A Story of Resilience
I was recently speaking to a group of young black women in an after-school STEM program in Harlem, New York, about black wealth. I began by asking them what came to mind when they think about blacks and money.
Their comments were telling. “We struggle with money.” “We don’t understand money.” “We don’t know about things like investing.”
The whole energy in the room changed when I shared with them that:
Black households in the U.S. earning $75,000 or more are the fastest growing income group, with the biggest gains coming in those who earn more than $200,000.
Blacks read financial magazines 28% more than consumers from other racial or ethnic groups.
Black buying power in the U.S. is $1.2 trillion and is expected to reach $1.4 trillion by 2020.
Between 2013 and 2016 net worth increased 29% for black families, and just 17% for white families.
Nearly 70% of blacks under the age of 40, who earn at least $50,000 a year, invested in stocks.
Closing Our Gaps
Despite these income gains, the wealth gap in the U.S. remains significant. In 2016, the median wealth for black families was just $17,600 — significantly lower than other racial and ethnic groups. When compared with other families across the U.S., blacks tend to have fewer assets, like owning their own home or business; less savings; limited access to 401(k)s and IRAs; and often hold higher interest loans for automobiles and mortgages.
In addition, systemic racism, discrimination and a lack of access to wealth-building opportunities remain significant impediments to the black community. But possibly the most destructive hurdle to overcome is the negative mindset these impediments have created for many blacks, like the young women I mentioned earlier.
The Financial History of Blacks in the U.S.
The financial history of blacks in the United States is a surprising and devastating untold story that serves as a reminder of how tough it has been for blacks to accumulate wealth in the U.S. For example: Between 1865 and 1874 newly emancipated slaves amassed $57 million in the Freedman’s Bank. Their deposits were taken to build the Treasury Annex building, and they were never reimbursed.
During the Great Migration between 1916 and 1970, more than 6 million blacks left the South and moved to the North, Midwest and West to search for employment and opportunity. It was also to escape brutal violence, including what’s been called terror lynchings, according to The Equal Justice Institute. They left behind millions of acres of some of the most lucrative land in the U.S.
The Tulsa Race Riot of 1921 destroyed the affluent black community of Greenwood, also known as the black Wall Street for having a high concentration of black wealth and entrepreneurship in the United States.
When you consider the financial, psychological and emotional scars events like these have left, the financial gains the black community has made serves as an incredible reminder of the resilience in all of us.
Understanding Your Financial DNA
The young women I shared these facts with were shocked, curious and now had new information that would allow them to change their perceptions about blacks and money, which meant they were able to change their perceptions about their own financial possibilities.
As new generations of blacks try to create financial security for themselves and their families, they must look inside and see how this historic conditioning is impacting how they feel about themselves.
We should all examine the role race and culture play in our financial beliefs and ask ourselves:
- What are some of the stereotypes that are associated with my racial or ethnic group?
- Do I see some of these stereotypes playing out in my own behavior?
- How would I need to change the messages I’m telling myself if I were living my ideal relationship with money?
The Truth Will Set You Free
Awareness is the place where transformation can occur. As we see from the financial history of blacks in this country, we were born with everything we need inside of us to thrive, even when faced with tremendous challenges. Resilience is our birthright, and a tremendous asset for our journey to financial freedom.
Stacey Tisdale is compensated by OneMain.
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