For this reason, in the context of wealth creation and financial freedom, the black community in the US continues to trail whites approximately 160 years after the official abolition of slavery and the outlawing of all forms of involuntary servitude by the 16th president of the US, Abraham Lincoln. Pretty much the same position holds for South African blacks, nearly three decades after the birth of their democratic state.
In essence, unendowed with any meaningful inheritance, from the moment a black baby is conceived, the deck is already stacked against him, cursed to a lifetime of subservience and thralldom, and in time, he would be forced to work a lot harder to reach parity with a white baby born on the same day, despite being possessed of similar IQ and EQ. Born out of privilege, the white child often lives in the lap of luxury, insulated from life’s unforgiving trials by the generational wealth that always serves as a good start and failsafe cushion, while the black one is unfortunately born into a vicious cycle of debt and poverty.
No wonder, an all-out cry is reverberating in the socio-political corridors in the US and South Africa pushing for reparations and expropriation of land without compensation. The import of this article is not to discuss the merits or otherwise of recommended remedies for historical economic injustices, partly because the track to tread is obvious for all people, including those endowed with a bony-eared assfish-like brain, but principally because I am not in the habit of throwing myself into the wide and deep pool of political wrangling.
The injustices of the past, which among others include blatant and subtle racism, systemic and structural inequalities, and a system of access to quality education that favoured whites over blacks; have given birth to an ugly phenomenon, that, to this day, continues to haunt blacks from cradle to grave, simply called black tax.
A horrible financial burden that endures from one generation to another! Parents have worked hard and sacrificed a lot for their children, but despite this, many have not been successful in pulling themselves out of this rut. This has resulted in the passing of a baton of deprivation and economic hardship from generation to generation. Consequently, each generation performs sub-optimally because it is saddled with the responsibility of ploughing financial resources into offering freebies to loved ones, outside their family’s nucleus.
Interestingly, black tax is not confined to jurisdictions where racism was at some point endorsed by officialdom. African countries where economic take-off was compromised by the wanton stealing of resources by colonial masters, which continues to this day in some countries, particularly Francophone states, are forced to contend with the black tax. Owing to compromised economic growth, challenges in attracting FDI, poverty wages, staggering unemployment, misplaced priorities and systems that prioritise a healthy workforce over senior citizens; pensioners in countries that claim to offer universal old-age pensions are only offered a monthly pittance that can hardly see them through the first week of each month.
In the absence of effective social safety nets, aging parents tend to look up to their children for financial support to cover daily sustenance, utility and medical bills; thereby reducing their offspring to a retirement plan.
In some cases, older children are expected to look after their younger siblings and foot bills that should ordinarily flow to the parents. Unfortunately, this tends to breed a culture where many employed young ones are not able to save, nor to pursue a financial plan that would result in wealth creation. Nothing is as quite disquieting as living each day in a state of worry, anxious that you may soon receive a message from loved ones asking you to send them money immediately. Hand-to-mouth existence is often the order of the day, particularly for individuals engaged in the informal sector and many people in the formal sector whose position at any point of the month is always a pay cheque away from poverty.
However, black people are not necessarily condemned to a life of servitude. Although this is an exception rather than the norm, in the US and South Africa, a few blacks command respect and lead Fortune 500 companies and top-performing entities listed in the Johannesburg Stock Exchange. Locally, almost all top positions in the public sector and state-owned enterprises are occupied by our compatriots. The private sector is also awash with senior leadership teams mostly comprising fellow citizens.
While in some cases, these people take care of their extended family, they have, to their credit, engaged their long-term thinking gear, succeeded in making wise decisions on debt management and rewarding investment, recognised that while extravagance remains an alluring crutch for the insecure it is nonetheless antithetical to value generation, led a lifestyle that never crossed the boundary of their means, created an enviable net worth for themselves, and pulled together investment-worthy heirlooms for the benefit of posterity. In the process, they learnt that, unlike the serendipity associated with a lottery win, accumulation of wealth is not an event, but a deliberate and protracted process that starts with value generation, which if sustained, yields wealth creation.
The bottom line is, we can work on pulling ourselves from enslavement to black tax. It starts with taking education seriously, especially in an environment like ours where the government continues to offer education from elementary to tertiary level at nil or negligible expense to parents.
This must be coupled with a sense of discipline that would enable young ones to rigorously pursue entrepreneurial or employment opportunities. Dropping out of school, particularly before one finishes the 12-year basic education programme will always be a non-starter.
Financial education is also crucial. Oftentimes, this does not form part of the normal curriculum. Nothing beats self-development and self-empowerment. Once one has been endowed with basic education, it should be easier to connect with money coaches and financial advisers to leverage universal money management skills and apply them throughout one’s life course.
Since cash reserves are often thin or non-existent, it would not make sense to hoard information, but wholly apposite to liberally share it with all deserving dependants, decisively retire the unsustainable spirit of dependency, and embrace the superior and dignified culture of financial independence.
