All Articles Tagged "business investment"
Invest in a business? Pfft, forget it! Affluent Black Americans would rather take their chances in real estate, Atlanta Black Star reports.
The top five percent of the wealthiest African Americans, in comparison to Whites of the same income bracket, are much less likely to risk their fortunes on a business investment, according to a Credit Suisse study. The most deep-pocketed Blacks have only nine percent of their non-financial assets invested in a business of their own, or someone else’s. For the wealthiest Whites on the other hand, that figure is at 37 percent.
The real estate market, though, is much more attractive to well-heeled Blacks.
Affluent Black Americans had 41 percent of non-financial assets invested in properties. Whites, on the flip side, only had 21 percent of non-financial assets in real estate.
Atlanta Black Star believes that Blacks are less likely to invest in businesses due to racial discrimination in the loan market:
“…A 2010 study issued by the U.S. Commerce Department found that minority business owners had difficulty securing money from traditional sources: they were less likely to receive loans compared with non-minority business owners; they received loans that were, on average, less than half the size of whites; and they received loans that were, on average, 140 basis points more expensive.”
These hindering factors place quite a damper on Black entrepreneurial pursuits. Thus, Blacks are more inclined to try their hands at investing in real estate. But Stefano Natella, one of the lead authors of the study, asserts that Black wealth could increase ten-fold if they invested in businesses:
Investing in real estate has historically been a smart and steady way to build wealth,” he said. “But if you successfully invest in a company—a tech company is a great example—you could you could see a multiplier of three, four, even 10 times your wealth. That’s where more conservative wealth-management behaviors can sometimes be limiting.”
The Credit Suisse study found other interesting tidbits as well. African-Americans have a tough time preserving their affluent position in society over time. Only 37 percent of the wealthiest Blacks remained in the highest net worth quartile 20 years later (from the year 1984). Compare that to 56 percent of Whites. The report also found a sluggish upward mobility trend among Blacks — only seven percent, compared to 12 percent of whites, climbed to affluence.
This Credit Suisse study looked at wealth patterns between Black and White Americans with over $357,000 in net worth.
(HipHopDX) — Kanye West’s ever-expanding business portfolio has just expanded, as the Chicago rapper has purchased the franchise rights to 10 Fatburger Restaurants in his hometown. According to TheDailyBeast.com, Ye, whose other ventures include clothing design and film, purchased the rights through his holding company, KW Foods LLC.
(AJC) — Despite a tough economic climate, Georgia last year saw a 2 percent increase in the number of companies coming to the state, along with an 11 percent rise in the number of jobs promised. Still, the Peach State wasn’t one of the top 10 destinations for business relocation. Georgia ranks sixth in overall business climate, according to this month’s Site Selection magazine, which tracks the competition among the states. Every state wants economic development, usually aiming for a mix of home-grown expansions and move-in businesses. But they must pay a price for that development. Getting into the contest means ponying up — money for marketing, for improvements to local infrastructure, for tax breaks.
(Businessweek) — Last year, Mary Metoyer’s New Orleans flooring company took in just $80,000 in revenue, one-third of her annual revenue before Hurricane Katrina struck. Her customer base of landlords and homeowners had started to return, but many were then hurt financially by the BP (BP) oil spill. When the bank she went to for a $10,000 loan lost her paperwork a few months after Katrina, she says she didn’t have the heart to restart the application. Metoyer did try her luck with a nonprofit, applying for a $10,000 loan early this year. She received the money last spring, paid it off, and took out a second loan in September, for $6,000, to upgrade her 25-year-old showroom in New Orleans’ Warehouse District. “Even though these are little loans, they have been a big, big help with financing some larger jobs I’m doing,” says Metoyer, 64.