Boston is known as a hub of education, technology and enterprise throughout the United States, but there remains a distinct difference in net worth drawn on racial lines.
As of 2017, white families in the Boston area have a median net worth of $247,500. However, trickle down economics stops helping there, at least for the Black community. In that same study, the reported median net worth of Black Bostonians was $8.
Roxbury Community College held Wednesday the second monthly installment of its “Build Black Wealth” series, which focused on how people of color can become debt-free. The event was in partnership with Our Village Initiative, a consulting agency designed to connect underserved populations with resources and to increase home ownership.
RCC views these seminars as a way of discussing tangible steps POC can take to increase their net worth and inviting industry experts to teach wealth management methods deployed by the American elite.
The seminar focused on a myriad of strategies for POC to take meaningful action toward financial independence. The discussion included three speakers, including Michelle Brathwaite, regional vice president at Primerica, a financial support and investment firm with a focus on families.
Brathwaite’s talk centered on strategies to build wealth and escape debt, which she said is the most detrimental threat to financial stability.
“Of all the threats to your financial security, none is more dangerous than debt, and I think that we can all agree with that,” Brathwaite said. “The idea is that we want to try to figure out: how do we keep our head above water?”
Brathwaite, the primary speaker of the night, focused on typical types of debt and their elimination strategies, such as the snowball method versus the stacking method. The snowball method involves prioritizing debt payments from smallest to largest amounts owed, and the stacking method entails paying off debts with higher interest rates first.
The conversation then moved on to discuss how to make biweekly mortgage and auto payments while ensuring fiscal responsibility.
Brathwaite also examined the power of compound interest in investment. She described several steps to financial freedom, which included paying off debts, investing passive income and overall wealth management.
Jeffrey Allen, an assistant professor at Boston University’s Questrom School of Business, said in an interview the American higher education system suffers from a lack of comprehensive education in financial well-being and wealth management.
“Across the board, most universities don’t have classes that educate people in these areas, in particular, people of color,” Allen said. “There’s fewer people of color in universities and colleges.”
Allen added wealth disparity and systemic inequities are barriers for POC communities in the U.S., but he is optimistic financial education can help set them up for success.
Lukas Baumilas, a freshman in Questrom, wrote in an email he feels racial minorities face stark economic disadvantages in the U.S., which he believes points to a larger problem.
“As we see it existing now, this inequality seems to be indicative of a greater problem of limited economic mobility, due to extenuating circumstances that have yet to be addressed in our country,” Baumilas wrote. “As to what steps can be taken to overcome this inequality, I believe education is key.”
Baumilas wrote he thinks there’s a need for government involvement to create sustainable change in economic mobility within these communities.
In spite of lack of actionable initiatives, Allen said POC, despite historical setbacks and limited resources, have still accomplished a great deal.
“I think it’s just about education, exposure and recognizing that this wealth disparity among people of color has been in place for centuries,” Allen said. “Black and Brown people have done so much with so little for so long that we can almost do anything with nothing.”
With classes such as these, Allen said it seems possible BIPOC communities at a natural disadvantage can rely on this “education exposure” in wealth management and investing to put themselves on a track toward upward economic growth.
Perhaps Questrom is becoming more aware of communities as well, Baumilas wrote, adding his courses have taught him more about the social impact of business and wealth.
“I strongly believe that the Questrom curriculum paints a very real picture of business,” Baumilas wrote, “and thus also shows how business can be used to address socioeconomic issues for the greater good of the economy.”
Madeline Humphrey contributed to the reporting of this article.
