Williams was once a federal government employee with a high security clearance, as well as multiple promotions and professional recognitions. 

About a decade ago, she says she was living the definition of success that was set by her mother, a 42-year federal government employee who was honored by President Barack Obama upon her retirement. 

But the ground fell out from under her, Williams says, when her department changed bosses.

“The new boss that I had was a white woman who clearly was coming into the role with bias. She told me instead of writing these national level security reports, I would now be demoted to organizing travel for the office,”  Williams says, noting that she was the only black woman in the office.

“I did that for three months and then she came back to me and said, ‘I think this is too complicated for you.’ And I got demoted again to making badges for people who visited the office,” Williams said. “Then another three months passed and I was demoted yet a third time and that was to badge people out of the ladies’ and the men’s bathroom.”

That professional fall from grace, as she calls it, led her to quit her job in 2014 and find her passion—becoming an entrepreneur and promoting Black entrepreneurship and Black job creation so that she, and other Black professionals, could break out from having their only income stream controlled by a boss or employer that may or may not treat them fairly. 

Williams, based in Washington D.C., is now the chief executive officer and founder of The Black upStart, a pop-up training school that has trained more than 550 Black entrepreneurs since 2016 in several cities such as Atlanta and Baltimore, and helped secure more than $3.75 million in financing. She also manages United Negro College Fund’s entrepreneurship initiative.

“The people who don’t have capital in a capitalist economy will remain economically weak,” she says. “I think that entrepreneurship is that road to economic independence.” 

That road, however, is a rocky one. 

According to the 2021 Small Business Credit Survey’s report on businesses owned by people of color, Black-owned businesses continue to lag behind white-owned companies and have more acutely felt the effects of the pandemic: 

• 85% of Black-owned businesses reported a decrease in revenue during the prior 12 months, compared to 76% of white-owned businesses. 
• 77% of Black-owned companies said that they were experiencing poor or fair financial conditions, versus 54% of white-owned companies. 
• 67% of Black-owned firms reduced their operations because of the pandemic, while 54% of white-owned firms did the same.

Challenges for Black entrepreneurs

Starting a business is hard enough, but Black entrepreneurs can face additional challenges, biases, and obstacles that their white counterparts do not, including higher interest rates and potential discrimination at traditional banks and lending companies. 

“You ask any small business owner, they would say access to capital is their number one concern. But if you ask an African-American, they’ll say their top one, two, and three concerns are access to capital,” Ron Busby, president and CEO of U.S. Black Chambers (USBC), says. 

Busby says it is common for Black entrepreneurs to be held to a higher standard when applying for business funding, with lenders requiring higher credit scores from Black people than white people. And when they do get loans, often the rates can be much higher than for white-owned businesses, he says. 

In a USBC statement put out in 2020, Busby points to the story of Freddie Lee James Jr., a St. Louis, Missouri entrepreneur who was denied a business loan from a bank even though he had a credit score of around 750 and his product —homemade barbecue sauce —  generated about $200,000 in profits and was sold in 1,000 stores, including major retailers like Home Goods and Hy-Vee.

Overcoming barriers

Williams points to historical Black entrepreneurs, including hair product entrepreneur Annie Malone and bank president Maggie Walker, as inspiration for how today’s entrepreneurs can push through racist and discriminatory practices to create and fund companies, and then hire and train employees.

“There is a Black history entrepreneurial blueprint that Black people could follow and be very successful,” she says, “without looking at other entrepreneurs who are not Black who were successful but didn’t have obstacles of racism and discrimination to overcome.” 

Some major financial institutions are paying more attention to the Black business community, including JPMorgan Chase’s Advancing Black Pathways initiative and Capital One’s training programs on unconscious bias and micro-behaviors. And spurred by protests during the summer of 2020, some banks have responded to criticism that they’ve exercised discriminatory lending practices. For example, Citigroup, JPMorgan Chase, and Bank of America promised to lower fees for Black and minority-led companies seeking supply-chain financing. 

But Busby and Williams say Black entrepreneurs still rely heavily on personal loans or crowd-funding and using their own personal savings as well as loans from Black-owned banks, such as Liberty Bank.

“We have to be resourceful, we have to look harder and we really have to have our information together when we go to these financial institutions,” Busby says. “It is a huge challenge for Black business owners.” 

Shifting Focus in the Black Business Community

While funding and profitability are usually the main focus for entrepreneurs, Black business leaders like Williams and Busby are now spearheading a push further into both job creation and harnessing the immense buying power of the Black community.

Williams says she wants to see more Black entrepreneurs start businesses that create the products and services that the Black community already buys.

“We have $1.3 trillion of buying power,” she says, “but we spend that money making other entrepreneurs that are not us, rich.”

Williams says she’d like to start seeing Black entrepreneurs move into the spaces where Black consumers spend the most money, including: 

• $1.04 billion on non-refrigerated juices and drinks
• $829.8 million on detergents
• $152 million on women’s fragrances
• $136.8 million on cookware

Busby believes the best way for Black-owned businesses to succeed is by supporting Black-owned businesses. And while that may seem obvious, it really requires all consumers to work to seek them out. 

“We do have to take the extra step,” he says. “When we look, we can find.”

To that end, the USBC keeps a searchable directory of black businesses that is now 107,000 strong.

The Black upStart is also increasing its focus on Black wealth management to encourage growth and spending for everyone, even if they don’t have the capital or the desire to become an entrepreneur. That includes “demystifying” wealth language and educating people on retirement accounts such as of 401(k)s and 403(b)s, investing in the stock market, or in the creation of their own Black-owned business.

“How do we begin to acquire assets, something that we can pass down to our children, that our children’s children can benefit from?” Williams says. “But then also the type of assets that can make us money while we sleep, which is, of course, a goal.”

Photo: by Christopher Creese

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Currently,  there are just four Black chief executive officers leading the largest public companies in the U.S. They include Thasunda Brown Duckett of the Teachers Insurance and Annuity Association of America (TIAA), René Jones of M&T Bank, Marvin Ellison of home improvement chain Lowe’s, and Rosalind Brewer of pharmacy Walgreens. Frank Clyburn will become the fifth when he takes over as CEO of International Flavors and Fragrances on February 14, 2022.  

And despite attempts to increase diversity, Black executive leadership at Fortune 500 companies has actually decreased since 2012. The Fortune 500 includes the 500 biggest companies in the U.S., bringing in $13.8 trillion in revenue, collectively. 

While many of these companies have committed to increased diversity and inclusion in hiring, Black workers may experience more prejudice in the office and more roadblocks to advancement in their careers, according to experts. For these reasons, there still exists a significant leadership gap along racial lines at the top.

Understanding the leadership gap

Franklin Raines was the first Black CEO to head up a Fortune 500 company, taking over the role at the mortgage loan company Fannie Mae in 1999. Since his tenure, Fortune 500 companies have seen only 22  Black CEOs or board chairs.

This leadership gap widens further for Black women. When Duckett  took on her position at TIAA, she became the third Black woman to hold a CEO position at a Fortune 500 company. Ursula Burns was the first, acting as a CEO of print business Xerox from 2009 to 2017. In 2019, Mary Winston became the interim CEO at Bed, Bath, & Beyond, before she was replaced by a white man. 

The leadership gap extends beyond CEO to other executive roles. Black Americans make up 8% of professionals in the U.S., according to a 2019 study from Coqual, formerly known as the Center for Talent Innovation (CTI). Additionally, 3.2% of executives, senior-level officials, and managers are reportedly Black. 

Black professionals may also experience more roadblocks to advancement. The Coqual study found 65% of Black employees said they were “very ambitious,” compared to 53% of white employees. Meanwhile, 19% of Black employees said that someone of their race or ethnicity would never achieve a top position at their company, compared to 3% of white employees. Black respondents reported less access to senior leaders at their jobs than white respondents (31% vs 44%).  

Black employees are also more likely than other racial groups to experience prejudice in the workplace, according to Coqual. Fifty-eight percent of Black workers have experienced racial prejudice at their jobs, compared to 41% of Latinx workers, 38% of Asian workers, and 15% of white workers. 

When Black employees do hold executive positions, they reportedly aren’t often ones that lead to higher roles, such as CEO. For example, 13% of chief human resources officers, 20% of chief sales officers, and 43% of chief administrative executives at Fortune 100 companies are Black.

How companies can address the leadership gap

The lack of advancement for Black employees is often a failure on the part of the organization itself, say some experts. “The biggest reason why there is a lack of Black executives remains due to the lack of talent development which leads to high retention rates,” says Michelle Ngome, founder of Line 25 Consulting, an inclusive marketing company, based in Houston, Texas.  

To combat racism in the workplace, changes need to come from existing leadership, says Gena Cox, the head of advisory and research at consultancy Feels Human, Inc., in Tampa, Florida. “Decision-makers and power-wielders must get to know people of color, and Black people, particularly, a little better,” she says. Cox urges companies to hire more people of color, but also to “infuse inclusive behaviors” into their workplace cultures to prevent Black employees from leaving. 

Ngome also notes an increasing interest Black entrepreneurship as an alternative for Black professionals to build their own businesses, with Black Americans at the center. “People turn to entrepreneurship for a ton of reasons, but most Black people have a bad taste in their mouth when it comes to corporate. Entrepreneurship is a new way of life with freedom and flexibility,” she offers. You can learn more about Black entrepreneurs and how you can support small Black businesses during Black History Month here.

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Julien, 40, and Kiersten, 36, met at work and were married in 2015. They claim to have paid off $200,000 in debt in just five years, quit their well-paying hospitality jobs to become “digital entrepreneurs.” And they plan on retiring for good by the time they are 45. 

They credit the teachings of the Financial Independence, Retire Early (FIRE) movement for inspiration, namely extreme savings and investment with the hope of retiring decades early. 

Julien Saunders spoke to personal finance writer Sarah Netter about overcoming obstacles, their path to financial success, and why they believe it’s especially important for Black middle-class Americans to break out of the traditional income-based mindset. 

The following is an edited version of their conversation.

Managing money as a couple can be tricky

I was really passionate about building wealth. Kiersten, I would say, was passionate about income. We were passionate directionally about the same things, but we were addressing it and handling it in very different ways.

I had some credit card debt. I had student loan debt at the time, and a car note, and a mortgage. And I may have had a little bit of tax debt at the time. Kiersten didn’t have any student loan debt, but she had a car note and credit card debt.

When we first met, we [each] thought we had found someone [else] who was like-minded. It wasn’t until we got into the details that we realized we were taking very different approaches. Specifically, she was very much a gung-ho professional, wanting to earn as much as she could. She had set a lofty goal to earn six figures by 35. 

I was actually at a point where I was pleased with where I was, but I knew there was a hard stop really soon because I was looking to replace my wage income with other means of income.

I was already starting to do research into real estate investing. I was scratching the surface about online businesses and learning about the FIRE community.

And so it really wasn’t until we started blending incomes and sharing the cost of being together that the details kind of forced the conversation which ultimately led to our first fight which led to us reconciling and getting on the same track.

We booked a trip to Panama. We said we would split the cost and she put all of the costs on a credit card. I came back and I was very much accustomed to, okay let’s pay this thing off and if we need to make any adjustments to my spending then we can do that. Little things like, I’m not going to go out when we get back from vacation because I just got back from a vacation.

But she was very much of a different mindset at the time. We had such a good vacation that when we got back she wanted to celebrate the vacation—“Let’s go out!” And that was like the opposite of what I wanted to do. That led to a pretty heated conversation—a huge yikes conversation.

Looking back it was one of the best things that ever happened to us, because it forced us to have a very early conversation about money. That was really the beginning of what ultimately became our blog and our story. We really wanted to help other people have better conversations about money.

The importance of being frugal

Saunders says they began paying down their collective debt in 2012, erasing it completely over the next five years. They launched rich & REGULAR in 2017. 

I think the biggest thing for us was overcoming the [work] culture and social pressure [of the hospitality industry]. It’s a very, very real thing. You’re young, you’re doing well. There’s a lot of pressure to buy up, to get that new car, to move into that new neighborhood or, in some cases, you’re looking to get promoted so you’ve got to look the part to get the part.

We really resisted a lot of that. There was very little buying of new clothes, we drove the same vehicles. I just bought a new-to-me car, the first time in 12 years.

The other big thing for us was cooking at home. We were in the hospitality business so if there’s one thing we knew how to do it is to go out and enjoy food and beverage, and to have a good time. A huge part of [Kiersten’s] identity at the time was tied to going out with friends. She was in a sales and business development role, so there’s this natural inclination to go out and celebrate and network with people. And I was in a similar boat. 

But we were focused on the long term which, for us, was building wealth, saving, and investing as much as we can, and giving ourselves the option to retire early. To do that we knew there was a social cost and a career cost as well. 

Building wealth through investing

Once they tackled their debts, they shifted their focus from generating wage-based income to building their wealth through investing, real estate and continuing to live frugally. Their number one investing tip that anyone can start with is index funds.¹

What we want more people to do is realize you don’t have to be an expert, you don’t have to know everything about investing. You need to know for sure how much it costs to invest, which is why we’re such huge fans of index funds. 

Low-cost index funds, understanding what impact they have on your overall ability to build wealth. I don’t know anyone who, after a long day of working, especially if they are married and having children, wants to sit down and churn through charts and understand the details about their long-term investments.

That’s not to say that index funds are foolproof or recession proof. [Note: All investing involves risk and investments may lose value.]

I think the biggest thing is overthinking it. There’s a tendency for people to want to make sure they understand in depth every single variable in the equation. By the time you’re done thinking, the opportunity has moved on. And so, more than anything, what people need to get accustomed to is just starting and having the courage to move forward without having the answers to every single thing that might impact your ability to achieve a particular goal. 

Consider starting your own business

In 2019, Julien and Kiersten wrote a letter to Black middle class America urging them to break free of a corporate business structure that holds them back.

I didn’t realize how much of a bubble I was in. I think what was most heartbreaking was seeing how many people just didn’t get it. And by people I mean Black middle class America —my peers—who were still of the belief that all they needed to do was outthink and out work their peers and everything would work out. I just found very little evidence that was true.

When we wrote that letter it was an open invitation for them to do essentially what [we] did. 

Over the last 40 years, wages, factoring in inflation, have been relatively constant. You can be as smart as you want to be, as hard working, diligent, do all of those things. [I believe] unless you are starting a business, the chances of you reaching the goal that you are working for are slim to none, especially if you are Black.

It was a wake up call. I didn’t want to do it in a way that was shameful, because there’s certainly enough of that. It’s a dare to that community to be different. I dare you to think differently, I dare you to act differently and sit back and watch the result. The reality is that your money has proven to work significantly harder than you ever could. It doesn’t get tired, it speaks multiple languages, it earns money in a global economy. Focus on that.

Obsessed with excellence

The rich & REGULAR website focuses just as much on the “regular” as the “rich.” That’s because they know most people don’t want to talk about numbers. They want to focus on what makes them happy and what motivates them. 

We know that our community is so obsessed with excellence and they use that as a badge of honor. What we’re arguing is excellence isn’t really lucrative. It’s just exhausting. 

We don’t focus nearly as much as other people on financial education or the numbers because we know that’s not what’s going to motivate people. Math isn’t going to motivate you. What motivates you are the underlying beliefs that shape the way you act every single day.

For the people who are choosing to spend a disproportionate percentage of their income on things that depreciate in value—our goal is to invite them in and get them to think about money differently.

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