Do Stocks Hold The Keys To Black Wealth?
By Taylor Durham
- 67% of African-Americans earning $50K or more have invested in stocks
- Compensation for CEO in America’s largest firms is now 312 times the average worker pay
Investing is often touted as one of the most reliable pathways for wealth accumulation. The stock market is probably what comes to mind for most, but its volatile nature and complexity leaves many folks feeling overwhelmed. If you bought one share of Google (GOOG -2.62%) in 2010 for $100, that same stock is now valued at $476. For Apple (AAPL +3.30%), a $1,000 investment in 2009 netted a 1,200% return for $13,000 a decade later. The writing is on the wall: investing in the stock market has great long-term gain, but who exactly is befitting from that long-term investment, in one word “billionaires.”
Why This Matters: One benefit of owning stocks should resonate with the Black community and that’s ownership. Historically, entrepreneurship has provided the keys to prosperity and the escape from disenfranchisement. Given that knowledge, stocks are an excellent way for the Black community to build wealth by buying ownership in fast-growing companies. Billionaires have become so wealthy through investing in stocks, studying emerging trends and striking at the right moment. If you can’t beat ‘em, join ‘em. About 67% of African Americans with incomes of at least $50,000 have money invested in stocks or mutual funds in 2017. That compares with 60% in 2010 and 57% in 1998, according to CNBC.
The collective wealth of billionaires grew from $3.4 trillion in 2009 to $8.9 trillion in 2017. It’s a staggering reflection of the continued widening of the wealth gap across the world. As the saying goes, It takes money to make money, and while the average person tends to live paycheck to paycheck, many don’t have the excess funds to invest in the market. When proven options like real estate, CD, and insurance policies exist, the case for investing in stocks becomes much harder.
Situational Awareness: The stock market is the pathway to prosperity and provides leverage for a better economic future for minorities. Democratizing access to stocks through apps like Robinhood has helped to foster individual streams of income and boost personal wealth. Billionaires wrote the playbook, we just need to read it.
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