The Guide to Black Wealth

Camari Ellis
Jan 23, 2016 · 15 min read

Black wealth, or the lack thereof, is a very popular topic these days. Google “Black wealth” and your search results will return tons of articles and research showing the widening wealth gap between Blacks and Whites in the United States.

Recently, The Huffington Post reported on a Pew Research Center report that stated White household median worth was $141,900 and that Black household median worth was a mere $11,000. That’s a pretty big gap!

Typically, I hate these surveys because they are purely academic in nature and the people reporting, usually, are not professional advisors working with real people and their money. I usually hate these articles because the headlines are guilty of race baiting, in my opinion, and rarely provide any solutions.

Every time I see articles like these, I wonder — Where are The Black Accountants, The Black Investment Advisors, The Black Lawyers, and The Black Financial Advisors on this issue?

For me personally, I know I try my best to avoid these topics in The OPEN Public in fear of being labeled “THE ANGRY BLACK GUY.” Maybe that is why other Black money professionals don’t speak out. It’s hard to drop that label even if it is inaccurately attached to you. For me that stops today! If folks label me that, then so be it. But it will not be because I am race baiting. Rather, I am presenting the facts and some insight from my experience as an Advisor (who is Black) and gives advice to his clients of multiple ethnic groups on money matters.

Many of the problems found in the State of Black America are directly attributed to a lack of funding. Ironically, Black unemployment has been double that of the national average for over 50 years. It is almost impossible for a poor or middle class person to obtain wealth with out a good source of income. The link between income and wealth can not be ignored. If high unemployment rates are a chronic issue, creating wealth is going to be an ongoing challenge. This clearly highlights a systemic issue that has not been addressed. If history is a teacher, then this issue will persist until a paradigm shift occurs.

In order for a shift in paradigm to take place, Black America must advance every possible effort to move closer to Wealth Parity with White America.

Below are the Top 15 issues, from my experience, that Black America must tackle in order to close the Wealth Gap.

1.) Develop an Abundance Mindset

During slavery many of our African ancestors were able to buy their freedom from their slave masters. This wasn’t a quick process. Nor were they lucky. They planned and strategized while remaining focused on their goal of freedom. Their focus had to be rooted in the possibility of freedom, despite their current condition. I attribute this to their rejection of a mindset of “Poverty” and hopelessness and adoption of a mindset of “Abundance”.

“You are what you focus on” — (Unknown)

“I have begun everything with the idea that I could succeed, and I never had much patience with the multitudes of people who are always ready to explain why one cannot succeed.” — Booker T. Washington

“Believe in life! Always human beings will live and progress to greater, broader, and fuller life.” W.E.B Du Bois

Our focus must be centered on positivity and abundance. When you expect bad things, bad things tend to happen and when you expect great things, great things usually happen. It may sound a little wishy washy, but I find it to be true and the wealthy individuals that I know tend to believe the same.

2.) Legacy Mindset

We stand on the shoulder of Giants. Many of us benefit directly or indirectly from the work of people that lived before us. A great example of this is the Civil Right Movement. People like Medgar Evers, Thurgood Marshall, Rosa Parks and Martin Luther King all sacrificed so the present day generations could have a better standard of living.

“A good man leaves an inheritance to his children’s children, but the sinner’s wealth is laid up for the righteous.” -Proverbs 13:22

Clearly, the Civil Rights era fulfilled the mandate of Proverbs 13:22 — We must do the same, when it comes to passing wealth to future Black Generations.

A shift must occur from solely “ME” thinking to “WE” thinking. We must also shift our thinking from a short-term focus to being long-term oriented. The greatest gains, always occur from long-range thinking, however this is a very counterintuitive process.

“Today is the seed time, now are the hours of work, and tomorrow comes the harvest and the playtime.” — W.E.B Du Bois

You can look at the works of Benjamin Franklin, who set aside $1000 for the cities of Philadelphia and Boston at the time of his death, in 1790. This money was held in a trust for over 200 years. In 1993, that initial $1000 gift grew to $2.25 Million and $5 Million, for Philadelphia and Boston respectively. That is the power of compound interest at work.

What would happen if a Black family did the same thing?

3.) Financial Education

While attending Temple University as an undergraduate student, majoring in Finance, I could count on one hand how many other Black Finance majors there were. From my recent anecdotal observances, not much has changed. Sadly, I find that we tend to shy away from any money related topics or fields of study. As a result, financial literacy in the Black community is at frighteningly low levels.

If Black people are to make significant strides towards financial parity with the rest of the Nation, we need more financial professionals. That means we need more students majoring in economics, finance, and accounting.

Institutions like the Black Church, HBCUs, The Masons and The Black Greek Letter Organizations have done great works in the community and would stand to benefit greatly from an infusion of better financially equipped membership. Since these organizations are mainstays in the community, it stands to reason that the community would benefit from this as well.

4.) Talk about Money

I find that people in general have a hard time talking about money. What is fascinating to me is how much more this is intensified in Black communities. We may talk about a credit card here or there, or even the interest rate we have on our mortgage or new car loan, but talking about investing, or a current business deal is usually frowned upon.

Not trying to bore anybody to death, but these conversations are necessary to heighten our financial IQ, which will help in building a bridge to more wealth opportunities.

5.) Destroy Money Myths

Money is the Root of all Evil — Capitalism is Evil — The 1% is Evil…

I hear these phrases time and time again, in the Black community.

They are all false.

Sadly, if something is repeated enough times or can be found on the internet it must be true, according to some urban legends. These statements can be heard around the world, but they seem to be hurting the Black community on a large scale.

John Wesley, who founded the Methodist Church nearly 200 years ago and was among the strongest opponents of slavery in the United Kingdom, taught 3 simple rules about the use of money:

1) gain all you can without hurting yourself or wronging others,

2) save all you can and

3) give all you can to help your fellow man.

This is a part of the spiritual heritage of the Black Church.

Money is a tool, and just like any tool can inflict damage, money is no different. However, when used properly a hammer can build wondrous works of beauty like homes and furniture; money is no different.

6.) Dominate S.T.E.M

Black incomes have risen drastically over the years, but it still pales in comparison to the national average. Currently, average Black incomes are approximately $35,000 while the national average income is $50,000. The national average is 42% higher than that of Black Americans.

A major factor for this large disparity is due to the type of work that Black America performs, generally. Just like the field of finances, we are underrepresented in the fields of Science, Technology, Engineering and Math (STEM). STEM jobs typically pay much higher salary than the national average. However, the educational requirement is much higher.

Recently, I was watching Bloomberg and a guest stated that high school students need to be doing calculus in high school to be competitive in STEM fields — which means they need to start Algebra in the 7th or 8th grade.

STEM is all the rage; nothing new here. However, we need to focus on this field with much intent, because this field will craft our future, literally. Today’s planes, trains and automobiles, will be tomorrow’s sonic planes, levitating trains and driverless cars. Robots will become permanent fixture in our daily lives. If we miss out on this, we will be shut out of another major wealth building opportunity.

Black America dominates most sports fields, we need to apply that same concentration on STEM fields. by replacing little league baseball and football with little league hackathons and robotics.

7.) Adequate Life Insurance Coverage — Don’t be Selfish

The loss of a life is irreversible. Many times, human beings have a hard time dealing with their own mortality and fail to plan for that inevitable day. Blacks are not exempt from this. Many times there is a negative feeling towards life insurance and a great reluctance to get coverage.

Currently, there is a MetLife Insurance commercial, promoting Burial Life Insurance Policies to African Americans. A mother and daughter are sitting at the kitchen table having a conversation about being prepared for the passing of the mother. The daughter was clearly disturbed by this conversation. Who wants to think about death, let alone talk about it? The mother was very persistent in this conversation. The mother then lets her daughter know that she recently purchased a Burial Life Insurance policy from MetLife and there will be money for her burial expenses.

Sadly, life insurance is often thought of as only a tool to pay for burial, but it can be used as a wealth creation tool also.

“Nobody gave me anything, so why should I give my children anything,” is a familiar phrase I hear when talking to many people about life insurance. This mindset is a contributing factor in the Black Wealth Gap. Meanwhile, many White American households see the value and are the recipients of large life insurance benefits once a loved one passes away. This infusion of funds helps to pay for new homes, college education and business ventures. This simple yet effective tool helps to build a foundation for future Wealth creation. Very much like the snowball effect, once the money ball starts rolling it gains momentum and creates other opportunities for making money.

Depending on the age of the person, they can get up to 20x to 30x their annual income in coverage. The average American earns approximately $50k a year, if they purchased 20x their annual salary that would be a life insurance policy worth $1,000,000. The cost for one of these policies could be as low as $50 a month. This is lower than the cost of your average cable bill. As long as they pay their premium, their family is guaranteed to receive $1,000,000, at the time of death, of a loved one.

Also life insurance proceeds are not subject to income taxes. Can you imagine if every family received a cash injection of $1,000,000 that is INCOME TAX FREE? This could help to close the Wealth Gap if properly allocated and invested.

8.) Support Black Owned Business

The Black community in America generates more than $1 Trillion dollars annually, but only 2% of those funds are spent with Black Businesses, according to Maggie Anderson in her book, Our Black Year.

How is this possible?

Maggie Anderson conducted an experiment, where she shopped exclusively at Black Owned Businesses for an entire year. She documented her family’s tough journey in Our Black Year.

Ironically, Mrs. Anderson also states that, “Black Businesses are the biggest employer of Black people, with the exception of government employment”. Ms. Anderson, further states that if the 2% of black spending were to increase to 10%, it would drastically, reduce Black unemployment. Reduced Black unemployment would have a positive ripple effect on Black communities throughout the country by way of a reduction in crime, increased savings and a better quality of life in the Black community.

In a 2012 article by Nicole Kenney of the NAACP, dollars earned by Black people leave the community within 6 hours. By comparison “a dollar circulates in Asian communities for a month, in Jewish communities approximately 20 days and white communities 17 days.”

Supporting Black businesses will combat this trend in multiple ways:

· Keeps money the community directly

· Filters down to primarily Black employees (who will hopefully spend it in Black businesses!)

· As the businesses grow, they can hire more employees from the community

· Businesses can send money up the supply chain — again, hopefully to Black manufacturers, suppliers, vendors and shippers

· As those businesses thrive, the cycle continues.


9.) Create Black Owned Business

One of the Major Drawback to Maggie Anderson’s year long experiment was her difficulty in finding certain Black Businesses — namely grocery stores. In my hometown of Philadelphia, PA, there are no black owned grocery stores (at least not that I know of).

With the advent of food deserts in Black communities, you would think this is a wide open business opportunity. Famous actor Wendell Pierce has invested in this very opportunity in New Orleans since he recently opened up a supermarket. Having Black owned businesses in these underrepresented business fields would help to fill these gaps and to help fill the Wealth Gap as well.

10.) Learn and Embrace Investing (Not Just Real Estate)

From my observations, the only investing that Blacks are really excited about is Real Estate. For years, I thought it was specific to my circle of clients and friends, but as I travel the country, I find that Blacks oftentimes LOVE real estate.

To be fair, this isn’t just a “Black Thing”. Everybody is crazy about real estate these days. I think it’s the tangibility factor; you can touch it, feel it and smell it.

One of the biggest reasons that Black Wealth has declined drastically in the last few years is due to the steep decline in the real estate market, during 2007 and 2008. Home values across the country dropped steeply. Sadly, it has not bounced back anywhere near its record high. In the same time frame the stock market has increased approximately 150%.

Prudential and MetLife, both have conducted studies on the Black community as it relates to finance. Both of these studies state that Black Households don’t utilize investing instruments like stocks, ETFs and mutual funds at the same rate as White Households. Furthermore, I have found that many Black Households don’t participate in their employer’s’ 401(k) plans. These plans which are set up for employees to save part of their salary in a retirement accounts usually have a savings incentive offered by their employer. That is free money that is missed out on.

11.) Create Investment clubs and groups with Family and Friends

People are social by nature. We benefit from doing things together.

Next time you are at the gym, take a look at the spin, Zumba or yoga classes. They are packed.

We can do the same thing when it comes to our finances. Investment clubs are a great place to learn about investing. Get five of your closest friends together and all of you commit to pooling $50 per person into a bank account (Joint Account with Rights of Survivorship) until you reach $10,000. Meet once a month to discuss business/investing books and about the most trending business and investing news that happened that month. Upon, reaching your $10,000 goal, place $7500 into a Brokerage account (Low Cost Brokerage) and pick 10 stocks to invest in equally. I would suggest starting out with companies or industries you are familiar with.

There are families that pool their money together for scholarship funds, subsequently; these actions silently translate to benefits for the next generations. While creating Scholarship funds are good, what would happen if you took it a step further and pooled money to fund solid business, investment and various other ideas?

12.) All Black Youth Organizations should have a mandatory money course (Not just one class)

Every youth organization should have a class about money. Boy Scouts, Girl Scouts, Jack and Jill, etc., should all make a money course a part of the overall programming. Years ago, many banks sponsored savings club, where each student had a savings account. Many of our youth organizations could recreate this activity.

The classes should be a main component and not just a one-time class.

You could be very creative with this. Monopoly tournaments, stock market challenges and business plan competitions are just a few ideas that you could build out entire youth money programs.

13.) Every Black Church & Religious Organizations should require that all members take Money Management courses

Money is talked about in the Bible and Quran, but I find that many times the subject of money is avoided, with the exception being when it’s time to “Pass the Plate”. Historically, the Black Church, has stood as a security blanket for the community. Everything from taking care of the sick and shut in, feeding the homeless and the Civil Rights movement to fight for the very freedom that allows me to write this today.

So, what better place for a modern money movement to begin for the Black community, but in the Black houses of worship?

Every new member’s class should have a segment about money and money management. The basics of credit, economics and investing could be taught. Clearly, a financially strong church membership will help to ensure financially strong churches.

14.) Major Black Churches should form new Banks or Support Black Banks already in existence

Over the last 20 years, we have seen the creation of the mega church. Five, ten, twenty thousand members in one church. Many times there are more than one in a given city or region. Many of these churches could band together and just like Martin Luther King did, call for their parishioners to either deposit their money in an existing Black bank or to be investors in a newly formed Black bank.

Many Black churches have credit unions to help their members, but credit unions cannot access the Federal Reserve’s, which allows the bank to have more access to money and resources. The process is a bit harder, but well worth it.

In my city, Philadelphia, there are several articles about churches who have rebuilt their facilities using loans to fund the process.

Over the last 15 to 20 years, many churches have become mega churches. Ironically, much of the bank financing was handled by traditional banks. What would have happened if these mega churches would have created their own bank? The interest payments from the building expansion would have been a major profit center for this newly formed bank

Each of my points about closing the Black Wealth Gap really centers on increasing education, so we can create the space for money (not materialism) to become part of our culture. Not a product, sale, or some passing fad. But a lasting fixture in the Black community.

Every craftsman, counts on his/her tools to create works of wonder — We must look at money as a tool to create the works of wonder that are needed to build better educational systems, which leads to better business/job opportunities and a reduced crime rate.

15.) Multi-Generational Living

When it comes to having several family members living in a single household, Latinos and Asians are the butt of the joke. In reality, the joke’s on us — since housing costs typically account for approximately one-third of an individual’s income.

Imagine your housing cost divided by, three or four adults. It’s a substantial reduction in cost and potential source of future savings and investing

For the average American, making a salary of $50k annually, housing cost would be roughly $16,500. Which could be the initial investment into a Snap-on Tools franchise (

Before Desegregation, it wasn’t uncommon for Black Families to have 3 or 4 generations of a family living in one household. Those were crazy times! However, it also helped preserve family traditions and helped to connect older and younger generations. This is something that has been damaged as Black Families have been able to move out of traditional Black neighborhoods and establish themselves, in predominantly White communities.

If families take a multi-generational approach to home ownership, they can buy homes in nicer neighborhoods, preserve a sense of family and save money all at the same time.

When you look at the 15 points that have been laid out for an improved Black Wealth situation, you will see it really centers on a couple of key points. Namely, education and collective activity. Some of these things are easy and can be done right away. Others take more planning and strategy.

I truly believe that if enough people actually implemented these items you could see a MAJOR shift in the Black community very quickly… And the Black Wealth Gap would gradually disappear forever.

Camari Ellis

Written by

An Investment Advisor that Loves Business, BBQ and Hip Hop. Connect with me FB

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