America will be celebrating the first anniversary of its newest annual federal holiday, Juneteenth, since President Biden signed it into law. The holiday, which commemorates the emancipation in Texas of the last Confederate slaves on June 19, 1865, more than two years after President Lincoln’s Emancipation Proclamation, offers a collective opportunity to contemplate the contributions and triumphs of Black Americans that have been woven into our nation’s history.
For me, emancipation is synonymous with what I define as “true wealth.” Wealth is often defined on purely monetary terms, but there is so much more. As a financial advisor, I have made it my mission to work with individuals and families who are seeking to build long-lasting, multigenerational wealth that will lead to the freedom for them to shape the legacies they desire.
There is no greater time to act on that mission than the present. Many of the statistics on the gap between Black household wealth in relation to others are well known. These differences drive the big opportunities that I see. I’m honored to bring resources and networks to the individuals and families whom I serve.
Entrepreneurship As a Path to Equity
Certainly, there are many aspects to the history of institutional racism and biases that have been a critical driver of this wealth gap. At the same time, American history is filled with meaningful stories of wealth creation powered by entrepreneurship. Before the pandemic, the average American adult held 15.3 percent of their wealth in business equity, with a mean value of $147,000.
In the Federal Reserve’s 2019 Survey of Consumer Finances, families with the highest net worth were more likely to have a business. Yet, a study from the consulting firm McKinsey showed that Black Americans have not been able to equally reap the benefits of ownership–only 5 percent hold business equity, compared with 15 percent of their white counterparts. That entrepreneurial spirit must survive beyond the idea stage and persist through the business owner’s journey.
Importantly, entrepreneurship is not solely for the young person looking for the next start-up opportunity. Many of our business-owner clients started their businesses only after many years of working for others. It takes a lot of time and energy to build a great business. Financial and social capital, as well as strategic connections to people with resources, are other key elements that help business owners move forward. After learning their trade and building a network, they often saw a chance to meet a market need and then took the proverbial leap of faith into business ownership. Today, a multitude of resources are available to help budding Black entrepreneurs and their businesses.
Emancipation and Ownership
Beyond owning a business, wealth can come from owning public stocks. Stockholders can help drive positive change in businesses and the society in which they operate. White households are nearly twice as likely to own stocks (61 percent) as Black households (34 percent), according to the 2019 Census Bureau. Net worth is highly correlated to public stock ownership. This approach to wealth creation is long term, and the barriers to entry are low. The Black community must start recognizing this value and focus its attention on saving and equity ownership, instead of consumerism.
An opportunity may be in your very own community. You can make an impact with your investment dollars. In UBS’s recently released Invest to Advance report, the Black investors surveyed said that supporting their community drove them more than investors overall. More than six in 10 (65 percent) agreed it was important to spend their dollars with Black entrepreneurs. And nearly six in 10 (59 percent) believed it was critical to donate to charities that advanced Black communities. Likewise, you can put your investment dollars to work to push for a greater level of equitable, social and sustainable impact in the Black community and beyond.
Juneteenth represents the awareness of the freedom that all Americans enjoy. Wealth offers the power of choice, strong networks, and the ability to uplift communities. To get there, people need to make their voices be heard. Become an owner. Own your own business and the public companies that can help drive positive change. May this holiday continue to remind everyone of the journey that it took to get here, and the tremendous opportunities that lie ahead. Happy Juneteenth!