Systemic racism plays a major role in our personal finances. We need to change that.
When my co-founders and I launched our business in 2017, we set out to help as many American families as possible avoid the painful and costly process of going through probate to settle a loved one’s estate. Today, most Americans die without a will. Their families can spend up to two years and $ 50,000 in probate court to finalize their estates. It doesn’t have to be that way.
In recent years, I have become much more aware of my white privilege. Black, Indigenous and Colored Communities (BIPOCs) continue to struggle to stay afloat financially, mostly due to a system that set them in place to fail. While growing a startup is a challenge for anyone, I know I am fortunate in not having to overcome additional hurdles that BIPOC communities face.
For example, black families in America represent on average less than 15% of the wealth of white families. According to 2019 Federal Reserve data, the median black household has a net worth of $ 24,100. The median net worth of white households: $ 188,200. In the under 35 age group, the median black family had $ 600 in wealth, compared to $ 25,400 among young white families.
These figures do not only reflect the difficulty some families face in meeting the cost of basic and basic daily needs. They also shed light on the challenges of planning for long-term financial sustainability.
Planned inheritances are a tool to help keep families afloat while maintaining a certain economic status for generations. It is clear today that the racial disparities of wealth in America are reaching a climax. Significantly coupled falling homeownership rates, less inheritance and lower wages, BIPOC communities are not on an equal footing with their white counterparts.
This must change. Underserved communities must have the same opportunities and be educated about securing their wealth for generations to come, not to mention access to education and information on financial planning. I recently spoke with Ruby Taylor, MSW, a double former HBCU, social worker, lawyer and founder of the Financial Joy School. She highlighted the challenges of educating underserved communities on the importance of creating generational wealth. Specifically, she mentioned that although our society has a strong focus on retirement planning and resources, in order to close the racial wealth gap, we need to put more emphasis on how to make the money work. for you – how to maximize the inheritance you absorb by investing it. and the creation of generational wealth over time.
EMPLOYEES AND EXECUTIVE DIRECTORS
Now is the time to act. Here are small steps that can help you:
• Donate or bequeath to charities that fight systemic racism, including the NAACP, the National Urban League, and the Jack and Jill Foundation.
• Support and hire BIPOC advisors for your business and your board of directors.
• Open an account at a local black-owned community bank.
• Buy from 15% of retailers that contribute to engagement.
• Join the Fintech Equality Coalition, which aims to rethink a more inclusive and equitable financial ecosystem.
• Donate to the Financial Joy School, which will empower and educate one million future black investors this fall.
It is our responsibility to ensure that everyone has equal access to building financial stability for their families and generations to come.