The $95,000 Question


2 weeks ago there was an article I read courtesy of Chloe Mentar called "Why are whites 5 times richer than blacks? The full report was released by Brandeis University in Mass and I think it warrants a perusal.

It says that the wealth gap between whites and blacks has widened over the past 30 years NOT shrunk as many would probably like to believe

It says white families typically have assets of $100,000, while black families only has assets of $5000.

A quarter of the black families have no assets at all. 2000 families were studied for this report with continuous monitoring since 1984.

The assets do not include real estate as it is not a readily accessible asset and cannot be realized as cash, but the report says that if it did the gap would be even wider.

Today in the US a mere 1% of the population owns 40% of the countries wealth, the top 25% owns 87%. The remaining measly 13% is left for middle and low income households.

Only 1 in 10 blacks own shares of stock, 1/3 do not have a job that offers a pension plan and if they do the plan has only a 5th of the value as a white person with a pension plan.

Interestingly enough, the wealth gap grows larger when families make more than $50,000 a year, below that the gap is smaller.

Wealth amongst the highest earning blacks in this country has actually DROPPED in recent years.

In 1984 high income blacks had more assets than middle income whites, now they don't.

The article says that economic policy is to blame..such as red lining, steering, predatory lending, etc.

Some things that I've been saying for years the article finally puts out there... Blacks start with less period, most don't have a trust fund waiting for them at 18, most of our parents didn't accumulate any wealth either so they can't help us pay for college, buy a house, or leave us any money when they pass on. Each generation is always starting over from scratch!

Additionally social factors are finally being recognized as having added to the gap. Well off blacks are constantly being asked to lend money to their families and help cousins brothers and sisters pay for school and help other family members with legal issues which probably includes immigration issues as well.

Another major contributor that needs to be acknowledged is the MATERIALISTIC MENTALITY issue...

Too many of us college educated, professional/ graduate school educated, Negros.. get a little something and feel like we have ARRIVED!!!

We don't set aside 10% of our paycheck for a rainy day from the first day of our first job, we blow that 10% as if its Discretionary income!!!!

We feel entitled to have all the things we couldn't have when we were just typical struggling blacks. so now with letters behind our names and sweet paychecks being cut to us, we lose our damn minds and give into the game of capitalism now that we have the resources to be a player...

We get soooo caught up.. thats why high earning blacks have less assets than middle income whites.. because we're wearing it all, its in our driveways or hanging on our shoulders.. we're SPENDING IT instead of SAVING IT and INVESTING IT!

We're clocking 6 figures while living paycheck to paycheck... sigh, frugality is like a curse word to some of us.. Be frugal??? why??? I EARNED THIS.. lol

Rightttttttt.. what you need to earn is some sense and groundwork to protect yourself and your family.. learn from their struggles and don't repeat the cycle..

xoxo
Carrie Pink
Pretty World Inc
Modern Day Supergirl

17 comments:

KP said...

It's true that we have an almost perverse tendency to 'wear' our wealth. In the school where I work, I was talking to one of the young ladies who is now a single mother about why she bought her daughter a 120 dollar pair of shoes that she was going to grow out of in two weeks but didn't have a savings account. She didn't really have a genuine account. I recognize that for many of us, we spend our lives trying to just "get by", so we feel entitled to "live our lives" when we get a little something. As a new business owner, transitioning from one career to the other, I've made a conscious effort to save and put aside, regardless of any successes I have. It's hard sometimes, when you see a really nice bag or a 'hawt' pair of shoes that you really really want...but I appreciate the security better.

There seem to be lots of financial literacy workshops around, perhaps one of them should incorporate how to be 'be fab' and 'save too'. I hate to see so many of our people wearing their wealth with nothing in the bank.

Carrie Pink, Modern Day Supergirl said...

I think thats a great idea, but then the be fab and save too would have to convince people to stay out of the gucci and LV stores long enough to actually have something to save. Buy a coach bag and save the difference between the two.. but people aren't there, they want the best of the best no matter the cost.

KP said...

That's true too...but I think that should be part of the workshop's purpose...to show you how you could do both...sure, everyone may not necessarily buy into it, but at least the information is provided, which to me is half the battle.

I could go REALLY deep and say that a bigger portion of the problem stems from problems past that were never resolved (you could reference every African American philosophical concept that has 'held our progression back' - Willie Lynch papers, long term effects of Jim Crow, etc, etc.) but I won't. Many current day people don't even know what those things are. They simply copy what they see that the value is placed on.

Think about it. If you go to school, and after a certain age, you are told by your public school system that you have the GED as an option, a piece of paper that in essence says "you have successfully completed the NINTH grade", and you are encouraged to apply to CUNY as opposed to Columbia, to Globe Technical or TCI instead of even St. Johns, for that matter, and you look at a dude like Diddy who dropped out of what is deemed a 'good' school and is now, well, Diddy, which would YOU wanna do or be? If I can get all that "fly stuff" and not have to go to school for it, why am I bothering? *shrugs, climbs down off of leopard covered soapbox*

KP said...

Not that I agree, of course...I'm just saying...

Carrie Pink, Modern Day Supergirl said...

You make some excellent points, but thats why its important for people like Diddy and others etc need to say to kids look I know my life seems great but the percentage of you who will get to my level is sooo slim that you need a fool proof back up plan... EDUCATION and SAVINGS! the average American will never become Diddy, it's great to try, always expect the best but prepare for the worst and no one knows what happened before Diddy got there, hell Tyler Perry was homeless for 3 months living in his car writing scripts.. if people talked about the realities of their experiences instead of just the glitz and glamour it wouldn't be as sexy, people would look for a practical plan to complement it.

KP said...

I couldn't agree with you more. I tell my students all the time that there's nothing wrong with reaching for your goals, but know that 1 in every million people actually do what Diddy did...or Tyler Perry...or Kobe Bryant...or anyone similar. If you don't have the education, you have no backup plan. Education is so that you have a backup plan. And I don't mean trade school, either...I mean an actual school that will confer upon you an actual, nationally accredited degree that you can use in multiple ways.

If more of us talked about this in a public forum instead of just talking about it amongst ourselves...well, you can finish that statement. I say throw it in a Weezy song! (that's not a bad idea, now that I think about it...hmmm...)

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