NewsMultiple Ways For Blacks To Build Wealth In 2024

Multiple Ways For Blacks To Build Wealth In 2024

Be mindful that building wealth is not an easy task is an ongoing situation that can always be enhanced. Consider how you would pay basic bills if hit by an unexpected job loss without adequate savings.  How would you buy a house or car without financing?
Those are real-life questions Americans are facing, and for many people, there is no clear-cut answer. 

 

Develop a financial plan
To get rolling, the first place to start when building a financial plan is by defining your goals – what are you saving for?  Roberta King, Vice President & Branch Leader at Fidelity Investments, says typically people have several goals they are working towards simultaneously, but defining each one is critical. 
For example, do you want to buy a car, and if so, in how many years? Are you saving for a down payment on a home, and when do you wish to buy it?  Are you saving for retirement or a child’s education or hoping to pay down debt?

“Making a list of the goals, prioritizing each one, and outlining the timeline for reaching your goals is a great first step,” she says. ” This is also a good time to ask yourself if your goals are aligned with the vision you have for your life—it’s expected that your goals shift as your life changes; but it’s critical to periodically pause and ensure alignment. Your efforts to achieve your goals deserve to be truly anchored in what is meaningful to you and your life, and not anyone else’s life.”

She stressed if you are planning with someone else or someone else who can impact your finances, make sure you talk with them regularly.
 

Establish a budget
A budget will show you what you’re spending and what extra income you may have left over after paying for essentials like food, housing and transportation. If you are left with anything after managing your monthly expenses, identify if there is room to trim. Are there gym subscriptions you’re not using or streaming services you don’t watch often?

 
Erase debt
King advises the most important thing to review when evaluating your debt – say it’s a mortgage, college costs, auto loan or credit card for instance – is the interest rate. The higher the rate, the more you’ll pay in the long term. King says if the interest rate on your debt is 6% or greater, you should generally pay down debt before investing additional dollars toward retirement. She added taming debt is important as reducing it will in turn increase your net worth.  Fidelity has various resources to help you review and manage your debt at
 
Boost savings

“Pay yourself first. Have part of your paycheck swept to a high yielding savings account on payday (a different account from where you pay bills).”

 
Investment and retirement planning
Having a diversified portfolio that aligns with when you’ll need the money, along with risk tolerance or  how comfortable you are with ups and downs in the marker, as well as a savings goals are all critical. This link offers help to build and maintain a diversified strategy. On the retirement front, King recommends always being open to making yourself eligible to accept the “free money” offered by your employer plan if available, including matching contributions and profit sharing for example. 
 
Protect your assets
Insurance is an important part of anyone’s financial plan, something made easier for yourself and protecting yourself and your family with the right insurance. 

“Underinsurance is a major financial risk for individuals and the overall wealth of our communities. With safety nets in place, financial wellness is less likely to be jeopardized by tragic events.”

She shared a financial advisor can help you pick investments that parallel with your goals. 
Further, be sure to include specific target date funds that can help you achieve time-based goals like saving for the golden years or stashing away to pay for college tuition.
At this year’s Black Enterprise’s Black Men Xcel Summit, Devon Kennard, a former NFL player, real estate investor and author, offered expertise on building wealth. For instance, he talked about Target Monthly Income (TMI) and knowing how much you’re spending each month. 
In fact, Kennard’s book, It All Adds Up: Designing Your Game Plan For Financial Freedom, focuses on creating wealth and how to build multiple income streams. He pointed out many people don’t know exactly how much they spend on a month-to-month, year-to-year basis.  He says in conversations with African Americans, too many of us don’t know what our TMI is, what that looks like for us.

“Addressing that and identifying that our financial wellbeing is just as, if not more, important than our physical, mental, emotional and spiritual wellbeing.”

A seasoned financial educator and financial literacy advocate, Jeff Ferrell, among his comments spoke on the book, How Money Works – Stop Being A Sucker. He explained the book  talks about basic introductory principles and concepts that people need to understand about how money works. He advised that you should not be afraid to ask questions about your finances.

“Find professional, find someone that is either where you want to be or beyond where you want to be. It starts with just being willing to accept instruction, and then that can develop into a relationship where someone will coach you and help you to get where you’re trying to go. But don’t go at it alone.”

Check out more financial empowerment insights from Kennard and Ferrell here. 
RELATED CONTENT: How Millennials Can Score in the Game of Wealth Building

Source: Black Enterprise

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