Honoring Dr. Martin Luther King Jr. - The Financial Lessons We Can Learn
There’s not much about Reverend Martin Luther King Jr. that can be said that hasn’t been said already. He is one of the most prolific civil rights leaders of all-time who showed us that the path to peace and justice is not one riddled with violence and pain but rather peace and understanding. He is the one that taught us that though it may have seemed radical at the time, there was a future where all of God’s children, black men and white men, Jews and Gentiles, Protestant and Catholic, will be able to join hands and sing the ever historic chant: “Free at last! Free at last! Thank God Almighty, we are free at last!”
While we’ve made much progress since the days of his march, needless to say we are not quite at the promiseland, even half a century after his untimely passing. Voting may now be a universal right and we may not be as segregated socially as we once were, there are still large gaps that remain when it comes to financial equality. The top 1% of U.S. Households hold more than 15 times the wealth of the bottom 50% combined. And the numbers are unfortunately even more disheartening when you break it down by demographics.
The hard truth? If we break down net worth by race, it becomes quite apparent how large the wealth gap truly is. Data on this from the Federal Reserve since the late 1980’s shows that the net worth of white individuals has ballooned to over $100T in recent years while those of other races struggle to even break $20T and looks much more meager for particularly for the black and hispanic community.
The Urban Institute also has data supporting a similar trend. They tracked the median family wealth by race from 1963 to 2016 and found that by the end of that study the median wealth of white households dramatically grew to be 10 times greater than that of their black counterparts and 8 times greater than their hispanic counterparts. There’s no shortage of supporting evidence when it comes to understanding there is a significant wealth gap in this country.
Now, that’s the bad news. What’s the good news? Just because that’s been the trend so far does not mean it has to continue being this way. The great Martin Luther King Jr. showed us that we don’t have to accept the status quo and that it’s okay to demand what is right. So what are some financial lessons we can take from Dr. King?
Your own financial freedom is critical to building the best future for yourself, and by extension helping to close the wealth gap. #StayWoke, #BuyBacktheBlock, #StackYourChips. Those are personal and community goals that Dr. King spoke of; start a movement of one and bring your friends and family into the fold.
1. You Need To Plan and Take Action
Though the only constant in the world is change, there is no guarantee that the change to come will be in your best interest. As history has shown us, when it comes to wealth inequality, it's not on a path to fixing itself. So just like the leaders who marched from Selma to Montgomery to demand their right to vote, you too need to be willing to take the time to plan a path towards financial freedom. Start a budget and stick to it. Maybe you don’t need that morning Starbucks or maybe you start packing lunch 2 or 3 times a week to save on dining out. If you can set a goal for yourself of saving a certain amount of money to set aside or invest, it will become that much easier to make it a reality since you’ll be one step closer to having the right structure to attain that goal.
2. Don’t Be Afraid To Fight For What’s Right
A large part of wealth building, as we alluded to earlier, stems from your earnings. You can save and cut back as much as you want but if you’re not bringing in much money to begin with, the chances that your efforts to save amount to a significant sum over time become much smaller. It’s important to ask for and get paid what you’re worth. Most Americans go about their jobs with the expectation that if they work hard they will get noticed and promoted for their good work. Though this does happen, it doesn’t happen quite as often as people may think. It’s in your best interest to pay attention to your tenure and the value you bring to the organization so that you can ask for an appropriate raise when the time is right. And when that time comes, don’t be afraid because remember, you’re worth it!
3. Use The System To Your Advantage
Dr. King was definitely not the first individual to want equal rights for all Americans, but he was among the first to try and unite the efforts of many to work within the law to try and bring systemic change. The financial world, much like the law, is from a very simplistic point of view simply a system; and each system is governed by its own set of rules and dynamics. When starting fresh it can seem a little daunting but just like learning a new language, with enough practice you can very quickly get to a point of financial literacy where you can begin to use the system to your advantage. There are tons of free content on the web that can teach you about the basics of wealth management and how to approach investing. Once you understand the system, you can start making changes to make the system work for you. There’s a reason Albert Einstein once said “compound interest is the 8th wonder of the world.”
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