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lth,chapl.02
11/22/05
11:~5PM
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erc
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c:
\COlorof
w••lth.chapl.0l
U:26PtC
pag~
1/2:1/05
Til.C:flLIJIL
or
WE.\LTII
WHATIS\VEALTH?
In
thisbook,whenwe
use
theterm
..~alth:·
wemeaneconomicassets.
A
fam-ily'snetworth
is
theirassetsminustheirdebts,orwhattheyownminuswhatthey
owe.
A5setsincludehousesandotherreal
estate.
cash,stocksandbonds,pensionfunds.
businesses,
andanYthingelsethatcan
be
con-
verted
to
cash.such
as
canandworksofart.
These
arenottheonlykindsofwealth.Family.social,andcommunitynetworks,educationand
skills,
publicinfrastructureand
a
healthyenvironment,religionandspirituality:
all
thesenotonlymakeuseco-nomicallymoresecure,theyhelpusfeel
wen
offin
ways
thatmoneycan't
buy.
Butthisbookfocusesonfinancialwealth.andthestoryoCthegovernment'sroleininQuencingthe
racialwealthdivide.
OurnetworthisinfluencedbythenetworthoCourparents,grandparentsandear-liergenerations.MostprivatewealthintheUnitedStateswasinherited.Andevenforpeoplewho
do
notinheri]moneyailertheirparents'deaths,theirfamily'seducationandsocialcontactsandfinancialhelpfromlivingrelativesmakeabigdifference.Thencialwealthgap
has
continuedtogrow(seeFigure1.1).From1995to2001,accordingtotheFederalReserveBanktheaveragefamilyofcolorsawtheirnetworthfall
7
percent.to
$17.100
injustsixyears,.whileanaveragewhitefamily'snetworthgrew
37
percent.to
$120,900,
inthesameperiod.The
gap
infinancialassets(cash.stocks,andbonds)isevengreater.sincemostpeo-pleofcolor'sassetsarcinvested
In
theirhome(secFigure
t-2).
L\
PERCEPTIONANDREALITYOFECONOMICINEQUALITY
BY
RACE
Explicit
racial
discrimination
has
been
illegal
sincethe
civil
rightslawsofthe19605.somanypeoplenowattribute
new
differences
in
financialsuccessentirelytoindividualbehavior.WhiteAmericansinparticulartendtobelieve
that
theplayingfield
is
nowlevel.EveryyearGalluptakes
a
"minorityrightsand
relations"
poDthatrevealsethnicdifferences
in
perceptionsofopportunity.fnthe2004poll,
77
percentofwhiterespon-dentsand
.69
percentofLatinorespondentssaidtheybelieve
that
AfricanAmericanshaveasgoodachanceaswhitesdotogetanykindof
job
forwhichtheya~quali-fied.Only..
t
percentofblacbfeltthesame.'2
 
lor
of
w••
lth.chapl.03
11/23/05
13:16PM
pag~
TIIIS"00T
II
0'T"ER.\CI,\LW
II.\
LTHDIVID•
.
..
FICUIII
1-1
Mediannetworth
by
race,
2001
(assetsminusdebts)
••••••••••••$110,900;
2001
•
c
..............S,0J,4
00
1998
r:;:r~er
$'7.9
00
e
$5
0
,000$150,000100,000
DOLLA••
FICiUII
1-2
Medianffnancialassets
by
race,
2001
•
c
•
~
o
$10,000
$4
0,000
$5
0
,00020,000
$30,000
DOLL••,
s
:·~-;"·~;l.
••J;
'!"'Y....
'f'......
.;,t......
5ov,",
Fftlnalleserw.""
~Df""',umerflna_
of 00

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