Strivers & Drivers

Philanthropy, Financial Savvy & Finding the Bottom of the Cup

Dwight Raiford, MetLife Senior Financial PlannerDWIGHT RAIFORD
MetLife Senior Financial Planner

Why did you decide to found the Harlem Little League? We got involved with Harlem Little League rather selfishly. Our, then, 7-year old son came home from school one day and said that he wanted to play baseball. All of his friends were playing in the West Side Little League and he wanted to play too. We said, ‘You don’t live on the West Side. You live in Harlem. We’ll sign you up for the Harlem Little League.’ That’s when we discovered that there wasn’t one. So my wife cut a deal with my son that if he practiced his piano without giving us any grief, we would start a Harlem Little League. On April 8th 1989 we opened our first season with 129 kids and eight teams, playing on a dilapidated field on 145th street and Lenox Avenue. Within about three years, we had grown to over 700 kids. Of course, we had to build more fields. The Parks Department built four new fields in Harlem, including our flagship field at Marcus Garvey Park.

It’s a great feeling to go into a park and see the kids playing baseball and the parents watching and cheering them on. Part of what we want to do with Harlem Little League is give our kids a sense of their abilities and to develop their work ethic. People always ask if we’re going to get kids into the Pros. Well that would be nice, but that’s far from our mission. We produced lawyers and doctors. One parent wrote me last year about his son who started playing Little League Baseball our very first year, in 1989. The kid just earned a doctorate at M.I.T. He wasn’t a great ball player, but his dad talked about how it gave him a real sense of himself. The kid was going to be brilliant one way or the other, but the dad was convinced that having him play with black kids from the neighborhood was very empowering for him. Now we’ve even got kids who have graduated from college and are coming back to coach Harlem Little League. I can’t tell you how awesome of a feeling that is.

When did you begin playing golf? The first time I played was about 40 years ago. It was my freshman year at Yale. A classmate of mine took me out to play. It was going ok until the 9th hole, which was a par 3. Essentially, there was a tee box, a river and a green. I somehow managed to get the ball within 3 feet of the cup on my drive. I was hooked from then on—though I haven’t been able to do it since. But as you can see, that’s the one shot I remember.  I probably shot about a 200 that day, but that one shot was enough to interest me in the game.

I didn’t play much after that, but I really got serious this year. Two of my older brothers played a great deal. I never had time to get out and play with them, but I always wanted to. Then my older brother died and I regretted that. So, I hired a pro who is excellent. The pro was very good at breaking down the old stuff and rebuilding the swing and really teaching me from the ground up. Now, I play around twice a week if I can.

Have you been able to pass the game on to anyone else in your family? My youngest son is getting interested. He just turned 21 and he loves it. I’m on the board of the City Parks Foundation and we’re teaching kids all around the city of New York to play. We just completed the construction of a six-hole course in Brooklyn. I’m really proud to get urban kids involved in the game.

Over the course of your 30 years in the financial industry what are some of the most noticeable changes you’ve seen with regard to African-American wealth creation? As a result of the civil rights movement opening up opportunities, and opening up capital, there has been an explosion of African-Americans who have tremendous income—income that our parents and grandparents couldn’t even dream about. We’re closing in on a $1 trillion GDP for black people within the next three or four years. Some have taken advantage of that for the purposes of wealth creation. We have a ways to go, however. The statistics are really startling. We’ve closed the income gap between blacks and whites to about 70%, meaning blacks as a whole make about 70 cents for every one dollar white people make. That’s tremendous compared to what it was 40 years ago and we continue to close that gap. Where we still lag is in net-worth. For every one dollar of net-worth that white people have, black people have a tenth of that—even though we’re making good money. In my mind, the number one goal for our people should be closing that gap. If we look at why the gap still exists it has a lot to do with the transfer of wealth from one generation to another.
It is absolutely critical that we preserve wealth to pass down to future generations. Let me give you a statistic: 89% of white families help their children with down payments on their first homes. For blacks, it’s 11%. The more house you buy not only creates wealth for you going forward—but think about the impact on your children. If I can afford to buy a house in a great neighborhood my children can go to an excellent public school. If I can’t afford to buy a house in the best of neighborhoods then I will probably have to send my kid to a private school, which means more of my income goes toward that expense and I don’t get a chance to accumulate as much wealth.

We’ve got to be smarter about transferring wealth. Quite frankly one of the reasons I work for MetLife is because life insurance is one of the best ways to transfer wealth. You’re transferring millions of dollars tax-free. 63% of black families own life insurance policies, as opposed to 58% of white families—so we’re onto something. But the problem is that our policies are primarily small dollar, for burial and final expenses. We ought to be buying millions of dollars worth of life insurance to pass on.

Can you provide some insight into the current economic turmoil? We are at a crossroads. Some folks are comparing what we’re going through now to the 1929 Crash and the Depression. The fact of the matter is what we’re going through now is far more akin to what Western Europe went through in 1873. Western Europe had grown to financial dominance and the economies were booming. A lot of them had been supplying goods to the Civil War in America so their factories were doing very well. Things were going so well that people were borrowing to invest and borrowing to build and borrowing for mortgages. Land prices and housing prices went through the roof. People just borrowed more and more and got very leveraged, and companies did the same. But the companies got trapped when this little upstart nation, only about 100 years old, started shipping goods, foodstuffs especially, that were cheaper than what could be produced in Europe. That upstart country was called the United States of America. So, the money started flowing west and it built up the banking system in the US. When the bubble burst in Europe people were over-leveraged, housing prices collapsed, factories were idle and a lot of people got laid off. In the US a huge market for our exports dried up and died.

Fast-forward to the last few years and you see what happened with housing prices in the US. Housing values went through the roof, people borrowed money, the stock market went wild, there was leveraging to the hilt. There was this euphoria that things were going to keep on going forever. Inflation was kept low, jobs were being shipped oversees and Chinese goods undercut domestic prices. We just couldn’t compete on a manufacturing level and as a result huge amounts of dollars flowed to China. They’re our largest lender right now, as the US was to Europe in the 1870s. By the way, there were some very intricate financial instruments back in the 1870s. Not quiet what we see today, but there were some complex mechanisms for mortgages. So there are broad similarities. That recession took four years for Europe to get out of—I’m hopeful that the America’s current crisis won’t take that long. But we’ve got to look at this as a cycle. This is not new. It may look new because a lot of the instruments that got us into this are more sophisticated. We’re not on the edge of a cliff. We’re on the side of a hill that’s been going down—but there is a valley. And there is a hill on the other side going back up.