Hey everybody, it's Sam from Financial Samurai. In this episode, I want to talk about racism and how we can deal with racism and what we can do about racism, because I'm mad. I'm pissed off. This shit is fucked up and bullshit. What's happening in the black community is an outrage.

The woman in Central Park calling the cops on a black man for asking her to put her dog on a leash and then going into hysteria, saying that he's attacking her. I mean, what if there was no video camera? You could easily see a situation where the cops would side on her side and put the black man away, and then there would be no due process.

You can see that happening. I'm sure that's happened many times in the past. What about the young black man who was hunted down by two citizen vigilantes and then shot? And of course, what about George Floyd, who was lying on the ground? He wasn't resisting arrest, and he got choked to death because an officer put his knee on his neck.

I mean, this stuff keeps on happening over and over and over again. And thank goodness there is cell phone footage, because otherwise, this stuff is just gonna get swept under the rug because the system is messed up. There's institutional racism all throughout the country, and as a result of historical institutional racism, you are seeing a massive widening of the wealth gap between white America and black America.

For example, segregation of housing, having different loan terms based on your race, getting shut out of universities because of your race, not getting a job because of your race, not getting the same opportunities because you have nobody in that organization who looks like you who can fight for you.

Institutional racism is systemic and it's endemic, and it's not going away anytime soon because the people in power are gonna have to hurt, are gonna have to lose some of that power, give up some of that wealth in order to help those who have been negatively affected by institutional racism.

This change takes generations, and hopefully, hopefully by speaking up and speaking out, the younger generation, the next generation, those who are poised to inherit trillions of dollars of wealth from their parents are gonna recognize how messed up the system is and that they should do something about it by utilizing their wealth and power to help others.

If you don't believe there is systemic, endemic, institutional racism all throughout the country, let's just look at some statistics. This is from 2014, and I'm sure the data for 2020 is gonna look even more egregious. If you think institutional racism does not exist, you would assume that the median household net worth between white America and black America is quite similar post-college.

The higher the education level goes, the closer the net worth levels. So let's take a look. According to the Survey on Income and Program Participation of 2014, the median household net worth for white America with a high school education is $118,580. The median household net worth for black America is $6,660.

That's with a high school education. The median net worth for white America with some college is 135,415. The median household net worth for black America is 18,200. Now with a college degree, the median household net worth for white America is 268,000. However, the median net worth for black America, this is with a college degree, is 70,219.

Fine, there's all sorts of different levels of college, qualities of college, forget about legacy admissions, all that crap. Now let's look at post-college. So a master's degree and a doctorate degree. These institutions are much fewer and they're much tighter in terms of the quality. The median household net worth for white America with a post-college education is 455,000, whereas the median household net worth for black America with post-college education is only 141,000.

So we're talking about a 3x differential despite having a master's degree or doctorate degree, this is less than 15% of the college educated population. And think what happens when there's this discrimination that goes on in society for decades, if not centuries. And think about what happens to your wealth if you allow it to compound for a long enough time period.

Compound interest is the most powerful force in finance. And if you are given or if you start with a higher level of wealth and you get to earn a higher income and you get to save a higher amount every single year for decades or centuries, you are gonna blow that wealth gap wide open.

And you can forget about meritocracy because for our children, it's gonna be a tremendously unfair fight. And as a father now, I think about my children all the time. I think about how they're gonna compete in this ultra competitive society. I think about so many of the setbacks they are probably gonna face due to discrimination, due to racism, whether it's overt or it's disguised.

Because let's be frank, most discrimination is a disguised form of discrimination that is spoken behind closed doors, behind closed doors. And it's disguised because you cannot really figure out what is going on in the decision maker's head when he or she decides not to hire you for the job or hire you for some side hustle or pick you up or want to or not wanna work with you for some project.

It's that disguised discrimination, that disguised racism that is really hard to identify. And let's be honest, we all have some preconceived notions and beliefs about certain people. And that's just how we process information. We need to process information and come to some kind of conclusion and make a judgment.

And we can't not make a judgment because we wouldn't be able to function efficiently. But I challenge everyone to really think about an issue, get to know a person before passing judgment. It is really much harder to hate someone if you get to know someone. This is one of my main messages of this episode.

It is much harder to hate someone if you get to know someone. And this is why I encourage everyone to try to learn another language, to travel abroad, to live abroad for an extended period of time, to diversify your social network. Look around and see who you're all friends with.

Are you all friends with people who look like you, talk like you, come from the same background as you, same socioeconomic class as you? If so, it's gonna be hard for you to grow. It's gonna be hard for you to get out of the normal and natural way of thinking and doing things.

But if you get out there and diversify your network and make an effort to learn and grow, I promise you things will get better. But in the short run, unfortunately, you will be probably looked upon as an outcast, someone who might be ruffling some feathers just for change, an agitator or whatnot.

For myself, here in the personal finance community, financial samurai is often looked at as an outcast. I don't participate in all these conventions that tend to congratulate the same people over and over again. I'm not constantly out there trying to self-promote so I can sell something, and it's totally fine.

I just don't have much to sell, right? I've got a book on severance negotiations, and that's about it. I just wanna live my life, but I also wanna speak my truth, get my message out there on what I believe in, and I'm not afraid of the herd. I don't need to be in a herd to feel safe and protected.

If someone's gonna come at me, I'm gonna defend myself, I'm gonna defend my family, and I'm gonna come after them if they cross the line. That's just the way I've always been since I was a kid. One of the main reasons why I talk so much about personal finance and why I want everybody to gain financial independence is so that you guys can speak up, speak your mind, and not be so afraid of financial ruin.

You don't have to kiss anybody's ass at work if they are doing something bad or they're berating you. You don't have to look the other way if you see some type of injustice. You speak up, you say, "Hey, yo, what are you doing? "What are you doing?" If you can save up enough money and build a large enough passive income portfolio, you will have the courage to speak up.

I've talked about racism in the past in several posts, maybe four or five, whether it was experiencing the Ku Klux Klan down in Abington, Virginia when I was visiting my girlfriend to experiencing multiple types of racial incidences when I was growing up in Virginia for high school and college.

And racism, frankly, is one of my main motivators to not stop, to keep working hard, to keep saving, to keep being free, because I went through so much crap growing up in international schools and in American schools. And I wanna share some of them with you. So if you have racial tendencies, if you haven't traveled, if you haven't gotten to know me or gotten to know the person you're trying to hate on or you are hating on, maybe you will stop.

Maybe you will learn to empathize because it's really important that you know that racism is wrong and it's very exhausting and it's sometimes deadly to the person on the receiving end of racism. My first experience with racism started in the fourth grade at Taipei American School in Taiwan. We always had a Americans versus Chinese soccer game during recess.

The issue was I was an American, but of Asian ethnicity. Americans was really a code word for white, which included my white European classmates. And it was just so weird at that time. I knew at that time, fourth grade, that this thing didn't make sense and it was creating this fissure between us, unnecessary fissure, but what could I do?

I was in fourth grade, I was like nine years old. So even though we were in Taiwan, Asians were called derogatory names on the pitch by non-Asians at the school. There was a fight every single week. It was every single week. And I got into those fights. One time I was tripped by a white German kid who proceeded to then stand over me and taunt me with racial slurs.

He was a slightly bigger kid, but I wasn't having any of that shit. No way. So I swept his legs, stomped my heel into his solar plex, and he started to cry. He laughed no longer. We both had to face the wall during the next recess. And then another time in the seventh grade at the International School of Kuala Lumpur, Malaysia, I was minding my own business.

I was shooting hoops during recess. When this white kid proceeded to pick up my ball, punt it across the outdoor court for no reason, and then top it off with a racial slur, I was like, "Yo, what are you doing?" I was so pissed off. I was really pissed off.

So I told him, "Look, go get the ball. "Go get the ball, you, blah, blah, blah, blah, right? "I was like, go get the ball." And then when he refused, I just lost it. So I punched him in his eardrum with an open hand. And he went to the nurse's office crying.

And then they said he had lost his hearing for about a month. And that was a shock to me. And I felt really bad. So I apologized to him. And then he apologized to me. But that was another incidence where I will never forget. What the hell? And from that day on, we were cool.

We were cool. He realized what he had done. And I realized I probably shouldn't have gone that far. And it was interesting because, you know, elementary school, middle school, I was able to fight back. And I always fought back because we were more or less the same size. But then starting in high school, people started getting bigger.

And I stopped growing. I'm only about 5'10". And I was like 150 pounds then. So it was much harder to fight back because it was much more dangerous. And some kids brought knives to school. And this was a public high school in Northern Virginia. But even with the size differential, I still fought back on occasion.

And it was strategic. You know, I remember getting suspended for a couple days because this big guy, he was like 6'2", he was 40 pounds heavier. I was tying my shoe. This was computer science class. I was tying my shoe, just minding my own business. But he wanted to sit in that seat.

And there was no assigned seats. So he said, "Sam, move." I said, "Look, I'm tying my shoe. "Just give me a moment." And so he had a cheap shot. He pushed me down while I was tying my shoe. And I hit my head on the back of another desk.

And so I got up and I punched him in the face, right in his glasses, which shattered in his face. And then I remember, I still remember the look on the teacher's face. She was just frantic. "Oh no, oh no." And then everybody was just jeering and cheering. And that was when the disciplinarian came in to the room, pulled us aside, broke us up, told us to knock it out.

And it was interesting because the disciplinarian, I don't know what his official word was. We called him a narc, but he wasn't a narc because he was clearly over 40 years old. He was my high school tennis coach. And so he was like, "What are you doing?" And so I got suspended a couple days.

And, but I told him what happened. I said, "Coach, this guy pushed me over. "He was picking on me and I fought back." And he's like, "You know what? "You gotta fight back. "You gotta fight back against that." And then when I was a junior in high school, I used to work at McDonald's.

It was kind of the worst job ever because I had to get in at 6 a.m. And the pay was $3.75 an hour initially. And I think I got a raise to $4 an hour. So imagine being in high school. It's a weekend and you gotta get in there at 5.55, 6 a.m.

to open up shop, make sure everything is clean and start preparing the food. And you're making $3.75 an hour, which frankly at the time was not a lot. It's minimum wage is minimum wage. So minimum wage right now, wherever you're earning, is not a lot of money, right? So at that time, I remember studying three years of Spanish.

My language skills, not so good. But I was studying Spanish and I wanted to practice my Spanish and all of my colleagues spoke Spanish. And so I would try to speak to them between eating some apple pies. Obviously the broken apple pies, not the good ones, right? Or flipping the quarter pounder in cheese and trying not to drop it on the floor and putting it back in the heating oven.

And whenever the manager would hear us speak Spanish, he was a white guy and he was total power tripper. He would say something like, "Shut up all of you. "Stop speaking Spanish "and making the customers feel uncomfortable. "This is America." Right? And I was thinking, look, we're in the back, we're talking Spanish, we're trying to kill time while we make $3.75 to $4 an hour.

What the F's your problem? I mean, he's a total power tripper. And this is when I was realizing, you know what? I don't know, making $4 an hour and getting verbally abused by this fellow was not worth it. I'm gonna be frugal, I'm gonna save money, I'm gonna work hard, and I am not gonna put up with this shit for the rest of my life.

And then as I got to college, at the College of William & Mary, it's in Williamsburg, Virginia. It's the South. It's not the deep South, but it's the South. I remember having a midnight snack at Denny's with my girlfriend. She's half Asian, half Caucasian. And then all of a sudden, four massive football offensive linemen sat in the booth right next to us.

And then we looked over, we just glanced over, right? And then they looked over and they said, "Get the fuck out of here, you chinks. "Get the fuck out of here, you chinks, "or else we'll beat the fuck out of you." And man, I was so pissed, because you gotta imagine, I'm here with my girlfriend, these guys are making me look like a fool, and I wanna defend my honor and her honor, but there's four on one.

And so we paid our bill. And we were about to leave anyway, but still, this enraged me so much. And it's just sticking with me to this day. And if there was just one guy there, I didn't care if he was 100 pounds bigger, I would have gone to war.

But when there's four huge guys, who are basically outweighing you six acts, 'cause you're just massive, you gotta pick and choose and live to fight another day. And this is a key lesson for many of you, all of you who are experiencing racism, discrimination, some type of antagonist, you've gotta be strategic nowadays.

If you're an adult, you've got assets, you've got kids to care for and stuff. Be strategic in the fights you choose to participate in, because a lot more is at stake now. Back in college, when that incident happened, I thought to myself, okay, I can go to war with these guys.

Maybe the manager will break us up. Maybe I'll get some fists of fury in before I get beat into a pulp. But at least I will have defended my honor. But I thought in that instant, okay, I think I was a junior in college. I'm applying for jobs. I don't wanna get in trouble again, because I already got in trouble in high school.

If I got in trouble again in college, clearly this was not good and it would ruin my future. So I decided strategically, all right, you guys win the battle today. I'm gonna swallow my pride, and I don't want anybody to get hurt, most of all my girlfriend, but I'm gonna win the war.

And I'm gonna win the war by using these experiences to motivate me to work hard, to save aggressively, to find a path to financial independence, so I don't have to deal with this type of bullshit anymore. Or at least I don't have to deal as much with this type of bullshit.

Because if you think about it, a lot of your stresses is due to other people. Well, other people just hate you, they're jealous, they just wanna put you down, whatever it is. If you have enough money, so you don't have to deal with other people, or you can pick and choose exactly who you wanna deal with, life is much better.

So for the minorities out there listening and reading Financial Samurai, who are pissed off at what's going on in America, use racism, use discrimination as motivation for you to work hard, take calculated risks, save, invest, more than you ever thought you could for your future. Unfortunately, and realistically, bad things are gonna happen all the time.

And there is gonna be someone out there who just doesn't like you for whatever reason. You need to fortify your finances so you can fortify your independence, and you gotta figure out how to love yourself and love others by educating yourself. The more you can learn about someone else in some other culture, the less you'll be able to hate them.

And the more you can learn to love yourself, the less you'll find a need or desire to hate other people. You just don't have time for that hate, you just don't have room for the hate, because you're happy with yourself. Every single antagonist that I've met online and offline has some type of issue, whether it's a personal issue or a financial issue they're dealing with, that propels them to take it out on you.

And because Financial Samurai is a relatively large site, based on the law of numbers, you know, even 1% of a million people who hate your guts, that's a lot of people. But when I get to know them, I better understand where they're coming from and where their hatred is coming from.

And I would say, almost all of the time, when they get to dig deeper into my work and understand where I'm coming from, that hatred goes away. A lot of people find Financial Samurai from a search engine, and they visit once or maybe twice, read a couple articles, and then they never come back.

So they only get one small glimpse of my thoughts on some topic. But if you stick around for long enough, I think you'll get to understand the overall principles of Financial Samurai. And I think you'll be able to see other sides of the equation, you know, different sides, different viewpoints make for better thought and better people.

I wanna end this podcast by saying that if you've ever been discriminated against based on your race, your sex, age, religion, or whatever it is, just know that you're not alone. Plenty of people get slapped around every single day, but plenty of people don't rise up and fight. You can either take the insults lying down, or you can get up and get motivated to work harder and smarter than you've ever worked before.

And when you have the right opportunity, you should fight back, and you should voice your opinion. You need to be heard, and you need to confront the injustices out there. Confront these people, talk to them, tell them how their actions make you feel, and how it negatively affects other people.

You must confront them, hopefully in a peaceful way, not like what I did when I was growing up as a kid, but in a peaceful, logical, thoughtful way. I have found that if you confront your antagonists in a peaceful and thoughtful way, in a rational way, give them an opportunity to explain themselves, tell them how you feel, and how what they're doing is making you feel, or how it's negatively affecting other people.

I have found that more often than not, they will listen, and I think they will come to an agreement and acknowledge what they're doing is wrong, or at least acknowledge what they're doing is making you feel terrible. Too many people don't confront their antagonists. They're too afraid, they don't wanna rock the boat, but you should confront them, you should talk about it.

It's important to have these difficult conversations, otherwise nothing changes. What happens is just people bottle up all their anger inside, and then one day they explode, and they pop off, and they do something really, really bad. So try to let out the steam slowly by confronting the issues when they bother you, by having an honest conversation, a respectful conversation, and I think this will help your antagonist too, the person with these hateful feelings, learn why he or she is hating on that way, or doing something bad in that way.

Don't let them just keep on doing what they're doing, and don't let that rage inside you bottle up and explode. For those of you with racist tendencies, I want you to think about some of these final points that I wanna address in a personal finance and a society context.

One, when you assume everyone can happily relocate to a lower cost area of the country, that is an incorrect assumption because not everybody can comfortably fit in. Two, when you assume that everyone has an equal opportunity to get good grades and high college test scores, that is an incorrect assumption because not everybody has the financial means to pay for tutors, and not everyone has a stay-at-home parent or two loving parents.

Three, when you assume that everyone has the equal opportunity to get ahead in the workplace when there are very few senior people who look like you, that is an incorrect assumption. People who are already in power tend to take care of people who look, talk, act, and have the same background as them.

Four, when you assume someone has special talents, intelligence, or skills based on their race, that is a lazy assumption. Everybody is unique. Five, when all your friends look the same, talk the same, support the same people, interview the same people, believe in the same thing, it's really hard to grow as a person.

Go out there and learn a new language. When the economy opens up and the restrictions are done, go travel, make different types of friends from different racial backgrounds and different socioeconomic backgrounds. Spend some time listening to their stories, really listen and try to see how they differ from your background and your beliefs and see if you can share your background and your beliefs in a thoughtful and respectful manner.

Finally, let's not paint an entire group of people based on the actions of a few. I know this is how stereotypes are created, but this is mental laziness. We need to be vigilant against mental laziness. Just don't assume that everyone is just like this. Everyone is different and unique.

We need to spend the time to learn, to understand, to listen and to share our thoughts and perspectives. Thank you for letting me address this important issue in society today. It has affected me my entire life and I know it's gonna affect my children, their entire lives. I've been living in this bubble, frankly, since 2001.

I've lived in San Francisco where minorities are a majority. Minorities make up 60 plus percent of the San Francisco population. And I haven't felt racism in quite a long time, at least overtly that I'm aware of. And one of the reasons why we're happy to go to Hawaii to live out our remaining days is because Hawaii is a minority majority state.

However, I realize not everybody can live in a minority majority city or state and not everybody wants to, that's fine. There are plenty of awesome cities and states all across America and I respect that. And I also love a lot of these states, including Virginia, where I grew up for high school and college for eight years and where I experienced a lot of racism.

I don't think we're born racist. We're just taught racist thoughts and actions. And I think the more we can share and embrace and love, I think we're gonna make things better. So thanks so much for listening to this episode. And if you found it valuable, please share it and I'll see everyone around and fight on.