With all of the financial advice available now it is easy to get confused. Credit card reduction companies and different investment strategies that are sometimes scams. They often prey on the financial ignorance of a population obsessed with consumption but hate to budget and save. Black people according to Nielson read more financial magazines 28% more than any other group, but lag behind in wealth and resources as a group.
In terms of wealth, meaning home value, what you earn after all bills are paid, retirement account, emergency savings and stocks and other holdings the black and white disparity is overwhelming! According to the Washington Post, in stocks, bonds and other holdings whites have $180,000, blacks have $1,100. We could get into all of the stats and disparities but today I would rather focus on the potential.
Having the proper mindset to develop wealth is the starting point. Understanding that wealth is a gradual process based on practical economic decisions where compounded interest expand your reach and lifestyle decisions protect you from outside conditions. You should already know that my first rule is to live below your means, if possible way below. This must be repeated and emphasized as simple as it sounds because of the constant need to live large or keep up with the Jones’ in American society.
The next question is after living below your means which would allow you to create an emergency savings, what do I do with my surplus cash? Any person building wealth should always be looking for ways to make their money work for them. You may want to invest in your own business or a family members business. You may want to invest in real estate. We just cited the disparity in stock holdings. Don’t be afraid to jump in. Do your research thoroughly but take action. You can invest in the companies that you already spend money with that you like. Look to see if they have drip accounts. A drip account allows you to invest in stock shares with as little as $25.
I have to bring it back to a story that I read about 3 years ago. Mr. Earl Crowly worked as a parking lot attendant for 40 years never making more than $12 an hour but managed to accumulate a stock portfolio worth $500,000 using drip accounts! This was his wealth strategy! You could use it for yourself and add other strategies with this. Mr. Crawley has no credit card debt and I believe his home is paid for. Although not quite a millionaire at the time of the report he probably is now. If not, it does not matter because he has laid a wealth foundation and strategy for his children to follow from only $12 an hour! Mr. Crowley is the perfect example of The Trillionaire Next Door. I know he lived below his means based off of his income he had no choice, but he saved and invested wisely! It just proves my point that hard-working people can create a foundation of wealth and financial independence for themselves and family by playing defense! It doesn’t matter how much money you make as long as your mindset is correct. Cut out frivolous spending, live below your means, save and make wise investments.