In honor of Black History Month, Northwestern Mutual – Chicago hosted an event on Thursday, Feb. 15, to discuss the racial wealth gap and ways to help close it. Panelists provided finance-related anecdotes from their lives, inspiring testimonies and knowledge regarding the African-American community on advancing racial equity.
Wealth increases throughout life, but there is a concern about whether African Americans reap the benefits.
For Black households, many social media gurus try to get people to sign up for information about wealth building but don’t have the experience, educational background or knowledge to help them.
That’s why it’s past time for Black people to be included in conversations about closing the racial wealth gap, said Bezos Academy Chief Equity Officer Robert Johnson.
“When you talk about the racial wealth gap, most of us have been excluded from the opportunity to participate in these financial vehicles because they have minimums, or they are not marketed to us, or they have fees that diminish anything that you might be able to accomplish from.”
Most of the panel at this event would agree that it begins with changing your mindset to make better financial decisions for yourself and your family and finding a knowledgeable and experienced person to help you — someone you can trust with your private information.
The Mindset Needed to Build Wealth
Moderator Dundee Gouin, managing director of Northwestern Mutual in Chicago, gave an example of how acquiring wealth can start with changing your perspective. Even though there are so many different companies or easy paths to take with your personal life and finances, he says, we must first trust a critical person.
“What it is starts on the individual level and mindset, to be honest with you. If we’re willing to change our mindset, this is only possible. If we can change our mindset, then it will change our actions, and our actions will change systems.”
Some people may need everything in order and have a specific financial range in mind before creating a wealth plan. But that’s not necessarily the case.
“A big misconception in our community is that you need to have your I’s dotted and your T’s crossed to converse with advisors, and you need millions of dollars. That creates a barrier for most everyday people who could use solid information. I have people that I work with who invest $20 bucks or up to $2,000 a month and everything in between. A lot of times, that step isn’t taken because of fear,” said Jabari Turner, an associate managing director with Northwestern Mutual in Chicago.
Because of the history of discriminatory practices by predatory institutions, Black people can be skeptical about working with banks to formulate a wealth plan.
Still, said Jamil Henderson of Northwestern Mutual, when clients are ready to start their financial journey, they should prepare questions to ask any advisor about what they are signing up for.
Henderson, a financial advisor with the company, added, “There’s a lot of competitors out there that are preying on our people because they know most of us lack the knowledge. They may get people portrayed as financial advisors but just for a side hustle. That’s how they’re getting their policies and people to move forward with investment services because it’s somebody that they know and feel comfortable with, granted that person has the educational background and experience.”
Bringing ‘Wall Street to MLK’
The panelists also talked about ways to help close the racial wealth gap by creating resources in our communities and sharing knowledge that we obtain from other associations that have made their mark.
Johnson said he managed to take all the knowledge he learned in rooms where he was the only Black person and bring that information back to his community.
[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””]”I will bring Wall Street to MLK, all of the stuff they do from high finance…When I think about the racial wealth gap, I want to establish people. There needs to be a gap in the three stages of wealth. First is accumulation, then preservation, and then there is legacy.”[/perfectpullquote]
Johnson also stated, “From a product standpoint, we are not a one-solution-fits-all-all type of community. We need products that speak to our needs. I’ve become very passionate about that crusade now; as a complement to closing the racial wealth gap, my brother and I are very passionate about our community, Bronzeville. Every year, a billion dollars go out of our community because there are few places like a Northwestern Mutual building or white tablecloth restaurants where we can dine. We’ve taken it upon ourselves and some outside resources to redevelop 47th Street. We’re buying up the blocks in Brownsville and trying to line the streets with Black businesses and exceptional housing opportunities. That’s what we’re focused on, creating those sustainable communities where people can live, work, play and pray.”
From the audience’s outlook, two prominent black men also expressed another way to overcome the wealth gap by supporting and collaborating in businesses.
Marquis Miller, vice president and principal advisor to the Executive Leadership Team on diversity, equity, and inclusion for the Obama Foundation, said digital business connections could help.
“Some initiatives are underway to help storefront owners and businesses connect digitally,” said Miller. He also suggested that Black businesses can be promoted when the Obama Presidential Center opens if they open digital marketplaces.
Sherman Wright, co-founder and managing partner of TEN35, said we must also get out of survival mode and into a thriving mentality.
“The challenge is we grew up aspiring to be rich. There’s a difference between the rich and the wealthy: get rich or die trying,” Wright said. “Wealth is creating a platform that sustains the ebbs and flows of the economy. We have to go from a survivor mentality to a thriver mentality. It’s all about the hustle. How do I go from a consumer to a wealth creator? We are a consumer community, but we must go to wealth-creation platforms.”
Building Multigenerational Wealth for Your Family
A family office is an investment vehicle when creating a legacy with your loved ones. It can be an entity such as an LLC or even a private trust, where the family puts their money into this entity and uses it to grow the money. This could also be the back end to ensure that the money continues growing from a generational perspective.
Start a healthy conversation with private family members, whether it’s about investments or policy information.
Turner said he has helped start the narrative in his family by getting his sons to invest.
“It begins at home. As a quick example, my kids, when they get money, know that they should save some and get to spend some. I helped them open accounts and started with what they liked, like Roblox. It’s a small step in the right direction. A conversation like that will go on forever, and with the next generation, we’ve got to make a difference. We have to be proactive when asking our connected family what our estate plan looks like, talk to our kids about money, and make it less of a taboo so that people are more comfortable having that conversation. We can approach some of these systemic changes. People will be much more comfortable having these conversations because they know.
For Generation Z’ and future generations, Donyiel Crocker, associate director of employment and engagement at DePaul University, wants to help return value for diverse students by ensuring they have opportunities and become educated about the racial wealth gap and financial investing.
“The anxiety level around their ability to accumulate wealth now rather than later is high. I have two sons, who are 24 and 22. And they’re conversing with me about, like, well, what does your will look like? Back then, I dared not ask my mama that question (laughs). This is an opportunity for conversation. Still, I also recognize that in terms of the community, there is a desire to learn more about wealth, preservation and legacy.
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