The Inadequacy of Black Wealth in The Twenty-first Century

By Kenya M. Sykes, CPA MSFS MT

Few things trouble me more than the black wealth gap caused by the lack of financial literacy in the African-American community, heretofore referred to as ‘the black community’. Please forgive me as I use the term black community, but I’m truly sick of the political correctness inherent in that terminology when the essence of pride in being African or American is clearly questionable. I am equally troubled by the fact that in 2010, the community represented by the Diaspora can be so far behind the majority population in the United States when it comes to wealth.

In a society and culture that is so mesmerized with the term paper chasing (a la Diddy’s ode to wealth in, It’s all about the Benjamins Baby). Well, I couldn’t agree with my mentor more, because it truly is all about the duckets, scrilla, loot or whatever colloquial moniker you wish to place upon it. Though this black wealth has appeared sparingly in our culture through the likes of BET’s Bob Johnson, Oprah Winfrey, Tiger Woods, Michael Jordan, and Bill Cosby, it constantly eludes the average black person and that frustrates me to no end.

This is just my theory, but it is based on a daily deluge of current events, the political tides of the day and a sheer desire to seek any morsel of data to support a closing of the black wealth gap in this country. There are so many problems that ail the black community that it would take a full dissertation to enumerate the ones that are just floating around in my head. Besides, Tavis Smiley has sufficiently covered this topic in his book, The Covenant with Black America, and so have countless others who are trying their very best to educate our community. Yes, there are many ills, but as a CPA, the one that troubles me the most is the lack of or inadequacy of black wealth in the twenty-first century. We are so enamored with material wealth (i.e. name brand ish from clothes to cribs), but I’m talking about real ‘generational’ wealth. I mentioned that I am a CPA, well I am a tax accountant and I have done tax returns reporting income that would make your head swim. You think you have money, well like one of my favorite TV hosts, Jim Cramer of Mad Money would say, YOU KNOW NOTHING! Let’s talk about tax returns where the income reported is in the seven to eight digits. I’m sure I have your attention now. Would you be surprise when I say that I have never done a black person’s tax return with this type of money reported? Better yet, I also do trust and estate tax returns and have never done a trust or estate owned by a black person. Admitting that seriously bothers me. There are so many reasons why this may be the dominant fact, but I will chalk it up to ignorance, indifference, or procrastination.

Recently I stopped by a check cashing store to get an isolated money order and people were in there cashing their paychecks, welfare checks, tax refund checks; I think you get the picture. I was immediately pissed off by this display of my people giving their hard earned money away at these usury rates. Do you know how much they charge to cash a check? We still fall for the CHECK CASHING shake-down because we continue to harbor extremely outdated views of the white man and the “I’m not going to give him my money” mentality. Well guess what, you are still giving your money away. Don’t let me start on the people who salivate at tax time for their refund (I mean government) check. THIS IS MY BIGGEST PET PEEVE. Wake up people, that’s your f@#king money and every time you get your tax refund check, the government has enjoyed an interest free loan courtesy of your ignorance. We would rather have our uncle Willie prepare our taxes, the same Willie who has a regular job and knows absolutely NOTHING about taxes, but he said he can hook you up. Wake up people!

We have to stop this ridiculous cycle and begin to educate ourselves about financial matters. Knowledge is power, but ignorance can cost you thousands, and in some cases, millions of dollars over a lifetime. Financial literacy is clearly absent in our community. In a society where a majority of our kids remain functional illiterate, I don’t see where, or how, this gap will narrow in the near future. There is so much work to be done to educate the black community. While the majority of the population earns the bulk of their money through capital gains and asset appreciation, I fret that a lot of ‘our’ people don’t even know what these terms mean. That’s a truly scary notion in 2010.

Like Bill Cosby so eloquently exclaimed, ‘Come On People’! Open a checking or savings account, get an accountant, start a retirement account, learn how to invest, watch personal financial planning lessons free on your television, teach your children about money. We have so much ground to gain, so let’s get to work.