By Nyesha Stone
Wealth is in land and owning a piece of land is something most Americans, specifically Black people don’t have, but times are changing. With the access to anything we want to know, one would think those resources would be used to increase one’s status in life.
According to Generation One, a documentary created by Black people for Black people discussing the topic of wealth, there are six steps to being wealthy.
1. Real Estate (owning land)
2. Precious Metals (i.e. Bitcoin)
3. Foreign currency
4. Own a business
5. Equity (i.e. stocks)
6. Annuity (a form of insurance or investment that adds interest to your money each year it’s not touched)
Many don’t use the free (or affordable) tools provided by the internet, and around the city, to step up their financial literacy game. Achieving wealth is more attainable today, but that doesn’t matter if people don’t know how to get it or what it is they should be going to get.
Owner of Bara Legacies, LLC, a consulting agency and graduate of MPS, Cameron Summers said it’s a reason our people lack this knowledge.
“What we see and what we hear influences our brains,” he said. And most minorities come from poor neighborhoods that don’t accumulate much wealth. Resources and funds are scarce in these areas but that doesn’t mean this knowledge can’t be spread.
“Wealth is more than money and health is wealth,” he said, “and if we all win than we all have money to grow.”
Credit is key. Credit is borrowed money that can be used now and paid back later. Most times, one must pay what they owe plus interest, which is where many go wrong.
For example, if you’re approved for a Forever21 credit card with a $500 credit limit and an APR (annual percentage rate) of 27.740% and interest charge of 6.06% then you’ll always be paying more than what you’ve borrowed, unless your credit card charges no interest for some limited promotional reason.
What these numbers mean is if you spend $15 at Forever21 and you don’t pay this amount before the next statement bill (payment is due) then that $15 will be charged an extra 6.06%, which is called an interest charge. And if you’re bill is due at the same time another year has gone by since you’ve had your credit, then that $15 will not only have an interest charge, but also 27.740% from the APR.
These charges can be avoided by paying the amount as soon as possible, yet this isn’t always possible. The entire amount is not due by the next payment, but depending on your credit score, that will affect your minimum payment (how much you must pay without negatively affecting your score).
Always remember that APRs and interest charges vary depending on the person’s credit score and the company they’re receiving the credit from.
Now, credit score is how good or bad someone’s credit history is, and it ranges from 0-850, with 850 being A-one credit. A higher credit score can get you lower interest rates. There are a variety of factors that affect a credit score, such as how long you’ve had credit (the shorter the credit history, the lower your score will be), if you make payments on time (a late payment can decrease a credit score tremendously), and how much of your credit you use (always try to only utilize (spend) 30 % of your total credit limits.
This sounds great, free money now, but let’s not forget credit has ruined the Black community. Most of us are in debt from overspending on things we really don’t need. Just because you have credit doesn’t mean you should use it.
Another mistake people tend to make is closing out their credit card once they’ve paid the balance off. Never cancel a card, either let it close itself from not using it, or spend very small amounts on it (as low as $10) and then immediately pay it off. This always looks good on a credit history plus it boosts scores.
One important thing about wealth people must remember is that not everyone with great credit has money. It’s all about how you play the game. There are many people who lease expensive items, such as luxury cars, but they’re able to afford them because their monthly payments are lower.
It’s not impossible to grow wealth, but you have to start somewhere.
National Care Financial Group is a million-dollar enterprise located in California that is one of America’s largest African-American owned financial services firms, according to the website, and it’s owned by a Black man.
CEO of National Care, Malcolm “MJ” Harris, says one must understand the barriers put in front of them because they’re a minority, but don’t let those stop you.
“We have all the tools to create Black Generational Wealth,” he said. “We need to become entrepreneurs.”
Harris says he experienced Black Generational Wealth head on because his grandmother, too, owned an insurance agency and she gave him the tools (knowledge) to build his own empire.
Starting at 18, people can apply and be approved for credit. Only spend what you can afford to pay with cash and make smart investments that will pay off long-term.
And with good credit, you can be approved for loans at a low interest rate to then purchase land and now you’re on the high road to attaining Black Generation Wealth.