GREENSBORO, N.C. — As the country celebrates Black History Month, it's important to connect the dots between Black spending power, net worth, and building wealth.
Money expert Ja'Net Adams said the Black community's financial spending and investing behavior is evolving as African Americans' spending power reaches $1.6 trillion.
"Despite deeply rooted inequalities in financial literacy and opportunities, the GI Bill typically referred to as redlining, disparities in education, and now the pandemic has caused African Americans to play catch up for a few centuries now," said Adams, who wrote the book, The Money Attractor.
Adams shared three ways Black Americans can increase net worth today regardless of the discriminatory practices of the past.
1. Don't Jump on The Bandwagon:
"A lot of net worth is tied up in homes, so the logical solution would be to buy a house. But that could end up being a money trap right now because many homes are still overpriced and it's not worth buying an overpriced house," Adams said.
"The market should cool off in the next year, but you can increase your family's net worth by keeping the houses you already have in your family. Once the housing market cools off then find a house that is underpriced so that you are getting a deal."
2. Don't Follow the Crowd:
"I am not a financial advisor, but I will say never chase after investments promising quick riches. There are many people of all races losing their money in cryptocurrencies. For example, bitcoin is not something you should use as your long-term investment strategy," Adams warned. "If you have money to lose, then, by all means, buy up bitcoin. But if you don't, you should be saving for retirement."
Instead, hire a licensed financial advisor to help you get started in mutual fund investments.
"The goal is to grow your money over time and become wealthy, not to lose it and then work for the rest of your life."
3. Spread the Knowledge:
"Knowledge is power! If you're able to keep grandma's house in the family, then share that process with a friend of the family that is going through the same situation. If you find a financial advisor that you trust, share the name of that advisor with other family members and friends. Most importantly, work to right the wrongs of the past," Adams said.