The U.S. has made it easier for Black Americans to access health care, reducing the gap in life expectancy to three years.
According to the Federal Reserve Bank of St. Louis’ most recent data, Black Americans now expect to live until 75. This compares to 78.5 for Whites. Experts agree that a longer life expectancy is a good thing for Black families, and has unquantifiable financial benefits for those who want to pass wealth on to the next generation.
Deborah Owens, an ex-executive at Fidelity Investments and a coach for Black women about how to build wealth, said that “health is wealth.” Living longer is good because we can allow our assets and not depend on them for income.
Researchers at the Fed found that Black Americans are dying less from heart disease and cancer as a result of more frequent visits to the doctor. Researchers found that homicides are down among Black Americans, due to a drop in crime rates nationwide over the past century, and Black middle-class families moving to safer areas.
Growth takes more time
Owens stated that Black Americans are able to invest more aggressively in the stock market and also save cash to purchase real estate or establish trust funds for their heirs because they live longer. She said that trust funds and real estate are the most important vehicles for wealth transfer.
Owens stated that Black families are now more aware of economic inequalities in America and have been focusing on wealth building in the wake of the coronavirus virus pandemic, and the murder of George Floyd, in Minnesota. A U.S. Bank survey in 2021 found that Black Americans are more likely to want to pass wealth to their families and communities, than any other racial groups.
Owens stated that a higher life expectancy and better financial decisions can make it possible to achieve the goal of generational wealth. Ashley Fox, an ex-Wall Street analyst and financial educator, stated that the key to achieving financial freedom is for Black Americans not to waste money but to save and invest.
Fox, who is Black, stated that “living longer means we are as healthy and as well as being as healthy as possible, but we also want it to ensure we don’t run short of money.”
“No magic bullet”
It is important to be clear that an investment portfolio alone will not make Black America rich. Black Americans have been historically marginalized in many areas, including income, housing, education, and other areas. Racial biases still exist.
According to National Association of Realtors data, homeownership rates for White, Hispanic, and Asian families has increased by at least 51% in the past decade, but fell by about 1% among Black Americans. According to the United Negro College Fund, Black students have less access than White students to college-ready courses in high school. According to 2018 Census data, the median income of White households was $84,600 while that of Black families was $51,600.
Many researchers agree that the federal government must pass laws to eliminate systemic racism. They argue that fairer policies, combined with individual efforts towards building wealth, will pave the way for racial equality.
“While there is no panacea for racism, accessing wealth and the security to share it from one generation to another would go a long ways toward changing the economic trajectory of Blacks,” Darrick H. Hamilton, a professor of urban policy at the New School, New York, stated in an opinion piece for Fast Company.