Black Wealth Matters

Recent Trends in Wealth-Holding by Race and Ethnicity: Evidence from the Survey of Consumer Finances

By Michael Quatrini
Full Report

I recently read a disappointing report from the Board of Governors of the Federal Reserve System on Recent Trends in Wealth-Holding by Race and Ethnicity: Evidence from the Survey of Consumer Finances. The report showed newly released data from the Survey of Consumer Finances (SCF) showing that wealth rose for families in all race and ethnicity groups between 2013 and 2016.

Wealth rose for families in all race and ethnicity groups between 2013 and 2016.

The long-standing and substantial wealth disparities between families of different racial and ethnic groups, however, have changed little in the past few years. Wealth losses during the Great Recession, and the magnitude and timing of the recovery, also varied substantially across families grouped by race and ethnicity. This FEDS Note explores in more detail these patterns and average differences in financial and demographic profiles of families grouped by race/ethnicity.

Household financial profile
The detailed household balance sheet information collected in the SCF allows us to move beyond total wealth to explore differences in income and the types of assets and debt held by families within each race/ethnicity group.

Wealth tends to increase with income because of higher levels of saving among higher-income families, and because of the feedback effect on higher incomes from the returns generated by accumulated assets. In 2016, both median and mean incomes are higher for white families than for all other groups of families ($61,200 and $123,400, respectively). Median and mean incomes are considerably lower for black and Hispanic families, whose median incomes are $35,400 and $38,500, respectively. Median and mean incomes for other families fall in between those of white families and black and Hispanic families.

Full Report

Intergenerational Wealth

Intergenerational relationships can also influence how families accumulate wealth–for example, receiving assets from relatives in the form of inheritances and other major gifts. In addition, households are better able to maintain their wealth when they can count on help from family and friends to weather unexpected financial emergencies. White families stand out as the most likely to have received an inheritance or other major gift–26 percent of white families have received an inheritance, compared with less than 10 percent of black families and Hispanic families. Most white households (71 percent) report being able to get $3,000 from family or friends in a financial emergency, compared with less than half of Hispanic and black households (49 percent and 43 percent, respectively).

Our commitment to helping create your Family Office

From childhood, having grown up in a family without means, I have worked my entire life to ensure my future generations will never encounter similar hardships. My takeaway is no matter what ethnicity or economic situation every family from the earliest stage needs to work hard and set aside even the most meager nest egg with a goal to create a multi-generational Family Office, in an effort to help them not only save for their next-generation but also benefit from the tax laws thereby creating intergenerational wealth. And train their children it is their noble obligation to pass on more than they were given. CAPQ stands committed to educating Family Sponsors and helping folks organize the paperwork to create and manage their Family Offices in an effort to help them build their own legacy for their family’s future.

Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top