This month, however, has many of us humbled to our very core. We’ve been summoned to put others before ourselves and face some uncomfortable truths. We’ve stayed at home to protect our healthcare workers and vulnerable populations from COVID-19. We’ve come together as a community to help our small businesses and those who were economically impacted. And now more than ever, we are unpacking the systemic roots that marginalize disadvantaged populations.
Financial independence is not an equal conversation. When we claim victory on our financial freedom, we cannot deny the circumstances, privilege, and luck that helped us along the way. Here are some sobering statistics:
The median net worth of white households is roughly 10x the median net worth of black households
Building net worth is a crucial part of achieving long-term financial sustainability. Creating multiple income streams, both active and passive, provides a greater safety net in times of economic hardship or unexpected events.
The median income for black households is less than 60% of that of white households
Income generation is (not surprisingly) a core driver to building savings and net worth.
The poverty rate for black Americans is more than double that of whites
Research shows that lower income levels magnify life’s misfortunes due to the inability to cover one’s basic needs.
This past month on the blog, I’ve focused on building wealth in a way that provides long-term stability and a greater sense of well-being. When the stresses and hardships of covering basic needs are removed, you create arguably your greatest asset, time.
How we use this currency of time is just as important as how we manage our money. And research shows that “prosocial spending” can create some of the greatest returns for both ourselves and those on the receiving end.
The US is facing some major inequality gaps in wealth and income. The chart below shows that in 2016, the bottom 90% of the US population owns less than 25% of overall wealth.
If you are fortunate enough to find yourself on the path to financial freedom, now is a better time than ever to pay it forward.
June Financial Checklist
This month, my checklist is focused on creating social impact to pave the path for the financial freedom of others. I spent this past year of my own career break working with an organization that provides a voice for another underrepresented population, adults with special needs. I've learned a lot about these extraordinary adults and their families through my experience and how to support underrepresented populations.
Here are some ways you can get started as well:
Be observant about your local or global community
There are so many things you can learn from talking with others outside your network, traveling, or just being observant of the environment around you. Stay informed, be present, and see what is happening on the other side of the fence.
Connect the dots
We are a data-driven world with a vast amount of resources to educate us on different issues and inequalities. So much of the information we are opening our eyes to now about people of color has been around for decades - we just needed to look for it. Validate your observations and understand if they are part of a larger pattern or trend.
Find your burden
We all have something that is weighing on us that we know is broken or unjust. Focus on what speaks to you most.
Identify your gifts
If you are on your path to financial sustainability, recognize all of the hard work, grit, and effort it took you to get there. You have undoubtedly uncovered or honed unique gifts that can be used towards social good as well. Find what you are good at and identify opportunities where you can apply your expertise.
Make yourself uncomfortable
Creating social impact is not easy. It will undoubtedly take you out of your comfort zone and force you to face some hard truths. Find your support system, embrace these feelings, and immerse yourself with the issues or people you are helping. You will come out with more empathy, gratitude, and acceptance.
Listen and let others lead
You may be eager to improve the quality of life for others based on your own standards and ideals when those you are serving may just want to be heard. Stay open-minded and attuned to their most pressing needs and let them lead the conversation. You are there to support them, not direct them.
Be a voice
One of the most rewarding parts of being financially independent is being able to have a voice and be a voice for others. You no longer have the fear of financial setback for taking a stand. Take this social responsibility to heart and help advocate for those who do not have the same freedoms.
Financial Freedom for Good
Right now it feels like the weight of the world is falling on us and it's hard to know where to start. Social impact can come in many forms though. It can be a career centered around advancing a community or population. It may be time or money donated to a particular cause. Or it may simply be some difficult or deeper conversations that begin within your household.
Let's let 2020 be a reminder of what we have, what we are grateful for, and how we can pay it forward to those in need.
“I tell my students, 'When you get these jobs that you have been so brilliantly trained for, just remember that your real job is that if you are free, you need to free somebody else. If you have some power, then your job is to empower somebody else.” - Toni Morrison