Black Wealth with London and Ornella
Black Wealth with London and Ornella
I sent out a message from the CEO on June 2, where I promised to utilize my platforms to bring light to, and make positive changes for, the Black community, specifically where wealth is concerned. Today, in the first of what will be many future episodes specifically utilizing my platform to amplify black voices, I’m speaking to Ornella and London, two trainers here at The Financial Gym, about the racial wealth gap, some of the challenges they see in the Black community as far as narrowing that gap, and how we can work to decrease the gap and make changes for this and future generations.
What are we drinking?
London - Peppermint Tea with a splash of Jack Daniels Tennessee Honey
Ornella - Apple and Eve Juice Boxes
Shannon - Black Cherry Schweppes
Podcast Notes
Both Ornella and London are Financial Trainers at The Gym. Ornella had a corporate job, but she realized that giving people financial advice and helping them navigate their money is what she really wanted to do. Ornella lives in Newark, New Jersey and she sees the struggle to manage money in her community. She has a passion to help.
Ornella was going to start her own consulting firm, similar to The Gym’s model. As she researched her competition, she found The Gym and decided to work for them instead.
For London, 2019 was a good year financially. He was able to tackle his debt and start saving for an emergency. He used to live life on the edge, but he was exhausted.
Three months after starting his debt payoff journey, he saw Shannon on TV talking about money and The Gym. London was living in L.A. at the time, but his company wanted him to move to either Texas or Florida.
He decided to take the severance and right afterward, there was a job posting for The Gym on Indeed. Shannon did London’s interview.
When Shannon started as a financial advisor in the corporate world, clients needed a minimum of $250,000 in assets. All of her clients were white and mostly male. There was only one black employee in her office.
When Shannon started The Gym, she had a client that was black. Once she got involved with this client’s finances, she realized how many differences there are. There is a black and white of money.
When you are a black woman, you are fighting the challenges of being a woman on top of being black.
The average net worth for a Caucasian family is $171,000 versus $17,150 for a black family. The average income is $70,600 compared to $41,000. For home ownership, 65% of white families own a home versus 42% of African American families.
A house is the best way to build net worth and build equity, but black people do not have access to buying a house and they don’t have other assets they use to diversify.
The ownership of stock is 20% for a white family versus 2% for an African American family.
Race is a bigger determinant of your social class and status than anything else. If you are born black, you have an 80% higher chance of being poor than if you are born any other race.
Black people are playing catchup, and they don’t have the extra income to invest. The black unemployment rate is higher than the white population.
If you don’t have access to a bank, you don’t have access to put money in a checking account, let alone a brokerage account. There is also a distrust of financial institutions. If you don’t have a bank, how do you get paid? You go to payday loan places and you have to pay fees.
Payday loan companies, pawn shops, and check cashing companies open locations specifically in African American communities. They are predatory on purpose and it normalizes it.
There are so many different debt products that are targeted at the black community. It is a structural problem.
Black people are used to working with people who don’t look like themselves. Many black people have a lot of family support. Ornella is from South Africa, and it is part of the culture. There are some aspects that are just part of the black culture.
Black people feel judgment from people outside of their community for not having what other people have. What people think is normal in other races is not normal for black people. Having a trainer that understands is really important.
London’s experience is that Asian clients have the opposite experience of black clients. Many times their expenses are completely covered by their parents and they have access to their entire paycheck.
It is different for African families versus African American families. London has friends from other countries who feel obligated to support their parents, where his African American friends do not have that pressure, they just need to support themselves. There are a lot of nuances.
For generations, black people were told they couldn’t have what other people had. Some black people feel like they need to overcompensate to show that they’ve made it.
We are moving toward thinking differently and learn more about finances. People are talking about it. The Black Lives Matter movement has awoken a bit of the financial side and people are yearning for more information. There is more good to come.
Homeownership has always been an important part of wealth building, but in the black community it has always been out of reach. Start with the numbers. Don’t house yourself into poverty by using all of your savings.
If you can’t buy the house, but you want to buy a house, go into it with other people and own a percentage of it. Pool your capital together.
A lot of black people who are 40 and under want to break the cycle. The younger generation wants to buy a house and pass it down to their children.
There are other ways to access a house. One program The Gym educates clients on is NACA.
Steps to break the cycle include education. Most people have not had any financial education. Take ownership of your future and learn about your situation and how to get out of it.
It is important to understand how to invest in yourself and make the conscious decision to bet on yourself. The money you spend on The Gym is money you will probably spend elsewhere. Determine what is an investment and what is a waste of money.
If you feel like $90 a month is going to break the bank, you need to be at The Gym. There is catch up and there is harder work that will need to happen. If you are in the cycle, there is a way out.
London watches a lot of YouTube videos and listens to personal stories of how they conquer their situation. The Gym has the Financially Naked show on their YouTube channel.
Ornella is an Instagram/finance blog person. She follows a lot of people like the Finance Bar and Clever Girl Finance. There are so many. They spread good, general financial information. Ornella also reads a lot of Nerd Wallet posts.
All listeners need to get life insurance, the right kind like term insurance. Don’t let your family go into debt to bury you. People don’t value life insurance, because they think they will be around for a while, but it is important and inexpensive. This is a way to create generational wealth if something happened to you.
Takeaway: My biggest takeaway is that, at first glance, acknowledging the racial wealth gap can be very daunting, but, like any journey, the important point is taking the first step and committing to change. I’ve seen it consistently over the last seven years, but positive results are always possible if you work at them consistently. I want to thank Ornella and London for being so open and honest about their personal journeys and their commitment to helping their community close the racial wealth gap.
Random Three Questions
What has been your go-to entertainment option during quarantine?
If this was your last night on earth, what is your final meal?
If you won a million dollars, what would you do with it?
Learn More about Ornella and London
If you have any topics you would like me to cover on this podcast, or If you’d like to get in the financially naked hot seat, I encourage you to email me to Shannon@fingyms.com, or join the private Martinis and Your Money Facebook group, and let me know what you want to hear.
Black lives matter and, in addition, black wealth matters. If you’d like to sponsor or support our scholarship program to help our team work with more people who can really use it, please contact Caitlin@fingyms.com or visit financialgym.com, to find out how you can help us make a difference today.