Entrepreneurship and Financial Wellness as Radical Activism
Written by Cicely Green, LCPC
Reaching financial freedom requires a delicate and intentional dance between capitalism and your ideal life. You have to play along with the system for a bit to learn it, and figure out how capitalist systems can help you achieve the life that you want. In honor of Black History Month and in response to listeners/readers requests, this blog covers: how you can become an entrepreneur through financial wellness and how this act is radical activism for Black individuals, businesses, and communities. We even touch on how to reach millionaire status in your lifetime.
According to the Black-owned bank Greenwood, the key is that income needs to stay in the Black community for longer. Currently, a dollar circulates 6 hours in an African American community, compared to 17 days in the White community, 20 days in a Jewish community and 30 days in an Asian community.
The CDC recognizes that due to systemic oppression, social injustice, and inequalities in the social determinants of health, the Black community has been prevented from having fair opportunities in reaching equity in health. The CDC recommends that barriers must be removed so that everyone has a fair opportunity to be as healthy as possible.
We can no longer rely on systems to remove these barriers - we must do so ourselves and keep the dollar within our businesses and individual lives longer to ignite the generational wealth that we have been denied for centuries. This is radical activism.
Before we can feel grounded in creating our business, we have to get our finances in order. Business is directly correlated with money. We need money to run a business. We need to be confident in understanding how to manange our business’ finances before hiring someone else to do it. And so, we need to first learn how to manage money and achieve financial wellness in our personal lives. Once that happens, we can add a business to the mix.
Disclaimer: I am not a financial advisor. This blog is based on my personal experiences and research.
Relationship with Money
America is cursed with consumerism, materialism, and the temptation to “keep up with the Joneses” and compare our lives with the curated lives we see on social media. This leads to us spending money on things that we may not truly value and don’t have an ROI (return on investment). We also learn money habits and beliefs from those who raised us. The first and most essential step to achieving your ideal life, financial autonomy, and financial wellness is to turn within and assess your relationship with money. Do you spend money to cope, fill an emotional void, or for instant gratification? What money habits have you learned from your family or friends? What money beliefs do you carry? Do you buy things based on what you feel your life should look like? Do you feel money will always be available, or can run out at any moment? Why are you buying things you can’t afford? What are your essential expenses to live as a human in this world? What do you value where you feel good and joyful about spending money on and is a nonnegotiable (e.g. fitness, hobby, grooming, etc.)? How can you cut down expenses to things you actually use and value? Do you really use those subscriptions? Do you really need to buy material and expensive gifts? Black folks have traditionally been provided less resources and financial role models than our counterparts which has left us figuring it all out on our own in adulthood. Use those questions to build a budget and become your own resource and role model.
Debt
The US has the world’s highest national debt at $31.4 trillion. Debt keeps us stuck in service to capitalism, so removing your debt is essential to your freedom. We get into debt due to our unhealthy relationship with money, lack of education about finances, student loans, medical bills, and many other reasons. There are a few ways to address debt so that you can move to the next step. Use a portion of your income to pay towards your credit card debt. Apply for income based student loan repayment. The amount of income you report is what they will base your monthly student loan payment on. If your income is at a certain threshold, you payment will be $0. Public service loan forgiveness happens after 10 years of working at a nonprofit or public service position, but first you need to apply to be in the program. Bankruptcy is also a “non ideal” option, but this does not erase student loans. Consult with a lawyer about bankruptcy options and consequences, but generally bankruptcy will be off of your record in 10 years and will likely prevent you from acquiring loans and credit cards during that time. Credit card debt is more harmful than student loan, mortgage, or other low interest “good” debt. Yet credit cards can be a way to finesse the system by using it to pay for monthly expenses responsibly, paying it off in full every due date, and therefore, accruing (travel) points and building credit score. Keep in mind to only use 30% or less of your credit limit to prevent a decrease in your score (who comes up with these rules?!). You’ll also need to acquire a healthy relationship with money to manage credit cards. Credit scores can prevent or grant you access to your ideal life such as credit cards with greater benefits, business loans, home ownership, and condo apartments.
Investing in You
Money is the greatest agent to change. It’s why Black Wall Street was so threatening to the regime. It’s time to begin financially investing in you to change your life. Once you have eliminated your debt or feel that your payment plan towards that debt is manageable, you are ready to begin saving and investing. A common approach to saving is having an emergency savings that is equal to one month to 12 months of your expenses, so choose which amount feels right or attainable for you. I personally recommend at least 1-2 months of expenses saved before beginning to invest. Investing is putting your money into something that allows your money to grow whereas leaving money in your savings or checking account is not allowing your money to grow or work for you. Investment aka passive income options that exist are real estate, mutual funds, investment retirement accounts (IRA), cryptocurrency, and creating a business. Creating an estate plan with a lawyer and buying a life insurance plan are ways to protect your investments and money after death. These are options that I personally understand, and therefore are comfortable sharing; but there are other options out there that you can research online. Here is the millionaire tea: If you invest $500 per month for 30 years to Fidelity’s high interest mutual fund FXIAX, you will have 1 million dollars. The average return on FXIAX is 10-12% per year, it’s free to have a fidelity account, and you can put the numbers in a compound interest calculator to confirm this. Research your options (YouTube is great) and choose one or multiple investment paths that are best for you.
Pursuing Your Passion
Entrepreneurship aka creating a business as your investment is the type of investing I’ll be diving deeper into. You must first give yourself privilege, then pursue your passion through entrepreneurship / creating a business. You give yourself privilege through the above steps that we already went over. Specifically, having a job or enough money coming in that does not leave you in struggle but pays enough to support your expenses and savings - ultimately providing financial stability before pursuing passion. With this financial stability, you can have the money and emotional space to invest in your ideas, joys, passions, and hobbies. Create more space in your life outside of your job hours or on weekends to find what lights you up. Eventually and if you decide, this joy and passion can develop into a business idea. Once you launch this idea, it can grow into passive income which can then become your primary income. Financial freedom are the moments where you can work on your own time and terms, set your own rates, and survive without working for anyone else but yourself. Businesses are considered investments because you can sell them later, it works for you, you can scale it…all the same things you can do with a house, mutual funds, cryptocurrency, IRAs, etc. As a personal example, without the pandemic induced financial aid from the government, corporations, and businesses, I would probably still be in the rat race. I was not making enough money to save, let alone invest; I wasn’t happy; I was an over spender; and I had no financial education or awareness. The pandemic’s financial aid and the ability to work from home allowed me to feel financial and emotionally stable enough to pursue Chicago Black Therapists as a business. Giving me the time and motivation to teach myself financial and business education. Which has then allowed me to pursue other passions and live in my dream city.
All the above are in order from beginner to advanced ways to use finances as radical activism. They’re in chronological order if you decide and have the means to do them all. Not all steps are required. Doing even just one step and/or teaching these options to your children or clients is a radical step toward developing Black legacies and igniting generational wealth. Ultimately, learning how to use money to reach your ideal life and taking the necessary action steps to do so is the path to liberation.
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Reach out to hello@chicagoblacktherapists.com if you would like a future financial literacy blog post that dives deeper into any of the topics covered.