3 Sad Truths of Why Minorities Struggle Financially – Reversing the Trend

At a recent event hosted by Veronica Garcia, Victoria Cintron and Virgil Garcia at Humboldt Park’s Siboney Cuban Cuisine, I was asked, “Why do many minorities struggle financially?”

Great question…a LARGE reason why we are so passionate about spreading a message of financial hope to Middle Class families, especially in the “hood”.

When I finally had my first full-time job at 17 years old, I wondered why I later found myself a few years later in my early twenties, broke and struggling to make ends meet. After all, making more money while getting promoted up the “food chain” would solve my problems right?

Why did I shortly find myself living paycheck to paycheck. Chances are… it had to do with my upbringing and ethnic culture.

Does it really matter if you are a minority in the US as it relates to your level of financial literacy and ability to make money smart decisions? Does being raised on the “other side of the tracks”, factually matter?

According to several reports it absolutely does.

1) Lack of Financial Education and Awareness

Back in the late 90s, I was in the middle of my second enlistment serving on active duty in the United States Marine Corps. Coming back from a counter-drug deployment in the Bahamas, I walked into my home located in military housing on Marine Corps Air Station El Toro to a stack of credit card bills. Oh joy.

My wife at the time had charged up over $15,000 between 3 credit cards. As a Corporal, this was close to one year’s worth of annual salary. Needless to say, this was a major area of arguments between us which eventually led to our divorce and two years of child custody battles. (Inside military joke, but not really, is that you can’t leave active duty without getting married, have a kid… then get a divorce. Ask around, it’s sadly true.)

What was my attempt to get financial help? I would ask fellow Marines, senior leaders who happened to be Black and Hispanic, just to discover they too faced the same financial difficulties just on different levels. Bottom line, they had no answer. It was the blind leading the blind.

I learned my first rule in personal finance… stop asking for financial help from your broke friends (and even family).

Had it not been for retired Master Sergeant Carleton Enloe, who I happened to meet in a bathroom of a Best Buy in Laguna Hills (don’t laugh), I would have never started a journey on learning how to win the money game. He worked at a financial firm that opened my eyes and took me under his wing.

My solution beforehand to get out of a financial pit was just to find ways to make more money out in town, off-duty, as a Jiffy Lube hood technician and bartender at the Officer’s Club on base.

When I share this story at financial conferences and even our weekly financial workshops, I find that this scenario hits most everyone in the room… even non-minority caucasians who also where raised on the same side of the tracks I was.

2) Underserved, Abandoned and Biased by Financial Services Industry

The fact is, if you are Black and Hispanic, you are deeply underserved by the financial services industry. Most financial firms will not even extend a conversation to help a potential client unless you have at least $250,000 of liquid investable assets or lacking the one-time planning fee of $500 (some as high as $5,000) to pay a Certified Financial Planner/ Investment Advisor just to tell you that you… “you’re broke!”

I spoke at a Women Diversity Conference and I be-friended a financial planner who was the ONLY Black financial professional in the ENTIRE state of Illinois for their national firm. And yet, her office was in the suburbs… no where close to the city.

Think you can find a minority financial professional that you can relate with and understand your cultural struggle and desire to get out of the financial rat race? They are not very common. The American Council of Insurers expose a significant gap in pass rates just for minorities passing a simple life insurance exam as an entry point to the financial services industry

3) Upbringing and Cultural Financial Ignorance

Does it have to do with cultural trends and parental upbringing to handling your personal finances? Comedian Kevin Hart threw out credit score jokes towards dark-skinned women, which he later apologized for, relating to a commonality of poor credit.

Sure, it’s comedy, but could it possibly be true? When was the last memory of your parents teaching you the value of credit and how to build your credit score over the kitchen table?

You know the answer.

Just like me, you’ve had past experiences holding your breath while eating out with friends hoping the server doesn’t come back asking for another form of payment.

Over the past two years, I’ve taken pride in helping build a financial movement where we’ve recruited and trained a new breed of financial professionals entering the money business.

The level of connection with our audience, relating to their financial struggles and finding solutions to transform their financial lives have been nothing less than transformational.

We’re helping close the considerable gap of minorities making $100,000 per year, where today, less than 5.9% of six-figure income earners are Asian, 5.6% are Hispanic and 5.5% are Black. (Source: Wikipedia.com)

Of the 43 financial professionals I have mentored as a marketing consultant and trainer, 35 are either Black, Hispanic or Asian. 8 are bi-racial couples raising bi-racial children. Already, we have a six-figure earner who is a Hispanic woman and a retired-Filipino nurse who cash flowed over $13k last month.

My advice? Continue to love on your friends and family but unfortunately, facts point that they are not the ones to help you lead a path towards financial freedom.

From what you learn about money, bring that back to your community and be that change-agent within your family… regardless of their negative opinions towards you. Stand strong, stand firm, stay focused, stay disciplined.

Reach out, seek and earn the mentorship and association of people who want to have more, be more and willing to DO more. Look past the color of their skin. After all, money has one color and desires to hang out with those who know how to take care of it.

Your children, grandchildren, even great-grandchildren will be glad you did.

If you are finding yourself wanting to reverse the financial trend of you and your family and looking for leadership in this direction, please connect with us at one of our next events by calling 630.560.3673 or email me personally mgs@moneysmartguy.com