2022 is the Last Chance to Close the Racial Wealth Gap
Discussion surrounding the growing racial wealth gap is not new by any means. But a recent report given by CNBC's Frank Holland has sparked new life to the topic.
Here I will layout why 2022 is a critical year for the Black community to close the current wealth gap before it becomes permanent.
As of right now there is still hope.
Studies have proven that the main contributor to the current wealth gap is systemic oppression through political policies. But with the rise of new technologies the Black community no longer has to rely on governments for access to wealth opportunities.
How Big is The Gap?
The current racial wealth gap is floating between $10.5 and $11.5 trillion; meaning that Black households will need to recover this amount in assets to have wealth in proportion with the U.S. population.
This will rank the Black community last in comparison to any other ethic group; and the gap continues to widen as the income rates remain lower.
Below is a chart depicting the difference in household income between ethnic groups in America:
Why Does the Problem Exist?
1. Systemic Oppression
The main problem is that the US was founded on racism and free labor.
Despite this fact, Black people have been able to fight for rights through several rebellions and revolutions. Though, the Black community has made major progress we have now reached a point of stagnation.
The truth is that you can only attain a finite amount by means of force. By forcing oppressors to give back "rights" that are supposed to be established at birth we are still putting others in the power position.
With this approach policy makers can make change at their own pace.
2. Lack of Awareness from Technology Addiction
Traditional media giants like CNBC and CNN are trying to control the narrative; and social media platforms are rocking us to sleep by continually reinforcing the same message.
Drowning media feeds with stories of victimization has become prevalent; causing people to subconsciously feel helpless in their current situation.
This programming nullifies our ability to have independent thinking and awareness.
Awareness is power. Lack of awareness is ignorance. Ignorance is slavery.
3. Over Spending
Black people spend 4% more money than any other race despite being paid 30% less than the national average.
Debt, Essential needs, Entertainment, and Escapism are the main contributors to the spending problem in the Black community. In most cases, we are living well above our financial means, resulting in outgoing cash to exceed incoming cash.
On a bright note, 30% of Black investors under the age of 40 started in 2020. It is critical that this pace continues in order to close the gap; investing $5 per day in a safe index fund can leave you with $30,000 in 5 years. That's enough for a down payment on a house or investment property.
4. Lack of Discipline and Self-Doubt
Learning financial literacy takes discipline. And the reason most of us don't commit to the journey is because we truly think our circumstances are permanent or we just don't want it bad enough.
This is probably the most important problem because it is completely in our control. Most people choose self-pity as opposed to overcoming their circumstances because it requires less effort.
There is a psychological concept called "learned helplessness", which is a human response resulting in a lack of motivation. Some symptoms of learned helplessness are: depression, failure, and a weak immune system.
How we reverse this psychological illness is through healing. People have the tendency to hold on to past event and latch their identity on to them. It is key to reframe adverse situations in the mind to eliminate negative thoughts and replace them with optimistic language.
How Do We Close the Gap?
Closing the gap is simple but not easy. It will require us to unlearn all previous conditionings we have in regards to building wealth so we can make room for the new information that can serve us.
80% of all US dollars in existence were printed in the last 22 months; meaning the overall value of cash money has diminished tremendously.
Over the next 10 years savings accounts, 401Ks, and other "safe" investment vehicles will not be able to out pace inflation.
We are completely shifting to an asset based economy. Your equality will be based off the amount of equity you hold in America. Given this fact, we will need to adapt our mindset to properly interact with the opportunities of today.
Below is a list of the key strategies we will need to remain valuable moving forward:
1. Invest in Self
Self love supersedes anything else in this crazy world. Take responsibility over your life by pouring everything you have into your personal development. This can be traveling, reading, getting a coach/trainer, or just reorganizing your life with foundational goals and principles.
View yourself as a lifelong learner. Just because high school or college is over doesn't mean we don't need to acquire new skills. The world is changing faster and faster as the days pass; to stay on pace with society we must continuously update our brains with new programming.