Wealth Patterns Among the Top 5% of African-Americans

Credit: Black Enterprise

Credit: Black Enterprise

This is a share of a recent report by Brandeis University that shows huge insight on the racial wealth gap.  This report, which focuses on the top 5 percent of African-Americans by net worth, asks some telling questions: What are the key drivers of wealth creation among this group? What makes the investment choices of this group distinctive? What brings about these distinctions?

The results are striking: For example, the report observes that wealthy blacks own few high-reward portfolios containing stocks, bonds, and mutual funds and more low-reward portfolios containing CDs, saving bonds, and cash-value life insurance. And meanwhile, whites of similar high wealth steer clear of such low-reward investments.

As a result of these potentially unintended choices, wealthy blacks end up with annualized returns of 1 to 2 percent whereas wealthy whites end up with annualized returns of 7 to 10 percent.

Before we get to that point though, we have to get over the extreme gap in current wealth.  For instance, only 5 percent of black households have $360,000 or more in net wealth while 28 percent of white households have $360,000 or more in net wealth.

Black Wealth

For more details of the full report click here: https://iasp.brandeis.edu/pdfs/2014/Top5.pdf

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2 Comments
  1. Great post. I’m so interested in promoting growth of wealth among people of color. We don’t own anything of significance, even though we built everything.

    • Dorothy,
      Thanks so much for commenting. This is a very worthwhile topic that I think should be part of our regular conversations. We have the talents and skills. But none of the wealth. That shouldn’t be the case.

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