Racial economic inequality has persisted in America for decades and systemic racism continues to contribute to the persistence of race-based wealth gaps. Centuries of white privilege have made it easy for white people to get ahead, while making itdifficult for people of color to achieve economic stability.
What We Mean By Wealth?
Wealth is a measure of assets that an individual or family owns, this includes houses, vehicles, money in the bank, investments etc. Wealth is determined by calculating the total market value of all assets owned, then subtracting the debt.
Wealth makes it easier to respond to emergency situations or move to new neighborhoods, it helps with financial planning for college or retirementplanning.
Wealth Inequality
Families rely on theirwealth to pay their bills and ensure economic stability in retirement. Unfortunately, wealth in America is unequally distributed by race and African American families have just a fraction of the wealth of white families.
What is the Racial Wealth Gap?
White households in theUnited States have ten times more wealth, on average, than Black households. This is known as the racial wealth gap
The History
Historical policies and laws have marginalized African Americans, denying them opportunities and restricting their freedom. These discriminatory policies were set out to ensure white people could build more wealth than Black people.
The Present
Despite the fact that these discriminatory policies and laws have ended, they created a systemic inequality which has proved difficult to eliminate.
Over time, this has contributed to Black Americans having considerably less than white Americans, on average. Less wealth translates to fewer chances to build wealth or pass that accumulated wealth down to future generations.
How to Grow Wealth
There are several building blocks that fit together to construct wealth. It helps to start with the basics and work your way up. Learning is a lifelong process, and you’re never too old to start.
Create a budget
Comprehensive financial planning is the key to ensuring you’re making the most out of your money. Putting your money in the right place can make all the difference.
The best place to start is by recording your income and spendings in a budget to see whether you have a surplus or deficitin your day-to-day spending. Try using an Excel spreadsheet template or downloading an app.
Be Smart with Your Spending
Once you’ve created a budget, how do things look?
If you have a deficit, you need to find a way to balance the books so you aren’t accumulating debt. Perhaps you could find a cheaper mobile phone provider, or cut back on eating out.
- If you have a surplus, do some financial planning to find reliable ways to use that money to your advantage.
- Think investments, savings accounts and retirement planning.
Live Below Your Means
To live below your means is to spend less money than you make. You have money left over at the end of the month. If you aren’t already living below your means, make it your goal and set targets to keep you on track.
Hire a Pro
Whether you’ve got a surplus or deficit, it always helps to ask an expert for advice. African American financial advisors have a comprehensive understanding of the racial wealth disparity.
They offer client-centered solutions and have the skills to help you with the comprehensive financial planning necessary to maximise wealth building efficiency.
Even if you’re in debt, African American financial advisors could help you save money by prioritising which debts to pay off first.
Save for the Future
Saving for the future isn’t just so you can buy a new car or house, it’s about retirement planning. We are living for longer than ever and in order to retire with enough funds tokeep us going for all those years - savings are crucial.
Improve Your Skill Set
When it comes to improving our skills, the mind can easily get stressed by the daunting thought of financial planning for college. Now give those thoughts the boot, you don’t need to spend big bucks or loads of time to upskill.
Find out what you’re actually interested in, have a look online at what free courses or resources are out there that you can learn from. Absorb this data first before committing to a costly online course or college degree. There’s no point in thinking that starting a business is right for you, spending money on that education, then realising your true calling is actually in nursing or construction.
Invest Safely
There’s an element of risk to all investments, some more than others. Access to financial markets that are well-functioning and provide healthy returns on savings without undue risks is important.
Don’t risk investing in a scam, if you’re thinking about investing - invest safely. It takes comprehensive financial planning to make the right investments. Talk to African American financial advisors about investment, and be sure to find someone you can trust by checking their testimonials or reviews.
