Menu

Moderator: Welcome to CNN Forum on the State of Personal Finances concerning African American Women. The question we are going to answer is are African American Women over their heads in debt and spending behavior and is it negatively impacting the national income. If so, how can we fix this issue?

First I want to introduce our panel. First we have Suzie Orman, a national financial advisor. Samuel Jackson CEO and founder of the Economic Empowerment Initiative, Inc. Cheryl Brossard, author of many self help books for African American Women. Melody Hobson, founder of the first African American investment banking firm. Gloria Mayfield Banks, the first black millionaire of Mary Kay Cosmetics. Oprah Winfrey, America’s favorite Billionaire. Beyonce Knowles, a singer, dancer, clothing designer. Along with our esteemed guests, we have Tarshika Johnson, mother of 3 girls and a member of the Atlanta community.

Our first question goes to Ms. Orman, what is the state of personal finances around the country before and after the recession?

Suzie Orman: Generally, the personal finances of America are in deep turmoil. They were suffering before the recession and there finances are even worse now.

Moderator: Mr. Jackson, how has the level of retention and want to learn financial literacy since the beginning of your company in 2001.

Samuel Jackson: Young People and those in the community are slowly yearning for way to educate themselves before it is too late and miseducation is a lesson learned. However based on campus sessions, it is still not the most attractive learning activity.

Moderator: Ms Johnson, please tell us about your personal finance journey.

Ms. Johnson: Well at 31 years old, I just got off of welfare and just landed a secretary position at a local law firm. In the past I lived off my daughter’s child support and below minimum wage jobs. I had 3 girls shortly after high schools when I moved out of my parent’s home and moved in with my girlfriends. I lived paycheck to paycheck and always borrowed money from the guys I was dating to take care of my share of the rent and basic grooming. I never had much but I made sure the four of us had a home, food and clothes on our back. Now that I have a job I am not on welfare but I still live off child support and borrowed funds. Life is hard but I use every dime that I bring in to take care of my family.

Moderator: This question goes to our other guest. As African American women, what do you think about this issue and how do you think it is affecting our culture.

Cheryl Brossard: As a woman who writes books on how women can take matters in to their own hands, I am very aware of the issue and I am playing my part in alieving the burden to our African American sisters.

Mellody Hobson: As founder of an investment banking firm, I have acquired much success and I know that there are large number of African American Women who are not as fortunate.

Gloria Mayfield Banks: As part of my duties to help woman become businesswomen, I train these women to avoid poverty and give them options to make money.

Oprah Winfrey: Growing up poor and working for my billions as taught me to give back by any means necessary.

Beyonce Knowles: I know that I am very privileged to be where I am and there are others who are not as fortunate.

Moderator: To Ms Knowles and Ms Winfrey. After acquiring success and fame your taste and the amount of money you have earned as really hanged how do your expenditures have contributed to America’s over spending.

Ms. Knowles: Once I started receiving paychecks that I could afford the finer things in life, then the price tags of my purchases increased. When I received my first royalty paycheck from my record deal my parents advised me to save my money and not to spend it on items that would not last long.

Oprah Winfrey: Yes, my tastes have become better but I do have sufficient income, so I can afford such luxuries. I cannot be compared to those of middle class and low income African American Women. However I have not forgotten where I have came from I was once poor and my family couldn’t even afford the basic necessities. We saved our last and didn’t dare to spend it on frivolous items.

Moderator: Since your spending habits have changed, have you started saving more or even setting up a retirement fund, this goes to Ms. Hobson, Ms Banks, Ms Winfrey and Ms Knowles.

Ms. Hobson: As a financial advisor, before I advise clients on investment packages I ensure they have sound saving and retirement plan. So to practice what I preach I do have a regular savings plan and I contribute to my retirement fund, on a regular basis.

Ms. Banks: Coming from corporate America to starting my own business, I was able to keep my 401K and IRA. The way I have built my business, I have various streams of residual income that I can live on, travel, and use for savings for short and long term.

Oprah: I wouldn’t say that I save regularly but I do have leverage and I am prepared for retirement, if I choose to go in that direction.

Ms. Knowles: Being in the music business and owning a fashion line after the recession, the income is not what it used to be. To avoid low economic times, I set a budget to live by. Additional funds left over are used for savings.

Moderator: Ms. Johnson, we know that your financial situation has not allowed you the opportunity to save but what are your opinions on financial security.

Ms. Johnson: well security in general is welcomed if we all have the means to have it. Financial security is a luxury I hope to have one day

Moderator: Ms. Orman what are your takes on what the ladies have mentioned and do you think that they are one the right track.

Ms. Orman: If you talk to any financial advisor we all say that regular contributions to your savings, retirement fund and costly expenditures should be done wisely but in comparison to your income. Now we certainly cannot compare Ms Johnson’s financial plan to those of Ms Knowles, Ms Winfrey, Ms Banks and Ms Hobson. But I would like to pose a question to Mr. Jackson. After listening to the financial plans of our guest how have your middle and lower class clients mock or differ from the stories above?

Mr. Jackson: well I think the point we must focus on is that it’s not the amount of income you make for a financial plan, but it’s your plan that is important. The mind blowing reoccurrence in our community is that we are so preoccupied with what we want to buy we don’t not self instill the mind set to set a goal for savings.

Ms. Johnson: Well if you don’t have the money to back up your plan, what is the purpose of having a sound plan. There are millions of Americans in my situation who struggle everyday to survive so the only security that we are focused on is food, shelter and clothes for today and then we will worry about tomorrow when it comes.

Ms Banks: I agree, I reach out to women everyday in her situation. Feeling good is great but even having $20 for food for an entire family is a struggle so asking them to save or even investing it is out of the question.

Ms. Knowles: I totally agree, when my Dad lost his job, my Mom’s salon which was struggling, was our only income and I hadn’t landed a record deal, we fell on hard times. We had little savings but saving it for long-term life was out of the question.

Moderator: I am going to play devils advocate here and run off some statistics about African American mainly women their personal finance struggle. The Review of Black Political Economy Over one-half of black families headed by women are in poverty and they constitute two-thirds of all black families in poverty. The Pittsburgh Gazette list the median wealth of Black Women at $5. The Defenders Online states nearly half of single black women have zero or negative wealth.

Ms. Orman: Well I don’t think that is not just a Black Women’s issue, that is a issue of many Americans. After the recession thousands of Americans are in the same situation.

Ms Broussard: This is true Suze, but throughout history Black Women have been on the lower tier as far as the finances are concerned. This is the reason I went into business.

Moderator: Ok I think we are reaching a turning point here but its one more question I would like to ask why are African American Women more likely to consume materialistic products rather than save for future investments.

Ms Winfrey: As women we want instant satisfaction from things we can get now that we get blinded by what we could get by holding off on those short term expenditures.

Moderator: So how do we help our community change their prospective from instant gratification to preparing for a more opportune future?

Mr. Jackson: well I think the first step is to reach out to the middle and lower class and show them options to a better life and help them with their finances to develop a life plan

Ms Johnson: ok but a life plan around our finances cannot help us if we are constantly being denied a better future

Moderator: When we reach out we must come equipped with ample resources to help our fellow Americans. We cannot simply suggest options we need to go directly to the neighborhoods, schools and churches and be willing to help one another.

Ms Banks: Resources such as small businesses, non-profits, and schools should reach out to give their resources to those who are in need, who may not come forth and simply to give options

Mr. Jackson: Exactly, there are thousands of resources across the country to help everyone. Non-Profits such as the Economic Empowerment, Inc have pilot programs across the country and in the Atlanta area, residents can come to our office on the first Saturday of each month to attend a financial literacy session. If you are a college student in the Atlanta or Charlotte area you can attend these seminars on your campus.

Mellody Hobson: Ladies, if you are in the Chicago area please contact Ariel Investments, LLC. We offer free financial planning services for those in the community as apart of our community relations intitiative.

Cheryl Broussard: Ladies, I will begin my financial planning tour starting in January 2011. Look out for tour locations and dates on my website. In the meantime, start reading books, contact local financial planners and use online resources to create a budget and start a savings and retirement plan.

Oprah Winfrey: I am going to pledge a 1 million dollar Black Women Financial Empowerment Initiative to help our Women get back on track.

Ms. Knowles: I am going to support this Initiative with my 1 million dollar pledge for Black Women to start their own businesses, receive financial planning help and to plant a seed in savings for our young women.

Ms. Orman: I offer many services through my website and my TV so make you check those out.

Moderator: I would like to thank our guest for speaking today, we have a lot of work to do to help our Black Women and the African America Community. If you missed today’s show you can view what each guest www.blackwomensfinances.blogspot.com. If you would like to contribute to this issue please post your information on the blog.