Sharing hard-won money lessons to build generational wealth
Jacent Wamala’s family pushed her to follow what they saw as the American dream. After all, that was part of why they moved to the United States from Uganda — so she could go to college, get married, have children, succeed. She did all of those things. But after 26 years here, she had acquired something else: huge debt.
“I got divorced and lost my father while I was in grad school,” Wamala said. “Because money wasn’t something we talked about heavily growing up, it was during that time that I accumulated the majority of my debt, which was student loans and credit cards.”
Wamala decided to make a repayment plan, and she used her Instagram feed to keep herself accountable, logging her progress through posts and stories. Before she knew it, she had gained more than 15,000 followers, many of whom came from backgrounds like hers and had had similar experiences.
Now a licensed therapist in Las Vegas who has paid off more than $90,000 in debt, she motivates her followers to develop a good relationship with money.
Wamala is especially eager to work with people of color and other first-generation immigrants, because in her view, the mindset many people grew up with can be limiting. “There is trauma around money,” she said.
Wamala, 31, is part of a wave of Black, Indigenous and people of color influencers who are using their hard-won financial knowhow to help others from disadvantaged communities reach their money goals, advising them on how to achieve debt freedom, save for retirement and build generational wealth — whether they are middle class or aspiring to be.
Personal finance podcasts, blogs, Instagram profiles and Youtube channels dedicated to people of color have proliferated over the past few years, making bestselling authors out of some and helping others develop clientele willing to pay for their advice.
“We have seen this area of BIPOC content creators explode with the social media platform explosion,” said Jessica Bufkin, the CEO of Fincon, a convention for personal finance content creators. On Youtube, uploads of videos with the terms “how I paid off,” “investment” and “student loans,” grew more than 50% from 2018-19, according to data from the video-sharing platform.
Many of these influencers believe nontraditional ways of investing and earning income can help marginalized communities, which have endured generations of financial shocks. “There are ways to shift from that place of disadvantage to taking advantage of the possibilities in front of you,” Wamala said.
According to an analysis by the Federal Reserve Bank of St. Louis, Black and Hispanic families are less likely than white families to own assets like homes, businesses and investment accounts, and when they do, those assets typically have lower values than those of whites.
The analysis, of data gathered in 2019, found a particularly stark gap in the median net worth between white and Black families. The typical white family had about $184,000 in assets, while the typical Black family had $23,000.
The Fed study cited some of the factors influencing Black families’ economic marginalization: the massive land grant under the Homestead Act of 1862 that went almost entirely to white Americans, and redlining, which led to Black Americans being denied access to mortgages and homeownership — an important step in building wealth.
Mandi Woodruff-santos and Tiffany Aliche, co-hosts of the podcast “Brown Ambition,” decided they wanted to help women of color learn how to budget and get out of debt after the pair met at a conference for finance bloggers in 2014. Woodruff-santos brought her experience as a personal finance editor, and Aliche brought hers as a teacher in Newark, N.J., and they have changed the content over the years as their followers’ questions have expanded.
“You don’t have to subscribe to the conventional way of working a 9 to 5 and collecting your Social Security and making that work — you can work beyond that,” Woodruff-santos said. “It’s really building wealth that will outlast you, that will live beyond you for your children and for your children’s children.”
The “Brown Ambition” audience is “looking at retirement in a nonconventional way,” said Aliche, who has been among the speakers at Fincon. “They want to either retire early or they want to build a life they don’t necessarily want to retire from.” In their podcast, Woodruff-santos and Aliche preach the importance of having life insurance and opening brokerage accounts for children, among other strategies.
Taking control over one’s finances to achieve freedom now, rather than at some far-off future time, is a key theme for many influencers.
Julien and Kiersten Saunders, creators of the blog Rich & Regular, go so far as to call “retirement” the “R word.” Gaining that independence is crucial now, they say, not just after 65. And they encourage their audience, which they reach on Youtube, Instagram, Facebook and Twitter, to look at out-of-the-box ways of doing so.
“Minority communities are obsessed and focused on earning more income through their jobs,” said Saunders, 41, who with his wife started giving personal finance advice in 2017. “We’re pointing them toward passive income that doesn’t require the middleman, permission or promotion.” Passive income could come from renting property or, for digital creators like themselves, through sponsored content, he said.
Debt relief is a huge topic within the online personal finance community. Debt, including student loans, credit cards and medical bills, disproportionately affects people of color in the U.S. The typical debt load of Black and Hispanic Americans was 46% of their assets in 2019, versus 29% for whites. And about 21% of African American borrowers were behind on their student loan payments, compared with 6% of white borrowers, according to a 2020 study by the Aspen Institute.
Leo Jean-louis, known as the Millennial Debt Freedom Coach on Instagram, advises his 50,000-plus followers to get their debt balances to zero by incorporating the lessons he and his wife, Faith, learned after paying off more than $200,000 in less than three years. An occupational therapist by training, he picked up weekend and holiday shifts, and the couple cut back on expenses by canceling cable, cooking their meals, carpooling and more. He said the pandemic recession had brought engagement and more questions from his followers.
“I also saw an increase from other platforms wanting to give out information,” Jean-louis said. “Other Instagram influencers reached out for collaborations.”
For female influencers, the gender pay gap is a major issue. According to the U.S. Bureau of Labor Statistics, women typically earned about 18% less than their male counterparts in 2020, and the gap was far bigger for Black and Hispanic women. Black women in professional occupations earned only 68% of what white male colleagues earned.
Bola Sokunbi, a certified financial education instructor and the creator of the website and podcast Clever Girl Finance, points out one effect of lower earnings to her audience.
“The gender wage gap leads to an investment gap,” she said. “If you don’t earn as much money, you’re not likely to invest as much.”
Sokunbi, 40, of Chester, N.J. said she believed that social conditioning had led too many women to think that they could achieve financial success only through others — whether it was by marrying a man with money or by obtaining a large divorce settlement. As a 4-year-old growing up in Nigeria, she remembers attending her mother’s college classes. Her mother had decided to return to school and get a degree to fuel her own career after seeing female friends struggling.
“My mom would tell me that you don’t want to be in a position where you don’t have options and you can’t exit a situation that’s not serving you,” Sokunbi said.
Like other influencers, she said women of color face discrimination that makes it harder to acquire assets. For example, Black homebuyers, on average, pay significantly higher mortgage interest rates than comparable white borrowers, and the difference is larger for women, according to an analysis by the Joint Center for Housing Studies at Harvard University. Learning how to invest and pass down wealth is something many of her followers seek, especially when the advice comes from someone who shares a similar background.
“A lot of women in our community are coming from spaces where they are the first,” Sokunbi said. “They’re the first to go to college and the first to earn a certain amount of money. They don’t have a lot of role models to look to.”