Mini Money Management Origin Story

When I was 8 and my little sister was 5, we asked my mom to go out to eat everyday. She got fed up with it and posted on the refrigerator a job opening for ‘son’ and ‘daughter’. We had to apply and then interview for the positions, she even called our references (who had nothing but nice things to say). Once we got the jobs we were paid a weekly salary and had to pay for expenses like rent, utilities, and it cost more to go out to eat than it did to stay in. My mom’s claim to fame is that at the end of the summer she asked us if we wanted to out to eat and our response: “No mommy, that’s too expensive”

Growing up I wasn’t taught anything complex about money. I didn’t learn about stocks or bonds or Roth IRA’s. I was taught when you get money in, you save a little bit, pay for your needs and then have fun with whatever is left over. These simple principles have helped me graduate from undergrad (economics) with no student debt and then get a masters degree (in finance) in London while travelling to 11 countries and 15 cities across Europe. I had a part time job through these 5 years and only had my parents send me money once (lol I messed up in London once, nobody is perfect). It is extremely important for people to learn how to make more money and increase their net worth, but I have seen firsthand how managing the money you have now can make the true difference. 

Current Financial Landscape

When people say that money is the root of all evil they aren’t incorrect. If you look at 99% of the problems in this world, they all surround money. 

Let’s have a look at our current financial situation.

  • Millennials are in debt
    • $28,000
    • The highest % of this is credit card debt, not student loans
  • Cost of Living – In the last 50 years (inflation adjusted)
    • Salaries have decreased by 5%
    • Tuition increased 418%
    • Housing increased 191%
    • Healthcare increased 484%
  • The Racial Wealth Gap
    • Average White Net Worth: $171,000 ($166,000 in 2000)
    • Average Black Net Worth: $17,000 ($26,000 in 2000)
    • Average Hispanic Net Worth: $21,000
  • College
    • For every $1,000 of tuition increase, enrollment diversity decreases by 2.6%
    • Black borrowers have $7,000 (undergrad) and $20,000 (graduate) more debt than white borrowers
    • Black borrowers are 4x as likely to default on their student loans
    • Bachelors starting salary is $27,000 higher than a high school diploma
    • The racial enrollment gap has closed from 8% to 5% since 2000

Let’s call a spade a spade. We are setting people up for financial failure and it is disproportionately affecting people of color.

We are in a terrible financial cycle that’s causing the wealth gap to continue to grow. 

  1. Tell kids that they need to go to college to make more money
  2. Don’t educate students how to financially prepare for post-high school plans 
  3. They take out more student loans as college tuition increases
  4. The jobs they get out of college aren’t paying as much (average salary is decreasing while cost of living is increasing
  5. They are in debt, and their net worth decreases. This impacts families of color who already have a low net worth. 

The Reason Behind Mini Money Management

So why do all this? That’s such a great question. 

  • I’m doing this because I feel responsible for my people.
    • I grew up as a black male in America, my expected net worth should be $17,000
    • I  have travelled the world, graduated debt free and I’m the CEO of  a tech company with a $2.5 million company valuation.
    • The only reason I could do any of this is because my mom taught me the basic principles of money. When you get money; you save a bit, you take care of your needs and then you have fun with the rest.
    • It all started with my parents though. They got to the point where our ‘basic needs’ were met. Let’s set the next generation up for financial success with our actions. 
    • I want kids of color to see people who look like them making big changes in education because I didn’t.

Lorne