Black Millennials: Pushing Beyond the Wealth Gap
When I think about Black History Month, it's a time to celebrate the many achievements that we as African Americans have contributed to society. It's also a time to reflect on progress that needs to be made, and as it pertains to wealth, there's virtually been no progress for the last 50 years. Despite gains in income and wealth for black families in America, white families often have a net worth up to 10 times higher. Based on data from the Federal Reserve’s Survey of Consumer Finance, the typical black family has only 10 cents for every dollar held by the typical white family.
Discriminatory financial practices such as credit discrimination have increased the wealth gap and contributed to black families not being able to produce generational wealth. Before laws that prohibited discrimination in lending, a practice known as “redlining” prevented minorities from acquiring credit. Redlining is the discriminatory practice of denying financial services to residents of certain neighborhoods due to race or ethnicity.
A prime example of the wealth gap is the fact there's 614 billionaires in the United States and only 7 are black. Numerous white billionaires in the United States gained money through an inheritance while all 7 black billionaires are self-made. You may not know, but times are beginning to change towards a positive direction, slowly but surely. Black millennials are becoming one of the first generations to push beyond the wealth gap to find financial freedom.
We call them, first-generation wealth builders. The term first-generation wealth builder refers to someone who does not have any financial inheritance and builds wealth, starting from $0, or even less in some cases. They tend to be very appreciative of everything they have and are hard-working. They tend to have two goals.
Improve their personal financial situation.
Improve their family’s financial situation. That goes for their current family members and future generations.
As black millennials find mentors and other resources to help begin their journey to building wealth, one thing I know without a doubt is that it won't happen overnight. It’s the small steps like saving, investing, understanding the wealth gap, and designing a legacy that will lead to financial freedom for black families. However, you can understand as their success grows, the obligation and pressure they feel grows, as well. It's very important for wealth builders to learn how to embrace their success and build positive financial habits. Making sure they navigate the many hazards and roadblocks they'll face throughout their financial progression and stay strong while doing so.
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We all know that success is not a walk in the park and for these first-generation wealth builders it's even harder. To that point, as their success grows, so do the responsibilities and obligations that come along with it. First-generation wealth builders may add additional pressure on themselves as their wealth continues to grow. Numerous individuals are the first in their family to go to college, earn a high salary or have some disposable income.
They should enjoy their success. Many of us know the phrase, "When you work hard, you play hard.", but many end up feeling a sense of guilt. The same guilt motivates them to step up and find ways to provide for their family, as well as the devoted black community that helped guide them over the years to help get them to where they are today. What's wrong with this? Nothing at all, but it can at times cause financial tension if the person allows giving back to overrule smart personal financial decisions they need to make for themselves and their own families. Whether you have savings goals or student loan debt, establish a plan to address your own needs before trying to financially support others.
As an African-American woman who came from nothing, it's very important to gain financial freedom for not only myself, but my family. Throughout my past, I was tired of living paycheck to paycheck. I was tired of "breaking my back" to not have enough money to pay bills. I was tired of not being able to reap the benefits of my hard-work and I'm sure many of you can relate. Because of this, I gained a drive I can feel in my soul, and I made myself a promise. To educate myself, to surround myself with like-minded individuals. To do the work to get myself to a place where worries aren't financial in nature. To change the lives of the generations after myself and never forgetting to give back to my family and my community. It's important that we remember our roots, and to celebrate the people and the culture that makes us who we are.
Schermerhorn, Calvin "Why the racial wealth gap persists, more than 150 years after emancipation." Washington Post, 19 June 2019, https://www.google.com/amp/s/www.washingtonpost.com/outlook/2019/06/19/why-racial-wealth-gap-persists-more-than-years-after-emancipation/%3foutputType=amp
Miller, Kaitlin "Black Billionaires in America 2020"
Oliver, Brittney "How Black Millennials Can Finally Close The Racial Wealth Gap" 2 May 2018,