Building Financial Capability and Black Wealth: The Quintessential Road Map to Financial Freedom

Financial capability builds black wealth. Black wealth, like other kinds of wealth, is the net worth of a black household. McKinsey & Company, in a recent study, found that only about 2% of black households have a net worth in excess of one million dollars. This book is intended to help change that. Financial capability, is the ability to manage money and take control of household finances while capital is anything that has value. In this timely book, I discuss three forms of capital that drive the financial capability of the household head(s). First, returning ten percent of one's increase (i.e., net income) enables one to be financially blessed (Malachi 3:10-12). This adds value to the household and is therefore “<i>spiritual capital</i>.” Secondly, when members of a household have common goals, shared values, and a collective money mindset, they have more <i>cognitive capital</i>, a valuable asset. For example, it is important to be aware that our minds play “tricks on us.” In other words, we have cognitive biases that, when left unchecked, can adversely affect our financial decisions. Although there are many, in this book, I identify five cognitive biases: <i>optimism</i>, <i>loss aversion</i>, <i>self-serving</i>, <i>procrastination</i>, and <i>status quo</i> that can hinder the development of financial capability, and hence, black wealth. Thirdly,<i> intellectual capital</i> includes the ability to do short-term and long-term financial planning. In this book, I offer my Pyramid of Black Wealth (PBW), which is essentially, a roadmap to financial freedom. The PBW, which has ten levels, helps one to prioritize the steps needed to reach the top and experience financial freedom.