My immigrant Latino parents never spoke to me about money. Their emphasis was always on education. I had to go to college, end of discussion. But when I got to college, I knew nothing about savings accounts or high-interest-rate credit cards or how debt can ruin your life.
One-third of Black investors said they invested in something based on information they saw on social media, compared with 20% of white investors. According to the FTC, financial scams, including cryptocurrency schemes, cost consumers $3.8 billion last year just in the U.S., twice as much as in 2021. Read: ‘We’ve really lost a decade to lip service about inequality’: World’s richest 1% captured almost two-thirds of all new wealth created in two years, report says
Overreliance on Social Security According to the National Academy for Social Insurance, Social Security is the sole source of income for 40% of Latinos aged 65 and over, 33% of Black Americans in that age group and 26% of Asian and Pacific Islanders; it is the sole income source for only 18% of whites.
Financial literacy is key Studies and experts concur that financial literacy can bridge this gap, empowering individuals from all backgrounds to make informed decisions about retirement savings. Becoming financially confident and lifelong savers and investors helps create good habits that will follow people into retirement. It also helps investors discern between reliable online sources of information to make wise investment decisions.
Cautious, for good reason Trust also plays a major factor. Black Americans are less trusting of the stock market and financial institutions than white Americans, according to the Ariel-Schwab survey. This has led many Black investors to pull out of the market. Since 2020, the two main reasons Black Americans have given for not investing were lack of trust and bad investing experience.