Six Ways Group Economics Build Wealth Within Black Communities
- Group economics is when a collective group pools their money together to benefit a common interest.
- An increasing number of Black Americans are practicing group economics to build wealth.
- Purchasing from Black businesses helps them employ people within their community, close the racial wealth gap, and economically empower Black families and individuals.
- Hiring Black employees will help close the significant and long-standing racial gap within the job market.
The practice of group economics is becoming more popular, especially since it is becoming a more recognized way to build wealth with your family or friends. By definition, group economics is when a collective group pools their money together to benefit a common interest. A great example of group economics was Black Wall Street, a district in Tulsa, Oklahoma, founded and developed by African Americans that grew and flourished as a Black economic hub.
The awareness surrounding the need for group economics has become more widespread, even within pop culture. Last year, several NBA players wore jerseys with social justice messages to shed light on the racial injustices happening in Black communities. Those messages included the words “Black Lives Matter” and “Equality.” Three NBA players, Andre Iguodala, Anthony Tolliver, and Jabari Parker, all decided to have the message “Group Economics” written on their jerseys. Small acts such as wearing a jersey with a message that reads, “Group Economics” can significantly impact Black communities.
Today, an increasing number of Black Americans are practicing group economics to build wealth. For example, a group of five friends from Philadelphia saved $50 per week for two years to purchase their first investment property.
People who practice group economics band together for one or more reasons, including building generational wealth and providing economic support for their communities. When you implement group economics into your lifestyle, you make a conscious effort to financially support one another's common endeavors. Below are six ways to practice group economics with your friends, family, or simply to support Black-owned businesses.
1. Buy everyday items from Black-owned businesses.
When you purchase an item from a Black-owned company, you help that business feed and empower its community. You are also helping Black businesses employ people within their community, close the racial wealth gap, and economically empower more Black families and individuals. To support these businesses, you can start buying your everyday items like food, toothpaste, hair care products, and clothing from Black-owned business directories like The Village Market or We Buy Black.
2. Create an investment group.
An investment group refers to a self-managed group of individuals who meet for the purpose of investing their money into a common fund such as real estate or the stock market. Like the story of the five friends who bought an investment property together, you can also pull together a group of reliable and trustworthy friends and family members to start an investment group.
Starting an investment group is no easy task. One common misconception about investment clubs is that they will allow the members to earn money in a short time while also helping them to get rich quickly. However, if you’re considering starting an investment club, you and the members should take it seriously. They are formed on the foundation of practicing group economics to build wealth among its members.
3. Share Black-owned products and services online.
Word of mouth is one of the most powerful and effective marketing tools. When you share Black-owned companies online, you attract a familiar audience, like family and friends, who are more likely to buy Black-owned products or services due to the information coming from a trustworthy and valuable source.
If you and the people in your network decide to buy those products and services, they will help increase its revenue generation. With more income for Black businesses, they can hire in their community, add more resources, and scale their business faster.
4. Hire and upskill Black employees.
Hiring Black employees will help close the significant and long-standing racial gap within the job market. Additionally, allowing employees to further educate themselves through training, certification classes, or obtaining a degree in a specialized skill genuinely shows if the company cares about its employee's personal and work development growth.
When you hire or upskill your employees, it will allow them to grow within the company, but also, if they decide to, they can get a job that better suits their career path and goals.
5. Purchase a home from a Black real estate agent or homeowner.
What's the number one source of personal wealth in America? Homeownership.
Although redlining is illegal now, it was common for mortgage lenders to deny individuals and families mortgage loans based on their racial makeup. This allowed a massive racial wealth gap because Black people were unable to buy homes. Moreover, even if Black people were lucky enough to buy a home, the “redlined” neighborhoods would decrease the overall property value.
When you purchase a home from a Black homeowner or real estate agent, you offer them an opportunity to build wealth. Also, when you buy a home from a Black family, it will help close the home equity gap between Black Americans and white Americans.
6. Create a sou-sou group to encourage economic empowerment.
A sou-sou (based on an honor and trust system) is when a group of people works together to save a lump sum of money. The money can be used for a common goal, like buying a house or investing in a family car. The money can also be rotated among its members each pay cycle to help one another get ahead on their emergency savings fund.
What are your thoughts on practicing group economics? Share your thoughts with us in the comment section below.