Blacks and whites invest differently

I remember coming across this report earlier in the year and the information presented is fascinating.
  • "A survey by Charles Schwab Corp...and Ariel Mutual Funds concludes that four in 10 African Americans with household incomes of $50,000 or more have no money in stocks, compared to just one quarter of whites."
  • "Ariel's survey also found blacks who enrolled in retirement plans save a median $173 a month while whites save $252."
  • "A separate survey of retirees found whites are nearly twice as likely to have $100,000 or more saved than blacks, even when education, peak income level and other factors are held constant."
So why aren't some blacks and hispanics saving more? Good question. The article points to several possibilities, here are a few:
  • "Ethnic and racial groups approach saving and investing differently, said Hewitt's Tapia, who was raised in Peru. For instance, "long-term," suggests a shorter time horizon to immigrant Latinos accustomed to political instability and high inflation that made long-term planning seemingly impossible, he said."
  • "There are also lessons in the demographics of the black community, said Ariel's Hobson. A larger percentage of African Americans raise children in single-parent households, care for aging parents and have non-immediate family members in their homes, she said...'That old saying, it takes a village, that's very, very clear in the black community,' she said."
  • "Historical factors may also play a role in blacks' preference of real estate over stocks. Racial discrimination by mortgage lenders may have heightened blacks' interest in owning a home, she said."
The take-away here, for me anyway, is that the message of retirement planning is the same for everyone. The key is making sure that message is delivered in a way that different communities can hear it, be those communities people of color, women, or boomers. Same message, different package.