Wealth is the net result of what you own minus what you owe. Our community needs to increase what we own to build Black wealth. The most effective way to do that is through homeownership.
This is a message we need to send loud and clear to the Black community: Buy a home. Don't rent forever.
It might feel more familiar to rent. Maybe that's what your parents, grandparents, aunts and uncles did when you were growing up or still do now. But it's not the path to wealth.
Each time you make a mortgage payment, you buy a little more of your home and build your wealth. The monthly payment is predictable. You can also take advantage of one of the best benefits offered by federal government, the mortgage interest and real estate tax deduction on your tax return. Claim what you pay in interest and you'll likely have more money in your pocket, year after year.
Compare that to renting. There's always an increase in the rate when you renew your lease.
With every payment, you're paying somebody .· else's mortgage and building their wealth, not yours.
Real estate gains value. It usually becomes worth more over time, compared to a vehicle, which starts losing value as soon as you buy it. Don't spend on a flashy ride. Save it for a home, which will increase your wealth and empower you to leave something to your loved ones.
There are local non-profit organizations here to help. My own, Community Link, has an education and one-on-one counseling program for first-time homebuyers. We teach our customers how to improve their credit score, how to identify the best loans for their needs, and what expenses to expect to maintain a home.
We teach financial empowerment beyond homeownership, too. (One tip I'll share here: If your company offers a 401k retirement program, invest in it as much as you can because your company will match your contributions.)
Purchasing a home is a powerful financial move. Children who grow up in homes owned by their parents will become homeowners themselves. They realize it's possible because they've seen it.
You've heard home prices are climbing in Charlotte. Affordable housing is a big issue. But condos are an alternative if there are no affordable single-family homes where you want to live. You might buy a condo now and sell it later to purchase a house. I've seen couples in the condominium building where I live do just that.
The Black community can use land and real estate to build generational wealth. It's an exciting prospect and it's time to
Floyd R. Davis, Jr. is president and CEO of Community Link in Charlotte.