Wealthy black Americans feel better off than they did five years ago, and think the country is better off as well, according to research released last week by Northern Trust.
Black respondents to Northern Trust’s Wealth in America survey of people with $250,000 or more in investable assets attributed their positive outlook to market stability and the re-election of President Barack Obama.
Sixty-two percent said they felt better about their personal finances than they did five years ago, compared with 29% of overall survey respondents who felt this way.
Half of blacks surveyed also thought the U.S. was better off, compared with just 18% of total respondents who shared this sentiment.
Black entrepreneurs surveyed also expressed optimism about the future growth of the economy. Respondents noted these plans for the next 18 to 24 months:
- 47% will hire more workers
- 37% anticipate keeping staff levels stable
- 34% intend to invest in information technology
Sixty percent of black business owners identified increasing revenue as their main focus.
Planning for higher taxes and investing in the future growth of the business were of key importance to about a third of respondents. Twenty-one percent were focused on succession planning.
The majority of wealthy black survey participants said 63% of their total household assets came from earned income, while 11% came from investment returns. This compares with 44% and 22%, respectively, in the general population.
“Wealthy black Americans are often first-generation stewards of wealth,” Linda Nolan, a Northern Trust managing director, said in a statement.
“Many are business owners who consider their hard work as a key to achieving their financial goals. While many want to grow their wealth, just a small group reports actually having an established financial plan to help ensure they are on track to meet their goals.”
Fifty-one percent of high-net-worth black respondents said their primary investment objective was to grow wealth, compared with 16% who said their main goal was to preserve capital.
The survey found that 27% believed it was important to have a written financial plan, but only 11% had established such a plan.
Respondents reported taking these steps to achieve their goals:
- Save more—32%
- Diversify investments—28%
- Work with a financial advisor—18%
Eighty percent of black respondents said they involved their spouse or partner in household financial decisions and at least monthly discussed such financial matters as goals, business planning and charitable contributions.
Sixty-five percent said it was important to speak to their children about their wealth, and 72% reported they had already done so.
The survey found wealthy black Americans continued to contribute to charitable causes, donating an average of 87 hours in 2011. Ninety-four percent cited helping the less fortunate and 93% said contributing to a cause in which they personally believed were the most important reasons for giving.
The top recipients of their donations were human services organizations, educational institutions and religious organizations. In addition, 83% said it was very important to them to help their children develop an appreciation for giving.
Researchers conducted 1,700 online interviews from Nov. 16 to Dec. 17. Thirteen percent of survey respondents were black.
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