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

Samuel Spralls (Editor), Samuel A Spralls III

Research output: Book/ReportBook

Abstract

Have you been struggling, financially? Or, maybe you have been able to make ends meet but you’d like to take it to the next level and make your first million. You know, your first million is the hardest. Well, there is one predictable way to become rich and that is to gain the household resources necessary to build wealth. The resources to build black wealth must be in the house. No doubt, the concepts put forth in this book will help all households build wealth and I hope that everyone will read it. However, I am particularly writing to the black households of the world, which are often headed by black women. Black women face a particularly tough uphill battle as their economic futures have been rocked by inequality. 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.<br>Financial capability is the ability to manage money and take control of your household finances.<sup>⁠</sup><sup>1</sup> There are at least three major building blocks of financial capability: (a) spiritual capital, (b) cognitive capital, and (c) intellectual capital. I call these three blocks <i>capital</i> because they add value to your household.<sup>⁠</sup><sup>2</sup> The premise for this book is really quite simple: to the extent that these three blocks are present in your household, you have financial capability<sup>⁠</sup><sup>3</sup> and, in turn, black wealth.<sup>⁠</sup><sup>4</sup> For the technically inclined, here is the framework for the entire book.<br>Building financial capability and black wealth using household capital.<br><b>Spiritual Capital</b><br>When you tithe, i.e., return a tenth of your income to God, you become financially blessed. I say this because obedience has its benefits (Malachi 3:10-12) (all biblical references KJV). Being financially blessed adds value to your household — therefore it is “spiritual capital.” On the other hand, failure to tithe, being disobedient, hinders the development of black wealth in your household (Haggai 1:6, 9). In Chapter 1, I help you to build spiritual capital by generously and joyfully giving in both structured (tithing) and unstructured ways (offerings).<br><b>Cognitive Capital</b><br>When the members of your household have common goals, shared values, and the same “money mindset” your household has the potential to become <i>super productive</i> at managing money and this <i>cognitive capital </i>has value as well. In Chapters 2 and 3, I discuss ways to build the cognitive capital of your household. For example, members should agree as to what constitutes an asset (e.g., jewelry vs. corporate stock). Secondly, they should understand that prosperity is a choice and one has to decide to be wealthy — it doesn’t just happen. Lastly, our minds play “tricks on us” in other words, we have cognitive biases. Although there are many, 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 black wealth. Of the five, optimism bias may be the most harmful. It is an individual’s tendency to claim they are less likely, than others, to suffer harm or where people over estimate future wealth (e.g., “When I hit the lottery…”) and use that as justification for not saving. In Chapter 3, I show you how to make good financial decisions despite these biases.<br><b>Intellectual Capital</b><br>I have done several things for you in Chapter 4. First, I have selected a number of key financial concepts, “the essential few” that have a big impact on your household’s financial capability and explained them in a clear, practical, and straightforward manner. In Chapter 5, I show you how to develop, and live by, a budget and stress the importance of living below your means so that you have money to save and invest — the key to black wealth. You don’t have to be wealthy to invest. I close the chapter by giving you my Updated Joseph’s Budget. Let’s face it, everything we do should glorify God and that includes our spending. In Chapter 6, I discuss what I call <i>kingdom spending</i>, which includes: (1) buying for the right reasons, (2) buying the right product or service, (3) paying for things in the best way, (4) shopping for value, (5) building long-term relationships with trusted merchants, and (6) equipping yourself with the right skills.<br>In Chapter 7, I show you how to do short-term and long-term planning. In particular, I offer you my Pyramid of Black Wealth (PBW), which is essentially, a roadmap to financial freedom. The pyramid has ten levels and helps you to prioritize the steps you should to take to reach the top. The breakthrough insight in this jam packed chapter is that the desire to incur debt is powerful and you must break it spiritually. Next, I offer you a simple strategy for making your first million and then discuss each step in more detail. Chapter 8, the last chapter of the book, teaches you how to select and manage financial products related to banking, mortgages, refinancing a mortgage, auto purchase, and taxes. I close the chapter by helping you to make the inevitable transition from internal combustion engine (ICE) vehicles to electric vehicles.<br> <br> <br> <br><sup>1 </sup>Taylor, M. (2010). Measuring financial capability and Its determinants using survey data. <i>Social Indicators Research</i>, <i>102</i>(2), 297–314. https://doi.org/10.1007/s11205-010-9681-9.<br><sup>2 </sup>Falkenberg, A.W. (1996). Marketing and the wealth of firms. <i>Journal of</i> <i>Macromarketing</i>, <i>16</i>(1), pp. 4-24.<br><sup>3 </sup>Nussbaum, M. (2000). <i>Women and human development: The capabilities</i> <i>approach</i>. Cambridge University Press.<br><sup>4 </sup>Friedline, T., & West, S. (2016). Financial education is not enough: Millennials may need financial capability to demonstrate healthier financial behaviors. <i>Journal of Family and Economic Issues</i>, <i>37</i>(4), 649-671.
Original languageEnglish
PublisherAmazon Kindle
Number of pages518
StatePublished - Aug 7 2021

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