I’ve taught Finance at the college level for over 20 years. I also learned more about Finance by the age of 25 than most experts learn in a lifetime. But one of the funny things about stuffing all of this knowledge into my brain is that I found that being forced to align a series of very complex ideas almost always brings us back to the simple things. For example, I realized that, even as a young finance faculty member at Syracuse University, I would often call my late grandmother Felicia to get financial advice.
My grandmother never had the chance to finish college and she never earned more than $25,000 per year. But in all of those years, after raising four kids without a husband, I never once saw her borrow money from anyone. She always had perfect credit. She owned her own home and car. Relatives earning five times more than she was would come to her to borrow money. Her financial situation was in perfect order on the day she died, all the way down to the Louisville Cardinal red dress she wore when they put her in her casket.
In other words, my grandmother went out like a baller. I also realize that, in hindsight, she was my first finance professor.
So, it is in the spirit of my late grandmother that I share some of what I learned from our thousands of conversations, from all of those thick text books I studied in school, and also from the game of life which led to me create what I call “The 10 Commandments of Black Economic Empowerment.” If just 10% of all black people followed the rules written in this article, we would become the mighiest economic force on the planet:
1) Never get all of your income from one source: Most people choose a job by asking themselves one simple question – “How much money am I going to make?”
By choosing your career path based solely on how much money you’ll make, you’re missing the vast majority of all of the benefits that come with choosing the right career. Another factor that people often overlook is the importance of factoring in financial security as one of the primary measuring sticks of what might determine the right career decision. When you earn all of your income from one source, you are ultimately controlled by the person or entity that is providing your family’s means of survival. In other words, you’ve effectively sold yourself into slavery. For some people, slavery is much more acceptable if they get to keep the money themselves.
My greatest economic freedom came when I found ways to make money outside of my job. This not only filled my pockets, but it also filled my spirit. When I was attacked by Bill O’Reilly years ago, and threatened with job loss for being an outspoken black man, I was able to tell my bosses (and O’Reilly) to go to hell. You can’t put a price tag on being a free black man, it has literally kept me out of the insane asylum.
2) Never go through life without adequate training and education: Running away from education effectively means that you’re running right toward slavery. Any person who doesn’t want to put in the work to get additional education and training is going to pay a very high price with all of the stress, hard work and heartache they will endure playing catch up for their entire life. The fact that it’s easier to get some people to turn on an episode of “Scandal” or the NBA finals than it is to get them to crack a book is indicative of the fact that our priorities are all screwed up.
I get disgusted when I receive an email from a college student whose friends have told her that she’s a nerd for wanting to study on a Saturday night. These so-called “nerds” in college are the ones who are running the world 20 years later. We can’t just be known as the people who will spend 10 hours a day on the basketball court and five hours at the after party. There’s a lot more to life than getting “turnt up.”
Your hard work today is that which protects you from volatility and turmoil tomorrow. You should always be working to learn something new, all the time. Laziness will get you nothing but self-pity when your life is falling apart and you have no idea why.
3) Never allow yourself to become addicted to money: Money is valuable and it is powerful. You should never underestimate its significance in your life. But if you allow yourself to become someone who worships money or will do anything for another dollar, you’ve basically watered down your entire existence. I’ve seen rich financial addicts, who define themselves by how much money they have. I’ve seen poor financial addicts who will do anything to have a chance to live like rich people do. I’ve seen rappers who will write a thousand lyrics about how much money they’ve made, as if it somehow makes them a more worthy human being. Then, they’ll write another thousand lyrics about how they turned around and gave it right back to the white man. Let’s please stop celebrating this kind of coonery….it’s not cool, it’s not masculine, it’s not productive. It’s f–king stupid.
The problem with financial addiction is that any black person choosing to become addicted to a commodity that is primarily controlled by whites is basically putting himself into a position where someone is going to be able to control their very existence. This means that, whenever your spirit tells you to take a stand for your community, you’re going to be told to sit right back down because in the eyes of those who own you, you’re not a man, you’re just a weak, dependent little boy. As the rapper Immortal Technique likes to say, “Not all money is good money,” and we should train our minds to know the difference.
4) Never allow your self-esteem to be contingent upon validation from predominantly white institutions: One way that black people are consistently hypnotized by racist institutions is that we’ve somehow concluded that we are more worthy than other black people if white people like us. So, if I’ve got a prominent position at a white-owned university, I am always “more successful” than the scholars teaching black students at HBCUs. If I am a vice president at IBM, I’m somehow more accomplished than the black entrepeneur who earns half of my salary. By allowing professional carrots to be held above our heads, we are effectively giving power to the person who controls the carrot. It is critical to realize that you are an important person, even if white people don’t like you. Malcolm X figured this out a long time ago.
5) Avoid allowing yourself to go deep into debt, especially for the wrong reasons: Debt is not always a bad thing. It can actually give you the chance to take advantage of good investment opportunities. If used appropriately, debt is actually a financial time machine: Allowing you to do things today that might take years to do if you had to wait until you’ve accumulated all of the capital yourself. But in addition to these other things, debt is also an OBLIGATION. With any obligation, there is a great deal of power in the hands of the entity to which you owe that debt. The United States government is vulnerable to the Chinese government because a) We’ve accumulated far too much debt and b) much of that debt is held by Chinese citizens. That’s bad for our national security.
If you’re deep in debt like most Americans, you probably have to keep pushing just to make your interest payments and avoid default. This means that, if you have just one job supplying all of your income, you are that much more beholden (and enslaved) by your employer because your overwhelming debt has precluded your ability to walk away from your existing situation. The point here is that if you’re not careful, debt can make you feel financially trapped, which is not a good place to be.
6) Always save your money, no matter what: Everyone can save, I don’t care how broke you are. If you can give tithes to your pastor, then you can also give tithes to your family, your community, your future and yourself. Saving your money and getting rid of debt if possible are ways to create the kind of financial cushion that protects you from sudden shocks in your economic situation. A person who has been saving her money, cutting down her debt, building her skillset and creating alternative revenue streams is almost always going to be better able to handle an economic downturn than someone who has done the opposite.
7) Always think like an investor: Investing doesn’t always relate to money. In fact, it rarely does. The most valuable resources we have in our lives relate to things that are non-financial: Our health, happiness, freedom, relationships, etc. Every time you allocate a resource toward a long-term goal, you’re making an investment. You’re investing when you spend time with your children, when you go to the gym, when you take a business meeting, when you pick up a book, when you buy a savings bond, when you start a small business. The list goes on and on.
FACT: Buying a new pair of Air Jordans is NOT an investment. It only adds to the wealth of Nike and Michael Jordan. Consumption can certainly be a part of your financial plan, but it can’t be the only part. Before you give all of your money away to the big white companies that enjoy making fun of black people, ask yourself: What am I putting money, time and energy into that is going to give me a good payoff tomorrow? What ventures are out there that I can put a few hundred dollars into today that will pay me a few thousand dollars back in a few years? Malcolm X once said that the future belongs to those who prepare for it today. In other words, he was saying that you want to think like an investor.
8) Find a way to own something: America is run by people who own things, not by those who rent them. So, whether it’s your first home, a small business or even a website, find something that you can obtain that belongs to you. Ownership also allows you to get into a financial situation where your money is working for you. You shouldn’t be breaking your back into old age in order to pay the bills. The thing I’ve loved most about owning things is that it breeds an awesomely powerful sense that I control my own environment. I am not an extraordinarily brave man, but I don’t wake up with the same trepidation in my heart that is felt by many of my scholarly colleagues. Much of this “liquid courage” comes from the high of owning my own “stuff.”
Another community benefit of breeding the value of ownership in our children is that this is the ONLY cure for the black unemployment crisis affecting America. Part of the reason that black people (especially black men) can’t get jobs is because we are begging for jobs from white people. White people are never going to hire us before they hire other white people, that just doesn’t happen in America. So, the best way to get access to an opportunity is to create the opportunity yourself. We must control our own economic destiny.
9) Never allow yourself to be infected with the disease of laziness: I worry about those who are afraid of hard work. Laziness and complacency are death traps when it comes to reaching your goals or building wealth. By always attacking your situation over and over again, constantly reassessing your targets and adding good old-fashioned hustle to your game, you’d be amazed at how many obstacles you can overcome.
He who hustles hardest will almost always end up ahead. Hustlers also tend to have the best luck. Never waste your life being timid, passive or unfocused. That’s what they want you to be.
10) Choose your mate and family situation wisely: Bad family planning is one of the easiest ways for any person to find themselves in the poor house. For men, choosing the pretty girl who drains you financially can ruin your economic life. For women, it might mean getting so excited about a marriage proposal that you find yourself strapped ont0 an economic dud. Additionally, having children out of wedlock can be a financial train wreck for both the man and the woman involved in this tempting sexual transaction. For men, child support courts DESTROY your bank account. For most women, the struggles of being a single mom and working full-time are enough to drive you insane. Choosing the right mate and having your kids in the right way can open the door to wealth building and a powerful intergenerational transfer. Doing it the wrong way can leave you frustrated, broke and embarrassed. Don’t make the wrong choice.
Here’s a bonus commandment:
11) Avoid the legal system if at all possible: The legal, educational and healthcare systems in America are the biggest financial drains imaginable. Thousands of families give away all of their home equity trying to fight a losing legal battle against a criminal justice system that is hellbent on locking up as many black men as possible. Universities leave students swimming in debt after receiving a mediocre education. I won’t even go into how the healthcare system has manipulated the price of drugs to the point that almost no one can afford them.
Some of this can’t be avoided, but it can be managed. When it comes to the legal system, it is a good idea to try to stay out of it. This might mean avoiding unnecessary legal problems that come from violating the law. Educationally, it might mean choosing a state university over a private school or pushing your kids to make good grades so they become eligible for scholarships. At the very least, the child can share the financial burden which might come from massive student loans.
This list of tools for economic empowerment is not at all exhaustive, but is a start in getting the right mindset for wealth building. We should be sick and tired of black people always starting over, always feeling left behind, and allowing ourselves to be trained to throw away every asset that we have in our possession. Oppression is real, we know that. But we should also know that your oppressor is almost NEVER going to voluntarily stop oppressing you. So, if you’re waiting for racist institutions to give you what you need to survive, you’re going to be waiting a long time.
Our economic future belongs to us and any goal is within reach of a community that is determined. But the undeniable and consistent fact is that we must grab this destiny ourselves. No one is going to give it to us.
Dr Boyce Watkins is a Finance PhD and author of the best-selling book, “Black American Money.” To have Dr Boyce commentary delivered to your email, please click here.
The opinions expressed in this article are solely those of the author.
