Cedric Nash’s enthusiasm for helping African Americans close the racial wealth gap is evident when he speaks on the topic. “Personal finance has always been a passion of mine,” he says.
That passion led Nash to found the Black Wealth Summit and serve as its president and CEO. The conference is “unapologetically dedicated to advancing the prosperity of Black people,” where participants can learn about investing from sessions led by Black financial professionals.
Nash tells Insider he founded a consulting company that grew to 300 employees and $90 million in annual revenue. Along the way, he learned his own money lessons as he invested in real estate, securities, and other businesses. He has distilled his investing principles into a set of steps he calls “Millionaire Money Moves,” which he shares on social media and will be included in a forthcoming book.
Nash spoke to Insider about his money moves and overcoming systemic racism, and shared a five-step path to building Black wealth.
The first step, according to Nash, is to understand wealth: why it’s important, how to get it, how to increase it, and what makes it decrease. Understanding the path to financial security is crucial. “If you can get control of your finances,” Nash says, “you can choose how you live your life.”
That includes redirecting spending from the trappings of wealth, such as expensive cars or luxury brands, to less visible wealth-building vehicles, such as investment accounts. Nash understands the need for validation of success within the African American community. He sees the desire for displays of wealth — which may help people feel respected — as an after-effect of slavery.
“We get that attention and that feeling of real success. It’s not enough to have it and nobody knows it,” he says.
He explains the transition in mindset as: “I’m going to start investing these profits, I’m not going to live these profits.” It’s the difference between looking wealthy and being wealthy. Nash notes that you can’t have both at the same time, and spending to look wealthy gets in the way of using money to make more money.
He says he thinks African Americans don’t need financial literacy, which he defines as learning about compound interest, how to balance a checkbook, etc. He wants his community to gain “wealth literacy”: an understanding of how to accumulate assets that grow in value and generate income.
Make a wealth goal
Your wealth goal could be financial comfort, independence, becoming a millionaire (which Nash notes is not all that much money today), or becoming rich, which he defines as a net worth of $5 million or more.
You might even aspire to become ultra-rich or a billionaire. At the very least, your goal should be financial independence when you retire, and having a clear objective will help you develop a plan to get there.
Get capital to invest
“You’ve got to get some excess cash,” Nash says, and “put it into motion” by investing to grow wealth. If you live paycheck to paycheck, he suggests optimizing your job to earn more or taking on a side hustle or freelance gig to raise extra money.
You can also get extra funds to invest by borrowing or raising capital, but both are fraught for African Americans because of discrimination in lending. Black entrepreneurs also have a more challenging time getting venture capital to support their businesses.
Nash notes that you don’t have to be a high earner to build wealth, just a consistent saver. He points to his grandmother, a single mother who worked in a laundromat earning $200 a month, who managed to save enough to buy a house, pay it off, and purchase and pay off a car.
“What we can control is what we do with what we have,” he says. “If we wait until the game is fair, we’ll never start.”
Invest consistently and intensely
Nash wants African Americans to invest more, increasing the scale and intensity with which they put money into wealth-building assets. Consistency is paramount: putting aside money from every paycheck, whether a little or a lot.
Younger investors seem to be getting the message. A Schwab survey of Black investors found significant disparities between Black and white stock market holdings in older age groups, but the gap closes for those under 40.
Investing intensely doesn’t mean going for get-rich-quick schemes. That means choosing slow and steady investments over the promise of a fast return, noting that 7% is a worthy rate of return. “When you tell me it’s fast, easy, or free, my antennas go up,” he says.
Nash suggests starting with the stock market. He likes index funds and also recommends buying individual stocks in companies that have a long track record of stability. The approach is to choose one company from each of several business sectors and to emulate Warren Buffett by holding those investments for the long term.
“The only thing I’m trying to get my community to understand,” Nash says, is “we can’t dabble in investing. We have to make it a priority — that’s what’s going to close the racial wealth gap.”
Nash also recommends investing in real estate, which he notes has been a wealth-building vehicle “since the beginning of time.” His advice: “Get busy investing in multi-family properties.”
Use entrepreneurship to increase your earnings
“The highest percentage of millionaires come from entrepreneurship,” Nash says. He believes that potential earnings and, thus, the ability to build wealth, is greater when you own a business.
At the same time, he’s a realist about obstacles to entrepreneurial success for Black business owners. For example, Nash couldn’t get capital when he started his consulting business in 1997, so he was forced to bootstrap it, which slowed its growth.
To overcome the obstacles, Nash says, “You have to build slower and be one hell of a salesperson.”
But Nash thinks that everyone has the ability to be a business owner. “You don’t need God-given talent to be an entrepreneur,” he says. The skills you need to run a successful business can be learned.
“It’s all about the mindset,” Nash says. If African Americans understand the path to prosperity and make the decision to build assets, anything is possible. And he feels an urgency about building Black wealth. “We don’t have time to waste,” he says. “It’s time to make millionaire money moves and start investing in assets.”