Today Kiersten and Julien from Rich and Regular talk about the specific challenges that the black community faces on their journey to FI. Recognizing the fact that not everyone starts from the same spot is important, so we are diving deep into the differences today.
Where Did Your FI Journey Start?
The couple met at work back in 2012. Early in their relationship, they stumbled onto an uncomfortable conversation about money. With one spender and one saver, their financial goals seemed to be at odds. Julien even told Kiersten that he might have not started a relationship with her if he had known about the credit card debt! However, the real issue was a different mindset towards money.
Over time, the couple worked to understand each other's money story and build a future together. As they went through this process, they started to audit their experiences to understand what made them happy. The idea behind the audit may have stemmed from Julien's MBA experience. It became a way to decide how they were going to spend their time and money.
They built a solid financial foundation and started to explore blogs and podcasts. However, they realized that their story wasn't being told. They were inspired to found Rich and Regular to reach a new audience.
How Do You Approach A Conversation About Your Partner's Debt?
With Kiersten's high amount of credit card debt, Julien had to broach “the conversation” with her. Julien knew that he did not want to build a relationship that had money problems. Although his opening line that he may not have started a relationship if he had known about the credit card debt is probably not a good place to start, it did open up the conversation.
Kiersten felt shamed about her money choices with this opening line but it forced them to start talking about money.
We went through a period where we would, sort of, audit every experience. We would go out to dinner and have, maybe Chinese food, and Julien would say, “ok, did that experience make you happy?” And it was like “yeah, sure.” And he was like “ok, if we did that three more times every week, would that make you happier?” Like it is a true static happiness or is it just in the moment? Trying to define our, or at least my, joy and where I derive my happiness from without attaching money. It was this exercise and we had to take it bite by bite with every dollar spent.
The couple worked through their separate money backgrounds by talking about it on a regular basis. It will require a lot of deep conversations to get on the same page as your partner about money. Make it a point to start talking about money and never stop!
As you talk, be forgiving and give your partner the flexibility to change your mind. Instead of becoming entrenched in the idea that you are always right, have a truly open discussion. Be delicate around this topic, but always be honest.
In the end, they talked through their different money stories and made a plan to tackle their debts. The couple made it their mission to pay off debt as quickly as possible.
I'd say for other couples in [a simlar situation] have a lot, a lot, a lot of conversations, and if you have to have a lot of conversations over a couple glasses of wine then that's fine. But talk a lot, talk early, talk often. And I'd also say, be forgiving of eachother. Give eachother flexiblity to change your mind.
Now, they are moving forward towards FI together. With a focus on building passive income, they are steadily working closer to that goal. In fact, they plan to be FI in July 2021-ish.
What Are The Differences?
It seems like their story is very similar to others in the FI community. However, they face unique challenges.
The unfortunate reality is that as an African American, neither has ever felt secure in their job. When Julien looked up the corporate ladder, he saw fewer people of color in those top positions. He feels that there was little reason to believe that there was an opportunity for long-term growth in his company. Due to that feeling, he has focused his efforts on building passive income through real estate instead of growing his career. The goal of this effort is to protect him and his family.
However, it is difficult to convince others in his community to fall out of love with 6-figure salaries and in love with passive income building because of “the talk.”
Julien knows that most black professionals have been told that they are going to have to work twice as hard to earn half as much. Many take that to heart and work extremely hard but eventually realize that they are not being given the same opportunities to grow as their white counterparts.
Instead of choosing to climb the slippery corporate ladder, this couple has decided to build their own wealth.
Historic Roots To The Wealth Gap
In America, African Americans were disproportionately affected by the way business started here. The sad truth is that we are not that far removed from the Jim Crow laws that crippled the community's ability to build wealth. The initial wealth builders were whites that had the benefit of owning land, voting, and better educational systems.
With that unequal start, the racial divide has been a problem ever since. African American families do not benefit from generational wealth that provides a safety net for their white counterparts.
The total financial experience for black Americans is just very different than white Americans.
For many decades, African Americans were unable to purchase homes in growing areas due to racial stigmas and systemic barriers that made it possible for whites to build wealth quickly.
Other wealth-building investments like the stock market are made inaccessible to the black community due to a lack of disposable income and an inadequate financial education. Additionally, a general distrust in banks based on the past injustices of the system leaves many African Americans to face a mental hurdle of trusting a bank to respect their money.
There is also an implicit distrust of systems and institutions, and things like banks that we have to overcome. So you'll see a lot of us in the space just working on basics, financial literacy to help people understand how this stuff works because if you go back to our grandparents or our parents they've been taken advantage of by these same systems that we are now coming in and saying “Yes invest. Give to banks. Give to institutions.” and it's like “I don't know if I trust that.”
Finally, building a business is a great opportunity for black Americans to build wealth because you are no longer relying on someone to promote you. However, there are still challenges. Banks are less likely to lend you money, especially if you are relying on the black community that has significantly less wealth.
Is It Getting Better?
Although one can hope that things are getting better, the wealth gap and inequality are systemic issues that can only be resolved at a macro level. Without policy level changes to institutionalized problems, there is a limit what can be done.
How To Overcome These Hurdles
You can choose to build your own financial situation with the spending choices that you make on a personal level. The purpose behind starting Rich and Regular was to empower others to take control of their personal finances. By building a new picture of black wealth, there is an opportunity for the black middle class to build wealth for the future.
Opportunity usually comes through education. Instead of going to school at all costs, look for opportunities to reduce student loan debt. Many people are coming out of school with so much debt that they cannot possibly earn themselves out of it.
The best way to spread the FIRE movement in the African American community is to teach by example. Instead of judging other people's spending habits, just answer their questions when asked. People are usually intrigued by this movement, so use that as a springboard to empower people on their own journey.
The Outcome Of FI In The African American Community
Julian and Kiersten are excited to spread the FIRE through Rich and Regular to the black community. If just 10% of the community chose this path, imagine the powerful benefits in our society. Not only would FI achievers be able to volunteer at social activism causes but also pass on the benefit of generational wealth to the next generation.
How To Connect
You can connect with Kiersten and Julien at their blog, Rich and Regular, or through social media @richandregular.
The Hot Seat
Favorite blog: A Purple Life.
Favorite article: Letter to Middle-Class Black America on Rich and Regular.
Favorite life hack: Buying a new food every week because it is an easy way to challenge yourself to try something new.
Biggest financial mistake: At 24, Kiersten leased (and eventually bought) a luxury car at $34,000 on a $40,000 per year salary. That translated to a $600 car payment for around 10 years but she still drives that car today!
Advice you would give your younger self:
Kiersten: Don't over-tweeze your eyebrows. And your money can work way harder than you can.
Julien: Start a business as soon and as often as possible.
Bonus! What purchase have you made in the last 12 months that has brought the most value to your life? A gift from his mother-in-law, the Kamado Joe Grill.
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