The Racial Wealth Gap in America: Asset Types Held by Race

[Houston911]

Not sure what these wishful thinking posts are about white millennials squandering inheritance is about. These wealth transfers are cascading. Look at white millennials who own homes and likely half of them state getting (large) down payments from parents is how they were able to purchase. But supposedly they won’t know what to do with the 800k they inherit when their parents die?

their kids will continue to go to college taking on less debt than us, they will pay off their mortgage in full, pay off other liabilities, start investment funds for future grandkids...wealth gap ain’t magically disappearing because you think white millennials are “weak”

Wealth gap will get bigger and bigger without intervention. It's silly to think otherwise

 

[ogc163]

Not sure what these wishful thinking posts are about white millennials squandering inheritance is about. These wealth transfers are cascading. Look at white millennials who own homes and likely half of them state getting (large) down payments from parents is how they were able to purchase. But supposedly they won’t know what to do with the 800k they inherit when their parents die?

their kids will continue to go to college taking on less debt than us, they will pay off their mortgage in full, pay off other liabilities, start investment funds for future grandkids...wealth gap ain’t magically disappearing because you think white millennials are “weak”

Some of these posts got me legit like White Millennials are several years away from one of the biggest windfalls in history and this especially true for the upper middle class.

 

[saint25225]

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[Serious]

A lot of this can be fixed, not completely resolved, but improved with not so many children out of wedlock.



We have to stop having all these kids that put women in the position to get on government assistance, section 8, and slow them down from moving up in life. The responsibility of those kids make you have to make decisions in a short amount of time in order to survive. And yes, people do get dependent, and are afraid to give those benefits up. Plus, a lot of the men are on child support, and that takes away their ability to save, put money down on a home, etc.

You have entire families where everyone has children out of wedlock, and it’s completely acceptable.

That's one aspect of it, but not the sole reason.

Racism, education, infrastructure, housing, transportation, all play equal roles.
Transportation Emerges as Crucial to Escaping Poverty.

I swear some of yall TLR cats hate women.

 

[saint25225]

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[Serious]

Since when is a car that depreciates in value considered an assets?
One reason why most people are broke is because of their car smh. My homie paying 650 a month on his car trying to stunt, when he could have got a cheaper car for half and invested the other. Also outside of all the systematic stuff, they never mention the other side to building wealth is your financial Iq. We all know americans suck with money. If this lady believes a car is a asset lol, then this explains why a lot of people will always be broke smh.

There it is again...


Yet some people on here keep thinking I'm making this shyt up.

If someone is dropping 650 a month on a car, while living check to check, then they are a fukking moron.

 

[MoneyTron]

Since when is a car that depreciates in value considered an assets?
One reason why most people are broke is because of their car smh. My homie paying 650 a month on his car trying to stunt, when he could have got a cheaper car for half and invested the other. Also outside of all the systematic stuff, they never mention the other side to building wealth is your financial Iq. We all know americans suck with money. If this lady believes a car is a asset lol, then this explains why a lot of people will always be broke smh.

Most cars are a depreciating asset. They will always have a value.

Have you not taken any basic finance class?

 

[☑︎#VoteDemocrat]

"well we need universal policies and shouldn't be divisive "

 

[ogc163]

Since low wages and labor market disconnectedness are often posited as dominant explanatory factors for racial wealth differentials, this experience of different groups in the wake of economic downturns is important to consider (Aliprantis & Carroll 2019; Barsky et al. 2002). This, however, implies that the direction of causality runs from income to wealth, and ignores the intergenerational transmission of wealth and the potential for the relationship to run the other way—from familial wealth to income. In fact, Millennials’ wealth mirrors that of their parents. Among the oldest Millennials, those born between 1980 and 1984, who have had some time to get farther along on their economic trajectory, the median wealth of Latinx adults lies between that of Black and White adults. Specifically, the median wealth of Latinx Millennials is $14,691, more than twice the median wealth of Black Millennials, who hold $5,676, and slightly more than half the wealth of White Millennials, at $26,109. At the very least, racial gaps in Millennial income reflect economic inequality only to a lesser extent. By their early thirties, the median household income of Latinx adults ($69,478) was greater than that of Black Millennials ($46,300), but lower than White Millennials ($81,137).

The median net wealth by income quintiles of Millennials (presented in the table at the end of chapter) shows both a distinct hierarchy and stark disparities according to race and ethnicity. The wealth holdings across the income distribution for both Black and Latinx Millennials are below White Millennials. Specifically, Black Millennials in the top income quintile hold less than half of the median wealth of Latinx Millennials, and Latinx Millennials in the top income tier hold less than half the median wealth of White Millennials. Even at the top of the income distribution, both Black and Latinx Millennials hold significantly less wealth.

While there are disparities according to race and ethnicity in the distribution of both income and wealth, the racial wealth gap is wider. This holds true among young adults. Wealth inequality between Black and White Millennials was 2.6 times larger than income inequality, and 1.5 times larger for Latinx and White Millennials. Despite less variation in median incomes across race and ethnicity, wealth gaps among different racial and ethnic groups are large and significant.

The Emerging Millennial Wealth Gap

I often post this link to help frame racial wealth gap discussions, and to show that even folks at the top of the Black millennial pyramid aren't doing as well as their white counterparts.

 

[Serious]

Most cars are a depreciating asset. They will always have a value.

Have you not taken any basic finance class?

He was agreeing with you.

 

[Serious]

Since low wages and labor market disconnectedness are often posited as dominant explanatory factors for racial wealth differentials, this experience of different groups in the wake of economic downturns is important to consider (Aliprantis & Carroll 2019; Barsky et al. 2002). This, however, implies that the direction of causality runs from income to wealth, and ignores the intergenerational transmission of wealth and the potential for the relationship to run the other way—from familial wealth to income. In fact, Millennials’ wealth mirrors that of their parents. Among the oldest Millennials, those born between 1980 and 1984, who have had some time to get farther along on their economic trajectory, the median wealth of Latinx adults lies between that of Black and White adults. Specifically, the median wealth of Latinx Millennials is $14,691, more than twice the median wealth of Black Millennials, who hold $5,676, and slightly more than half the wealth of White Millennials, at $26,109. At the very least, racial gaps in Millennial income reflect economic inequality only to a lesser extent. By their early thirties, the median household income of Latinx adults ($69,478) was greater than that of Black Millennials ($46,300), but lower than White Millennials ($81,137).

The median net wealth by income quintiles of Millennials (presented in the table at the end of chapter) shows both a distinct hierarchy and stark disparities according to race and ethnicity. The wealth holdings across the income distribution for both Black and Latinx Millennials are below White Millennials. Specifically, Black Millennials in the top income quintile hold less than half of the median wealth of Latinx Millennials, and Latinx Millennials in the top income tier hold less than half the median wealth of White Millennials. Even at the top of the income distribution, both Black and Latinx Millennials hold significantly less wealth.

While there are disparities according to race and ethnicity in the distribution of both income and wealth, the racial wealth gap is wider. This holds true among young adults. Wealth inequality between Black and White Millennials was 2.6 times larger than income inequality, and 1.5 times larger for Latinx and White Millennials. Despite less variation in median incomes across race and ethnicity, wealth gaps among different racial and ethnic groups are large and significant.

The Emerging Millennial Wealth Gap

I often post this link to help frame racial wealth gap discussions, and to show that even folks at the top of the Black millennial pyramid aren't doing as well as their white counterparts.

From your article

These factors can have long-lasting consequences. There is suggestive evidence that not only are young adult Millennials acquiring student debt because of the limited wealth resources of their families, but that student loan debt is associated with lower wealth accumulation for Millennials. Young adult Millennials with student loan debt by age 30 have significantly less wealth than their counterparts with no debt, inclusive of those who never attended college and those who did. The wealth returns to a college degree appear to have greater benefits for those who either had no loans or were able to pay them back quicker.

How's this different from I've been preaching about avoiding debt and / or paying it down quickly.

For the record, I'm not against taking out debt for education, but individuals, especially minorities should have a plan in place to pay it down quickly. Not be nonchalant about it while living carefree.

You can live carefree once you're debt free.

 

[CreepyMcCreeperson]

That's one aspect of it, but not the sole reason.

Racism, education, infrastructure, housing, transportation, all play equal roles.
Transportation Emerges as Crucial to Escaping Poverty.

I swear some of yall TLR cats hate women.

Who the hell is forcing us to have these kids? I blame men just as much as women. Ultimately, it’s the woman’s body, and she is more responsible, but men need to be responsible.

If you already don’t have money, what’s the point of having a child you can’t take care of without government assistance. I’m not in favor of simply cutting people off, but if you have a baby at 17, 18, 19, you’re getting a job out of necessity, as opposed to having the time to get an education, and figure out a good career. Plus, nobody is equipped to be a good parent at that age. You don’t know who you are at that age. They are less likely to be good parents.

 

[Originalman]

You're comparing a depreciating asset (a car) to an appreciating asset (home, 401ks, stocks). And yes, you're right, you can not borrow against it for obvious reasons (it would be harder to collect on default). Nevertheless, it's an asset you can still sell.

Here's the definition of a business asset:

An asset is an item of value owned by a company. Business assets span many categories. They can be physical, tangible goods, such as vehicles, real estate, computers, office furniture, and other fixtures, or intangible items, such as intellectual property


So if you owned a car rental business, best believe your fleet of cars would be considered an asset. They're just worth more today than they will be worth tomorrow due to thier depreciating nature.

Yeah brotha, I totally understand that from a business aspect. As you said if you own say a hertz the value of the business is based on the cars on the lot. But the article is using the car as an asset to the avg american house hold and I just don't agree with that cause its not really an asset to the avg american. The avg american can't flip that car in to a profit or extra revenue like an asset.

And I say all of this as a person who one knows folks in the car business and two due to being associated with them I have a car dealers license. So yes I can go down to Adesa auction buy a 4k car at whole sale and then turn that investment into 6k to 8k by selling it to someone on the street. But realistically the avg america can't get a dealers license or has a business whose money is tied to cars and able to invest in a car to make their money grow like a home, 401k, 403b, stocks and etc.

IMO these articles use cars as an asset like how famous folks use vehicles as an asset. You know like this is the rolls royce owned by liberace "it was bought in 1975 for 300k and now its worth 2 million". Or "look this is the fire bird that burt reynolds drove in the first smokey and the bandit. It was worth 10k in 1977 and now its worth 317k".

When really the story for the avg american is "look this is the 1989 honda civic that the smith family bought in 1989 for $6,500 its now worth $250 today".

And on the real brotha this isn't a issue that I have had recently. I have been saying this for years when these studies take into account avg american folks wealth and count their cars as a part of their wealth.

 

[ogc163]

From your article

How's this different from I've been preaching about avoiding debt and / or paying it down quickly.

For the record, I'm not against taking out debt for education, but individuals, especially minorities should have a plan in place to pay it down quickly. Not be nonchalant about it while living carefree.

You can live carefree once you're debt free.

Again you are drawing up a strawman, the issue is not simply your statements regarding avoiding debt, the issue is:

1. Your lack of nuance and adequate consideration as to why Black people are often indebted in the first place.
   1. And your consistent habit of engaging more with low hanging fruit--debt attached to conspicuous spending--versus debt taken on primarily as the result of a lack of Black wealth and access to capital--student loan, medical debt, and outsized housing debt.
2. Your solutions are often overly reductionist and trivial considering the size and scope of the debt problems present in the Black community.
   1. And this comes off as moral grandstanding because your rhetoric is not attached to process-based advice that is:
      1. Highly practical given the size and scope of the problems.
      2. Aware of the layers of constraints prevalent in the Black community.
3. You continue to paint this strawman that I am justifying or rationalizing reckless and carefree behavior on the part of the indebted because I think your grandstanding is shallow.
   1. But I may be wrong, and you can provide evidence that I have justified or rationalized carefree debt induced behavior.

 

[Serious]

Again you are drawing up a strawman, the issue is not simply your statements regarding avoiding debt, the issue is:

1. Your lack of nuance and adequate consideration as to why Black people are often indebted in the first place.
   1. And your consistent habit of engaging more with low hanging fruit--debt attached to conspicuous spending--versus debt taken on primarily as the result of a lack of Black wealth and access to capital--student loan, medical debt, and outsized housing debt.
2. Your solutions are often overly reductionist and trivial considering the size and scope of the debt problems present in the Black community.
   1. And this comes off as moral grandstanding because your rhetoric is not attached to process-based advice that is:
      1. Highly practical given the size and scope of the problems.
      2. Aware of the layers of constraints prevalent in the Black community.
3. You continue to paint this strawman that I am justifying or rationalizing reckless and carefree behavior on the part of the indebted because I think your grandstanding is shallow.
   1. But I may be wrong, and you can provide evidence that I have justified or rationalized carefree debt induced behavior.

I've stated a million times on here that the main issues affecting black upward mobility are: education, access to resources, racism, proximity and transportation.

These are core issues.

With that said, we still have a over a trillion dollars in spending power collectively.

So my question always is, where are we putting our money? At the end of the day a lot of our people aren't saving and investing, even if and when they're middle / upper middle and are in a position to do so. Or at least not at the rates that they should.

All I'm saying that we need to a cultural shift.

I shouldn't have to produce a study of cats buying J's, mercedes, gucci, rolexes, $100 kicks, as evidence that a lot our peeps, don't save and invest when they should / can.

We all know this frequent in our community breh. There's nothing wrong with owning nice things but a lot of peeps misprioritize the importance of collecting depreciating assets.

White people aren't going stop being racist, but we can be a lot smarter with how we choose to spend our money.

It's going take some extraordinary measures to get over this unique disparity. Part of the reason why hispanics are able to get ahead and build, aside from a facing a different type of discrimination is because they live in multigenerational housing and are able to pool their money, thus decreasing the financial burden. Obviously that not the whole story but part of it.
Freddie Mac - Borrower of the Future