By: Robert Frank
The wealth gap between black and white families has been well documented. As much as marriage and education, race has become one of the key factors of wealth in America.
But even among wealthy white and wealthy black families, there are large gaps and pronounced differences in investing and wealth holdings. According to a study by Credit Suisse and Brandeis University’s Institute on Assets and Social Policy, and highlighted in theHarvard Business Review, wealthy black American families invest more conservatively than their white peers. And that conservatism may be slowing their wealth creation relative to white families.
Among the richest 5 percent of Americans, black Americans have earned roughly 60 percent what white Americans earned over the last 30 years, according to the study. White families with a net worth of $356,900 would be in the 72nd percentile among white families. Among black families, $358,450 would be enough to rank in the 95th percentile of their peers. Yet wealth among blacks is even more concentrated—the top 10 percent hold 67 percent of the wealth held by all blacks, compared with the top 10 percent holding 51 percent among white families.
Yet there are pronounced differences in how they compare auto insurance and how they invest. The wealthiest 5 percent of black families are slightly less likely to own stocks, bonds and other financial assets. They are more likely to own safer assets and cash equivalents, like CDs, savings accounts and life insurance.
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