Despite all the buying power we have, we seem to be spending it faster than we can earn it. Pew Research Center published a study in July 2011 entitled Wealth Gaps Rise to Record Highs Between Whites, Blacks and Hispanics; the stats are both damning and disheartening. First, let’s understand the difference between income and wealth. Income is the total amount of money you earn (e.g. your salary, investment income, etc). Wealth or net worth, on the other hand, is the value of the assets you have left after paying off all debts (e.g. that maxed out credit card with the 18 percent interest rate). OK now to the numbers: As of 2009, the median net worth of black households was $5,677 compared to $113,149 for whites (ahem, that’s 20x higher!). Exclude equity value of home ownership, and the median net worth of black households in 2009 drops to $1,050. Median. Meaning line up every black person in America from most impoverished to Oprah and in the middle is $1,050. On top of that, 35 percent of black households have zero or negative net worth (owe > own) and 24 percent of us have no assets other than a vehicle. This compares to only 15 percent and 6 percent respectively for our counterparts on the vanilla side of town.
I get that in today’s society we are valued as humans by what is tangibly seen. And we as black folks have a deep and treacherous history with how we are valued in America (three-fifths anyone?). But it is time to stop frontin’ for folks we don’t really care about, rip off the brand name band-aids and start dealing with the baller culture that has kept us in psychological, physical, and financial bondage. Being financially literate, teaching others, saving, investing – this is everyone’s responsibility if we are ever going to crawl out of that generations-deep sink hole. Many of the things that plague us can be traced back to the lack of economic resources including disparities in education, health, family structure, incarceration and life expectancy. Yes, cash does rule everything around us–so get the money …
… and KEEP it! Dolla, dolla billz, ya’ll.
[Man holding piggy bank image via Shutterstock]