Navigating Finances in an Unofficial Recession: Expert Tips for Black Entrepreneurs and Investors
In the midst of economic uncertainty and the looming possibility of a recession, many individuals are feeling stressed and overwhelmed about their finances. However, two experts in the field of wealth-building and financial management are offering valuable advice to help Black entrepreneurs and investors navigate these challenging times.
Yvette Butler, founder and CEO of Hive Wealth, compares wealth-building to constructing a financial house and shares her best tips for investing. She emphasizes the importance of making more than you spend, saving for emergencies, maintaining a high credit score, and keeping credit card utilization low. Butler also highlights the benefits of maximizing savings plans with before-tax benefits and employer matches, such as 401(k)s and Roth IRAs.
As an investor, Butler has observed increased utilization of 401(k) loans and financial burdens among Black homeowners and renters. The median Black household in America has around $24,000 in savings, investments, home equity, and other wealth elements. To afford down payments, many buyers under age 30 have relied on cash gifts or inheritances.
Butler’s best budgeting tip for investing is “dollar cost averaging,” which involves consistently investing a fixed amount of money regardless of market conditions. She recommends starting with a diversified index fund and gradually adding other investments like small/medium capitalization funds, international funds, fixed income, and alternative investments.
Lamar Tyler, creator of Traffic, Sales, and Profit, stresses the importance of mastering finances for entrepreneurs. He advises setting specific profit goals, creating an emergency fund, tracking revenue and expenses closely, and securing access to capital before it’s needed. Tyler also warns against relying on credit and leverage, as it can leave businesses vulnerable in times of need.
Both Butler and Tyler offer practical budgeting tips and strategies to help individuals weather financial storms and achieve long-term financial success. By following their advice and staying proactive in managing finances, individuals can build a solid foundation for a secure and prosperous future.