Two hundred years ago most Black individuals residing in the United States were slaves: bought, sold and used as currency. It was January 1, 1863, when the Emancipation Proclamation made humans owning others illegal and began the process of ending chattel slavery across the country.
In effect – Black people in America have since gone from being currency, to turning their earned money into capital by investing in stocks, bonds and small businesses.
The idea of economic mobility isn’t new for Black folks. In fact, there was a time (particularly during the era of segregation) that Black Americans had no choice but to build and invest in our own communities. Communities like Tulsa Oklahoma’s Greenwood area and Durham, North Carolina’s Parish Street were both areas of distinction and influence and both known as Black Wall Streets.
According to history.com, the largest number of Black townships after the Civil War were in Oklahoma. Between 1865 and 1920, African Americans founded dozens of Black townships and settlements in the region. The Greenwood area was the first.
In 1906 O.W. Gurley, a wealthy Black landowner, purchased 40 acres of land in Tulsa, naming it Greenwood after the town in Mississippi. Restaurants, hotels, luxury shops, pool halls, barber shops and salons, nightclubs and offices for lawyers, dentists and doctors could all be found on Tulsa’s Greenwood Avenue.
But the area was also home to less affluent African-Americans, as well. A significant number still worked as janitors, dishwashers, porters, and domestics. The money they earned outside of Greenwood, however, was largely spent within their own community.
“It is said within Greenwood every dollar would change hands 19 times before it left the community,” said Michelle Place, executive director of the Tulsa Historical Society and Museum.
As you might imagine, the investing this community and others like it were involved in at the time was often community driven. That is to say, it wasn’t all about banks and businesses it was also about people investing in the empowerment of their people. Sadly however, this wasn’t championed by everyone. It wasn’t long before Tulsa’s community of affluent African-Americans attracted the attention of local white residents, who resented the upscale lifestyle of people they deemed to be an inferior race.
This resentment would eventually lead to what is now known as The Tulsa Race Massacre or Tulsa Race Riots. During the massacre, scores of Black lives were lost while white Tulsa residents burned and destroyed property worth millions of dollars. No assistance in rebuilding was received from the city, though Greenwood residents (with the help of the NAACP, other Black townships and Black churches) really tried. Today, what’s left of Tulsa’s Black Wall Street area pales in comparison to what it once was.
A similar story can be told about Durham’s Black Wall Street area. The four-block area of Parish Street in Durham was once a bustling area for Black business and Black economic empowerment. In the early 1900s, Durham’s national success was said to have been due to this [former] hub for Black business and the Black middle-class.
N.C. Mutual Life Insurance Co. and Mechanics & Farmers Bank were among those businesses – successes that were also celebrated by well-known authors like Booker T. Washington and W.E.B. DuBois.
By the 1960s desegregation and eventual gentrification brought about the regrettable demise of Durham’s Black Wall Street, though the influence still remains.
Today however, when Black Americans are not purely restricted to patronizing Black owned Businesses as a result of segregation, Black folks investing for their families and in their communities looks a little different. Many invest in their families and communities via owning and operating their own businesses.
Bloomburg.com reports that after suffering a crippling blow early in the pandemic, Black-owned firms are seeing the strongest rebound among U.S. racial or ethnic groups. The number of African-American business owners in operation surged to almost 1.5 million in August of 2021, up 38 percent from February 2020, before COVID-19 hit the United States, according to new research from Robert Fairlie, a professor at University of California, Santa Cruz. The ranks of Hispanic owners rose by 15 percent in the same period, while White and Asian entrepreneurs fell by three percent and two percent, respectively.
For others seeking to invest outside of owning a business, information on investing is more accessible than in days past. With the advent and popularity of apps like Acorn and Robinhood investing has become less scary and more tangible for African Americans.
Charlottean and local business owner Dianna Ward has found great success in a hybrid of investing. Beginning with mutual funds a a middle schooler to arriving where she is today: owning multiple properties (both private and commercial) and continuing to invest in stocks and community. Clearly, Ward is an entrepreneurial force to be reckoned with.
She has lived in Charlotte since 2001 and is the owner of Charlotte NC Tours LLC. Her company provides Segway, bike, bus, walking tours and team building activities for groups and organizations. In discussing her journey of Black economic mobility, she shared her experiences and a few suggestions.
“I started investing when I was in middle school. It was nothing big, we had a church member who sold mutual funds and so I invested in a mutual fund out of Kansas City Missouri – every month I invested $25 in that mutual fund.
“We were middle class, we were not rich. Many of the good things that helped me to become who I am were in church. In church, I was introduced to people who opened my world. These people opened my mind for something that I didn’t have to wait to become to be an adult to understand. I learned about financial investing, golfing and other things.”
While pondering the state of Black economic mobility, Ward lamented that she’s not a financial advisor, but believes anyone working at a company willing to match a 401K by a percentage should acquire one. “Everybody should be maxing out their 401K and contributing the maximum amount, especially if your company is going to match your contribution.”
Regarding property ownership Ward continued, “Many times in our efforts to get away from urban areas, we move to areas where our properties don’t appreciate. People need to be looking for their primary residence to be appreciating. I’ve made money off every house I’ve purchased and I’m now on the sixth house. Every one of my homes has appreciated at least 50 percent. We kept them for the mandatory two years so that we wouldn’t have to pay capital gains.”
With all of Ward’s success, she was vehement in expressing that she hasn’t found success solitarily. “Everything that I’ve done was a matter of great partnerships. There are very doable things that everyone should be able to do to increase their net worth and in the process of doing, make sure that you’re also doing good, investing in the community, investing in yourself. More than anything, we need to do the small things first.” Those small things Ward spoke of begin with sharing information, “If you know something share it.”
As the country grapples with an affordable housing crisis, there’s an even larger issue of closing the gap in homeownership rates among Black Americans. “People are waking up to how we got to this point. They’re learning about redlining and deed-restricted covenants, things that made it impossible for Black families to own homes,” says Dr. Tiffany Manuel, founder of TheCaseMade, a social justice leadership training organization.
A report by the Urban Institute shed additional light on the inequities of residential property ownership today. Whereas redlining and deed-restricted covenants may be a thing of the past, “Since the 2008 financial crisis, the Black homeownership rate has fallen behind; and the gap between Black and white homeownership is now wider than it was more than 50 years ago. The U.S. Census Bureau reports: as of the first quarter of 2021, the homeownership rate of non-Hispanic white households was 73.8 percent. This stands in stark contrast to the 45.1 percent for Black households.
The Biden administration has outlined numerous plans to close the racial wealth gap and invest in communities that have been the target of racist policies or were collateral damage in a system that was designed to segregate people by skin color. Some of these plans include addressing appraisal bias, which is the practice of valuing Black-owned homes or homes in predominantly Black communities lower than white-owned homes of otherwise equal characteristics.
Homeownership builds wealth. The perpetrators of the Tulsa Massacre knew that, red liners knew it and apparently so does the Biden administration. Because of discriminatory laws of the past, many of today’s Black homebuyers are first generation homebuyers. President Biden’s Neighborhood Homes Investment Act aims to increase housing supply, refurbish outdated housing and offer down-payment assistance for first-generation homeowners. It is designed to assist first-time homebuyers and homeowners in neglected or outdated communities increase their home values.
Sybil Ingram, an entrepreneur who lives in Rock Hill, South Carolina, with her partner Thai, said she knows some things about home ownership and increasing property values. Despite all the odds against a Black and lesbian woman, Ingram has found economic mobility in property ownership. Currently she owns three houses (one she lives in) and two empty lots she plans to build on.
She purchased her first house back in the ‘90s and spoke a little about her shifting mentality towards home ownership. “Being a homeowner was part of the American dream I was bred into, my parents instilled that into me, but my parents didn’t look at a house as investment property, they looked at is as a way of raising a family. So when I initially purchased, I looked at home ownership the same way. As I began to have children, home ownership seemed like a natural progression – but because my father was in home improvement, I looked at it a little differently than my parents. My daddy fixed homes, for people, but never thought, I’m gonna buy this house and sell it.”
For Ingram, “Purchasing property for investment purposes – means having assets and using them to propel you [forward] financially and hopefully set you up for future financial growth.
“When you don’t look at owning a home as an investment, it is a liability. It takes you 30 years to pay a mortgage that is probably 30 percent to 60 percent of your income every month. So when you look at it as an investment, you look at ways to improve it to make it worth more than it was.
“When you do nothing but pay a mortgage, all you end up with is money going out of your salary every month with nothing coming in to offset that. So what I have done is gone out and invested in properties that I can make money from, whether that means fixing it up or renting it out. Now, the land I currently own is a liability at the moment because I haven’t developed it yet and still have to payout for the upkeep. When I develop it or sell, that’s when it becomes an asset.”
With the support of her partner, Ingram is in the midst of flipping her first house, a property in Columbia, South Carolina. “And I’m not the average flipper, I’m over 50 and just flipping my first house, slow and steady because I care about maintaining the integrity of the house. I’m paying homage to the black female professional who lived there for over 30 years by keeping the original structure and painting it red, she enjoyed red wine and it’s also a favorite color for us both. So, it’s never too late to start investing in your dreams.
For Ingram, property ownership coupled with a retirement nest egg from working with the same company for over three decades has led to economic mobility.
At the end of the day, one thing is clear, Black economic mobility sought through the conduit of investing takes thought, time and collaboration.