5 Steps to Building Black Wealth, According to a ‘Millionaire Mentor’

  • Cedric Nash founded the Black Wealth Summit conference to share investment principles with black Americans.
  • He believes bridging the racial wealth gap starts with investing in the market, real estate and business.
  • He shared a path to building black wealth that begins with “wealth literacy”.

Cedric Nash’s enthusiasm in helping African Americans bridge the racial wealth gap is evident when he talks about the subject. “Personal finance has always been a passion of mine,” he says.

That passion led Nash to found the Black Wealth Summit and serve as president and CEO. The conference is “dedicated to advancing black prosperity,” where attendees can learn how to invest from sessions led by black financial professionals.

Nash tells Insider that he started a consulting firm that has grown to 300 employees and $ 90 million in annual revenue. Along the way, he learned his lessons about money by investing in real estate, stocks and other assets. He has distilled his investment principles into a series of passages he calls “Millionaire Money Moves”, which he shares on social media and will be included in an upcoming book.

Nash spoke to Insider about his money moves and overcoming systemic racism and shared a five-step path to building black wealth.

1. Understanding wealth

The first step, according to Nash, is to understand wealth: why it matters, how to obtain it, how to increase it and what decreases it. Understanding the path to financial security is critical. “If you can be in control of your finances,” says Nash, “you can choose how to live your life.”

This includes redirecting spending from wealth traps, such as expensive cars or luxury brands, to less visible wealth creation vehicles, such as investment accounts. Nash understands the need to validate success within the African American community. He sees the desire for ostentation of wealth – which can help people feel respected – as a side effect of slavery.

“We get that attention and that feeling of real success. It’s not enough to have it and nobody knows,” he says.

He explains the transition in mentality as: “I will start investing these profits, I will not live these profits”. It’s the difference between looking rich and being rich. Nash notes that you can’t have both at the same time and spending money to look rich hinders the use of money to make more money.

He says he thinks African Americans don’t need financial literacy, which he defines as learning compound interest, how to balance a checkbook, etc. He wants his community of him to acquire “wealth literacy”: an understanding of how to accumulate resources that grow in value and generate income.

2. Set a wealth goal

Your wealth goal could be financial comfort, independence, becoming a millionaire (which Nash notes isn’t that much money today) or getting rich, which he defines as a net worth of $ 5 million or more.

You may even aspire to become ultra rich or a billionaire. At the very least, your goal should be financial independence when you retire, and having a clear goal will help you develop a plan to get there.

3. Get capital to invest

“You have to get excess money,” Nash says, and “get it going” by investing to increase wealth. If you live from pay-to-pay, it suggests optimizing your job to earn more or taking up a side job or freelance job to raise extra money.

You can also get extra funds to invest by borrowing or raising capital, but both are difficult for African Americans due to loan discrimination. Black entrepreneurs also find it difficult to obtain venture capital to support their businesses.

Nash notes that you don’t have to be a high income to build wealth, just a consistent saver. He points to his grandmother, a single mother who worked in a laundromat earning $ 200 a month, that she has managed to save enough to buy a house, pay for it, and buy and pay for a car.

“What we can control is what we do with what we have,” he says. “If we wait for the game to be fair, we will never start.”

4. Invest consistently and intensively

Nash wants African Americans to invest more, increasing the extent and intensity with which they invest money in wealth-creating activities. Consistency is essential: putting aside the money from each paycheck, a little or a lot.

Younger investors seem to have gotten the message. A Schwab survey of black investors found significant disparities between black and white stock market holdings in the older age groups, but the gap narrows for those under 40.

Investing heavily does not mean focusing on get-rich-quick schemes. This means choosing slow and steady investments over the promise of a quick return, noting that 7% is a worthy rate of return. “When you tell me it’s fast, easy, or free, my antennae go up,” she says.

Nash suggests starting with the stock market. He likes index funds and he also recommends buying individual stocks in companies that have a long track record of stability. The approach is to choose a company from each of the different business sectors and to emulate Warren Buffett while maintaining those investments for the long term.

“The only thing I’m trying to get my community to understand,” Nash says, is “we can’t dabble in investing. We have to make it a priority – that’s what will bridge the racial wealth gap.”

Nash also recommends investing in real estate, which he says has been a vehicle for wealth creation “since the beginning of time”. His advice: “Get busy investing in multi-family properties.”

5. Use entrepreneurship to increase your earnings

“The highest percentage of millionaires come from entrepreneurship,” says Nash. He believes that the potential gains and, therefore, the ability to build wealth are greater when you own a business.

At the same time, he is a realist about the obstacles to entrepreneurial success for black entrepreneurs. For example, Nash was unable to raise capital when he started his consulting business in 1997, so he was forced to start, which slowed his growth.

To overcome obstacles, Nash says, “You have to build slower and be a great seller.”

But Nash thinks everyone has the ability to be an entrepreneur. “You don’t need God-given talent to be an entrepreneur,” he says. The skills needed to run a successful business can be learned.

“It’s about the mindset,” Nash says. If African Americans understand the path to prosperity and make the decision to build resources, anything is possible. And he feels the urge to build black wealth. “We don’t have time to waste,” she says. “Time to make millionaire money and start investing in assets.”

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