My work as a wealth advisor allows me to advise successful Black professionals almost daily. During this time, I’ve witnessed firsthand the stark contrast between the perception of financial success and the lived reality. Despite the online braggadocio and social media flexes, a significant portion of Black millennials grapple with a financial paradox: they are disproportionately represented among the lowest median net worth of any racial or ethnic group in the United States. It’s an issue masterfully expressed in the words of Kendrick Lamar: “Us, they not like us, they not like us, they not like us.” These words give voice to the nuanced struggles of Black people, but especially Black millennials navigating uniquely black millenial experiences. In this article, I will discuss the financial landscape shaped by historical trauma, systemic barriers, and cultural expectations. Even in less nuanced, black and white numbers, the data from a 2024 U.S. Census Bureau report paints a stark picture: Black millennials, especially those in their 20s and early 30s, have the lowest median net worth of any racial or ethnic group in the United States. It’s a paradox that demands closer examination.
LOS ANGELES, CA – JUNE 26: Recording artists Beyonce (L) and Kendrick Lamar perform onstage during … [+]
The Illusion of Financial Literacy
The unfortunately popular narrative often attributes this financial disparity to a lack of financial literacy. It’s a lazy and easy scapegoat, suggesting that if only Black millennials were better educated about finances, they could overcome their challenges. This narrative, however, is both simplistic and harmful. It places the blame solely on individuals while ignoring the complex web of factors that contribute to their financial reality.
Financial literacy, while undoubtedly important, is not a one size fits all solution. It’s akin to giving someone a map without acknowledging the treacherous challenges on each street they must travel. Even armed with financial knowledge, Black millennials face a unique set of obstacles that stem from centuries of systemic oppression, misinformation, and psychological trauma.
The Legacy of Systemic Oppression
“Once upon a time, all of us was in chains/ Homies still double down calling us some slaves” Kendrick’s lyrics are a reminder of the historical context that shapes the present. For generations, wealth was, and still is, systematically extracted from Black communities through discriminatory practices like redlining, predatory lending, and the exploitation of Black labor. This legacy continues to cast a long shadow, limiting access to affordable housing, quality education, and well-paying jobs.
Even seemingly mundane policies, like the city of Chicago selling its parking meters for a fraction of their potential revenue, perpetuate this cycle of extraction. These decisions strip resources from Black communities, making it harder for residents to build wealth and invest in their own neighborhoods. There are simply much less bootstraps to pull yourself up from in resources restricted communities.
The Iceberg of Inequality
Financial illiteracy is merely the tip of the iceberg. Beneath the surface lies a complex web of systemic issues that continue to hinder Black Americans’ financial progress. These issues include:
- The Racial Wealth Gap: The median white family has nearly ten times the wealth of the median Black family. This chasm is not a result of individual choices, but rather a consequence of decades of discriminatory policies and practices that have systematically limited Black families’ ability to accumulate wealth.
- Discrimination in the Labor Market: Black workers face a disproportionate burden of unemployment and underemployment. They also encounter wage disparities and are less likely to be promoted into higher-paying positions, regardless of their qualifications or experience.
- Limited Access to Capital: Black entrepreneurs face significant barriers when seeking capital to start or grow their businesses. Higher interest rates, stricter lending requirements, and implicit bias within the financial system create a hostile environment for Black-owned businesses.
The “Black Tax” and Familial Obligations
How did “so and so” go broke with all that money? Compounding these challenges is the cultural expectation, often referred to as the “Black tax,” for financially successful Black individuals to support a wider network of family and community members. While rooted in a good and noble sense of collective responsibility, this can place a significant financial burden on first-generation wealth builders, hurting their ability to accumulate and sustain wealth at the same rate as their non black peers from other communities. This sense of pressure to financially uphold your network is long rooted in the images of success that has hampered successful black first generation wealth builders as they are typically the first person in their network or community that has had access to their level of wealth, leaving them less equipped to manage the nuances of their habits and relationships around money.
Unmasking the Just-World Fallacy: A Dangerous Misconception
It’s crucial to address the just-world fallacy, the belief that people get what they deserve and deserve what they get. This fallacy often leads to victim-blaming and ignores the structural injustices that perpetuate inequality. We all know of someone who is a great person who has had bad things happen to them or seemingly terrible people, who have enjoyed a great deal of fortune. In the context of Black millennials’ financial struggles, the just-world fallacy manifests as the assumption that their financial outcomes are solely the result of their own actions or inactions.This misconception is not only inaccurate but also harmful. It intentionally diverts attention from the systemic barriers that Black millennials face and places undue burden on individuals to overcome challenges that are often beyond their control with the same level of aptitude as they overcome the challenges within their control.
A one hundred dollar bill puzzle
Cultural Barriers and the Weight of Expectations
In my work with successful Black professionals, I’ve encountered a range of culturally distinct and ethnically unique challenges that their non black American and privileged immigrant counterparts often don’t face. These challenges include navigating complex family dynamics, managing the weight of high expectations from their communities, and overcoming a warranted distrust of financial institutions due to historical exploitation. These additional layers of complexity often exacerbate the financial pressures faced by Black millennials.
The Mirage Shatters: A Complex Reality
The financial struggles of Black millennials are a multi-faceted issue, encompassing historical trauma, systemic barriers, cultural expectations, and societal pressures. A warranted mistrust in American financial institutions, stemming from a history of discriminatory practices, coupled with inadequate financial education in schools, continues to complicate the path to full economic viability.
The pressure to “keep up with the Joneses” is amplified within the Black community, where the stigmas of poverty and burderns of success can be particularly heavy. These pressures, combined with the financial burden of supporting family members, friends, and community initiatives, can lead to unsustainable spending patterns and hinder long-term wealth accumulation.
Starting with fewer assets, lower rates of business ownership, and less homeownership, Black millennials face an uphill battle. However, it’s important to remember that their financial reality is not a self-fulfilling prophecy. It’s a reflection of a system that is still in need of repair. By acknowledging the complexity of these challenges and working towards a more equitable future, we can empower Black millennials to break free from the wealth mirage and build a lasting legacy of financial security and prosperity. Its just as important to identify the things that are outside of our individual control so that we can address them at scale, as it is to have the courage to aggresively tackle the things we can to create a better future for people LIKE US.
