ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel
  • »
  • Education and Science»
  • Economics

Minority Wealth Busters

Updated on February 21, 2015

Minorities are shooting themselves in the foot with some of the ways we a flushing money down the toilet. We waste so much money on frivolous things and come up short when it really counts. When it is time to send our kids to school, they have to take out loans because mom and dad did not prepare for college. When it is time to retire we have nothing but social security to look forward to which is really sad. My hope is that if I can shed some light on some of the wealth busters stealing our futures, we will stop making others rich (while spending ourselves into the poorhouse) due to our lack of knowledge.

Payday Loans

Fast Facts

  • Payday loan stores tend to aggregate in areas with higher rates of poverty.
  • In the U.S., 12 million people borrow nearly $50 billion a year through payday loans.
  • The rates charged on payday loans can be up to 35 times those charged on credit card loans and 80 times the rates charged on home mortgages and auto loans.

If you ride through upper middle class and rich neighborhoods, you will not see one payday loan stores; however, the minority low income populated areas are inundated with them. Payday loan lenders exploit minority neighborhoods that are underserved by mainstream banks. The lenders advertise the fees as dollar amounts instead of Annual Percentage Rate (APR) to make the loan appear more favorable; however, when you calculate out the APR you are paying triple digits interest. This $50 billion dollar a year industry has trapped many minority low income families into living payday loan to payday loan as 75% of the borrowers repeat this loan every two weeks.

If you are caught in payday loan trap, you need to bite the bullet and stop taking these loans today. They are making an already bad situation worst. If you cannot afford to live without these loans then you need to readjust your lifestyle. Set up a budget where you living on less than what you bring in. Also, you need to set up an emergency fund to take care of unexpected expenses. (Look at my Financial Plan and Rainy Day blogs to see tips on budgeting and emergency funds.)


Fast Facts

  • Lottery ticket purchases eat up about 9 percent of take-home incomes from households making less than $13,000 a year.
  • Numerous academic studies have found that non-whites spend much more on lotteries than whites, with one study putting the figure at $998 for African Americans and $210 for whites.
  • Eleven states raise more money from lotteries than from corporate taxes.

This is a hidden $50 billion a year tax that exploits the poor minority communities. African Americans on average spend close to $1000 a year on the lottery versus whites only spending a little over $200. This is money that could be invested into stocks, college funds or retirement instead buying into a (false) hope of striking it big. Economist Richard Wolff stated “Simply put, lotteries take the most from those who can least afford it. Instead of taking those most able to pay (taxes), state leaders use lotteries to disguise a regressive tax that falls on the middle and even more on the poor.” The sad reality is that the odds of winning is 1 in 175 million; furthermore, if you do win there is a 70% chance that you will end up broke and bankrupt. Translation: You probably will not win, but if you do, you will end up in a worst situation than you were in before you won the money.

The facts do not lie. Money does not solve the problem of poverty that the poor think it does. The poor think that poverty is a money issue; however, poverty is a mindset that has to be put to death before you can build and retain wealth. Money without the appropriate knowledge to manage it will turn into a curse. When you become wealthy by hard work, planned strategic moves and sacrifice, you are building the character it takes to remain wealthy. If you are suddenly given a boat load of money and you have not done any hard work to get it, chances are you have not built the character required to keep it.

Black Beauty Supply

Fast Facts (According to the Beauty Supply Institute)

  • The beauty supply industry generates $15 billion per year.
  • 96% of the customers are African American.
  • 3% of ownership within the industry is African American.

This is a $15 billion industry where 96% of the consumers are African American; however, African Americans only have 3% ownership within the industry. Korean-Americans control all major components of the beauty supply business. African American beauty supply owners have stated that it is really difficult to break into this industry. Those who do manage to break in are forced to pay a premium price for the same products which cuts into their profits; thus, making it hard to stay in business. When they cannot stay in business, the Koreans are there to buy their stores which further expands their control of the industry. They hire African Americans as the store clerk (for low wages) because who can sell the products better than the consumers.

I know that I have not covered all the ways that minorities’ are destroying their opportunities to build wealth but I have at least scraped the surface. If we could take even a portion of this money we are spending each year on these industries and invest it in income producing assets we could change the financial situation of the minority communities. We really need to start looking at how we are just pawns in a bigger systems that keeps us poor and make others rich. I know how difficult it can be to make adjustments to your life, but if we want to see great change this is inevitable.


1) Do you put too much money into any of these industries? If so, make a plan to cut back.

2) Leave a comment below.

3) Follow me


    0 of 8192 characters used
    Post Comment

    No comments yet.