Couple says joint strategies for building wealth come with ‘black tax’

  • Kiersten and Julien Saunders left their jobs at the company before they turned 40.
  • Join the Financial Independence / Early Retirement (FIRE) community.
  • However, the couple did not feel that the wealth-building strategies they learned took into account their life experience.
  • This article is part ofRe/Rethink/TermentThe series focused on inspiring financial planning for a different kind of future than what life from 9 to 5 would allow.

Kiersten and Julien Saunders first met at their hospitality job, then married a year and a half later. At that time, the couple subscribed to an idea Black Excellence.

Julian says, “Black excellence is that term we use to describe anyone who does a really good job, or even just a likable term used when someone shines so brightly in an area they might be least expected of.”

Both Kiersten and Julien had six-figure jobs in Atlanta that allowed them to travel around the country. It looked charming from the outside, but the couple says that their personal lives were strained. On their late honeymoon in South Africa, they still find themselves “work obsessed”, checking their phones “addictively”.

Julian adds, “What we found was that the term ‘black excellence’ created a distorted sense of presence, and really led us to work as hard as we did. We wanted to be an example of brilliant exceptionalism. We wanted to be the people who were able to do all these amazing things, Unfortunately, we did not pay attention to the losses inflicted on us. ”

That’s when they learned that things had to change.

When the couple joined the FIRE movement, they said the community was “mostly white.”

After the couple woke up to their work addiction, they became committed to “leaving the mill company” as soon as possible. Julian learned about FIRE online first, but didn’t really try to convince Kiersten to start his early retirement journey until after their honeymoon.

True to the principles fire movementwhich means financial independence / early retirement, the couple began to save and invest aggressively Real estate and the stock market to meet their needs early retirement goals.

According to records seen by Insider, the couple paid a mortgage, one on their home and one on their rental property, totaling $200,000. They were able to retire from their corporate jobs before they reached the age of 40 thanks to the stability provided by their rental income, as well as the cash flow from their blog, rich and plain.

But they said they found the community was “predominantly white,” and that much of the advice shared did not take into account their financial realities.

They have faced a ‘black tax’ within the FIRE movement

FIRE fans are usually very open about sharing their wealth building tips online, but the Saunderses soon realized that a lot of the advice shared on the forums wasn’t taken into account. The racial wealth gap faced by many black Americans. The couple said they faced “black taxes” – extra money spent due to racial economic imbalance – while starting the FIRE movement.

For example, Saunders says, the FIRE movement does not speak to individuals or spouses who are financially supportive of their families or other community members in some way. The Saunderssee found that their white counterparts, many of whom came from generational wealth, generally did not need to worry about anyone else’s support.

“One thing that often gets overlooked is how likely it is that older black Americans with underfunded retirement accounts have,” Julian tells Insider.

In fact, according to Employee Benefits Research Institute, 46% of all retirees retired earlier than expected, however, the reason older blacks retire earlier is usually for health reasons rather than access to resources that allow them to retire comfortably. In addition, the The State of Working America at the Economic Policy Institute The report shows that black Americans have 14.9% fewer white workers in their retirement accounts.

Says Kiersten, “White people will have more time to build and follow basic standard rules than we do. They have more valuable social networks because of favoritism.”

How the Racial Wealth Gap Prevents Blacks From Planning Early Retirement

When it comes to building wealth, the most popular strategies include real estate investments and building Diversified investment portfolioor own stock in the company you work for. However, the racial wealth gap can restrict black Americans from planning for early retirement, says Saunders.

For example, Kiersten says, “If you happen to own a house in a black neighborhood or have black art while going through the octagon, Your home will be worth less than your white counterparts. “Since rental income is a common source of cash that keeps retirees at a young age, she says, owning a home considered ‘less valuable’ can limit cash flow.

Additionally, pathways to early retirement through equity are usually less available to black workers. Carta’s 2021 Annual Equity Report It shows that only 4% of black employees own stock in the companies they work for, even though they make up 12% of the workforce. This compares to 65% of whites owning equity while making up 62% of the workforce.

“Having a 9 to 5 in excellent company is a great path to wealth,” Kiersten says. “But if you are a black person, the odds of owning stock in companies like Google or


Netflix

Really small, and when you look at the leadership in those companies, it’s even smaller.”