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Money Maven Teaches Wall Street Success Financial Values, Planning Key for Blacks, Women

By Sandra Block
USA TODAY

As the 1990s come to a close, Americans have much to celebrate. Thanks to the roaring bull market in stocks, many investors have seen modest savings grow into small fortunes. Flush with stock options and well-funded retirement plans, people are retiring early to pursue second careers. There's a chicken in every pot and an SUV in almost every garage.

But a lot of African-Americans missed the party. A 1998 study by Yankelovich Partners found that only 26% of blacks had most of their money in stocks or mutual funds vs. 51% of whites.

And many blacks, particularly women, aren't saving enough for retirement. According to the Employee Benefit Research Institute, only 48% of African-American women have saved for retirement vs. 70% of all women surveyed.

Enter Brooke Stephens, 55, a Wall Street veteran, author, civil-rights activist and occasional troublemaker. Stephens spends much of her time these days talking to African-Americans, and women in particular, about saving and investing. ''There are two things nobody teaches women about: money and sex,'' she says. ''So we end up with bankruptcy and babies.''

No one will ever confuse one of Stephens' seminars with Wall Street Week. During a conference in Delaware, she was distressed to discover her talk followed a discussion of banking on the Internet. Fearing her audience was nodding off, she asked the audio technician to crank up the old O'Jays tune For the Love of Money and ordered participants to get up and celebrate financial empowerment. ''Get out of your seats!'' she commanded. ''If your butt's asleep, your brain's not working.''

Early lessons

Stephens got her first lesson in money management when she was 9. Her mother gave her an allowance of $5 a week. She was expected to use it for bus fare and school lunches.

One Thursday, she spent most of her allowance on candy and hair ribbons. The next morning she realized that she had enough for bus fare to school, but nothing for lunch or the trip home. Her mother's response: Wear comfortable shoes because it's a long walk.

During her two-hour hike in the Florida sun, Stephens learned a lesson: Make money last until you know where the next dollar is coming from.

It's a message she returns to repeatedly. Despite gains, African-Americans continue to lag whites financially. The disparity reflects decades of discrimination, but Stephens writes in her first book, Talking Dollars and Making Sense, ''some of that lack of net worth is our own fault, the result of excessive and reckless spending and marginal financial values.'' She says the problem is particularly acute among young black women, who forgo 401(k) plans for visible badges of success: costly hair styles, manicures, clothes and shoes. And when African-Americans do save, they frequently put too much into passbook savings accounts, certificates of deposit and other low-interest products, Stephens says. Until a few years ago, Stephens' mother kept her savings in CDs and a passbook account. ''I finally persuaded her to give me $25,000 to manage,'' Stephens says. She invested the money for five years and boosted the total to $46,000. When she returned it to her mother, ''Her first question was, 'Is this legal?' '' Stephens says.

She says distrust of Wall Street leads many black women to put their money in low-interest, federally insured bank deposits.

A reluctant pioneer

Stephens didn't set out to be a financial maven. The daughter of a librarian, her first love was books. She wasn't allowed to watch television until she was 14, so she spent her spare time reading. Stephens' brownstone in Brooklyn, N.Y., is crammed with more than 3,000 books. She hasn't owned a TV since 1986. ''I decided I wanted my brain back,'' she says.

She finished high school early, and at 15 entered Fisk University in Nashville. It was the early 1960s, and the civil-rights movement was spreading. At first, Stephens admits, she and her friends attended demonstrations ''mainly to meet boys.'' Her attitude changed after the Ku Klux Klan disrupted a demonstration in Nashville. A white student from Oregon suffered permanent hearing damage after a woman hit him in the ear with her umbrella. ''Then some guys beat him up and threw him down a flight of stairs,'' Stephens says. ''That's when I became politicized.''

At Fisk, Stephens studied English literature and dreamed of becoming a novelist. Her mother argued that was no way to make a living. Stephens finally pursued a degree in library science and a paying job that would keep her close to books. After three years, ''I was bored out of my mind,'' she says.

Around that time, a friend at the prestigious Harvard Business School encouraged Stephens to apply. Harvard was accepting minorities, and before long, she was enrolled.

But Stephens quickly realized that admittance and acceptance are miles apart. ''That was my first encounter with the most refined kind of racism and sexism I had ever dealt with,'' she says. She was one of four African-American women at the school, and several professors made no secret of their disdain for women and minority students. ''One professor pulled me aside and said, 'You're going to have to work three times as hard as anybody else to show me you deserve to be here,' '' she recalls.

After a year at Harvard, Stephens landed in the hospital with an ulcer. She decided to drop out, but she didn't return to the library. Instead, she decided to spend some time on Wall Street and discover whether she wanted to remain in the business world.

She got a job as an international credit analyst at Chase Manhattan Bank. That was in the early 1970s, and the only other black women at the company ''either took stenography, worked in the cafeteria or mopped the floors,'' she says. She stayed at Chase eight years, watching other employees win promotions for which she felt she was qualified. Finally, she joined a class-action lawsuit with other women who felt they had been victims of discrimination. Chase settled the lawsuit, and Stephens used the money to go out on her own.

The power of money

Since then, she's worked as a stockbroker, insurance agent, consultant and financial planner. She's written two personal-finance books and edited a collection of essays by African-American women.

Financial success has given Stephens the freedom to pursue her dream of writing fiction. She's working on a screenplay and hopes to write a historical novel. She'd like to delve into the black history of Savannah, Ga., offering a perspective largely absent from the best-selling Midnight in the Garden of Good and Evil.

''Part of what everybody has to accept is that life will go through changes, but whatever you do will require money,'' she says. ''Whether it's moving, taking care of elderly parents, having children -- all those things require money.''

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