The Racial Wealth Gap with Leo Tucker of Northwestern Mutual
Racial Wealth Gap
DCL: What was your motivation for entering the field of finance?
LT: Thanks for asking, I feel blessed for being in this industry for 32 years.
I was raised within conversations that have often been absent in the homes of Black communities and families.
By joining Northwestern Mutual, I’ve learned the value of planning and delayed gratification – all the things that make a good financial plan in America – particularly for the privileged class.
I realized it’s not as prevalent in the Black community. My motivation is to share this information with as many people that look like me as possible.
The best way to expand my footprint is to share what I’ve learned with others. About three years ago, we started to track our impact of creating generational wealth in the African-American community.
DCL: What is your overall opinion of needing to explore this unique issue?
First, there is a dire need of financial literacy delivered in schools. Financial education should start in our schools, making sure there’s deliberate and intentional funding with specific curriculum to deliver the conversations in our school that we know are happening in the majority of markets.
Having funding in schools to begin the discussion of financial literacy is the best way towards financial well-being.
It’s hard to expect a single mom who’s working two jobs to now come home and talk to her son or daughter about mutual funds.
The reason why she’s putting him or her into sports is because it’s a really efficient babysitter. That’s not going to change, but if that kid is coming home saying I learned about the stock market today, it would benefit us tremendously. They may learn to invest not through some of the predictable venues, but maybe through private equity, investment banking, finance or accounting.
The second thing is making sure the opportunities to gain and gather financial education are shared in our community.
Education that’s community driven is a major key. The variety of community driven organizations, nonprofit and for-profit that that deliver education to the masses are vital. We just experienced an event today that does that. These venues are to make sure the people stay connected.
You’ve heard the term, “money doesn’t sleep”. Neither should the conversation because markets change and what’s relevant changes.
Bitcoin wasn’t a conversation 10 years ago. We have many new and creative ways to create wealth nowadays. The conversation needs to stay alive. Our people have wanted a piece of America so bad, that now we’re fixated on real estate. There’s nothing wrong with real estate and people that look like us should have, own and participate in the real estate game, but there’s so many other ways to create long-term wealth. They need to be exposed to all of it.
Lastly, the toughest part. I like government funding with accountability. I want the government’s participation in small business associations to also deliver education and mentorship so that those invested dollars will maximize the returns in our community. That way we will continue to expand and help others.
Those are the three components that I believe can help our community.
DCL: How do we create safer spaces for more people to engage and have financial conversations?
LT: I believe it comes from a couple of places:
We need more people that represent those communities to bring the conversation to the table. For example, when I got in this industry there were very few people that looked like me, and that was 32 years ago. When I became the Managing Partner for Northwestern Mutual, there were almost no people in my own firm that looked like me.
So how could those communities be properly represented in a safe way unless someone who looks like them was bringing this information?
More people who look like us should venture into financial services. If we can overwhelm the market with black and brown people, that alone will help close the wealth gap. There will be more of us to give room and space for those safe conversations.
Secondly, it’s really important that Black people stop believing that wealth creation, management, preservation and legacy is only a Caucasian thing. It’s not, it’s just a money thing. We need to become more comfortable asking questions. Because we’re so marginalized, we’re afraid to be vulnerable so we oftentimes show up with a suit of armor that prevents us from learning. I’m encouraging people to take the suit of armor off, get vulnerable, open up, and ask the questions.
I love this quote “when the why is clear, the how is easy.
My dad, who is an immigrant with a second grade education came to the states and said, “I am building this all for you. I’m building everything for you, your job is to build it for your kids.” When he passed, he didn’t leave us a dime in debt and my net worth went up when he passed on. Sadly in most African-American communities when someone dies, their net worth goes down because they just inherited debt.
This is a very simple fix. But the reason why it’s not fixed is because many people are not vulnerable enough to ask questions to learn how to solve for it. It literally costs pennies. An example of the “why” being solid: kids and my grandkids or my great grandkids who I might not meet that Papa Tucker (talking about my dad) started some thing that will impact our family for years.
By the way, that’s just routine in white communities. I want that conversation to become normative in our communities.
DCL: You have the unique experience of being the first Black managing partner at Northwestern Mutual. How has this experience of being in these spaces been for you personally?
This speaks to any Black person that finds themselves in a “c-suite” that they didn’t expect to be in. Because there’s so few of us that look like us, you immediately become impacted with “imposter syndrome”.
“How did I get here?” “Was I a part of an experiment?” The burden to perform at high levels is extremely heavy. Once you wash that away, how are you got here is less important than the fact that you’re here. Now that I’m here, how do I maximize this and make sure that what I’m doing is not only effective for this organization, but I’m learning, growing and adding revenue to any organization I’m involved with.
The second thing, it’s critical that when you get there should look back and figure out how to populate the room with other folks that look like you. By the way, I think it’s myopic to feel that you have to populate the room with other folks that look exactly like you.
I care about Latinos being in that room, I care about women being in that room, Asians, etc. When the critical volume of diversity shows up in any corporate environment, you’d be shocked at how easy it is to maintain momentum. Anything that looks different than that original group that landed here is good for this country and its growth.
This could rub people the wrong way, but at my age you have to be a hero in your own life before you can help others.
Our desire to serve and support our community is a beautiful thing. I never want that to go away. However when it comes to creating wealth, I find that there’s a delusion that doesn’t help us get to where we need to be. Let me be very clear, there’s only one color in America, and it is green. To the extent where our economic wherewithal has presence and power. We are now invited in the rooms that we have been out of forever.
However, if I have to take care of my cousin that I grew up with – it ain’t happening. Or my cousins little buddy, it’s not going to happen. This is the part that gets people offended when I share this.
I did some work in the athletic space when I was a young advisor with white and black athletes. Not one of my white athletes thought about taking care of their cousins and the kids they grew up with. That was never a part of the narrative. It was a part of every single black conversation.
That is beautiful, but also take care of yourself first. I’ll take care of myself first and now I can take care of way more people then I could’ve ever helped if I tried to do it while I was on the way.
DCL: I think it’s also about having the discernment of knowing who wants to help themselves. Do they have the aptitude? I think discernment is also very important to this topic if one does decide to help while they’re growing in their financial journey.
LT: It goes against our grain but one generation of that type of empowering behavior would make a huge difference.
Visit monipearson.com for added perspective on closing the racial wealth gap and photo gallery from the “Break Bread Brunch” event.