One Airport Place,
Today, Rich and Jag welcome Xavier Angel, out of New Century Financial Group's New Orleans office. Rich and Xavier thought Black History Month would be a good time to address the issue of financial literacy in the Black community.Xavier cites the percentage of households below the poverty line for White., Black, and LatinX households. The differences are stark. How did we get here? As a Black financial advisor, Xavier can cite examples of systematic inequalities that he's witnessed firsthand. Rich and Xavier get along very well because of similar values - both were raised to give back to the less fortunate. In fact, Rich cites a video about the importance of giving, as part of Home Depot's onboarding process. (and not being recognized for it). You can see that video here: https://vimeo.com/146029996Xavier discusses financial literacy - conversations that he's having with all clients, regardless of race or ethnic background. This includes the importance of having an emergency fund, the power of home ownership, and the need to make sure your credit report is accurate.
Welcome back into Financial Matters with Richard Oring. I am Jon "Jag" Gay, joined by Richard Oring from New Century Financial Group. Rich, great to be with you, and we've got a guest today.
We do. I have Xavier Angel from our office. He's located in New Orleans. He joined our firm three years ago, Xavier, right before COVID started?
Yeah, on January 2020 is when I joined the firm.
Rich, since I lived down there for three years, I'll save Xavier the trouble and tell you that it's New Orleans, and only tourists call it New Orleans.
Thank you for that one.
When I keep visiting, maybe I'll eventually start saying it that way. Xavier joined us right when COVID started and that was a great start. You got to transition your book of business and then take some time off working at home and gradually growing your business, when after March and the market started recovering, it was perfect.
Perfect timing. I mean, everyone was at home beginning in March. Everyone wanted to have those conversations, so it made it a lot easier to just jump on a Zoom call and start having these Zoom meetings with everyone.
And what's really nice is, Xavier joined us and just fit right in. His business model, my business model.
Right, and I think part of that, Rich, was just the culture that New Century Financial Group had. It was a culture where it was all inclusive. I mean, if you look at the diversity of the firm, it just made it a very smooth and easy transition to become a part of. I enjoy being there, the family atmosphere and just working with everyone there.
Well, I'm really excited. The topic of today's podcast is addressing financial literacy in the Black community. Xavier is a Black financial advisor, and Xavier and I, we've been working on the notes for this podcast for a while, and he was excited about this. Black History Month, let's do it, Rich, let's start recording. So I'm glad we're finally here and we're doing it.
I'm excited as well, Rich. This gives us an opportunity to talk about the income gaps and the inequalities between Black households and white households, and one of the things that I wanted to get from this was where do we go? How do we begin to correct this with future generations? What can future generations begin to do so that they can close those gaps?
Xavier, I think my first question for you with that in mind, is before we can address solutions, the first question is how did we get here? What are some of the factors that go into how we ended up with such a discrepancy we between Black and white households?
That's a great question. If we look at some of the national poverty rates within the African American and Black communities, I started doing some research going back to 2019. So if we look at 2019, roughly 20% of Black households are below the poverty line, 16% of Latinx families are below the poverty line, compared to 9% of white households that are below the poverty line.
I think that's a great place to start. The average white household's wealth is about eight times greater than the Black household here in the United States. And those numbers are based off of the Federal Reserve numbers. So when we talk about how did we get there? There's a couple things. Systematic inequalities, which were prevalent, a lack of financial literacy. If I look at my grandparents, they didn't have anyone talking to them about saving monies, about retirement plans.
About debt. No one was out there speaking to them about that. Then we have to look at the high default rates on some of the student loans that are out there. I came out of school, graduate of Loyola, Chicago. I came out owing just over $100,000 in student loans. So how do we tackle that loans? And I think no one was, again, speaking to families of color regarding that. I think one of the big ones is employment discrimination. If we look at the median household incomes, a white household, the median household income is about $76,000. In your Hispanic household, it's $56,000. And then in your Black households, it's at $45,000.
There's a huge discrepancy between what different households are making within the United States, and we talked a little bit about this prior to, so even though those Black households have less income than other households within the United States, two thirds of the Black households donate to organizations and charities and churches throughout the United States. We donate, and I say we as a Black financial advisor, so in the community, we're donating about 8% more than what white households are donating.
Xavier, I'm just curious your own upbringing with your parents. In our household, we talk about charity all the time. It's part of our religion. We call it Tzedakah, giving back with asking for anything back, like recognition or anything like that. Was this something your parents taught you at an early age?
Absolutely. Giving back to our high schools, giving back to our HBCUs, because without them, I wouldn't be where I am today. Where my grandfather and my uncles went to HBCUs, they went to Black high schools here in New Orleans, and without that foundation, I wouldn't have the education that I have. So we're consistently giving back so that they can help others behind us to have the same opportunities that I had.
And just to jump in for a second, for anybody listening that doesn't know the term. HBCU, Historically Black College or University, right?
Xavier. I think that's probably one of the reasons why we got along right away. I think we talked about religion, but we also talked about the community work we do. My wife and I, we have a nonprofit she runs feeding seniors in need for breakfast. And I know you're very active on a lot of community boards, and I think that's probably one of the reasons why we got along so well. We talked about that a lot.
It brings, as I mentioned before, that inclusiveness, and being able to work with someone who we have similar backgrounds in what we're doing in a community and how we approach giving. We don't expect anything in return, but we want to help those other people that don't have the same opportunities as ourselves. And that's one of the reasons.
I'm going to include a video of the founder of Home Depot talking about how every store and employee is trained about giving back to the community. It's an amazing story, and there's a reason why the public doesn't know about it. On the show notes, I'm going to include that.
Excellent. I want to jump in for a second, because sometimes having one thing in common with a person can really connect you. So for example, Rich and I are of the same religion. We connected over that. Both of you donate and give back to your communities, you connected over that. Xavier, when somebody walks into your office, a person of color walks into your office, is it there's sort of like this connection of like, hey, this person looks like me and understands some of the same things I've been through? And can that help get the conversation going when a new client comes in to see you?
Absolutely. We have those conversations to where I can relate where someone is from and they can relate where I started. One of the things that I tell people is I didn't start in the financial services industry. I'm a job changer. I got started in this career after having a four year career in the engineering field. And whether you are white, Black, Hispanic, Latino, we can have those conversations about how I got to where I was and what my past experiences were when it comes to debt and savings. And all of that helps us to build that relationship together.
So Xavier, now that we know there is an issue, how do we change? How do we educate, what do we do?
We've got to start teaching individuals on how to be informed, how to make effective financial decisions. And I think that starts with working with a financial planner. You and Jag had the conversation in one of your previous podcasts, what does a financial planner do? And you used that term, coach, and I loved it when I heard that, because that's exactly what we are. We're working with our clients to build that strategy that's going to help them to move forward. And we're constantly working with the, it's not just sitting down now and not talking to them later.
I believe through that financial planning process, it's not the plan that we give them, but it's having those conversations so that sometimes those solutions, they're coming up with their own solutions as we talk through different scenarios. Whether it be the investment side, or the insurance side, or the tax planning side. So I think that's one of the most powerful things that individuals can do. Work with the financial advisor, so that you're learning how to make those effective financial decisions.
I think one of the issues is getting the person in the door to talk about the issues and get them on the right track. We have another advisor, her name is Tiffany Jones, with our group. She's a lady of color, Northern part of New Jersey. Her husband left a job to start a consulting firm, but one of the things he did was he had a desire to start educating in the low income Black communities on financial literacy and start programs. So I guess the biggest thing is getting the word out there. Go make appointments with financial advisors.
Xavier, while we were prepping and doing a lot of the research for this podcast, I noticed that there was a few professional organizations for Black financial advisors. So there's got to be a big demand for Black advisors to get together, brainstorm and figure out how to get what they know out to the communities.
There definitely are, and as financial planners and financial advisors across the country, we're working to come together to have those conversations and find ways that we can get into the communities where people haven't historically had an advisor and a planer work with him. That is a big push throughout the country, with several of the different organizations that are there. I know at New Century Financial Group, that's one of the things that we're working towards, is let's reach out, let's touch some of the communities, work with them, begin to work with them on debt. How to reduce debt, how to make our money work for us. Build flexibility accounts, otherwise known as emergency funds. Those are some of the things that we're out there doing.
We talked last night, I can't put myself in your shoes. I could put myself in the shoes I currently wear, because I know what it's like to be discriminated as a Jewish person, but not as a Black person. I asked you a question, I said about discrimination or being prejudged. I said to you, if someone came into your office from Alabama, his name was Bubba, and you didn't say anything to him, you already have some things in your mind maybe, because we all have some built in unfortunately prejudices, but we're smart enough to know that they're wrong.
I mentioned my wife going to an auto body shop and she got quoted this ridiculous amount of money, and I went to the same auto body shop myself with a different person, and it was like two thirds lower. And I said to you, does that happen to you? As a Black man going in, do they look at you different or try to take advantage of you assuming you don't know?
It happens all the time. I'll give you an example. I work with an individual now, she's in her mid to late sixties. When we first met seven years ago, she had mentioned to me that she had met with a bunch of financial advisors and everyone automatically thought and made the assumption that she didn't have money because she didn't come into their office flashy, her car was 11 years old when she pulled up, and she just didn't get the service that someone else would have gotten.
Well, when I started working with her, she walked into the office. She saved every thing in her retirement accounts, and she had over $700,000 in these accounts that she was looking for someone to sit down with her, work with her, be that coach, guide her and keep her accountable. So it happens on a regular basis in the Black community.
Xavier, a moment ago you were talking about some of the financial one on one stuff you talk to clients about, which is having that emergency savings fund, something goes wrong with your car, having that flexibility, things like that. Building that solid financial foundation, and as you said, being a coach. What are some of the other points you tend to hit on with clients, Black, white, red, green, blue, purple, that really have to do with financial literacy here?
As you mentioned, it's across the board. These are things for everyone. When we start talking about that flexibility fund, save between 10 and 20% of your annual income. Let's look at ways to begin living within your financial means, stop living for today and let's plan for tomorrow and build wealth. Let's manage spending. The other thing that I wanted to point out was begin thinking about investing. If you have not started investing, begin thinking about investing. I'll go back to a 2019 study. Only 33.5% of Black households own stocks. That's somewhere where we need to begin looking at educating, and again, not just in the Black community, everyone, but let's start investing. Talk to your advisor, talk to your planner. They'll be able to work with you to find out what the right mix for you is and what the right place to go.
It sounds like, with that 33.5% number, it sounds like a lot of people aren't participating in the retirement plans at work.
Correct, and I think it goes back to financial literacy.
Xavier, a lot of my clients have been referred to me or they're calling themselves because we all know interest rates are going to be going up, and they're concerned about maybe the last chance of buying a new home with a low rate or refinancing. There's certain things we prep before they file an application for a loan. Do you want to mention that? Because I'm sure you're having the same phone calls with your clients.
I am. Home ownership is powerful, and I think what we need to know is what is our buying power? And by that, I mean we need to obtain credit reports, review those for any inaccuracies that may be on in there.
Xavier, I actually, for myself and my wife it's like $19 a month, and we get alerts if something shows up. We get a weekly update of credit scores going up and down, so monitoring your credit report is really easy now with the software out there you can just pay for. I think everyone should be doing that.
And even beyond that, Rich, there are sources like freecreditreport.com out there that you can get your credit report for free, and I know certain companies have waived fees during the course of the year. If there is something inaccurate in your credit report that is going to harm your credit, and to your point, Xavier, harm your ability to get a loan for a car, a loan for a house. Anything at all, you want to make sure that you fight that and get rid of it if it's not true. Why should you handicap yourself for something that's not accurate?
One of the things that I think a lot of people don't realize is those credit reports, not only does it damage your opportunity to purchase a home or to buy a car, but it affects auto insurance.
If you have a low score, it could jack up your auto insurance.
I've lived in New Orleans. Auto insurance down there is not cheap, even if you have good credit.
I just want to clarify one thing. That's state rules. I know where I live in Pennsylvania, it used to be that way, and now they don't use credit report for insurance rates. But I will add one more thing. When you're applying for certain jobs, they pull credit reports.
So it's powerful. Rich, you and I were talking earlier about younger people who have just started their careers, that 23, 24, 25 year old. That's one thing that I preach to them, is make sure you're checking it. Don't go get the credit card and just spending and live outside of your means. Make sure you begin paying back those student loans rather than continually pushing them back and not paying those student loans. I think all young adults should sit down with a financial planner and start working with them.
Xavier, if you could, would you please step in to my time machine and tell 20 year old me all of these things? I really wish I had known that a couple of decades ago.
Well, Jag, out of fairness, probably about a year ago you and I recorded a podcast all about credit reports and scores, and what the look for and the different ones, and the new credit rating that just came out.
Absolutely. Go back and check that previous episode. There you go.
I think it would do a lot of benefit to people. Again, at New Century Financial Group, part of what we're doing is we've got to push, let's go out there and start working with these young adults and helping them to build wealth. What can you do? How do you go about doing it? Well, working with that planner is going to help you to lay down that strategy or that roadmap. Again, going back to you guys' podcast, that GPS. So, that GPS is going to help you to get to those goals.
That was our last episode he's talking about.
Those are some of the things that you want to take a look at, and no matter who you are, what race, what culture you are, definitely reach out. Talk to a financial planner, financial advisor, and begin building those strategies so that you can have that wealth.
Xavier, on our last episode, it was talking about why everyone should have a financial advisor. And one of the things I mentioned is that a lot of people think financial planning is for the wealthy. They don't realize you can have nothing and still benefit from using a financial advisor. Do you want to talk about how you offer, and honestly it's the firm, how they offer financial planning, and explain how it's affordable? I know that you and I are very similar, that if someone comes to us and they don't have a lot of money, that our passion is to help them. We would accommodate. Do you want to talk about how you offer financial planning?
Because I encourage anyone listening to this podcast, and definitely if you want to work with a financial advisor who is Black and who understands some of the issues you had, reach out to Xavier. I mean, I know it's my podcast. I love getting business, but I love Xavier. I know he's great. We work as a team and I encourage people, except for my existing clients, to call him and make an appointment. Xavier, talk about initial meeting charges and things like that, because I know you don't charge them.
Right. The initial meeting, we sit down. We're getting to know each other, getting to know what your situation is, who you are, if we're a right fit. If we are a right fit, then we start moving forward. Financial planning is, there is a fee to go with it, and that fee is going to be determined on where you are in the country. New Jersey's going to be different from what Louisiana is. But you are typically looking at anywhere from 2,000 to $10,000, is what it costs for a financial advisor.
Our job is to help you, to be that coach, and I stress coach, because that's what we are. We're working with you to build that strategy. We're looking at everything. What are your goals? Where do you want to be in a five year time period? Where do you want to be in 15 or 20 years? And we're going to help you and build that and work with you on a daily basis. We're not here for this year, but we're going to be here with you in two, five and 10 years down the line.
Xavier, one of the things, when we set up our financial planning, we did this about two years ago, we restructured how we charge for financial plans. It used to be we would charge you an upfront fee, half of what it costs, and then you would pay the rest at the delivery of the plan. We didn't like that model, because they would pay for a plan one time. And the reality is once we deliver that plan, and we budgeted so much fuel a month, whatever, and you turn left to go to the restaurant instead of making a right, and you spend extra money after our meeting, that plan's not as accurate. So we decided to go on what we call subscription based planning, where instead of paying all that money up front, it's a monthly fee. So it's affordable for everyone.
I find a lot of individuals enjoy that or like that better than paying it up front and then coming back at the end and paying a lump sum.
When we manage assets, we charge a management fee. We have to work for our fee every day.
If you're not happy, we're not meeting expectations, we get fired. Same thing with a financial plan. If we're not delivering you value on what you're paying for, you fire us. Unlike other firms who are going to charge you more on the first year, and then they're going to charge you probably three quarters each year to update the plan the one time, whereas our subscription base, it's more affordable. You pay for what kind of services you're going to get. I'm not going to give ranges because of the state differences. Previous podcast, I talked about that for New Jersey. But it's affordable for everyone. I don't care if you are in debt and you need to figure out how to pay off your debt, there's strategies for that. We're not going to charge you $2,000 for debt planning. It'll probably be a lower plan, but as you progress and you need more financial planning and make tougher decisions, having a coach on your side to guide you in those decision making is priceless.
Absolutely. Everyone needs a coach, whether you're Tiger Woods, you've got a coach for your golf swing.
He's stealing my quotes now.
I know. LeBron James, one of the greatest basketball players of history, he's got a coach. He's had someone that's worked with him to get him to where he is. Michael Jordan, no matter who it is, we have these coaches so that they're going to help us and work with us to be able to get where we are.
So are you saying my Philadelphia Eagles needs a new coach?
Yes. Hey, we just got one here in New Orleans. The Saints now have a new coach, so we're excited. I want people understand that don't be afraid when you hear a subscription, because it's worth it. It's worth having someone sit down and have those conversations with you and work with you to build that plan. Don't just shun it away or walk away from it.
So I'm going to take Jag's part of the podcast. I'm going to say this time, you went over a lot of things, Xavier. If someone wants to reach out to you, how can they contact you?
Shoot me an email. Xavier, X-A-V-I-E-R, @plan-wisely.com. That's email@example.com. Send me an email. Would love to hear from you guys.
And again, if you want to reach out to New Century Financial Group, you can actually use this contact information to get ahold of myself or Xavier. He has another phone number, which goes through my office and it's the same number for me. It's 609-924-2049. My direct extensions 126, and Xavier's directly extension is 505.
Last thing I'll leave you with, gentlemen. Xavier, since I spent a few years down in New Orleans, I'll let you know we're recording this on February 9th. My Randazzo's King Cake is on the way in the mail. So I'm waiting for that to enjoy here in a couple of days.
Xavier, when we had dinner about two months ago, we stopped at Jag's favorite place and I stood outside and took a picture and sent it to him, thinking I was going to make him jealous, until he sent me pictures back that he was in Hawaii. But I love going down there, because everyone who knows me knows that I love food. Most people who work with me know that my original background was in the restaurant business, so anytime I get to go try different regional cuisines, it's a really nice treat for me.
You could eat your way through New Orleans in a month and still like not get through half of it. I have a lot of places I didn't hit in the three years I was there. Xavier, Rich, great stuff today. Even if you stole my closing line, Rich. Pleasure to have you both on, we'll talk again soon.
Thank you, and thank you, Xavier, for coming, and Jag, it's always a pleasure.
Thank you guys for having me.
Richard Oring's branch office is 1 Airport Place, Princeton, New Jersey, 08540. The branch phone number is 609-924-2049. Securities offered through Royal Alliance Associates Inc. Member FINRA SIPC. Advisory services offered through New Century Financial Group LLC, a registered investment advisor not affiliated with Royal Alliance Associates Inc. New Century Financial Group LLC and Royal Alliance Associates Inc does not offer tax advice or tax services. Please consult your tax specialists for individual advice. We make no specific comments or recommendations on any tax related details.