Hoppin' John: A Delicious Analogy for Saving and Investing
Black folks are familiar with the traditional southern dish known as Hoppin' John. Made up of beans and rice, this delicacy is said to bring good luck in the new year. But while it’s common knowledge that eating Hoppin’ John is a tradition, few know that it can also serve as an analogy for saving and investing.
The ingredients of Hoppin' John represent two key components of achieving financial success: saving (beans) and investing (rice). By dedicating 2023 to pursuing financial wellness through these two habits, we can create a stable foundation for our future, just like how the beans and rice combine to make a delicious, nutritious meal.
Saving serves as insurance against unexpected expenses and should be done regularly in order to reduce debt accumulation and create an emergency fund. In an inflationary environment, taking advantage of savings is essential for protecting one's wealth. Inflation erodes the value of money over time, so it's critical to save in order to maintain the same purchasing power. Additionally, when interest rates increase it becomes more profitable to save cash since banks pay higher rates. Having a reserve of savings in this environment also provides financial security and can provide peace of mind in times of economic uncertainty.
Likewise, investing also helps us build wealth over time by taking advantage of returns on investment – both long-term investments such as stocks and real estate, as well as short-term options like certificates of deposit or high yield savings accounts. Investing in an inflationary environment is important, even if the stock market is down. Inflation erodes the value of money, so investing can help protect against this by providing returns that are higher than the rate of inflation. Additionally, it can allow individuals to diversify their investments and profit from opportunities even when markets are temporarily down or bearish. By investing during an inflationary environment, individuals can hedge their wealth against the effects of inflation while also potentially creating additional income.
Black people want to get rich quick but they sometimes disregard the advice to save and invest. It’s just not sexy or inspirational. While saving and investing might not provide immediate returns like gambling or get-rich-quick schemes (i.e. cryptocurrency), it is a smarter way to manage money, especially in an inflationary environment. By taking the time and making the effort to save and invest, everyday people can secure their financial future without having to take unnecessary risks.
Saving and investing may not be an exciting route for obtaining wealth, but when done correctly, it can help Black people build stability, create greater purchasing power, and ultimately grow their wealth in a sustainable way. By following the “recipe” of Hoppin’ John – saving & investing – we can start to cook up some financial stability and make our dreams come true in 2023.