The Downside of "Black Girl Magic" and "Black Boy Joy"

1 In 3 Americans Have Less Than $5,000 In Retirement Savings.

Table of Contents

A Community in Decline

The usual reaction to this is, “Not Me”. However, once we drop all the emotion and pride, Average Americans are underprepared for the financial realities of retirement. To push it a step further, Millennials are underprepared to be adults.

For Blacks (African Americans and Descendants of Black Immigrants) living in America, the prognosis is worse. ⇠ Read this for the External Factors.

By 2053, Black households will have a median wealth of zero.

It will take Latino households another 20 years to drop to the same level, according to an analysis by Prosperity Now and the Institute for Policy Studies.

Having grown up on E! Keeping Up with the Kardashians, America’s Next Top Model, The Hills, The Real Housewives (every version), and The Bachelor…

Our adulting knowledge base plays out similar to a music video; complete with Brunches, Exotic locations, fake friendships/relationships, faux smiles, and Photoshoots. Like a party that’s dragging at 4 am, this is a cautionary tale of a group of people who will likely feel Burn’t Out in about 10-years.

Eight out of 10 (78%) Americans are concerned about affording a comfortable retirement. Two-thirds aren’t even aware of the likelihood of outliving retirement savings.

**So here is a list of Financial Stats associated with Being *Black in America:**

*As always, I’m just living on this earth too so don’t blame the messenger just look at the stats, and start generating solutions if you feel strongly about them.

Opportunities vs the Opportunistic

African Americans account for just 14% of the population of the US population.
$1.2+ trillion in spending power, African-American consumers are an important population for smart brands that want to grow market share and brand preference. As of the 2010 U.S. Census, there were 42 million black people in America (including multiracial African Americans). That means $1.2 trillion is about $29,000 in spending power per person.
The economic value of African American travelers has increased in 2018 to $63 billion from $48 billion in 2010. Average spending per trip around $1,345 – $2,078.
The current Average time spent on social media for the week: 15+ hours. Average time spent reading: 2 hours. According to the Nielsen report, African-Americans watch 37 percent more television than other demographics, and their consumption proclivities are equally influential.
While the African-American household earns less than the market average, their annual retail spending accounts for 87 percent of total market retail spending, demonstrating “vitality and resiliency.”
Billionaire Robert F. Smith’s historic promise to pay off approximately $40 million in student loans incurred by 2019 graduates of Moorehouse College will be a game-changer for the 396 graduates. That’s an average debt of $100,000.

The Real Power of the Black Dollar

How long a dollar remains in the black community. Some claims have been a dollar lasts no longer from one to six hours before it leaves. Rapper Killer Mike talk about this on his Netflix “Trigger Warning”.
The Empowerment Experiment shed great insight into economic trends of black people. Less than around 3% of the current black buying power is spent in black-owned enterprises.
More than 95% of these businesses are mostly sole proprietorship or partnerships which have no paid employees.
Black-owned businesses in the United States increased by 34.5% between 2007 and 2012 totaling 2.6 million Black firms.
If black America redirected about 10% of total black spending to black-owned enterprises, that could translate into the creation of about 1 million jobs centered around communities of color.
Black students borrowed nearly $29,344 on average for a bachelor’s degree at a public university in 2012, $3,500 more than the average white student.

Value of Wealth

The estimates of wealth transfer from African American households account for less than 2.5 percent of the $46.3 to $153.7 trillion (2003 dollars) of our 1999 estimate of total wealth transfer for the nation.
The average wealth of white families in 2013 was more than $500,000 higher than that of African American families ($95,000).
One in five Americans (21%) have NO retirement savings at all.
One in three Baby Boomers (33%), the generation closest to retirement age, only have between $0-$25,000 in retirement savings. The next 20 years set up the sandwich effect.
41% of households do not have enough liquid savings to cover a $2,000 expense.
Three-quarters of Americans believe it is “not at all likely” (24%) or only “somewhat likely” (51%) that Social Security will be available when they retire.
According to the Federal Reserve’s Survey of Consumer Finances, in 2013, the median white household had $13 in net wealth for every $1 in net wealth of the median black household.
The median wealth of a young debt-free black household was just $4,500 more than that of young indebted white households.

Spending vs Investing in the Future

Nearly half (46%) of adults have taken no steps to prepare for the likelihood that they could outlive their savings.
African Americans have cornered the ethnic hair and beauty market, ringing up $54 million of the $63 million total industry spend in 2017. This level of spending accounts for 85.65% of the market.
African Americans make up a significant portion of U.S. gamers. Seventy-three percent (73%) of African Americans 13 and older identify as gamers compared to 66% of the total population.
More than 85% said student loan debt was a major source of stress, and one in three said such debt is the biggest stress in their lives.
The average white family had more than $130,000 in liquid retirement savings (cash in accounts such as 401(k)s, 403(b)s and IRAs) vs. $19,000 for the average African American in 2013.

A Reversion to the Mean or Upward Sacrifice

The mean of black household wealth is $138,200—for whites, that number is $933,700.
One in 10 African Americans works with a financial professional compared with one in four white Americans.
Outside of retirement accounts, only 37% of African Americans own wealth-building products such as stocks and mutual funds.
Eighty-three percent of African American seniors lack the retirement assets they need to last the remainder of their lifetimes.
African Americans age 62-70 have a median net worth of $46,200 as compared to $331,700 for whites.
According to the Federal Reserve, the average balance of African Americans in 401(k)s is only $23,000. And Social Security and the Racial Gap in Retirement Wealth found the average balance for African Americans in pensions and IRAs was $10,300, vs. $105,600 for white Americans.
Forty-six percent of African American seniors rely on Social Security for at least 90 percent of their income, compared to 35 percent of Whites.
Only 42 percent of African Americans owned a home, compared to 68 percent of Whites. African American homeowners are 86 percent more likely than Whites to have an underwater mortgage.
Only 54.3 percent of African American workers have employers who offer a retirement plan. Of the African Americans with access to an employer-sponsored retirement plan, only 81 percent participate. Missing out on around $70,000+ of matching contributions over 30-years before any market growth at 8% annually.

Most people I encounter don’t know their current net worth. Many are merely ignoring their responsibilities hoping it will get better. …It doesn’t. We play ourselves to be the success story but in truth, we might just be the cautionary tale.