Is retirement for Blacks an unreachable afterthought?
The Employee Benefits Research Institute’s 2007 Minority Retirement Confidence Survey reports that Blacks and other non-Whites are far behind others in saving for retirement. Less than half of Black (48 percent) and Hispanic (41 percent) workers say they have money saved for retirement, it states. These rates were higher in 2003 (its last reporting) with Blacks at 62 percent and Hispanics at 60 percent.
The survey attributes the differences in retirement preparation to differences in income, but notes a lack of planning even among workers with similar levels of household income. The survey noted that minority workers are neglecting the most basic step in preparing for retirement, which is saving money, but what do parents and single mothers or the elderly do when wages are low and the costs of food and medicines are high? Elon Bomani, a holistic wealth builder, publisher and author of “Dynamic Diva Dollars,” who went from living as a homeless mother to a millionaire by investing in real property, interviewed with Final Call Staff Writer Charlene Muhammad and detailed the importance of knowing how to save and create wealth when income is scarce.
Final Call (FC): What do you believe is at the core of the disparities in savings between Blacks and others?
Elon Bomani (EB): A key factor is that starting out with absolutely nothing–coming to America as slaves–we’re always behind the eight ball. We always have situations and circumstances in effect that sometimes hinder our chances of being able to save money. The other is just like in other cultures and societies, we’ve gotten away from our African culture and understanding about the importance of saving. We live in the Europeanized American culture and because of that, saving is not a part of the objective. It’s instant gratification here in America and we bought into that situation. One thing we’re very clear about is as those issues are in existence, we’ve got to make changes and become habitual savers and we’ve got to do that now. I’m not, however, a proponent of creating savings of about six to nine months of income because right now returns on savings interest rates are very small and I’d rather have that money invested.
FC: How do the various income streams directly impact one’s ability to save, say employees or entrepreneurs earning six figures compared to low-income workers or welfare mothers? Does today’s inflated economy ever leave them with enough to save or any excuse not to save?
EB: No, because even if there are sunny days, there will be a rainy day. That’s just the balance of the universe. Need I say anymore–Hurricane Katrina is a prime example. It happened Aug. 29, only a week or two away from people getting their good government checks in the mail from Social Security, the welfare system, etc. The only reason all those people didn’t leave is they didn’t have the financial means to be able to leave, which gave them very little choices. Unfortunately, it gave a lot of people death. That ended up becoming the choice for a lot of people. If we’re going to talk about the severity of a situation, that was a wake up call. When Hurricane Rita struck, I could drive, fly; I had options.
FC: How can our people begin to develop the mindset of financially preparing for tomorrow, rather than living solely for today as researchers say that we don’t even think about it on the level we should, which will render us toiling through our senior years?
EB: That’s because of the choices that we make and our mental make up, having poverty consciousness. It’s believing that “a day late, a dollar short;” “making a dollar out of 15 cents.” We bought too much into that instead of creating a wealth consciousness and believing that we are capable of creating a savings and investment plan first, because we can sure enough go to the casinos; buy those lottery tickets. It’s our orientation to wealth or lack thereof that contributes to why we put ourselves in those predicaments. I’m very clear that we have to take responsibility for our actions. We will not completely exonerate the system for its part, but right now we have to deal with what we do have to deal over and our constitution of what we do with the money that we’re making. My financial situation didn’t change because I made more money; it’s what I was doing with the money that I was making.
FC: What are three practical things that any of our people, regardless of their current earnings status, do to move a secure financial future from an unreachable afterthought to an attainable goal?
EB: Number one, develop a wealth consciousness. Use your brain. Go the library and borrow books. Have perseverance and persistence. You can afford those things. Number two, become financially literate. And lastly, do the work. Work, save and invest from sun up to sun down. Before they used to whip us to do that, now we have to have the fortitude and strength to do it on our own accord. I didn’t want a mansion and all those things. I just wanted to stay at home and take care of my baby, and the wealth came. We have to go the extra mile.
FC: Thank you.