- Coming up next on "Black Issues Forum," our panelists discuss the root of financial disparities in the Black family.

- When other cultures get money, it all goes down.

When Black folks get money, you have to go up.

- Don't go too far.

We'll be right back to talk all about it.

- [Announcer] "Black Issues Forum" is a production of PBS North Carolina with support from the Z. Smith Reynolds Foundation.

Quality public television is made possible through the financial contributions of viewers like you who invite you to join them in supporting PBSNC.

[up-tempo electronic music plays] ♪ - Welcome to "Black Issues Forum."

I'm Kenia Thompson.

When we think of leaving a legacy behind, it's not typical for us to think of those that came before us.

We think of our children, our children's children, but for many Black families that wealth trickle-down mindset isn't always present.

Many find themselves in the position of looking back to help the ones who came before them.

- We're thinking about we gotta take care of grand mom, mom... hopefully if my parents are... are not divorced, then I gotta take care of two different families, right?

Sisters, brothers, aunties, the... the first uncle that brought you your first cleats, you gotta take care of him.

Um... so that last [indistinct] of legacy... we not thinking about that.

Our legacy is our... right?

Our people, our family, grandma, grand mom, mom and dad.

- To talk about the reasons why this continues to be an issue, we welcome guests Thomas Wilson, financial advisor with Edward Jones, Talib Graves-Manns, managing partner with Partners in Equity, and Kimberly Winborne, author of "The Debt Detox."

I'd love to initially just get your reaction.

Thomas, what was your reaction to that clip that we saw when we talk about money going down versus money going up and having to think about the people that got us to where we are today?

- Well I think, for all too many of us, that's a realistic conversation either we're either having in our head or we're having some type of dinner table or some type of social function, right?

And what we have to focus on now is where are we going in the future?

How are we preparing for those futures?

And that's where I think, essentially, you have to really focus on the financial plans and the goals you're trying to accomplish.

So I tend to be a futuristic thinker, whereas I...

I wanna plan for everything.

I wanna make sure I have the proper things in place in order to achieve my goals because you're right- it is about legacy and creating wealth is a long-term game not an overnight game.

And so we have to stay focused on the longer picture instead of just thinking about instant gratification.

So yes, that's a topic that we definitely need to have within our community.

We need to have at the dinner table, at the breakfast table, with our kids, and our... our grandparents 'Cause you gotta think about it, when we think about from our... our parents themselves and their legacy, it's certain things that was kind of somewhat taboo talking about at the table.

Well we have to move away those old misconceptions and come to the table and start having these serious conversations about economics, finance, and-wealth building.

- Mm-hmm.

And when we think about, you know, having a good job that pays well, we think that's wealth.

We think that that's having money.

Tell us what is the definition of wealth?

- Well, I think it's really about options, right?

Having the freedom to choose and live the life you really want to.

So there's three stages as you get to that wealth and what we call financial freedom.

The first stage is financial security.

Where then now we're looking at our needs- are all our necessary needs met?

The next part is your wants, right?

And we call that financial security.

So now I can get, I make sure my needs are met, I can step up and say, get some of my wants.

I may not get everything I want but I can get enough of it, right?

The last part is freedom, that last layer.

That freedom is that time value where I can now get to my wishlist.

Things I wish I could do, family members, the generational wealth, looking three, four generationS down the line and having that income that's coming in from assets and... and cash flow that not only takes care of my needs, my wants, but now I'm able to help others to be successful.

And so the ultimate thing, what that gives you, is freedom and options in life.

And that's the biggest part, that peace of mind and understanding that I'm not beholden to anything, that I can actually live the life that I desire and I can help others.

Other organizations, my schools, you know, my community, my family.

And that's where I think most people are trying to get to, that financial freedom level.

- Yeah.

Well for most American families, though, home equity is their... their largest asset.

Home ownership rates based on the US census in 2022 shows the following breakdown in ownership: 73.3% white, 50.8% Native American, 46.2%... um, I'm sorry... Hispanic, and 42.3% Black.

Talib, let's come to you.

We find that many in the Black community selling property has been something that they've done for decades, especially when they're tempted with the opportunity for a large settlement.

My question to you is, is selling grandma's house really the right decision?

- Um, lots of thoughts on that.

[Talib chuckles] We don't have a lot of time to unpack it, but I'll just jump into it.

So, when I think about selling grandma's house, the conversation of gentrification comes up.

And when I think about that, I...

I have to honestly say, from my vantage point, I'm not an anti-gentrification person, I'm a pro-Black participation person.

So, when dynamics are changing in an economy within a community, the property values go up.

We're not in control of that aspect of the economy, but we're in charge of doing research and understanding the proper values of our property and our equity position and in those and I think it's really our objective to make sure that we spend time doing diligence and understanding the values of the assets that we have whether they need to be sold, disposed, or leveraged or improved to create more equity and wealth within the community, I think it's the valuable, like, thing that needs to be happening within the construct of having conversations about grandma's house.

In addition to that, I've always gotta put a lot... a lot of ownership on our generation to have the conversations about grandma and grandpa's house and aunties' and uncles' house over the dinner table 'cause a lot of us, you know, we are the realized dream of our grandparents, aunts and uncles, and parents.

And oftentimes we grew up in a community like Durham, for example, and then we go on to college and go move to Atlanta or Los Angeles or New York or Philadelphia or another major market and aren't paying attention to the changing dynamics in the community back home.

So we don't know that grandma's house that we think isn't worth much is now worth four or five hundred thousand dollars, 'cause we're not paying attention to it.

When we come home for Thanksgiving or Christmas, we're hanging out with our friends and spending time with family when we should be looking at the tax records and also understand the development plans within our own community.

So, you know, when those conversations come up, I think the ownership is really on us to have these honest conversations and not overlook- - Oftentimes these gems that are the assets that our parents and grandparents worked hard for within our community.

- Many, many good points.

Kimberly, what would you say is the most concerning problem when it comes to our status in the wealth gap and what are we heading towards?

- Oh, our number one problem is that we are behind and we remain behind.

Historically, that's one of the things we really have to look at that a lot of people try to avoid.

The history of Black people in America is a history that continues to rotate and we can't avoid it.

The fact that we are 400 years of slavery, we came outta 400 years of slavery, there's a lot of disparities; emotionally, there's trauma that we have to consider when it comes to our financial situation, our financial uprooting as well as our financial forward moving.

There's a lot to look at when it comes to our neighborhoods like Talib was just talking about and being able to understand how to transfer generational wealth.

So there's a lot of disparities in the African American community that are not discussed back to what Thomas was talking about at those kitchen tables.

We need financial literacy, we need credit literacy, we need wealth strategies and wealth building information.

We need to sit down and like Talib just said, look at our history of our own families and what we have as far as assets.

We need to understand what these terms even mean.

We were talking about that behind the scenes.

What do the terms even mean when it comes to financial assets, when it comes to leveraging, when it comes to the basics so that we can take that information and be able to move forward.

So I'm an advocate of financial literacy, I'm an advocate of sitting down at the kitchen table, sitting down in the classrooms, providing that information to our youth early so that they can make decisions moving forward that will change the trajectory of their generation.

And so there's a lot like I believe, Talib or Thomas said in the beginning.

There's so much to unpack as far as solutions that we don't have enough time but a lot that we need to think about goes back to financial literacy.

- Yeah.

Thomas, I wanna come back to you as a financial advisor.

Is there a large percentage of African Americans who seek your services or even understand why would I hire an advisor to help with my finances?

- Okay, that's a excellent question.

You know, I think it's about really going into the community and educating us about what a financial advisor really does, right?

A lot of time you might think from just understanding stocks, bonds and just those assets, but it's really about putting together a financial plan and we have to understand the value that a financial advisor brings and most of us have not been thought whether or not what a financial advisor actually does.

So we think in our mind, this misconception is only for the wealthy.

It's for everybody that's trying to achieve their financial goals.

And you have to put a plan behind that whether it's education, whether it's retirement, saving for a house or the next big ticket item and putting a plan behind that and us going to the community like what we're doing right now is that exposure.

That exposure then comes education behind that of us looking at different factors that's gonna affect you through the course of your life.

Especially when you think in terms of health and insurance to protect those assets, I think Kimberly said it well that you have to have a wealth strategy.

So that wealth strategy goes with documentation.

How you document because through the course of your life you can accumulate these assets but how are you protecting yourself from somebody else taking it or passing on to the next generation where they don't spend it all with it in one generation.

And we've seen this happen too many times as Talib talked about.

The equity that you have in that house that you don't understand, how much value that that property has.

And so you might give away for pennies on a dollar.

So we really wanna educate our culture, we wanna go into the community.

Like me, I go into the community a lot and I team up with strategic partnership from the church, to school organization, to sororities and fraternities in order to make sure that we are having this conversation at that dinner table, at the kitchen table, social events.

This is a huge topic that you cannot escape because in life, the majority of our decisions are gonna be based around finance.

- Yeah, they are.

Well, one positive thing about a critical mass issue such as this one is the attention that it's bringing to the problem and the opportunities it provides for community to come together such as these guests today and create a solution.

Each one of our guests have created solutions in their own communities hoping to change the narrative.

So I wanna give all of you a minute or so to share the floor about the work that you're doing and its importance.

Talib, I know that you do a lot around educating home buyers and property investors on how to buy.

Tell us a little bit about that, about 30 seconds.

- 30 seconds, so you mentioned home buyers as well as commercial real estate.

Home buying is not something I do as a profession, it's something I'm passionate about.

I have lots of conversations with people over a drink or cup of coffee about understanding the personal real estate that you have.

But what we do professionally as Partners in Equity, we are a private equity fund that invests patient capital, equity, cash, into Black businesses to own their commercial real estate.

- Yeah, and so I'm gonna add on to that, you talk about closing the gap a lot with Partners in Equity.

Talk about what that gap is, why is it there and what you do to solve this.

- Yeah, I'll give you a round number to understand.

So if you're a Black business owner and you're looking to acquire your commercial real estate, so think of that barbershop, that accounting firm, that trucking service, you either own or you rent the real estate.

A lot of times many of our businesses don't own the real estate that they're leasing in.

And we see a problem in that because equity and wealth is created through ownership.

So for that typical business owner that might be looking at a million dollar transaction to acquire, to expand their commercial real estate, when they go to the bank, you have to put down 20%.

So in that type of transaction, you have to show up with $200,000 cash.

And a lot of Black business owners that are looking to do this type of transaction, they might have $200,000 in their account but a lot of times it's tied up in the operational expenses and income and expenses of the business so it becomes very risky for them to take that leap to acquire the real estate.

That's where our capital comes in as patient capital So we can invest anywhere between 15, really up to 15% for the acquisition of that real estate.

So instead of them showing up with $200,000, they have to show up with $150,000 and we take minority ownership in the real estate and help them own that asset.

- Great work.

Kimberly, as the author of "The Debt Detox", your work centers around creating a solid foundation for people.

Tell us a little bit about the book and then what are some of the first steps to take when reclaiming control of your credit?

- Absolutely.

So the book, 'The Debt Detox', the co-heading is "Cleansing the toxic financial habits that hold us back."

And so, oftentimes people have to track and have not taken the time to track their financial behaviors which is actually a thing.

So financial behaviors, experiences, the culmination of all of those, education or lack thereof, create the habits that we live out in our lives.

And so the book is 30 days to making that jumpstart to cleanse the toxic financial habits that hold us back so that we can then move forward with new information and also initiatives.

And so every day is an initiative.

And so that's what I do in my business.

As a part of the business is, a big component, because we are a society that is leaning heavily towards using credit, even if we have the income, a lot of times people are using consumer debt in order to attain things.

And so a big component is credit literacy within the financial literacy.

How can credit and or debt, however you want to call it, be an asset, or be an asset for you to leverage, as opposed to getting stuck in the rigamarole of debt and what that can do for your family.

The illness of debt that can take over your family and cause generations from today to be affected by that.

So do we wanna leave bills or do we wanna leave benefits as we go throughout our lives?

And so that's what it's all about.

- I love that.

Bills versus benefits.

- Yeah.

- Thomas, a financial advisor's work is never done.

So, but talk about what the important elements are in your role and who benefits the most from your services.

- I so love that question.

I think the community benefits a lot when you think about going into the community.

And me, I'm 100% committed.

I am passionate about helping people with their personal finances and learning about investing and educating because I'm in the business of changing lives.

And so I want to be that trusted resource in my community.

Whereas when we take a look at achieving them goals, whether it is planning for retirement, saving for education, or purchasing a house, a big ticket item like a house is, you know, do we have the proper steps and have we put together plans to actually achieve these goals?

And are they attainable?

So I kind of use the smart goals acronym, whereas, you know, S: specify.

We have to be specific about the goals we're trying to achieve and the timeframe that it's gonna take to get there, right?

And then measurable, how do we measure that?

How do we measure and track that to make sure that we're staying with that, we're actually following the timeframe that it's gonna take to actually get that.

And we're following up on that.

And then achievable, I think we talked about it behind the scenes a little bit.

Are they realistic or do we need to make some adjustments in the goals we're trying to achieve?

And then of course, relevant.

And I think I'm gonna piggyback a little bit what Kimberly said.

You know, when we think about financing we talk about the financial balance sheet but we also have to take a look at the emotional balance sheet.

What's the emotion that's driving this outcome, this goal?

Is it truly important in you to achieve this goal?

Is it truly relevant in order for you to achieve this goal?

Because if it's not, it's gonna be very hard to really accomplish that and you stay disciplined.

And then the timeframe we have to achieve the goal, I mean, and when we go back to relevant a little bit again, because we have to take a look at three different areas: short term - zero to two years, midterm - two to five years, or long term - more than five years.

What's the timeframe we have and your comfort level risk?

'Cause I really help clients get clarity.

'Cause at the end of the day, a confused mind takes no action.

So your first thing you have to start with is clarity.

Make sure your clients have clarity going into the community, educating the community because financial education is the number one thing.

No matter what you do in life, it's gonna revolve around your finances or we can save money.

And so we really have to go and really educate people on what investing is and leverage, you know.

I think Taleb might have spoke a little bit about it but leveraging, understanding leveraging compound interest and taking advantage of these tax strategies that are out here.

- Let me ask you a question, Thomas.

So, you know, some of the terminology may be a little beyond somewhat what people understand and some may just say basically, "I don't make enough money as it is, I can't afford the things that I already need to afford.

How can I afford a financial advisor?

How can I afford to save?

How do I do these things?"

So what's your perspective on that?

- Well, for me and the firm that I work for, it costs you nothing to have a sit down conversation with me to at least get the process started.

The goal is to get the process started.

So, we can't assume that we don't have enough.

Because at the end of the day, how important is you living a life that you truly want to live?

You know, the biggest risk that we face is running out of money in retirement.

Nobody wants to live to age 80, 90 or 100 and not have the resources in order to have that life, right?

So it is imperative that you sit down with a financial professional to really take a look to see where are you now.

'Cause the first thing you want to meet people where they are whether they're making 40,000 a year, six figures, seven figures, it doesn't really matter.

Everybody needs financial guidance and needs to be educated in order for you to help not just yourself, but your family.

And so I think it's imperative.

It's something that needs to be at the top of your priority list to sit down with a financial professional and really walk through it and help them dive in and kind of really make it simple for you to understand.

Starting with if we just look at a basic rule, 50, 30, 20.

50% going to your total expenses, 30% going to your wants and 20% going towards savings, right?

So we just look at that simple rule right there.

We can start making the necessary steps to actually achieve those goals.

- So it is achievable, it just depends on where your priorities are and where you wanna focus the goals that you're gonna set.

So as we explore the contributing factors to wealth disparities in the black community, student loan debt has been a large and ongoing conversation with many differing views on whether forgiveness should be given to some of those that hold the debt.

For more than 40 million student loan borrowers, the stakes are high as Supreme court conversations to eliminate up to $20,000 per borrower continues.

- [Prelogar] Without this critical relief for debtors, we are going to have a wave of default across the country with all of the negative consequences that has for borrowers.

I think it is precisely the type of context where the executive should be able to implement those emergency powers.

- Biden administration is defending the need for this program arguing that it is necessary given that we've been through a pandemic.

Kimberly, I wanna come to you and get your thoughts on what this could mean for the many, many students who have student loans that are waiting to be forgiven.

- Yeah.

So, the thing that happens at the age of 18, we are trying to start our lives.

We go off to college and we accumulate some of the biggest debt ever as we're starting our lives.

And so a lot of times, people, especially today because of the fact that it's so massive, they sort of put it off to the side as I'll get to it, and then it doesn't get paid.

So to the point of what the government is saying, it is one of those things that goes into default and people are okay with it.

They're okay.

The people who are paying everything else on time, really thinking about their futures and all of that.

I have conversations with them, and they have put their student loans to the side.

So I do believe, especially for Black people, but it's going to affect so many others because if it's a political reinstatement and/or process that happens and takes place, then it's going to affect the country as a whole, massively and in a good way.

So I believe in student loan forgiveness.

I remember when it first came on the table, I was concerned about what was gonna happen in the role of the government and what was gonna happen with economics.

But I do believe that it's going to be a benefit to all of us, and especially the Black community, because that's what we're talking about here on "Black Issues Forum".

The Black community is going to benefit.

But that's my answer.

[laughing] - And you're sticking to it.

- And I'm sticking to it.

- You're sticking to it.

Talib, there is a question about fairness, right?

What about the other people who've paid their loans off who didn't need to take out loans, who couldn't take out loans?

When we talk about creating equitable spaces for us, would this forgiveness begin that fight for equity?

- What I say might be controversial.

The entire collegiate system and the cost of it I think needs to be all restructured.

I think it's nonsensical, especially when you think about Black populations to actually show up knowing the historical conditions of our community and how our hands have been tied to create wealth and to make investments and to generate wealth over years to then be expected to be on par with other communities and pay the exact same price for the service.

I don't think it makes a lot of sense.

So financial aid has come along to try to help fix some of that, but it's not fixed.

So I don't feel that communities, one, should all expect to take on debt the same way because they weren't afforded the same ways to generate money to be able to pay for the debt.

And then secondly, I just think that as we explore the wealth of the country and where the United States is going and the need for more educated populous, that I think that, I really think that college should be free for everyone including graduate school and going into the PhD and medical fields, because I think America can afford it.

And I think that when you really crunch the numbers and where to get creative and explode some of the things that the people have created over time, that we can figure out that the actual capital that people can keep in their pockets will create a stronger economy, a stronger workforce over time.

- Yeah.

Thomas, a little more than a minute left in the show.

What do students need to know when we seek funding to pay for education?

- Well, so there's multitude of ways that you can achieve that funding for education.

529 plans, which they give you the ability to grow the money tax deferred and tax free as long as you distribute it for education.

And so that's one way.

Another way you can approach it is understanding and some people use the use of cash, cash value life insurance, where you can borrow against that and you help pay towards college.

Another advantage is some people use Roth IRAs.

Now, I don't know if that would be the best thing to go, because Roth IRAs, they do grow tax free and if you using it for education, you can't distribute it towards that.

However, I think it comes back to planning.

And when you think about it, you take a look at the different tools out there.

You got certain employers that if you got a part-time job, they actually can contribute towards that, towards your education, 5,200 where they get that as a tax writeup, and then tax write off, and then you are able to use it towards college savings, right?

So that's one avenue.

Another avenue a lot of people may not know about is those Series E bonds, right?

So Series E bonds can be purchased up to 10,000 per individual, for a couple 20,000.

But you think about it, right?

Those Series E bonds, they grow over a long period of time, and if you use it towards qualified expenses for college, they can add that appreciation, and the total bond amount can be used towards education without any tax consequence.

So there's so many different ways.

- So many different ways, so much more to talk about.

But we thank you so much for being here.

Talib, Kimberly, Thomas, great work.

Continue it and we're grateful for all the things that you do.

We invite you to engage with us on Instagram using the hashtag BlackIssuesForum.

You can also find our full episodes on pbsnc.org/blackissuesforum, and on the PBS video app.

Thank you for watching.

I'm Kenia Thompson.

I'll see you next time.

[upbeat music] ♪ - [Announcer] "Black Issues Forum" is a production of PBS North Carolina with support from the Z. Smith Reynolds Foundation.

Quality public television is made possible through the financial contributions of viewers like you who invite you to join them in supporting PBS NC.