the law in this country, but believe me, when it comes right down to it, your net worth is what counts. It determines where you live, where your children are educated and the quality of your life in your retirement years.
Yet, in a household survey conducted by researchers at the University of Michigan in 1998, only 4% of African Americans had a net worth of $170,000
or more compared to 25% of all others. Half of black families polled in the survey had a net worth below $8,400, while the median for other families was above $63,000.
What do those statistics really mean to African Americans? They mean that while most whites have enough money in the bank to purchase a new car with cash, far too many blacks have difficulty coming up with the full payment for a decent used car. It means that the majority of blacks are far less likely than whites to have the money for a down payment on a first home, or enough money put away for emergencies like a quick flight to visit a loved one in need or even to pay for the funeral
of a family member who dies unexpectedly.
Surely there are more prosperous African Americans today than ever before. The growing affluence among black professionals is undeniable. Yet, far too many hardworking African Americans still live paycheck to paycheck and never build lasting wealth-even as whites at the same income levels are putting money into retirement plans, investment clubs and individual retirement accounts (IRAs). There are African Americans capitalizing on the historically high rate of return for the stock and bond markets. There are black men and women whose investments are paying for their children’s college educations, for starting new small businesses and for comfortable retirements. But there are not enough of them.
I’ll let you in on a trade secret. Investing in the stock market really is not very complicated at all. Many times stockbrokers try to make it seem that way so they can impress you, but it really boils down to some pretty simple mathematics and common sense. Many pe
ople tell me that they have not taken advantage of stocks, bonds and mutual funds because they feel those forms of investment are beyond their understanding. Believe me, if you can balance a checkbook or put together a household budget, you can learn to understand those investment vehicles and cash in on one of this nation’s best methods for building personal wealth.
THE NEXT BATTLE IS FOR ECONOMIC FREEDOM
The African American community is not invisible, but its investment earnings are barely discernible. Blacks in this country are seriously underinvested in the American economy, specifically in that great creator of wealth, the stock market. I understand that in the past you may have been reluctant to invest in stocks, bonds or mutual funds because you didn’t think you knew enough about how they worked or what the risks were. Maybe you even had the sense that those investment opportunities simply weren’t available to