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1/21/2019 "The Black Economy 50 Years After The March On Washington"

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Wall St. and Business Wednesdays: Where Is The Black Investor Headed?

Next Wednesday we begin Lessons at Black Electorate Economics University (BEEU), Semester Two, Personal Finance – “Financial Literacy And Turning Money Into Wealth.” You can read more at: For the last couple of months, in preparation for this Semester I have been speaking and building with experts, lining up a powerful ‘guest lecture,’ reading, studying history, and praying over how to make a contribution that might give some order to the motion and spirit of wealth creation that is moving among our people.

If I were to poll our viewers at, I am quite sure that I would hardly be one person removed from someone who is either 1) seeking to accumulate money by saving their earnings 2) investing in real estate and the stock market, or 3) starting a business of their own. It is absolutely staggering and inspiring to see so many with this attitude and agenda.

Having said that, I am also struck and a bit saddened, at times, by how narrowly individualistic and superficial – in terms of motivation and scope - these efforts have become. I am the first to applaud anyone of any color seeking to do for themselves as an individual. I honor the spirit of industry and proactivity wherever I see it. But I wonder at times, where all of this is going to lead us and our people. And out of whose mindset and spirit are we, at times, thinking and moving on economic matters?

For about a decade now I have seen many of my young friends and associates from high school, college, the music industry and faith - yours truly included - stack and lose and stack and lose and stack paper assets and property, primarily in the real estate maket and/or through the stock market. I have seen many of us seeking something for nothing and still more who follow any new way of getting money that becomes the latest investment flavor of the month scheme. We are putting down books on Black economic development and wealth creation and picking up the hottest book on the subject of personal finance and investing at Barnes and Noble. And very few of us are going to that old library to study investment, finance and economics from a historical perspective.

The common theme in the worst of what I am seeing is an extreme form of materialism not being guided by strategy; wisdom that comes from the lessons of others; financial literacy; or a mission. And I am increasingly concerned. Concerned that one of the worst forms of the legacy of the sincere effort, among Black people, that resulted in integration, is now characterized by an extreme form of materialism. What started out as a quest for dignity, freedom, justice and equality – however misguided one might believe it to have been - has evolved, digressed or degraded into the internalization of some of the lesser parts of the value system of the people who were oppressing us. Our inordinate desire to feel that we, perhaps, were not full men and women until we became ‘equal’ with our former slavemaster, was a form of extreme humanism. It resulted in extreme materialism, whereby we feel compelled to have what our former slavemasters have and own what they own. Many of us recognize this under the name of conspicuous consumption, a concept I have elaborated on a bit in the past. But I believe it is also manifesting in the form of conspicuous investment. And I believe it can be seen very clearly in how many of our people are pursuing what they sincerely believe is ‘wealth-creation’ for themselves and their people, through real estate investment, in particular.

I am pleased to see the millions upon millions of dollars that Blacks are individually making through this tactic, but I don’t see it tied to a real wealth creation strategy that would result in economic development in our rural and urban communities. I also don’t see it connected with a willingness to consider that maybe the blind are leading the blind into the ditch. Some of us implicitly trust White people to guide us on economic matters. We defer to them. And as a result while we are reading the latest book on how to get money; we aren’t listening to Bloomberg radio; aren’t reading the Wall St. Journal, aren’t studying the Crash of 1929, aren't comparing the American economy to those in recorded history that have risen and fallen in the past, and certainly aren’t critically reading the Federal Reserve balance sheet, or minutes from the last Federal Open Market Committee meeting where interest rate decisions (which will ultimately determine the success or failure of most popular real estate investment strategies and tactics) are being made.

We are chasing paper, but not following the paper trail that would lead us to understand the power(s) that really determine the investment environment and who can really get money, where, and for how long.

In addition to this, I notice many Black investors following investment gurus who don’t mention one word about how to flip individual and familial wealth creation into entrepreneurial, community and economic development. There is a huge void to fill in this area, as you just don’t see enough of the dominant personal finance tactics being utilized by our people being connected to a badly needed effort and strategy to establish institutions of financial aggregation and intermediation, land ownership (not home ownership), and the start-up and growth of brick-and-mortar businesses in Black America.

The person who bifurcates personal finance from community wealth creation is about the same in the quality of their thinking as the one who tries to persuade us that there is no relationship between religion and politics. I intend to stomp a mud hole in this fallacious argument that ridiculously and deceptive argues that individual personal financial habits aren’t the basis of collective economic development.

What is a commercial bank then – if nothing more than a group of individuals, personally deciding to pool their resources collectively and allowing a small group of experts (bank managers, executives, lenders and analysts) to decide how to distribute personal financial assets throughout a community and in collective ways? The bank is loaning your personal finance to someone else’s business, real estate deal, and church.

Practically every ethnic group in America has used financial aggregation (banking and personal finance) and financial intermediation (collective economics and the redistribution of community wealth and pools of personal finance) to spur wide and deep economic development that reached a certain stage, usually before they embraced integration through the political process and social networking.

Many people would be surprised at the level of economic development that took place in Black America from about 1877 to 1920 when we were forced to aggregate and intermediate our personal finances on behalf of community development.

But if we are waiting for the hottest White personal finance guru to tell us this, and what the implications are for a Black economy, we are in bad shape.

We may be creating wealth for ourselves and our nuclear families, which is a necessary step. But now we need to broaden that definition of family and generate even more wealth, economic development and growth.

And I do think we will be forced to do so, as the larger American economy, and with it, the housing and real estate market, dips, relatively soon.

The question will be – how much ‘paper’ will be left for us to flip into other investment vehicles and tangible assets and businesses? If the housing market crashes or comes to a screeching halt, rather than an orderly slow down, there will not be enough time for a transition to liquidate and roll our capital gains into other money-making and wealth creation activities.

We are going to get into this in detail this Semester.

Our focus is not just getting money and turning it into individual wealth but also wealth creation for individuals and families that leads to the same for a community and people. Hopefully that is our contribution.

We intend to show that we can make more money and create more wealth collectively in community, than we do just as individuals, couples and families.

This is why we don’t educate our BEEU members in a vacuum. We accept the challenge of trying to find an integrated and unified view of Personal Finance, Private Finance, Public Finance and International Finance.

I hope that you will consider enrolling and contributing to this effort.

Today at 3PM Est we will be having a chat to discuss this issue and Semester Two of BEEU. Please join us by visiting the following address:

Cedric Muhammad

Wednesday, August 16, 2006

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The views and opinions expressed herein by the author do not necessarily represent the opinions or position of or Black Electorate Communications.

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