Building Family Legacy Through Entrepreneurship

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Yeah, thanks for having me. I mean, it's been fantastic. We need to talk about, though, the wealth stuff. I mean, not that I don't have any wealth, but how do I get wealth? You used the word earlier, access, good jobs and access. This is Changing the Trajectory. I'm your host, James Seth Thompson, Bernstein's Head of Diverse Market Strategy.

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Today we're airing our "Best Of" episode, and I'm really excited to share some of my favorite moments for what I believe is a very inspiring podcast that had amazing conversations. Since the launch of this podcast last January, we sought to introduce discussions that educate, inspire, and empower thought and action when it comes to the advancement of Black and brown communities.

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And I've said it a number of times, and I think we all believe it, 2020 has been very, very challenging, but I'm especially proud of our podcast during this unprecedented time. The insights my guests have imparted and the call to action we present have always been relevant and important dialogues to be had. But today the need for them is all the more acute. Thanks for being along for the ride. And here we go with the Best Of. Here's a staggering statistic for you.

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After 400 years over 40 million Black Americans own just two percent of America's wealth. I know we're focused on solutions, but also know that in order to solve for the future, we need to understand our past. I invited Shawn Rochester, a great friend of mine, and thought leader and author of The Black Tax: The Cost of Black in America to talk about the history of discrimination against Black people in America.

01:54 - 02:28

Shawn broke down just how impactful the financial costs of slavery and the Jim Crow era were and how in-depth knowledge of this is vital to grasping the fiscal standing of African Americans today. Now we talk about this quite often. Like people often say, we're still dealing with and living through the legacies of slavery and Jim Crow. What people haven't really done is put that into like financial or quantitative terms because otherwise we can just kind of agree to disagree. I think it was, you know, not that long ago. Somebody else thinks it was long ago.

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I think it was a bigger deal. Somebody else doesn't think it was that big a deal.

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Let's kind of really look at what economists say. So if you go back to the time of slavery and you start to look at, you know, what you could price from that time, there's many things that you could never, ever price, like what it cost to be an individual that didn't have life, that didn't have liberty to protect yourself or your wife, or your kids, or husband, so on and so forth. But the things you can look at, what are the financial costs of the labor, right?

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That was extracted from millions of people over 250-year period, a quarter of a millennia, which they didn't get to participate in. And those numbers are quite large, right? Some, you know, economists put the numbers as high as 24 trillion and others put it as high as 97 trillion.

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Right. There are different estimates associated with it. If you kind of split the difference, we're talking somewhere around 50 trillion dollars in today's equivalent. Right. It was a mind- bogglingly large portion of the economic progress of the country. And even if you look at the value of people in 1860, and it seems like a strange thing to say, right.

03:37 - 04:11

What's the economic value of enslaved people? Economists put the number somewhere between, in terms of wealth, 16 and 20 percent of US wealth. Right. So you're talking about somewhere between 14 to 17 trillion dollars. US wealth is about 85 trillion, in total. Others look at it from a national income or GDP standpoint, and they say that the value was somewhere between one and two years of GDP. Well, US income, GDP, is about 19 trillion. So if you take an average of those two points, you're at 28.5 trillion.

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And I think the point there is the economic impact, no matter how you look at it, is really hard to comprehend in its scope and its magnitude. And these are things as a foundation that that we need to understand. When we say it was a long time ago, the implication is that the impact wasn't that significant.

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Right. You know, if we have 20 million dollars and we lose a dollar, it's not that big a deal. Right. We can recover. But if you have 20 million dollars and you lose 20 million dollars, it's huge. The impact, what is the number? Right. And how do we put that in context? Because those resources were reinvested into other people and then the people from whom those resources were taken were never invested back into themselves. That has a huge impact.

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So after that necessary level setting, Shawn came back on the show for Part Two and invited us to get our PHD with him. Shawn advocates for specificity and a paradigm shift where we purchase, hire, and deposit in ways that create jobs, expand businesses, and provide capital in the Black community. PHD is all inclusive, right? If you want to attack jobs, businesses, and provide capital community, I think it's best to do that through, you know, the economic enterprise.

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Right, because it was the restriction of the economic enterprise that helped create that in the first place. So we can do that by the cars that we choose to buy. We can do that by the realtors we choose to use, we can do that by the insurance providers, the cars and homes.

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Right. We do that by the lawyers, the wealth managers. Right. That we work with. These are all, you know, just extraordinary folks that we can do business with. And the idea is you want to

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oversubscribe folks so that they increase employment or hiring, right, and then we also have to make sure that we're providing the capital so that they can afford to to do those things. When it comes to, you know, governments, institutions, and corporations, supply chain spend is critical. And I also think what's critical is that you got to have specific applications, right. Now, what we kind of term things, we kind of talk about these programs as, you know, diverse, inclusive, you know, kind of minority programs, which generally is like a euphemism for not White male.

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Right. The challenge with that is that if you say not White male, you're talking about 90 percent of people on planet Earth. It's an amazingly nondescript, dilutive way of approaching solving a problem. Right. So you have to be specific. Right.

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And in terms of advocating for economic development in the Black community, you've got to look for programs that are specific to advocating it. And people say, well, why is that necessary? We're already doing all the stuff under the guise of, you know, diverse and inclusive, and so on and so forth. I say, that's all true. But if you look underneath it about actually how much of that is going to Black enterprise, when you look at the numbers. Right.

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If you say, well, we want to do more business with women, and I completely agree with that, double, triple, quadruple down on that. Women-owned businesses that have employees generate about 1.2 trillion dollars worth of spend. But if you ask how many of that is from Black women, it's less than 2 percent. So not until the 99th dollar that you're investing, are you going to be having an economic impact on Black women. Right. So you got to be very specific.

07:31 - 07:55

From there, and in support of Women's History Month, I had the pleasure of speaking with Lauren Maillian and Maci Philitas, two incredibly dynamic Black female founders and investors about their personal experiences, pushing through barriers to redefine the face of entrepreneurship and investing as Black women. Whenever people say to me, what's been the driving force, what's been the motivation for you?

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It's been two things, right? It's one, it's been wanting to be a wonderful mother and also wanting to be a wonderful businesswoman and kind of wanting to debunk every myth that you can't have or do both. And then the other thing is that, you know, sometimes life throws you curveballs. And I've been thrown a few of them and Maci's witnessed them. And you can choose to do one of two things when you have a curveball thrown at you. Right.

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You can choose to let the curveball knock you down completely or you can choose to let it push your back up against the wall and you can choose to push back. And I had my back against the wall for sure, and I chose to push back. And I think that that's so important. And that's something that I think makes women of color resilient. Like when I think about resilience, that's exactly what it is. It's having your back pushed against the wall and pushing back. Right. Pushing back not necessarily to be a force, but just pushing back to stay where you are, you know. And so sometimes it's a fight to stay where we are to get ahead. Yeah. Yeah.

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Unfortunately, it's an uphill battle for Black women to attract the kind of capital and investment needed to start and grow their businesses.

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Maci thought it was time to do something different. And she formed a national engagement series called I Look Like an Investor or ALLI, to create more opportunities for Black female entrepreneurs. The ALLI community is truly inspiring in how it helps Black women persevere through the hurdles they face in the business world and forms connections for Black female investors or those who want to invest in these amazing entrepreneurs and founders.

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And how has the effort with I Look Like an Investor been going taught us a little bit about the women you are engaging, the connections you're creating, because that's very powerful, right? I think that's obviously one of the missing pieces to the puzzle. When we think through how to persevere through these challenges, how is it actually going for you? Well, thank you. It's been going really well.

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I actually I knew there was a need when I got started with this, but I didn't realize how large of a need there is or was. And beyond that, I didn't realize that it would have the impact that it has. So we, as you know, we've done a few events. The I Look Like an Investor summit. So far, we've been to New York, LA, and San Francisco.

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We've built a community of about 500 women, both who are existing investors, as well as those who want to become investors. And I'm super excited to be able to say that if you have become investors as a result of our programming, and the cool thing about this year is just seeing the way, so 20-20 is just seeing the way our programming and as well as our impact is able to scale.

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So we're partnering with organizations that provide those women who are interested in becoming angel investors with the tools that they need and the boot camps that they need in order to become angels, and then from there connecting them to prominent angel investing groups to really start to move the needle. Because as we're seeing, you know, when women are investors, when women control capital, more female founders also get the investment that they seek. Like the popular card game UNO.

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it's always good to have a wild card in your lineup. By conversation with acclaimed film director Malik Vitthal was undoubtedly one of my favorite episodes because it was full of unexpected surprises and ended nowhere near where it began. Malik told us a lot about his journey into the film industry and shared his dedication to driving meaningful messages by working in service to his community as a Black man in Hollywood.

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So I certainly didn't expect to hear that hockey is the reason why you're in the industry. That's certainly, you know, something I didn't know. It's inspiring nonetheless. You also kind of made your way up to the silver screen through the Sundance Film Festival and different cinema labs and things like that. Talk to me a little bit about that journey, but not necessarily just the journey as Malik, but the journey as a Black Malik producer, director, et cetera, et cetera.

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Yeah, it's all about access. And I was fortunate to really get a lot of access, you know, whether it be going to school at USC Film School. And then from there, no matter who you are, you as a filmmaker, you kind of have to be your own professor and scientist and engineer and diplomat, and things get really balanced out when you're a filmmaker because you just have to be a hustler. Access is certainly key.

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I think every conversation I have and every roundtable we produce with with great guests like you, the solution to any of the challenges we talk about, all the solutions, the opportunities that appear in front of us always starts with access.

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Then came the audio whiplash, and before I knew it, I was offering solicited on-the-air financial planning advice. Malik was certainly hungry for this info. We went on to have an important dialogue about wealth that underscores how fundamental education, experience, and exposure are to wealth accumulation, allocation, and management. Yeah, thanks for having me. I mean, it's been fantastic. We didn't even talk about, though, the wealth stuff. I mean, not that I don't have any wealth, but how do I get wealth?

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You use the word earlier, access, good jobs and access. I often talk about accumulation.

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Then allocation, right, I mean, you know, if you're an individual, it's about accumulating wealth through good paying jobs, you know, ownership, things like that.

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If you're a business owner, entrepreneur, a lot of times you need access to resources to help you kind of build that legacy and build that entrepreneurial track. But, you know, I'm a firm believer that once you accumulate a certain level of asset, you have to move forward to the mindset of how do I create sustainability?

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And that's where wealth management comes into play. It's having real good deep discovery conversations to really recognize how you value wealth and what legacy do you want your wealth and your assets to create for you, your family, and your community.

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So it really, really just starts with a conversation.

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Another favorite conversation was with Drew McCaskill, a former crisis manager, an executive at Nielsen. Drew's Energy is infectious and we share a passion for economic development for diverse communities. Drew got us up to speed on the depth of our impact, empowering African Americans to understand just how powerful and influential we are. When people understand their power, they move through the world differently. And so my goal is to relay to African Americans just how powerful they are.

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And I look at that power in the light of some of the media myths that are out there, the media myths that all African Americans are in poverty, media myths that African Americans spend indiscriminately, media myths that we don't vote, all sorts of things. But I look at it as African Americans have three really core epicenters of power, right.

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The power that we exercise at the ballot box, we're 14 percent of the US population, 48 million strong. African Americans consistently have a higher voter turnout than our Asian and Hispanic counterparts. When Black people go to the polls, we change the results of elections. The second epicenter of power is at the cash register.

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African Americans contribute 1.4 trillion dollars to the US economy. If you think about that in terms of just global money, if African Americans alone were a country, just Black folks, we would be the 15th largest GDP in the world between Spain and Australia. Is Black America, right? The wonderful world of Wakanda. Right.

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We are an economic force in this country. And speaking of economic forces, I had an amazing conversation with Vanessa Braxton. Vanessa is the first female African American distiller and operator of a multi-million dollar nationally distributed vodka brand Black Momma Vodka and Tea. Vanessa has a fascinating background and is laser-focused on leaving a legacy for her family and building generational wealth for her children's children. She offered invaluable advice for aspiring entrepreneurs with the same goals.

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Put your plans into place. It doesn't have to be a complete plan. You don't have to have the marketing, you know, everybody thinks about, oh, let me do my digital marketing. No, set up everything first of what you need to set up, the foundation. I'm a retired structural engineer, I did civil engineering. We have to build the foundation first before anybody puts a house or a building, right? You've got to calculate the foundation and make sure your structure is good. It's the same thing in business, same thing in life, same thing in investing.

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Set up the structure in position so it can have longevity. So I tell people that all the time and then, say, if you're working, it's OK to work, work and have your business. Let your job, which is a means to an end, support your business starting out. Not everybody has to start out making a ton of money the first five years. Have patience.

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This society will, this generation, they want things real quick. They want to, like, right now. No, you've got to have patience. Patience comes with everything, including an investing and keep reinvesting in yourself, whether it's knowledge, whether it's equipment, whether it's purchasing something else to create another investment vehicle for your business.

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Think outside of the box. But that's why you have to always go back to your assurance team, because you're going to always need that accountant, lawyer, and insurance, no matter what it is that you do. Set your foundation right. And then it will steer you to the right path.

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That's certainly some great feedback. And I didn't charge for that. So what's it like being Black in corporate America?

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This is a question I addressed to Lanaya Irvin, president of the global think tank Coqual, and David Clunie, executive director of the Black Economic Alliance and a former Obama appointee at the Department of Treasury at the White House. We looked at the data behind the inequities Black talent faces and how such factors impact economic challenges present in Black America today. I want to start by asking a point-blank question to the two of you. And David, I'll start with you.

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Why is it difficult to be Black in corporate America? This could take up the rest of the podcast. Well, I will be very brief in my answer and give you the high level response, which is, because you are always other than, different than, usually one of very few in the room. You have to be very aware of your surroundings at all times.

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And it is tough to find comfortable environments where you really feel like you can speak freely, bring your whole self to work. How about you? I agree with David completely. You know, I think the challenge is persistent lack of visibility in corporate spaces, constantly confronting this idea of exceptionalism and that there are few of us because those who have found their way in are somehow exceptional, which is something that I don't believe. There's talent everywhere. You just have to choose to see it. These are the challenges.

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We'll talk about the research a bit more. But over the years, I Coquille, we've conducted extensive research over a broad variety of themes and we tend to look at our data intersectionality, and we have noticed persistent headwinds bubbling up for Black talent. And so when we embarked on the research, we felt it warranted a deep dive. Ultimately, we came out with a study that was differentiated and shed light on the experience of Black talent, told a compelling story with data that's familiar to us, but perhaps new to others.

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And then, of course, it was supported by a framework for transformation and hopefully change. If you're looking to breathe through some performance anxiety, interview a trailblazer who hosts her own radio show with the listenership of over three million people every single day. Karen Hunter, host of Sirius XM The Karen Hunter Show, was a generous guest on the podcast, along with Eric Glass, our senior portfolio manager for AB Muni Impact Strategies.

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We had an amazing and vibrant conversation discussing what drives us to encourage and create change and the actions we can take in the social impact space to help bridge gaps that exist for under-resourced communities. What I am more than anything is somebody that wants to see the world better when I leave than when I came in. So from everything that I do, the goal is to teach, inspire, motivate others to be their best selves.

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And as I was saying before, the notion is how can I feed people every day? So whether it's in the classroom at Hunter College, which I've been teaching there now for 18 years, before that NYU, before that Harlem High School kids on a Saturday teaching them English grammar, or on the radio, which is an extension of the classroom where every day for three hours I get to disseminate not what's really happening in the world, but what's happening in your life and using the perspective of real world events to get you to think about how can I make a difference?

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And the ultimate goal is I want everyone in my life to be wealthy and healthy so that they could leave me alone. Seriously. Because when people are doing well, they don't borrow money. If they're healthy and happy, they are not calling you to complain. And you just get to live your life freely when you have good, healthy people around you living their lives freely. So that's really, that's who I am. How about you, Eric? My God, it's impact investing. It's working to change and expedite the environmental and social change that I want to see in the world.

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I'm just trying to use the skills that I've developed over time to change the way in which the investment world has thought about making contributions to community, specifically, historically under-resourced communities. That investment world is changing. I've been in the industry now 22 years, and I never thought I would be in a position to have this conversation in this way, in an industry that has not really embraced what we're all about.

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But what's evolved certainly through the efforts of folks like Eric and myself, is that the face of that wealth looks much different. We have an opportunity to influence people, to leverage their assets and resources, to do things that are more impactful, recognize that in the work I do, engaging multicultural investors, there are certainly some gaps, right. Historically, folks that look like you and I, Karen, have been underengaged, underserved, underappreciated by the industry.

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But that does not tell the whole story. There are folks that, like you and I, that are influencers. We have businesses, we are wealthy, and we have an opportunity to kind of, to take a pun on a show title, Change the Trajectory of what that wealth impact, that influence looks like. What a crazy year. I hope you enjoy these select clips as much as I did. And if there's anything that specifically piqued your interest, go ahead and check out the entire episode.

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I want to take a moment to reflect on his podcast. Never in my wildest dreams would I have imagined a year like 2020. What I do believe that this series, which in many instances has become a corporate learning and teaching tool, would create such an amazing platform to have the dialogue that many of us are challenged with, but also try to highlight the solutions that we all know we need to participate in.

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I am committed to keeping the content coming and I can't wait for 2021. I can't wait for you all to hear all of the great guests and the conversations that we have in store. I want to thank all my colleagues who are behind the scenes who helped bring Changing the Trajectory to life. You know who you are and I couldn't do without you. And thank you to our listeners. I'm so thrilled to have you here with us. As always, we love to hear from you.

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So please e-mail your thoughts, questions, any feedback to diversemarkets@Bernstein.com. Be sure to share, subscribe, and rate us on Apple podcasts or anywhere you listen to podcasts and check us out on Twitter at BernsteinPWM. Bernstein: making money meaningful for individuals, families and foundations for over 50 years. Visit us at Bernstein.com.