What is “Savoring” and How Can it Help You Build Wealth?
On June 19th, millions of people will celebrate Juneteenth. Juneteenth is a federal holiday commemorating the emancipation of enslaved African Americans. In 1863, the Emancipation Proclamation officially freed enslaved African Americans. However, 250,000 people remained enslaved in TX and it wasn’t until a full two and half years later that troops arrived in Galveston, TX and freed the remaining enslaved people. This was on June 19, 1865. Juneteenth is short for June nineteenth.
Being free, of course, didn’t mean economic parity or true freedom. As a matter of fact, the struggle continued for African Americans as they dealt with discrimination and segregation. Segregation did not end until 1964. In 1968, the median black family had $6,674 in wealth compared to $70,786 for the median white family. In a capitalist society, wealth matters. Wealth provides the opportunity to buy homes, maintain businesses and pursue an education. In short, wealth provides freedom. Without a solid method or means to build wealth, true freedom was never granted.
Today, African Americans have made many strides. There is still work to be done regarding economic equality. In 2019, Black Americans held just 17 cents of wealth on average to every dollar of white wealth. This sort of disparity isn’t too far from where Black wealth stood around the time that segregation ended. Many studies project wealth inequality to continue and even worsen. One study predicts that black wealth will fall to zero by 2053.
It is worth noting that there are a number of factors that have prevented Blacks in America from building wealth. Segregation ensured a separate and unequal education. During the period following the Civil War, southern states enacted Black codes that restricted the kind of work Black people could do. During The Great Migration, about a million Black people were fleeing segregation in the South and pursuing economic freedom in the North. Whites in the North feared that Black people migrating there would take their jobs. This caused riots and mob violence. One of the most violent was the Tulsa Race Massacre of 1921. Before the Tulsa Race Massacre, the Greenwood District was considered one of the most affluent African American communities in the United States. Greenwood had luxury shops, restaurants, grocery stores, hotels, movie theaters, barbershops, doctors, lawyers and a thriving school system. Whites descended on the town causing millions in property damage, burning more than 1,250 homes and leaving as many as 300 dead.
Redlining prevented Blacks from buying property in white neighborhoods where home values would increase faster. Segregation ensured that Blacks would receive an education that wasn’t equal to that of whites. Racial pay inequality created even more barriers to saving and building wealth. The list of attacks and government sanctioned discrimination against Blacks in America is long. The ones listed above are just a few.
Education, business ownership, land ownership and wealth are keys to freedom. By systemically keeping Blacks in America from being able to access land and equal opportunities, the United States has been instrumental in the destruction of Black wealth.
One interesting phenomenon about wealth is that it has a compounding effect. What that means is that those who already have wealth will find it easier to accumulate more. If your parents are college educated, they likely will have access to networks that make it easier for you to access stable employment. If your family owns property, they are likely able to amass wealth as the value of the property increases and they can pass it on to future generations. This is generational wealth.
So, how does a group of people who have been systemically locked out of wealth begin the process?
The first step is to understand how wealth is created. Wealth is created by ownership. This can be owning homes, businesses or investments.
The S&P gained an average 10.7% since its creation in 1957. Holding on to investments like stocks and bonds over the long term is a great way to start accumulating wealth. The key is to invest early, often and consistently. This allows those investments to grow in value over time. Investing is not without risk, however, learning about investing can help you reduce the risk you take.
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Although the housing market is tough to get into right now, there are benefits to owning a home. Home ownership gives you the opportunity to build equity in your home and more importantly, it provides you with an asset that you can later pass on to future generations. Homes require maintenance and areas change, however, homeownership has been shown to increase wealth.
Businesses solve problems. They provide jobs and meet the needs in their communities. Businesses also contribute to and improve the economies that they are located in.
Another way to build wealth is to build businesses. By doing so, you create opportunities for people to control their communities. For example, a business that provides food can buy from local farmers, hire local people and use profits to improve the community around them.
If owning a business is not for you, consider supporting Black owned businesses instead.
Building wealth takes time and focus. Unfortunately, for Black Americans, much of that time has already been lost. Although there are many challenges and opposition, you can still celebrate Juneteenth by starting to build wealth. If you are looking for help getting started, consider working with me by signing up here.
Anna Paul, CFP® is an Investment Adviser and Certified Financial Planner. She currently serves as money coach for Snowball Wealth providing personalized financial guidance in areas such as budgeting, building and maintaining credit, estate planning, debt management, and money mindset. Most importantly, she believes in coaching clients to adapt their mindset to their goals. She specializes in helping individuals identify financial goals and take actionable steps towards achieving them. Anna volunteers with Carolina Youth Coalition as a mentor and serves on the Volunteer Income Tax Association. When she isn’t giving financial education presentations, she can be found hiking, couponing, or trying new recipes.