In 1996, John W. Rogers, Jr. launched a school to expose inner-city kids to valuable financial literacy concepts. The curriculum has been a huge success, creating opportunities for students to become economically empowered, pursue their career goals, and contribute to their communities.
Rogers has used his success in the financial services industry to give kids a world-class educational opportunity that emphasizes an expanded view of financial literacy — a topic that is typically removed from classrooms across the country.
“To me, financial literacy is not just about saving, credit cards, retirement, and home mortgages,” Rogers said during an interview with Black Enterprise. “All those things are important. But equally important is understanding how to invest in the equities market and compound money. Long-term stock market returns have substantially outperformed the returns on savings accounts.”
The Power of Teaching Kids Financial Literacy
Rogers is known for saying that “people undervalue time and they overvalue money.”
By using the power of time, Rogers went on to build the first Black-owned mutual fund firm in the nation. He founded Ariel Investments in 1983 and serves as the Chairman, Co-CEO, and Chief Investment Officer. Now, the Chicago-based firm has assets under management totaling over $16 billion.
What’s Rogers’ secret to success? Starting early.
At age 12, Rogers’ father gave him stocks instead of toys for the holidays. This spurred his interest in the stock market — especially when he started collecting dividend checks from his investments. Then, John’s father introduced him to his stockbroker, Stacy Adams, who was one of the first African-American stockbrokers on LaSalle Street in Chicago.
This early stock market education inspired Rogers to open the Ariel Community Academy on the south side of Chicago. The school offers pre-kindergarten through eighth-grade students opportunities to practice financial literacy by managing stock portfolios and creating business plans.
Kindergarten classes start with $20,000 and watch their portfolio grow throughout their school years. When students graduate from 8th grade, they receive a portion of the profits. The original $20,000 goes back to fund the following year’s kindergarten class portfolio.“I’m replicating what my dad did for me. We are giving kids the opportunity to invest in real stocks with real money,” says Rogers. “Secondly, we’re exposing kids to money managers and stock pickers who look like them. That inspires the kids and shows them that they can do it too.”
He adds, “We used to take the students to McDonald’s annual meeting. At the end of every meeting, we would spend an hour with Don Thompson (first Black CEO at McDonald’s). These young people sit in a room and learn how he’s become the leader of one of the most iconic companies in the world. They start to think about careers in ways they wouldn’t have before.”
Building Generational Wealth through Financial Literacy
According to the Black Investor Survey, Black Americans under the age of 40 have increased their engagement in the stock market. This provides a sense of hope for wealth-building in the African-American community. It also creates an opportunity to educate younger investors about the power of patience and long-term investing. Rogers cautions investors to avoid using the Game Stop debacle as a way to define and measure their goals in the stock market.
“I do worry about the gamification of investing,” says Rogers. “If people think they can get rich quickly, they will have more of a gaming approach to investing. When I started my journey, my father bought blue-chip, conservative investments for me.”
A key component to building generational wealth is patience. “In my 20s, I quickly understood that trying to get rich quick by trading options and commodities was a loser’s game.”
Building long-term success requires education. Therefore, Rogers became a student of the stock market. He studied financial statements, annual reports, and books that provided the blueprint for success. He even signed up for classes that would give him an advantage as an investor.
“I took an accounting course when I graduated from Princeton,” says Rogers. “If you’re going to manage your own investments, understanding accounting is really important. You can get into a lot of trouble if you buy a company that has a great story but a weak balance sheet. When a recession comes along, that kind of company may go bankrupt because they’re overloaded…they have too much debt.”
He adds, “Read as much as you can about investors who have been successful. Listen to Warren Buffett. Invest in your circle of competence. Invest in the industry that you know well and are comfortable investing in.”