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The Importance of Intergenerational Wealth in Black Families



  • Inherited wealth significantly advances the economic launch point for future generations, providing opportunities for boosting emergency savings, investing in education, and entrepreneurship. Black families are five times less likely than white families to receive a sizable inheritance, and this disparity has contributed to Black Americans falling behind in wealth accumulation.


  • Racially driven violence and discriminatory policies have systematically destroyed and eroded the value of Black wealth since Reconstruction, with the effects felt today. Initiatives such as trusts, savings seed accounts, Universal Basic Income, and insurance policies can help individuals get on track to building wealth for future generations.

Intergenerational wealth refers to transferring wealth, resources, and assets from one generation to another. In the Black community, intergenerational wealth has been historically limited due to systemic racism, lack of access to educational and economic opportunities, and poverty.


Building intergenerational wealth is crucial for creating a legacy of financial security and creating opportunities for future generations.


In this blog, we will explore the importance of intergenerational wealth in the Black community, the historical context, challenges to building wealth, and solutions for creating a path to financial security.



Overview of the Importance of Intergenerational Wealth in the Black Community

In the Black community, intergenerational wealth is crucial for creating opportunities for future generations. It can provide a path to financial security, access to education, and opportunities for entrepreneurship. The historical barriers to wealth accumulation have made it difficult for Black families to build and maintain intergenerational wealth.






History of Wealth and Resources in the African American Community

Throughout history, Black communities have faced challenges regarding wealth accumulation. Slavery, segregation, and Jim Crow laws limited access to education, economic opportunities, and property ownership. Even after the Civil Rights Movement, Black communities faced discrimination in housing, employment, and other areas that limited access to wealth and resources.


Black families were often denied access to quality education and economic opportunities. This made it difficult for them to access higher-paying jobs and entrepreneurship opportunities, which are crucial for building wealth.


We were also denied access to traditional banking services, which limited our ability to save, invest, and build credit. Many poorer families rely on alternative financial services, such as payday loans and check cashing services, which often have high fees and interest rates. These company prey on the poor community.


These barriers are still working hard to block families and continue to impact their ability to build and maintain intergenerational wealth. These factors can make it difficult for families to accumulate wealth and transfer it to future generations.

Effects of the Great Migration on the Accumulation of Wealth and Resources

The Great Migration, which occurred from 1916 to 1970, saw millions of Black families leave the South for better economic opportunities in the North and West. This migration provided access to new opportunities, but it also resulted in the loss of family and community networks that were critical for building and maintaining wealth.



During the Great Migration, if black families had land it often was left behind. This loss of property ownership limited their ability to accumulate wealth and transfer it to future generations. The impact in terms of wealth accumulation and competition for employment and living space in crowded cities led to housing tensions and the creation of Black cities within big cities, like Harlem in New York City.


Racism and prejudice remained widespread, and racially-based housing ordinances were replaced by covenants that prevented Black people from buying homes in white neighborhoods.

Lack of Access to Educational and Economic Opportunities

Many families face challenges when it comes to accessing quality education and economic opportunities. This can limit access to higher-paying jobs and entrepreneurship opportunities, which has hindered their ability to build intergenerational wealth. Discriminatory policies and systemic racism have limited access to quality education and good-paying jobs for black individuals.


This has resulted in a wealth gap that persists to this day, with families struggling to accumulate wealth at the same rate as their white counterparts. Efforts to address these barriers and create more equitable opportunities for black families are crucial to promoting intergenerational wealth and economic mobility.


Systemic Racism

Systemic racism is one of the biggest contributors to the black wealth gap. From redlining to discriminatory lending practices, there have been numerous systemic barriers preventing black families from building and accumulating wealth. For example, redlining by banks and the government has historically prevented black families from buying homes in certain areas, limiting their ability to build equity and accumulate wealth.


Discriminatory lending practices and unequal access to credit have made it difficult for black families to start businesses, invest in the stock market, and build wealth through other means. These practices have contributed to the stark disparity between the average net worth of black families compared to white families. Without addressing systemic racism and dismantling these barriers, the black wealth gap is likely to persist.

Impact of Poverty on Wealth Accumulation

Poverty can be a significant barrier to wealth accumulation for Black families. Studies have shown that Black families are disproportionately affected by poverty, with a poverty rate more than double that of white families. This can limit opportunities for wealth accumulation in