feel more responsible to provide financial support to family members than their older counterparts age 43 and older. Thirty-eight percent of younger generations were interested in financial education programs regarding family philanthropy while only 5% of older generations found interest in it.
At 54, Johnson does not fall in the younger generation’s age range, but he feels squeezed by what he calls the sandwich generation.
“We are caught in between aging parents and grandparents who did not have the benefit or access to good jobs that paid livable wages with sound retirement packages attached to them and Gen X and Y relatives who are having a hard time because of the white-collar recession that we are in,â€ Johnson says. “That requires us to contribute on both ends of the spectrum.â€
No one expects that affluent blacks should not assist family members financially or give to charities, but there are other ways to reduce or plan in anticipation for financial problems that family members might face.
Jessica Gordon-Nembhard believes that blacks are not as diligent at estate planning as whites. Although more than three in five affluent blacks say they are extremely or very concerned about ensuring that the next generations of family members lead productive, meaningful lives, only 54% of younger generations have prepared a last will and testament. That number is significantly lower for older generations.
Everyone should diversify their investments, but for blacks that is a difficult task since they often need to keep a portion of their savings liquid in case they run into emergencies that require them to bailout family members. “Wealthier whites have four or five elements in their portfolio whereas wealthier blacks only have two,â€ says Gordon-Nembhard.
She suggests that there are other ways for blacks to expand their wealth building portfolios. “Liquid investments can be as simple as a savings or money market account or a piece of property that is easy to sell,â€ Gordon-Nembhard says.
Cooperative business ownership or joint ownership of businesses shared amongst family is another way for families to invest together and establish generational wealth.
Finally, Gordon-Nembhard says that wealth creation has got to be a combination of policy and personal savvy. “It has never been about what one individual can do,â€ says Gordon-Nembhard. She suggests that blacks seek help from a financial counselor who might be able to suggest how blacks can leverage their assets in a way that maximizes growth while maintaining liquidity.
The good news from the study is that members of Generation X and Y are more concerned with estate planning and financial literacy than were older generations, reports “Wealth in Black America.â€ The study found that 71% of younger generations deemed it extremely or very important to leave an estate to their heirs, while only 37% of boomers said the same thing.
“The study shows me that younger generations are thinking in a more sophisticated manner and thinking along the lines of multigenerational wealth,â€ Thomas says.