Black consumers spent over $1 trillion in 2015, yet black businesses as a whole only pulled in $183 billion. We now have undisputed proof of our extraordinary spending power and could realistically use that power to support black-owned businesses; this, in turn, will create more jobs in our community.
As of November 2015, the unemployment rate for African Americans was 9.4%, the lowest rate since June 2008. Even at its recent low, it is still twice that of white America. As staggering as those numbers are, African Americans still accounted for over $1 trillion in spending for 2014. It’s no secret that the majority of that spending was on items with no appreciation in value, but a simple redirect of those funds could easily mean more individual earnings and more jobs within minority businesses. Below are a few tips to build that kind of wealth.
This is an area, as a whole, that African Americans tend to stray from. The perception is that stock trading is exclusively for the rich, who have deep pockets and large trading firms on the New York Stock Exchange bouncing their money around for them. It may surprise some that the average stock costs between $50 and $75. This is the usual price for a stock traded on the NYSE. While that may be a bit higher-priced for some, there is also a potentially huge area of trading in penny stocks. These are the companies who cannot get onto the NYSE, and thus offer equity in their companies at a much lower rate. The best thing about trading penny stocks is the fact that it can be conveniently done from your desktop, laptop, or mobile device via software like E-Trade. Stop by your local Barnes and Noble and grab a book on trading penny stocks. Instead of getting a new hover board or iPhone, invest that money in building a stock portfolio that could earn you thousands.
Supporting Black Owned Business
For whatever reason, this is not second nature to African Americans, although it is something that goes without saying in the Asian, Indian, and Hispanic communities. Black-owned businesses can be found in every industry from fashion, to healthcare, to real estate. The more we support black-owned businesses, the greater their growth potential and the opportunities for these businesses to create jobs in our communities. If you’re not sure how effective this can be, there is a shining example in American history in Black Wall Street.
We are all tempted to spend frivolously. We all work hard, and want to enjoy the spoils of life. There’s nothing wrong with feeling that way, but is it worth splurging in the short run and then suffering in the long run? Cut back going out to eat a few times a month, and instead of buying those new Nikes, give your old ones a good cleaning. Maybe you could ride that old jalopy just a little longer before buying a new car. Making these small sacrifices in the short term could drastically improve your long term financial security.
Even though these tips can be and have proven to be effective in building wealth, there is no set way to do so. All of these actions take a bit of patience, courage, and discipline. At the end of it all, you must make a personal choice. Do you want to just survive, or do you want to thrive?
Nick Eden is a songwriter/blogger/R&B junkie/entrepreneur coach based in Atlanta, GA. His new book, ‘The Realistic Rich: A Guide To Financial Freedom,’ will be available fall 2016.