Tuesday, September 8, 2015

The Truth About the Black Dollar

Almost every day I see a post on social media about the "buying power in the black community". The estimates can be anywhere from $500 billion to $1 Trillion.  I also see posts about spending money with black-owned businesses, or not spending any money on a specific day to let businesses really know how strong the black dollar is. I even recently saw an article about a woman who "bought black" for an entire year.  Kudos to her.

Let me dispel a big myth: Black Financial Power (just like White Financial Power, Asian Financial Power, Middle Eastern Financial Power, etc.) does not come from what is SPENT. Financial Power comes from what is SAVED. Period.  Think about it. You don't retire, or buy a house based on what you've spent. Your current lifestyle may be based on what you spent, but your tomorrow lifestyle will be based on what you've saved.  Bill Gates is not rich because he spent money, he's rich because he saved it.

So long as we keep talking about "empowerment" and "spending in black-owned businesses" as a way to power, we will never have it. In the 80s and 90s we talked about "Buy Black" and we did. FUBU, Sean Jean, Baby Phat, even BET.  We did our part. And we made some people rich. But what did it do for the black community? I haven't seen a Sean Jean Technology Center, or a FUBU Scholarship for those with economic hardship. Or even a Joe's Tavern back to school giveaway.  Currently people seem to be mad at Michael Jordan because we're spending $200 for sneakers and he's not investing where we think he should. At least he is investing. Are you?

If the goal of supporting black businesses is to increase black power, black businesses have to give back, instead of taking the money out of the community and spending it in the Hamptons.  Making black business owners rich, then watching them send their kids to Ivy League schools while the kids in the community go to community college because that's all they can afford is not a path to growth. The question is simple. If I spend my money with a black business, what's in it for me? (I'm not even going to discuss how it seems many black businesses charge more then their non-minority owned competitors. Much more.)

We complain about how we don't have any thing to pass down to our children, while driving $50,000 cars, wearing $300 suits and living in an apartment. The rules of money are no different for black people than they are for any other color people. If you spend it you don't have it anymore.  It's real easy to talk about how "the man" is keeping you down. Newsflash: "the man" is playing the game, and showing you exactly how to play the game. He's driving an older car (with the factory rims), using coupons, buying only what's on sale, maybe even shopping at Goodwill. And he's saving. Not just in his 401k, he has money in his bank account, so that if a problem arises he's not running down to TitlePawn.  But we often want to play by our own rules.  The game is still the game.  Money works the same way for everyone.  If you take your tax return and pay for your annual vacation to the Bahamas, don't complain when when your bank account doesn't have any commas in it. That's not a black rule, that's reality.

If we are serious about Black Financial Power, we should be teaching our children how to save. We as parents, friends, and most importantly, HBCUs. High schools and colleges don't teach how to balance a check book or how to effectively use credit cards. But institutions of higher learning are quick to offer graduates a credit card with the school name on it.  Talk about pigs led to slaughter...

The bottom line is this: we can talk about "empowerment" and "controlling our own destiny" all we want. Until we decide, as a people or an individual, that saving is more important than spending, we will never be in a position as a people or an individual, to dictate anything.

Wake up and save.