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As my mother often says, when America catches a cold, Black folks get the flu. Further evidence of such comes from a recent Pew study which has revealed the tremendous impact of the  recession and housing crisis on African-American families.

In 2009, the average White family had wealth that was twenty times greater than that of the average Black family and eighteen times that which Hispanic families reported.

The numbers are astounding. The average wealth of a white family ($113,149 in net worth) in 2009 was 20 times greater than that of the average Black family ($5,677 ), and 18 times greater than the average Hispanic family ($6,325). This gap is the largest in over twenty years and has doubled since the start of the recession.

The study authors say that White households fared better in the financial crisis because they were in a stronger position to begin with. Most minority wealth came from home ownership; when the housing bubble burst, their net worth went with it. According to the study, Hispanic families lost two-thirds of their wealth between 2005 and 2009; Black families lost half. Whites, who had diverse sources of wealth including more money in stocks, mutual funds and pension plans, lost only 16 percent on average.

Many minority families were forced to tap into pension funds or savings to pay bills during the recession. In 2009, one third of Black and Latino families had zero or negative net worth. The future remains bleak, as minority families now have less money to invest in education and business ownership, which contribute to long-term wealth, as well as needed money for existing bills and health care expenses.

 

 

 

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  • Unfortunately this study and analysis just shows that the American Dream has been altered yet again and minorities are left on the outside looking in.

    As the study says housing is largely to blame for this stateWhites by and large already had homes that they were invested in that gave them room to invest in stocks and increase their financial portfolios, while Blacks and Hispanics were still chasing after that shiny beacon of the American dream; a 4 bedroom two bathroom house with front and back yards and a fence.

    Blacks and Hispanics chased that dream right into foreclosure, after foreclosure, after foreclosure thanks to predatory lending a.k.a. subprime mortgages that are unfortunately banks’ new comeback kid. Now our only investment has become our burden and the recovering stock market has done little for us to recover our wealth because we no longer own our wealth; our investment; our sure thing.

    the way to wealth for Blacks and Hispanics is going to be a long journey that starts with simply getting a job and saving money. After we’re able to save money then we can invest money in the stock market and watch it recover with urgency when everything else around it is failing apart. We can invest in something that is not tangible, that we cannot hold in our hands, and that we don’t understand (derivatives) and make $12 out of 15 cents.

    http://changecomesslow.com/2011/07/26/altering-the-american-dream/

  • JustSaying…

    If black people would do the following many of us would have money:

    1). DON’T HAVE KIDS YOU CANNOT AFFORD.
    2). GET MARRIED.
    3).GET EDUCATED ON FINANCES.
    4). INVEST AND STOP BUYING FLASHY ISH.
    5). START AND BUILD BUSINESSES.
    6). NETWORK AS A COMMUNITY.

    We won’t see any progress at all because black people can’t even get numbers 1 and 2 right.

    If the debt default situation isn’t handled properly stocks will more than likely nosedive. I got my money ready…do you?

    • Crystal

      Damn JustSayin I wish I knew you in real life. I don’t comment on this site that much but everytime i read your comments it scares me how much sense you talk sometimes. Most of it is just common sense though. I’m gonna start taking notes ;)

    • Nicole

      Im going to cosign that.