black people and money

Dr. Boyce: How a Lack of trust can destroy your economy of love

Dr. Boyce: How a Lack of trust can destroy your economy of love

by Dr. Boyce Watkins

Some people may know that S. Tia Brown (the entertainment editor at Jet Magazine) and I have been doing something called “Financial Lovemaking.” This is a venture where we discuss matters of love, life and money in ways that we hope will facilitate the resurrection of the black family in America.

I thought I would share part of a conversation I had with a friend on Facebook.  As a Finance PhD, I have learned quite a bit about investing.   But I don’t think of investing as the allocation of financial assets. Instead, I see it as the productive use of any kind of valuable asset in scarce supply:  Our time, our energy, our youth or even our love.

One other thing we understand in Finance is the concept of risk.  Risk aversion is when you are afraid of taking risk, which then has an impact on how willing you are to invest.  The problem with extreme risk aversion is that if an economy is filled with people and companies who are afraid of losing money, then everyone fails to invest in each other and the economy goes south. This was part of the problem that President Obama had during the financial crisis of 2008, when big banks were given hundreds of billions of dollars in capital but refused to make any loans.  Additionally, big corporations were bagging additional capital, but refusing to make investments or hire new employees.  The truth is that the frightening economic climate produced a lack of trust, leading companies to hoard their scarce resources rather than invest them.

The same thing that can happen in the standard economy can also happen in the economy of love.  If we’ve been traumatized by past relationships, this can create a kind of risk aversion which makes us unwilling to trust enough to make substantial investments of the heart.  This creates an itchy emotional trigger finger, where any sign of trouble causes us to run in the other direction.  This might be the recipe for relationship and emotional instability, since long-term relationships require the ability to consistently endure volatility and make investments even when things go south.

So, without much more yapping, here is what I said to my friend on Facebook.  I hope that this note helps you in some way:

I think much of our success in any relationship comes down to having the capacity to forgive and trust. Forgiveness might mean loving someone despite their flaws, and trust might mean lending certain kinds of respect even if someone hasn’t earned it. Many black relationships don’t work because there is a significant lack of trust – as soon as someone does something that turns us off, we shut down our investment in the relationship. It’s like starting a business and then killing the partnership after a bad quarter…the business won’t survive…..someone, in that company, has to care enough to keep investing even when times get rough. But if you are highly risk averse, then you won’t continue to invest because you either a) are mortified of losing more capital to a bad investment or b) have very little capital to give.

The analogy is that many black women have been so traumatized that they are in constant fear of being disappointed by a man.  This starts because many of them lost the first male love of their lives:  Their father.  So, as soon as they see something go wrong, many of them run in the other direction. They also might have very little emotional capital to invest after going through so many disappointments. But the thing is that love is like an economy: if no one is investing and taking risk, then the economy suffers and dies due to a lack of trust. 

I hope these words help someone.  Feel free to ignore otherwise.   But remember the old saying, “nothing ventured, nothing gained.”  That means that you can typically only get the rewards of life if you are willing to take some risk.  So, learn to trust, take some risk and accept the rewards that are forthcoming.

Dr. Boyce Watkins is a professor at Syracuse University and author of the book, “Financial Lovemaking 101:  Merging Assets with Your Partner in Ways that Feel Good.”  To have Dr. Boyce commentary delivered to your email, please click here. 

black people and money

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