We can't wait for the wealthy to close wealth gap. We can build wealth through investing then crowdfund commercial real estate with social impact results.
From Farm Worker to Ivy League
Just three weeks ago, before the COVID-19 pandemic turned our downtowns into ghosttowns, if you had look around any commercial district at lunchtime, you would have been surrounded by executives dressed to the nines, looking very successful. But you might be looking at someone who was wearing a suit today, but living in her car at night or someone who had been homeless to escape domestic violence, or someone who grew up on public assistance. With about 20% of the population living below the poverty line in the U.S., the facade we see often masks hidden realities.
As someone who grew up in the suburbs of Connecticut, one of the states with the wealthiest and poorest cities within 30 minutes of each other, I'm no stranger to the wealth gap. As a teen, my first summer job - along with dozens of other kids in my neighborhood - was picking and sewing tobacco on a farm owned by H.C. Thrall. It was hard, manual labor in one New England humid summer, but it was great money for a teen and I had the comfort of knowing that I would be old enough for a desk job when I turned 16.
But even though I knew I was only there for one summer, I felt moved with compassion for the dozens of black and brown co-workers who knew no other options but to travel from farm to farm doing that back-breaking work day-in, day-out, year after year. I was astonished to discover that, whereas I could see an end to this unfulfilling work, there were many people for whom it was a life sentence.
That's what cemented the conviction in my heart to level the playing field.
Like many others, scholarships and loans afforded me a great education, but my heart went out to others who lived month-to-month or lived in poverty here in the U.S. or the developing world and I didn't quite know how I could help.
So I went into non-profit fundraising where I could help bridge the gap between the haves and the have nots, and spent my life making the case for money moving from the wealthy to the needy. I encountered humanitarian causes and participated in mission work through my church, which are so needed, and yet I noticed that the aid seemed like a drop in the bucket compared to the need. And I wondered how long would the poor be at the mercy of the rich for handouts that never quite met their continuing needs.
That's when I discovered the phenomenon of micro-enterprise and how Grameen Bank was able to transform lives and communities with tiny mini-microloans.
Here is where humanitarianism met capitalism. By equipping people to create and sustain commercial enterprises, Grameen Bank was able to create a cycle of self-sufficiency that had a multiplier effect and turned the donation recipient into the benefactor.
The Wealth Building Pyramid
Through my observation of this topic, I began to recognize that I could build a strong financial position if I first built a firm foundation. I developed The Wealth Building Pyramid as one way for me to look at the process of personal financial independence. I theorized that, when implemented on the level of community, this method can contribute to community economic development, which in conjunction with humanitarian aid, is a combination that can move people from poverty to prosperity.
It takes 38 years and 8 months to become a millionaire by saving $100 per month.
Starting at the bottom of the pyramid, people can enter the Wealth Building Pyramid by generating cash flow from a business or a job that pays enough to cover employee benefits. Then safety measures can be put in place to ensure the preservation of assets with insurance, a retirement savings, and legacy planning. Once that foundation is in place, then the task of increasing positive cash flow becomes the next priority so that there is discretionary income to invest in financial markets and real estate. These investments, if invested wisely over the course of time, can enable people to achieve financial success.
Financial advisors say that when markets are low is an opportune time to enter the market and experience significant gains as the markets rise again.
Crowdfunding Inner-City Real Estate
If enough of us begin to invest now, it is my hope that one day soon we will have the ability to pool our resources and begin to establish points of light in disadvantaged neighborhoods. We can crowdfund the purchase of commercial and residential real estate. And we can create hubs of commercial activity with social service programming to create a ripple effect of inspiration and tools to uplift underinvested neighborhoods, giving families and children opportunities to move toward financial self-sufficiency.
And it all begins with those of us who care, to be the starting point.
Zap the Wealth Gap Campaign
April 1 being the first day of National Financial Literacy Month, we are launching this campaign to - in the words of Gandhi - create the change we want to see in the world. Your participating in the campaign consists of making a commitment to become a social impact investor. The commitment is most of all to yourself and your future, and second of all to those in need around the world, who unlike you, don't have the ability to take this step.
So what should you do next?:
1. Take the pledge to make your commitment and join our community of social impact investors;
2. Educate yourself on investing, using the library on this site and other resources;
3. Decide which investment platform you will use (there are many more than the ones listed on this site for convenience) and
4. Join our Facebook Group and share your comments about your investing journey