Changing the Color of WealthNot long ago, a young woman, who was a senior at the Howard University business school, asked me what she should do about a $40,000 retirement plan she had accumulated while working for the federal government. She was planning to go to graduate school in Georgia, and wanted to know what her options were regarding this money.
I asked if she had ever taken a course in personal economics where she might have discovered the answer to her question. But she didn’t even know if a personal finance course was available to her. I also didn’t know what Howard offered in the way of such courses, but my belief is that one course in personal economics should be required to graduate from all historically Black colleges and universities — period.
HBCU graduates need a greater understanding of personal economics than any group of people in this country. Not only would this be terrific for the graduates, but it also would be quite beneficial for the development offices of our HBCUs. Of course, doing this is much easier said than done. Just finding qualified instructors for such a mass education program would be a Herculean task in itself. In addition, because schools serve different student populations, with different needs, every college will have its unique curriculum demands.
In overlooking personal economics, however, we know from a study done by the Charles Schwab Corp., on the investment practices of high-income, college-educated Blacks, when we do educate our young people, we are preparing them to be no better off financially than their White-male high school counterparts.
Because we are rarely raised in homes where people feel comfortable investing in stock and bond markets, we don’t feel comfortable doing this, and we suffer greatly. With a bit of real-world education, we can undo this economic myopia for the next generation of our graduates. With such understandings, we can set their lives on paths that will significantly change the color of wealth in this country.
Achieving basic economic success in America is really quite simple. All it requires is that you have a steady source of income from which you invest a set portion — preferably 20 percent — in time-proven long-term appreciating assets. Yet in our schools, we almost never teach our young people how easy it is to be as successful economically as they have the willingness and commitment to be.
Establishing a Carter G. Woodson Economic Empowerment Institute at one of our premier HBCUs is one of the best ways to initiate change. As its primary mission, this institute would not only address the lack of entrepreneurship or investment savvy, but also help to train and develop a cadre of dynamic “personal economic empowerment” instructors for our HBCUs, our churches, and our public schools all over this country. This is History 101. If you want to change the world, like all people, you must begin by empowering your children.
Now, if you want to know about the young woman, the answer is simple. She did an IRA rollover into a family of time-proven no-load mutual funds. She chose funds that had great long-term track records and risk tolerances she could stand. She went off to graduate school as she had planned and now lets her fund managers worry about her money. — Ron Jarrett is the author of the NASDAQ Educational Foundation supported book, Discovering the Millionaire in Every Child — Mastering the Decisions That Define Your Life. Jarrett is a former professor at the School of Business and Industry at Florida A&M University.
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