Roundtable: African-American Wealth
FARAI CHIDEYA, host:
This is NEWS & NOTES. I'm Farai Chideya. Ed Gordon is away.
On today's Roundtable, who defines wealth in the black community? Is it clear from the kind of car you drive or maybe a seven-figure stock account and what can wealth do for our community? We'll tackle these and other questions with our special guests. From member station WUCF in Orlando, Mary Spio, inventor and president of the marketing company Next Galaxy Media. At member station WYPR in Baltimore, Maryland, Eddie Brown, president of Brown Capital Management. He's also a philanthropist and Wall Street Hall of Famer. And on the line from Las Vegas, Nevada, entrepreneur, motivational speaker and venture capitalist Farrah Gray. He also wrote the book "Reallionaire: Nine Steps to Becoming Rich from the Inside Out."
Thank you all for joining us. And let me start out with you, Eddie. You have built an incredible business in a very elite sector, top level financial management. There is a tendency to associate African-American wealth with celebrity, with sports, with people who you see on the TV every day. Now you are well-known within your field. You're increasingly well-known as a philanthropist, but is it important to identify wealth-building as something that African-Americans can do in business?
Mr. EDDIE BROWN (Brown Capital Management): Yes, very much so. And I think one key is entrepreneurship. I think we, as a people, should be more entrepreneurial.
CHIDEYA: Let me ask you about your philanthropy. You are someone who has given millions of dollars to the Baltimore Institute for the Arts, the Enoch Pratt Library. You made an announcement when Toni Morrison was speaking, about giving money for a black reading room. You have started something called Turning the Corner Achievement Program, millions of dollars to help middle-school students in Baltimore achieve and to help their families. What motivates you to take the wealth that you've earned and turn it into good for others?
Mr. BROWN: You know, I think it starts with a philosophy, and the philosophy is that many people just look at material wealth and accumulation of things. We, as a family, we have focused on giving back, remembering where we came from, which, across the board, very modest means, and trying to seek ways to lift and raise the sights of African-Americans. And many of the things that we have done have been focused in that area, focused specifically on youth. Youth is the future. And if we can give youth hope, give youth exposure, give them some means of getting out of poverty and a situation, then that's kind of, I think, the future.
The other thing that we've focused on is connectivity between the majority community and the African-American community. And we have found kind of unique ways, grounds of common interest cultural institutions, that are in serious trouble in many cases. Museums--you know, the audiences are declining. The symphony--audiences are declining, so we've come up with some fairly unique ways to help to connect the two communities.
CHIDEYA: I'm from Baltimore myself, I should say, and I think that, you know, I come from a family that's always taken advantage of things, like the library and the cultural institutions. But it's true that a lot of African-Americans in this majority black city don't even take advantage. So you really are building some bridges, some very important bridges. But let me turn to Farrah. Farrah Gray, you are not that far from being a youth yourself. Thinking about what Eddie just said about getting younger people interested in entrepreneurship, start out by telling us about your journey and also the kinds of outreach that you do to young people.
Mr. FARRAH GRAY (Entrepreneur; Author, "Reallionaire: Nine Steps to Becoming Rich from the Inside Out"): Well, I'm an old man, and I'm 21 years old. And I think it's important, looking at the journey that I've traveled in, coming from the Robert Taylor projects on the South Side of Chicago, growing up very poor, and I started my first business at six years old painting rocks and trying to convince people that these rocks that I was painting were bookends and paperweights and door-stoppers, and ultimately, I made my first million at 14, and by God's grace, I'm a multimillionaire now that I'm 21. And I think that what pushed me and what drove me--and I think that we really, as a community, should focus on the fact that when we look at statistics--growing up in the projects, according to statistics, I'm supposed to either be in prison or dead, not a successful entrepreneur.
So many times, we have to understand, as young people and as youth, that we may want entrepreneurship, but we need entrepreneurship, because many times, jobs are not made available for us, and many times, we will not be able to just walk into somewhere and say, `Hey, hire me,' because it's just not like that. So we have to realize that we're going to have to take up entrepreneurship, and when we look at the fact that two-thirds of the job force are provided by entrepreneurs, that we have to create and make our own jobs and create our own monumental unmatched platform to really address our issues in our community through entrepreneurship and through unity, I think, is very important.
CHIDEYA: Now, Farrah, there are entrepreneurs all over, but a lot of times, the entrepreneurs you see as somebody coming into the nail salon selling CDs, somebody else braiding hair in their house, low-level entrepreneurship, which I love. You know, I love, you know, going and getting my hair done in somebody's house, but really, what you're talking about is a much larger scale. How did you realize that you could go from selling rocks, small-time business, to big-time business?
Mr. GRAY: Well, for example, I'm thinking small scale ultimately becoming big scale. I just left the Virgin Islands last week, and I mean, if you had a goat, then they would turn a goat attraction--I saw one guy, he put sunglasses on a goat and had people wanting to take pictures with his goat. So entrepreneurship--I saw everything. If you could cook, you had a talent. If you could ride a bike, then you were--he was trying to hook other people up to the bike and turn that into an attraction. So I think that entrepreneurship is important in finding whatever your natural gifts and talents of what you may be able to see as an opportunity with.
And entrepreneurship on a larger scale was something that I went after because I felt--and I think the first thing we have to discuss is the confidence, believing in ourselves that we can achieve whatever it is that we want to achieve. And that's what I think is really rough for us. Many times, we only emulate entertainment because that's all--those are the examples that we see in front of us. And I would encourage some of the people that I work with in the entertainment industry to also highlight entrepreneurship as a career alternative, because we only, many times, have the confidence to be whatever we see as far as if we see 30 or 40 people make it in one industry, and we all follow, and God knows we know not everybody can rap and not everybody can...
CHIDEYA: Right. So what you're really talking about is role modeling. And, Mary, I want to get you in on this. Now you are running several different companies, president of a marketing company, Next Galaxy Media. You have a dating service, One 2 One. What was your role model path? Who did you look up to when you decided to go into being an entrepreneur?
Ms. MARY SPIO (Next Galaxy Media): I think for me, growing up, you know, everybody around me was in some sort of business, and so, you know--and so once I decided to go on my own, I just looked at it as I have to look around and see what common problems are there and what solutions can I provide for it? And in order to take entrepreneurship, as you were asking, on a larger scale, basically you look around you and say, `What problems can I solve with my skills?' which is what I did. Looked around, you know, as an engineer and said, OK, you know, we've got, let's say, The Boeing Company that's looking to solve this problem. How can I use my talent and skills to solve that? And that's what I went after.
Everybody around me was single and, you know, I'm a writer. How can--you know, and there was no, you know, magazine serving that community. How can I use, you know, what I have to provide some sort of solution for it? So on the very basic level, I just looked at, you know, what problems needed to be solved and how I could apply my--you know, my passion and skills.
CHIDEYA: Now some people can see problems, but not see the solutions. You are looking at a solution with One 2 One, your matchmaking business. Let me ask you a more delicate question. Is it isolating to be a successful black woman? We find that a lot of times, that career, African-American women, find it--people see it as intimidating. Men see it as intimidating. Is your service trying to address that aspect of becoming wealthy?
Ms. SPIO: Well, my service is--you know, it's for everyone. So it really--today in America, you have 50 percent of the demographic that is single, so it's a more wider scale, you know, issue that it's addressing. It's not just specifically for the African-American community, and, you know, it's just looking at it and saying, OK, America has gone from being, you know, married to now being single. What can I do to help with the process? And so even in addition to the dating service, now you have other things such as other companies that are looking to create diversity programs for their single employees, because 42 percent of the work force is single, that have now turned to the publication, that have now turned to my business and said, `Well, how can you help us better serve the single employees that we have here?' So it's something that started on a very small scale, you know, addressing the basic issue, and then now it's grown because that's the current that, you know, is--it's the undercurrent of America right now.
CHIDEYA: Farrah, let me ask you about this question of isolation. A lot of people can be judgmental in the African-American community about wealth. If you're too poor, there's one stereotype about you, and we talked about that on this program on Tuesday. If you're too rich, you're seen as a sell-out. How do you deal with all of the assumptions that people make about you based on your wealth and how do you see the landscape evolving for African-Americans looking at each other with suspicion sometimes?
Mr. GRAY: Well, I think that the suspicions are well-deserved, so I personally don't take it personal when people get a chance to meet me or read about me. They kind of get an idea of my personality and what my mission and my goal is, so they kind of say, `Whoa, you know, he's definitely one of us and someone who has his people's best interests at heart.' And I think that the most important thing is to realize that if someone is biased, it's not unfair. The majority of those who do become successful, they do sell out. They do get what I call selective amnesia and forget where they came from.
I created the Farrah Gray Foundation where I give a percentage of my personal income to after-school inner-city literacy programs, to scholarships. I just signed on as the spokesperson for the National Coalition for the Homeless, because I realize that the large majority of those who are homeless are black people. So I think that the biasness is fair, because mostly when people get money, they get this whole--they get all booji with their suits and ties and their credit cards and their new positions, and I always jokingly say they start to eat their chitlins with a toothpick. So they want nothing to do with struggle. They want no connection to it. So it's more of those than it is people that have the people's best interests at heart, so I say that it is fair with those thoughts that they have about them being sell-outs because the majority of them are.
CHIDEYA: Eddie, what do you think about that? Do you think that it's fair to call most black wealthy Americans sell-outs to the race?
Mr. BROWN: You know, I don't think so. I think there's some of that, but I think if one remembers--and we don't forget--you know, if we kind of keep in touch with those that are less fortunate and have a real passion of helping them, you know, for example, you know, I got to the ghetto to get my hair cut, you know. I talk to the people. And I think as long as we can connect to the situation and the desperation of the people and kind of connect to them and not act, you know, bourgeois, you know, I think that can kind of break down some of the barriers. And that's what I personally and my family have tried to do.
CHIDEYA: And, Eddie, let me lead you to what I think will be our final question, which is how do you get more African-Americans into the ranks of those who are comfortably well-off, if not wealthy? There was a study that came out in 1998 that found that while 14 percent of all Americans spent more than their income, 24 percent of African-Americans spent more than their income. That's a pretty significant difference, and it's huge in undermining the wealth-building in black America. What can be done to change that fact?
Mr. BROWN: You know, I think we'll have to get away from the mind-set of get rich quick schemes. It's really a longer term and persistent savings and accumulating and compounding your savings that will kind of get you there. The other thing is to try to get into an employment situation where there is kind of an entrepreneurial environment. For example, with my firm, I've tried to create an environment and mechanisms for people to create wealth. And I think we, as African-Americans, as we start businesses, as those businesses are successful, we should make sure that we, within our own companies, through retirement plans, through stock purchase opportunities, you know, to help our fellow employees create wealth.
CHIDEYA: Let me ask you, Mary, the same question. What can we do collectively to make sure that more African-Americans have the opportunity to build wealth?
Ms. SPIO: I think reach-out programs are very important, going back and really, you know, letting people know that entrepreneurial paths are, you know, in fact, a viable option, and then also getting to the root of, you know, our spending. Why are people spending so much in all the wrong places? And I think once we address that and get more comfortable, the more comfortable you get with yourself, you're not going to be out there, you know, spending as much, because the, you know, bling-bling culture, I think, lends, you know, itself to buying Prada shoes and doing this and you're nobody unless you're driving this and that. Once we started looking at, you know, a lot more of that and, you know, once we start getting away from a lot more of that, I think more people would be able to, you know, be on the path of entrepreneurship and also being--you know, successfully saving.
CHIDEYA: Farrah, there have been a lot of books that talk about how millionaires actually spend less than a lot of people with more--with less money. Millionaires can be frugal and build up their wealth that way, but we are faced with the bling culture. What do you tell the young people that you talk to about defying that expectation?
Mr. GRAY: Oh, well, I do a combination of two things. I, as of next month, and currently, we've set up in conjunction with the Kauffman Foundation and my foundation, the Farrah Gray Foundation--we've set up five schools to teach entrepreneurship for young people, so I think that would definitely be an asset and a resource to the community. Also, I say to those who are my generation, I say if you drive a Land Rover, a land cruiser, and have a landlord, something's wrong. So I always say it's important to invest and not invest where it becomes just an obsession, but invest where it becomes intelligent so that we're not just, as African-Americans, fuel for the economy. We actually become owners and we own a piece of what we are creating, and that is a society that we see today. So I say it's important to invest and maybe spend 10 percent of your income on anything that you want, but wait until that 10 percent then gets larger and save the rest and invest the rest, and then you're able to live off of the rest of your money. But I think investing--I had a friend one time that came into some money and bought a Rolex watch and was living at his grandma's house catching the bus.
CHIDEYA: Well, that's not smart, and we're going to have to leave it there. We know that your path is going to make a longer-term change than just spending that way. From Las Vegas, Nevada, entrepreneur Farrah Gray, author of "Reallionaire." In Orlando, Mary Spio, inventor and president of Next Galaxy Media. And in Baltimore, Eddie Brown, president of Brown Capital Management. Thank you all so much.
Mr. GRAY: Thank you.
Ms. SPIO: Thank you.
Mr. BROWN: Thank you.
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