free with access to resources, the only option for Black people was debt. This debt would be generational and a debt that we could never pay, no matter how hard we worked. 

The 20th Century brought World Wars and Black men and women served with other Americans. Black men and women risked their lives fighting for all Americans but were segregated and treated like second class citizens even in the military. They had access to the GI bill to get an education as well as adequate housing. However most Colleges and Universities that accepted the GI Bill didn't accept Black Veterans. Most communities where Black people were allowed to live could not be insured by the insurance companies and thus ineligible for loans from the bank excluding Black people from home ownership. Social Security was unavailable to farm and domestic workers.

Black people were the skilled labor on Plantations but when slavery ended, they were excluded from trade skills that taught special skills. They were relegated to physical labor, the lowest paying jobs. Black people had to fight to be clerks in stores. They could cook, clean and do all the jobs that White people didn't want to do. The middle of the 20th Century brought the Civil Rights Movement. Black people chose to fight for polices would bring equity. They fought for access to an equal education, proper housing, medical treatment as well as access to jobs which paid a decent living. 

Dr. Martin Luther King understood the importance of economic equity and access to capital. He understood that Black people lived on an Island of Poverty in an ocean of prosperity. Whitney Young also championed Economic equality in industry and the government. Some gains were made in the later half of the 20th Century. The wealth gap has grown in the last 50 years.

Lower incomes and lack of savings have kept Black people from acquiring generational wealth. The structural barriers to Black Wealth continue to exist. Collectively we can overcome these barriers. We can educate each other to change our habits from spending to investing. We can demand that banks live up to the constitution and practice fair lending. We can educate each other on insurance, real estate, stocks, retirement plans and other financial instruments. We can move forward in a anti-black, hostile world by working together and lifting each other along the way. Welcome to Hitting the Money Spot and join us on our podcasts to create Black generational wealth which is the Civil Rights that our ancestors died for us to achieve.