- Do more than save. Generate wealth. Some ways to generate wealth are becoming a homeowner, starting a business, investing in real estate, planning for retirement, becoming a franchise owner, capitalizing on compound interest, and keeping debt low. Home ownership is 44% among African Americans, but should be much higher.
- Create small businesses to serve the specific and specialized needs of African American communities.
- Spend at least 5% of every dollar with an African American-owned business along with your regular consumer spending.
Monday, June 16, 2014
Does African American Spending Power Still Exist in America
African Americans are expected to spend $1.1 trillion per year by 2015. One dollar circulates in Asian communities for 30 days, in Jewish communities for 20 days, and white communities 17 days. However that same dollar in African American communities circulates every 6 hours. What this means is that a dollar earned in the African American community leaves that community before the sun goes down. In other communities it stays for weeks on end. In addition, a mere .2%, or $.02 of every dollar an African American spends in the U.S. goes to African American owned businesses. According to a 2013 Prudential Research Study, 94% of African Americans have some type of debt: credit card debt, student loan debt, mortgage debt, or personal loan versus 5% of Americans who have some type of debt.
By comparison African Americans spend most of their money or credit on: clothing, appliances, alcohol, cars, electronics, computers, cell phones, clothing, travel, hair care, accessories, food, and household furnishings versus other communities who balance their spending with saving, investing and homeownership. Brand name products represent 82% of African American households’ total purchases compared with 31% of private labels and less than 1% of purchases from African American businesses. African Americans don’t balance their consumer spending with investing, saving and generating wealth the way other communities do and are most affected by economic crises.
Some possible solutions to help African Americans effectively manage their money and have extra income to support African American businesses are: