Like most people in this country, African-Americans pursue more comfortable lives by purchasing new homes, new cars and new clothes. In doing so, we have become one of the nation’s biggest consumer groups. Yet, with affluence comes the challenge of learning to invest and manage money, rather than simply spend it. For centuries, African-Americans had precious few opportunities to receive a financial education, a fact that continues to affect us. Many who earn solid livings and even statistically qualify as "upper income" have little positive cash flow and nothing but debt to leave their heirs when they die.

One of the primary reasons why blacks have been so unsuccessful at building generational wealth is that we have not created a better value system. From the cradle to the grave, all Americans are taught to be consumers. However, because African-Americans have not been able to participate fully in consumer culture in the past like other groups, we often feel that we must run hard and fast to catch up. Few can blame us for not wanting to live in the ghetto or for not wanting to walk to work, as we have had to do in the past.

But today we have created an unstable value system by not pacing our consumption. For example, a growing number of African-American males under age 40 seem to be already driving or aspiring to drive a luxury vehicle. The problem is that this typical driver still lives at home with his parents and is, thus, a financial burden on them. He cannot afford a home because he is paying for that car. In this self-defeating cycle, neither he nor his parents will reach their financial potential. The truly sad thing is that the parents will not teach him a better value system that will show him how to have both a car that he can afford and his own home. As he gets older and marries, he will eventually move out of his parents’ home into his own home and still carry those bad values with him, which he will teach to his own children. This cycle has plagued African-Americans for the past 40 years, and it is only getting worse in the new century.

Irrationales
I frequently hear African-Americans say that they would invest in the stock market if they knew more about it. The key to building generational black wealth lies in abandoning self-defeating excuses like this. We must take a different approach to our growing affluence and educate ourselves on money management. Furthermore, we must pass what we learn on to our children. If we are not talking to our children or grandchildren about building and managing wealth, then we can be certain that anything we pass along to them will not last long after we are gone.

Some of the lessons of wealth management are basic, such as understanding the difference between ownership and "loanership." We need to make purchases using less credit and more cash. The money we save by not financing a $50,000 car purchase can be invested for the future. We must also learn more about estate planning and purchase solid life insurance policies to cover estate taxes and other expenses at the time of our death so that our family is not stuck paying for our bad habits. Finally, we must protect our estates by purchasing long-term care insurance. As Americans of all stripes often learn the hard way, unforeseen medical expenses and long-term care quickly destroy family wealth.

African-American affluence is only increasing, a trend hard-won and long overdue. Yet, as our bank accounts grow, so must our values. The choice before us is simple: We can wisely use our wealth to create a cycle of affluence for generations to come–or we can continue down our current counterproductive path, and allow our grown children to live in our homes and park their $50,000 cars in our garages.

Keith B. Jones is a Houston-based wealth advisor and the author of Building Generational Black Wealth.