Financial Sense… Is It a Matter of Culture or Ethnicity?

Judy M McCutcheon

by Judy M McCutcheon MBA

I was listening to a conversation between two people – a Trinidadian of East Indian descent and a White North American. The conversation was centred around differences in culture and what the Trinidadian said, really gave me cause to pause and reflect, even though my first reaction was one of annoyance.

She said that before she was married and when she lived in Trinidad, she had her ‘fun’ with Black men and while she enjoyed her experience with them, she cannot date them. She went on further to explain that Black men in Trinidad were all about going to the gym and looking good, renting instead of owning, being in the latest fashion, and owning brand name cars, but their bank accounts were in the negative. She very proudly explained that most Trinidadian men of East Indian descent owned houses, cars and had money in the bank. The impression I got from listening to the conversation is that while it’s okay to have fun with Black men in Trinidad, they were not to be considered as marriage material. And this really disturbed me!

The conversation gave me cause for concern for 3 reasons, 1) I am of African descent, 2) I am from Trinidad and Tobago and, 3) I have brothers. It also had me thinking about what truths could be wrapped up in what I considered to be a racially charged conversation. When I told a friend about the conversation and that I was going to write about it, he said to me, just observe at the airport in Trinidad on a busy weekend. You would notice that approximately 80% of the travellers are of East Indian descent and just about another 80% of the hourly paid workers are Black. I wondered if this type of behaviour had its roots in slavery? Is it a matter of culture or ethnicity? Was it because the Indians were treated as indentured labourers, instead of slaves that they have a different concept of money? These and lots more questions were running through my mind, so of course, I went digging for answers. I wanted to find out why we spend the way we do and what if anything can be done about it.

The answers I found were equally disturbing to me. Although the research centred mostly on Blacks in the United States, I think that in the Caribbean we can very well relate to it, albeit on a smaller scale. After all, a significant number of Caribbean nationals help to make up the population of America. According to a report by Nielsen, Blacks have a spending power currently of $1.3 trillion, and you would think that with such tremendous spending power they would be in a better position. But here’s what I found out, we all love to spend on the latest fashion, the brand name cars, expensive purses, red bottoms and all that fancy stuff. The difference seems to be this: Whites tend to treat their spending on expensive consumables as an investment so, their expensive suits must last them a long time. They tend to lease rather than own new cars, to them, it’s simply a car, which is a depreciating asset. Blacks love to own and customise their cars, they want to own the latest in everything, but all for the wrong reasons. Spending on these expensive items appears to be a confidence boosting, feel-good kind of activity.

I remember having a conversation with a wealthy Middle Eastern lady and she was asking me about our buying habits during the holiday season. She wanted to understand why we needed to change our curtains every year. I didn’t have the answer then and I am not sure I have it now. What she told me is that when she spends on curtains it has to last her for at least 5 years, she invests in curtains, it’s not just a simple buying process.

From slavery to now there seemed to have been a systemic repression of Black people to keep them ‘in their place,’ and unfortunately, they have bought into that whitewash wholeheartedly. Blacks were treated with such harshness and were so oppressed, that one way of them dealing with it was by becoming fast spenders. There is one report which states, that a dollar circulates in the Black community for 6 hours as opposed to 30 days in the Asian community. What is also quite startling is that in America, there are 21 Black-owned banks with approximately $4.7 billion in assets and this accounts for just about 0.43% of the tremendous spending power of Blacks.

One website, gave these 5 reasons why Black people are still broke:

  • Black people spend more money than they make
  • Black people don’t support Black businesses
  • Black people don’t save their money
  • Black people don’t know how to invest
  • Black people aren’t working on getting out of poverty

These are some of the reasons for the stark reality. I am always confused as to why we do not support Black businesses. Why is it that with a $1.3 trillion spending power, the majority of that money goes to non-black businesses? We can even put this in our Caribbean context: how many of us consciously support Black-owned businesses? That’s a question only you can answer. For us to be on the road to building generational wealth, there are some things that we must do and that includes a mixture of investing and saving. It includes supporting each other to ensure that our businesses thrive. We must think about the future generations and do what is required to ensure that our kids can have trust funds or that we have wealth that can be passed down. We must concentrate on building for the future and cultivate a wealth mindset.

© All Rights Reserved
Judy McCutcheon is a partner in the firm Go Blue Inc, a Human Development Company.

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