The Way We Think about Money is the Real Problem
I was recently discussing what I call "Major Money Moments in Black History" with a dear friend named Marcia Canterella. Marcia is the daughter of great civil rights activist Whitney Young and author of I Can Finish College. Major money moments in black history are events that changed the course of our financial experience. Take desegregation, for example. Prior to desegregation, so many of us thrived in the business world as we provided products and services to our community. I'm not debating the social merits of desegregation, but it did result in a dramatic decline in black-owned businesses.
Another 'moment,' red-lining after World War II. Red-lining is a practice in which banks literally draw a red line around a neighborhood and say that certain people are not welcome there. In fact, Levittown in Long Island, New York had rental and sales agreements that actually said houses could only be rented or sold to members of the "Caucasian" race. The GI Bill gave low cost and subsidized mortgages to men returning from the war. We were shut out of some of the greatest opportunities in history to pass wealth to future generations through real estate.
Education, employment, predatory lending, you name it: There are systemic forces that have worked against our ability to create wealth. As a financial journalist, however, it has been easy to see that perhaps a bigger problem is the mind-set some of these factors have helped to create... The image too many of us have of ourselves as a group that is destined to struggle, and at the mercy of factors beyond our control.
Change Your Mind and You Change Everything
Throughout my career, I have interviewed many blacks who have created healthy financial lives and many who have not. A major difference in the two groups is how they view money and how they view themselves.
The reasons are complex, but successful people transcended the stereotypical image that money will be a struggle. They don't see their financial potential as limited by race. Some simply got different conditioning. They did not grow up with the same negative images of blacks and money as those who struggle. They saw their parents create healthy financial lives. They didn't grow-up in neighborhoods where the only financial institution was a pay day lender. Whatever the reasons, we have to come up with ways to move beyond the 'struggle' mind-set that is playing out in too many of our financial choices.
While many of our socio-economic disadvantages weren't of our own making, the abilities to change our minds and our perspectives are gifts we were all born with. We must tap into these abilities if we are to create the psychological, emotional, and financial environment needed to thrive.
The purpose of this blog and a major purpose of this focus on finance from BlackVoices is to start a dialogue and share information that will help us move into a psychological space that will help us build wealth. We will also discuss economic steps we can take to create financial well-being.
It Begins With Awareness
Financial journalists get a unique vantage point to see how people relate to money. I have observed three major influences at work in everyone's financial beliefs, consequently their choices.
- The ways in which we see money handled when we are growing up. Did we see healthy spending and saving habits? Did we hear healthy conversations? What were our 'Major Money Moments?'
- The ways in which we respond to social messaging: Social pressures to 'keep up.' Social stereotypes about financial illiteracy based on race and gender? Are we fitting our profiles?
- How we see ourselves: "People like me live with debt." "People like me don't invest." "I'll save money later, right now I have to struggle."
We must examine the messages that are really driving our attitudes and behavior if we are to identify the ways in which they need to be rewritten and changed. Key questions must become "What do I see people like me doing when it comes to money?" "What do I see people like me not doing?" "What are the influences that are playing out in my own behavior?" "What would I be doing differently if I were living my ideal relationship with money?"
Here are comments from friends I recently probed about the psychology of blacks and money. I look forward to hearing yours.
NFL Hall of Famer and businessman Ronnie Lott: (Ronnie and I work together to bring a financial literacy program called Winning Play$ http://winningplays.org to high school and college students.) "I always think about a conversation I had with Barry Bonds. He said he wants to think like a Rockefeller... They always think about building wealth for their families, with every decision, every move," says Lott. "The first thing that has to be changed is the thought, the self-image. You have to study what successful people did and how they did it. It's about being financially literate, and understanding what that really means. If you don't' understand how money works, how are you going to teach your kids?"
Dr. Dennis Kimbro, (Motivational Speaker and Author of Think and Grow Rich: A Black Choice http://www.denniskimbro.com/) "I recently spent time with a black diplomat from the Bahamas and I think he said it very well. One of the biggest financial mistakes the black community has made is that we did not record the stories of blacks who were financial success stories. When you turn on the TV, you're not seeing discussions with Oprah about her beliefs about money, you're seeing Warren Buffet," says Kimbro. "Our pocket books can't grow until our minds grow with knowledge. We need to be asking these people what they did differently, what are the things they tell themselves. We need to lose the image of ourselves as a group that has to be accepted. We need to take control of our money."
Lynette Khalfani Cox (Personal Finance Coach and Author, http://themoneycoach.net): "Some people just believe that you're really not down with the community if you haven't been through the struggle. The struggle is glamorized as a way of showing your 'black card.' I struggle with debt. I struggle with money." It's like the struggle itself vets you," says Cox. "These beliefs become self-fulfilling prophecies. It's hard when you see yourself as someone destined to live in financial bondage to feel free and liberated as a human being. You make different choices."
Bob Knowling: (Business Leader, Author, and Creator and CEO of the New York City Leadership Academy for New York City Schook Principals http://eagleslandingpartners.com/): "Because so much of my life has been defined by intense competition, either as an athlete or as an executive, I am certain about the central element at the heart of most success stories: You have to really want to win. Even when you have been defeated, you still have to want to win. In fact, from the moment that defeat is imminent, you must suit up for the next opportunity. This drive to win will help you know yourself and understand your mistakes. (There will be many.) It is the fuel that will help you get back into the contest, which, fortunately, never really ends."