Individual Wealth Building

The Delta Creative Business Challenge granted a local business owner/artist a cash prize with which he can further his business. The contest aimed to begin building community wealth, which builds ownership at the local level to allow individuals to control their own future. 

In the face of economic insecurity, this policy memo from CFED argues that an asset building approach can help families build their financial assets as students, homeowners, or entrepreneurs, thereby empowering individuals to steward their own resources more effectively and contribute to their own economic success. Highlighting how many Americans lack basic financial security, the memo calls for federal policy reforms that give low-income households better access to the financial tools and knowledge they need to build a secure future. Recommendations include improving tax incentives for low- and middle-income savers, reauthorizing the Assets for Independence Program and reviving US savings bonds. 

Written by Bill Emmons for the Federal Reserve Bank of St. Louis, Housing Market Perspectives explores how HOE accounted for almost half of Black and Latino's families wealth: 

Homeowners‘ equity (HOE)—the market value of residential real estate minus the value of homesecured debt—has long been the single largest component of wealth for black and Latino families.2 On average during the past quartercentury, HOE accounted for nearly half of black and Latino families‘ wealth, compared with roughly a third for Asian or other families and about a quarter for white families (Figure 1).3 During peaks in 1989 and around the financial crisis starting in 2007, HOE accounted for more than half of the wealth of the average black and Latino family

While the pay gap between men and women is widely discussed, the wealth gap is even more pronounced: single women own 32 cents for every dollar owned by men, with women of color owning pennies to the dollar. This new report from the Closing the Women’s Wealth Gap Initiative discusses the systems and dynamics that generate this gap, including disparate access to business equity and home ownership opportunities. The author recommends tax reforms that make wealth building subsidies more accessible to women of color in particular, as well as strategies like cooperative ownership and more flexible savings account options.

“America is currently forgoing an estimated 1.1 million businesses owned by people of color because of past and present discrimination,” writes Algernon Austin, author of this new report from the Center for Global Policy Solutions. Using data from the U.S. Census Bureau’s Survey of Business Owners, Austin finds that the country would produce an estimated 9 million more jobs and have $300 billion more in national income if entrepreneurship amongst people of color were proportional to their distribution in the labor force. To address this, Austin recommends creating tax credits to incentivize investments in minority-owned businesses, expanding the number of Minority Business Development Agencies, and utilizing alternative credit data for those with limited credit histories. 

This new report from the Federal Reserve Bank of San Francisco seeks to better understand the factors that influence and create disparities in wealth accumulation, particularly intergenerational resource transfers, historical context, and local asset markets. Researchers draw on data from the National Asset Scorecard for Communities of Color (NASCC) survey, the first of its kind, to assess wealth disparities among different racial and ethnic groups in Los Angeles and inform multifaceted policy solutions tailored to distinct community needs.

With nearly ten million households in the U.S. lacking a bank account, many families face challenges building wealth. However, with financial counseling and coaching, families can work towards financial security. This new collection of essays from Cities for Financial Empowerment (CFE Fund) and Citi Community Development highlights this potential and brings together the perspectives of leading experts in the field. The essays share strategies for building cultural competency, accessing public funding opportunities, and scaling and professionalizing efforts:

Median Latino and Black households have over $100,000 less in wealth than median White households, a disparity that persists despite reductions in income inequality. This new report from the Institute on Assets and Social Policy and CFED puts forward a “racial wealth audit” framework, assessing how specific policies either lessen or inadvertently perpetuate the racial wealth gap. The authors call for “targeted universalism” noting that policies such as Children’s Savings Account and eliminating student debt will only successfully address the racial wealth gap if they focus in particular on low income households.

Despite signs of a U.S. economic recovery, CFED’s 2013 Assets & Opportunity Scorecard shows that many Americans are still struggling just to get by. This year’s result finds that nearly half (43.9 percent) of households—or more than 132 million people—are “liquid asset poor.” As a result, they do not have enough assets to provide themselves with a basic personal safety net to protect against an unforeseen crisis, such as unemployment or a medical emergency, or plan for future needs, such as a child’s college education or homeownership. To address this problem, this report highlights measures states have taken to build financial security and increase opportunities in the areas of financial assets and income, businesses and jobs, housing and homeownership, health care, and education.