Turning a Financial Setback into a Comeback
By Kelvin E. Boston
While considering the findings in Prudential's 2011 study, "The African American Financial Experience", I was reminded of a saying by best-selling author Willie Jolley, "A setback is a setup to a comeback." Willie's words inspire us to turn the negative impact of our current economic recession into a positive one. As a former financial planner turned financial journalist, I would like to discuss how African American households could potentially use the information in the study to turn their financial setback into a comeback.
First, though, I would like to call attention to the significance of Prudential producing their first benchmark study of African American consumers. Although the company did it to better understand the African American market, they also decided to share this report with the public to help jump-start a national discussion on the economic future of Black America and to help other financial services companies understand the business case for better serving the African American community.
Study Findings
The study reminds us that despite the Great Recession, Black America is still viable economically, still has a stable middle class and still has vast financial resources. It also offers a number of new insights into the African American financial experience:
- We have a difficult time finding a trusted financial advisor. And African Americans are underrepresented in the financial services industry. I'd like financial services companies to use this study as the impetus to hire more people of color and to develop responsible financial products that meet the needs of African American consumers. This would help the industry while creating careers for African Americans.
- We want to better manage our debt. See for yourself the cumulative benefit of paying a small amount each month toward the principle on your consumer loans by playing with any of the online programs and websites that lay out the numbers.
- We have a strong interest in seeking more information about financial products. Increase your understanding by checking out books and magazines on investing in your local library or participating in free financial education classes available online. Or take a live class at your local National Urban League, NAACP, or Operation Hope office.
- We prefer low-risk, low-return investments. If substantially increasing your net worth is to be a part of you financial comeback, you'll find it useful to learn how to invest in publicly traded stocks, bonds, equity mutual funds, commercial property, and income property. Home and income property ownership are still viable options—just consider whether you want to pay someone to live in their house, or pay yourself to live in your own.
- We dream of starting a small business. The creation of successful African American businesses is vital to the future of Black America, so I encourage all would-be minority business owners to fully vet their business concept. Attend free business ownership classes and enlist the help of a volunteer to develop a business plan. This will position you to both assess your business capital needs and secure that capital—even in a tight credit environment.
Although African Americans were harder hit than most during the recent economic crisis, we are quite optimistic about the country's recovery. While optimism is useful, it will not secure our economic future. We must find tangible ways to turn our optimism into realized economic opportunities. Hidden between the lines, charts, and points of the Prudential study lie clues that African Americans can use to begin planning a comeback from financial setbacks. It is up to us to find the clues and use the information to start turning our financial setback into a comeback.
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