Better Financial Literacy May Help The Racial Wealth Gap

I grew up in a racially diverse Bronx  neighborhood. It wasn’t until I worked on Wall Street as a financial  professional that I encountered people with homogenous backgrounds.

Looking at the statistics, African Americans suffer the greatest of disparities in social and economic inequalities.

African Americans face more significant financial gaps in income and wealth than their white peers and other minorities.

Earning less income means reduced  abilities to expand wealth through more significant savings, debt  repayment, and money investment.

Black Households Earn Less Income

Typically, the higher the income a  family makes, the higher the wealth accumulated. Net wealth or net  worth’s calculation is assets minus liabilities.

Lower Net Worth For Black Households

The composition of assets and liabilities of black and white families are very different and tend to favor white families.

Different Composition of Net Worth

Liabilities can depress wealth. White  families have a higher proportion of their primary resident’s debt at  46% versus 32% for their black peers.

Access to Credit May Be Tougher Causing Higher Debt

During the Great Recession, unemployment peaked at 10%, but it was over 16% for blacks versus 9% for whites.

Experience Greater Harm From Economic Downturns

According to two major reports, the financial well-being of African Americans lags that of the US population.

Visible Gaps For Black Americans In Financial Literacy

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