The Wealth Gap

According to a Neilsen survey, African Americans earning more than $75,000 a year are the fastest growing income group in the country. However, over the last 20 years the wealth gap between Whites and Blacks has widended considerably. In 1987, Blacks and Whites were separated by roughly $20,000 however, the latest statististics show that gap now stands at about $100,000. One setback for African Americans was the 2008 implosion of the subprime home lending market. Experts say the mortgage meltdown wiped out a generation of economic progress and could leave its mark on the finances of Blacks for decades.

Sources: American Civil Liberties Union Justice Foreclosed: How Wall Street's Appetite for Subprime Mortgages Ended Up Hurting Black and Latino Communities, 2012, and For Black Americans, Financial Damage from Subprime Implosion is Liikely to Last, The Washington Post, 2012.

Higher levels of education generally are associated with smaller (shallower) increases in wealth for Hispanic and black families.

Sources: Federal Reserve Bank of St. Louis Unequal Degrees of Affluence: Racial and Ethnic Wealth Differences across Education Levels, 2016, and Study Finds Education Does Not Close Racial Wealth Gap. National Public Radio,  2015

Considering student loan debt, an unpredictable economy and/or periods of unemployment, smart money choices are a must for everyone.

African Americans face challenges in every measure of economic status.

• While African Americans make up about 13% of the U.S. population, they own just 3% of the assets.
• The average total net worth of white families is $70,000 compared to just $6,000 for African American families.

One part of this gap is explained by the fact that African Americans are twice as likely to be unemployed as the average American. The unemployment rate is 10.6% for blacks compared to 5.3% nationally.

Those African Americans who are employed earn about $13,000 a year less than whites. Another source of the tremendous racial disparity in wealth is the racial gap in home ownership, the size of which has doubled in recent decades.

Source: NAACP State of the Disparities Report, December 2006.

Wealth versus Income

• African Americans have a median net worth (value of assets owned, minus debt) of $5,998.00, compared to $88,651 for Whites. Even more alarming, 32 percent of African Americans have a zero or negative net worth.
• Although African Americans are more than 13 percent of the nation's population, their total net worth is only 1.2 percent of the total net worth of the nation. Source: The Covenant with Black America, 2006, Third World Press

Attaining Wealth

Most dream of winning the Lottery; very few a long-lost relative that leaves a large inheritance, thus financial literacy is important in attaining wealth. Practical money skills and cost-cutting tricks make paychecks stretch. The average American spends about $20 per week eating out at lunch. Multiply that $20 by 52 weeks and you've spent more than $1000 per year eating out for lunch! Take advantage of apps that help track spending as its never to late to reach financial goals.