But even among wealthy white and wealthy black families, there are large gaps and pronounced differences in investing and wealth holdings. According to a study by Credit Suisse and Brandeis University's Institute on Assets and Social Policy, and highlighted in the Harvard Business Review, wealthy black American families invest more conservatively than their white peers. And that conservatism may be slowing their wealth creation relative to white families.
There are some core similarities between wealthy white and wealthy black families. Compared to the broader population, both groups are more likely to be older, college educated, married and either retired or running their own business.
Yet there are pronounced differences in how they invest. The wealthiest 5 percent of black families are slightly less likely to own stocks, bonds and other financial assets. They are more likely to own safer assets and cash equivalents, like CDs, savings accounts and life insurance.
Wealthy black Americans have more of their wealth in real estate, according to the study. Not including their primary residence, wealthy black families hold 41 percent of their nonfinancial assets in real estate, compared with about 22 percent for wealthy white families. When primary residences are included, the figures rise to 57 percent for wealthy black families and 34 percent for comparable white families.
This conservative approach to investing and wealth creation among wealthy black families may be slowing their rise to greater wealth, the researchers said. But there are good reasons for their risk-aversion: black families are less likely to stay at the top once they get there, according to studies.
Source of article: Robert Frank CNBC Reporter and Editor