Mobilizing Black investment savvy to build wealth and capacity
Every paycheck, millions of us contribute to a 401k, 403b, Roth IRA, IRA, mutual funds, and buy stocks and bonds. Professional in our community take it a step further. They form investment clubs that meet monthly, pay their monthly dues, use a checklist to determine what stocks to buy, what stocks to sell, which to put on the stock watch list. We research, analyze and compare the companies, all in an effort to pick a winner. Every paycheck, millions of us contribute to a 401k, 403b, Roth IRA, IRA, mutual funds, and buy stocks and bonds. Professional in our community take it a step further. They form investment clubs that meet monthly, pay their monthly dues, use a checklist to determine what stocks to buy, what stocks to sell, which to put on the stock watch list. We research, analyze and compare the companies, all in an effort to pick a winner. We dream with each other of the great wealth we are achieving from our Wall Street investing.
But here is the dilemma for those of us who invest in stocks, bonds, 401k, 403B, Roth IRAs, IRAs, mutual funds and investment clubs: Black businesses are not listed on Wall Street. The local beauty salon, barber shop and soul food eatery with the down home chicken wings must rely on direct sales to tap into the millions of dollars Blacks spend as consumers. The investment club that uses the checklist to pick a stock has not invested a dollar into the growth of the Black businesses that are so vital to the survival of the Black community. In America, small businesses are the greatest employers of the communities in which they reside. The unemployment rate in the Black community is at an all time high for all segments -- men, women and youth.
Each day we can hear, see and experience firsthand the fallout of the lack of Black business investing. It's the sounds of gunfire, the tragic sight of Black youth standing on the corner working for the outlaw employer in the community - the drug dealer. The body count of the dead and forever damaged from the violence in our community keeps growing. These images play all across America in city after city. The lack of investing in Black businesses shows up in the decay of neighborhoods, boarded-up homes, vacant lots and 'going out of business' signs.
White businesses continue to thrive. We are investing in them directly and indirectly. We no longer have to pick our food up from the back window of the restaurant, sit in the back of the bus and shop without trying clothes on. We have achieved social acceptance, gained access to corporate America and live in affluent neighborhoods. Many of us have escaped the daily grind of living in the poorest neighborhoods. Many of us drive luxury cars, dine in fine restraints and travel around the world. Yet our investments contain not a single dollar invested in the same Black community we so strived to leave behind.
The question of the day is: "Why are Blacks not investing in Black businesses?" The Black businessperson must overcome obstacles by achieving with great sales ability, great money management skills, great marketing skills, great this and great that. For a Black business to reach Wall Street for investment dollars is improbable, if not almost impossible. There exists only one Black business listed on Wall Street from my research: Radio One.
The startup Black business must finance their business through great sales. There is no investor for the startup capital. Black businesses cannot rely on banks for a loan to start a business or provide working capital. Black business credentials will in most cases fail the bank's qualification standards. If a Black businessperson desires to open a business that requires $500,000 dollars -- such as a franchise like Popeye's, Churches or Perkins -- all employers of low-skilled workers that reside in the local neighborhood - he or she faces great obstacles.
We must create a catalyst of change in the Black investing community to organize investment clubs and opportunities for the growth of the Black business. W.E. DuBois referred to "The Talented 10th" - referring to the very well educated. We cannot rely upon professional basketball and football players, both of which are earning checks not by business savvy, but through physical skills, to