Tag Archives: news

Why Black Lives Matter and the Racial Wealth Gap

Yes, this is a personal finance blog. And yes, this is a post about racism and the horrific treatment of the black community. I’m white. And I won’t claim to be the most woke white person on the block. But I know injustice when I see it. Systemic racism is real. It’s a big deal.

This post is not about looters or rioters or social unrest. This is about what has led us here. This is a post about how today a quarter of all black households would have less than $5 if they liquidated all of their financial assets (source.) White families, on the other hand, could turn to liquid assets such as stocks or bonds or other savings. The median white household had a wealth that totaled more than $140,000, while black Americans had $11,000.

Why do I have the money I have saved up?

  1. I grew up in a middle class town with access to a good public education and extracurriculars.
  2. I never had to worry about being hungry or my parents not having money to pay the bills each month.
  3. My parents were able to save enough to put me through college without loans.
  4. My parents were able to purchase a home in a nice middle class neighborhood with a regular loan and move in with mostly other white middle class families which made the value of the neighborhood go up over time.

Aren’t there poor white people too?

Yes, there are poor white people. That’s an issue as well. There are areas where white people (and people of all colors) do not have access to clean water or a good education. Talking about black systemic racism does not mean that these other issues aren’t issues. We can talk about them separately. We can focus on them one at a time and understand why the problem exists in the first place and then work together to fix them.

“Once in the middle class, it’s harder for African American’s to stay there. More than half of African Americans raised in the middle quintile fall out of the middle as adults, compared to a third of whites.”

The long history of redlining in this country is a huge part of the problem. Decades after the formal end of redlining, blacks and Hispanics are less likely to be homeowners than their white counterparts. While homeownership is not the only way to wealth or the best way to wealth, the reality is the most people do not know how to save or invest their money otherwise. Home owners are forced to save over the years, and they also see their initial downpayment increase in value as their home grows in value over time.

You know what’s fucked up?

Research shows that property values start to decline when a neighborhood becomes populated by 10 percent black residents (source.)

Black young adults are more likely to owe on student loans (44 percent) compared to white young adults (35 percent.)

Today African-American incomes on average are about 60 percent of average white incomes. But African-American wealth is about 5 percent of white wealth.

African American families were prohibited from buying homes in the 1940s, 50s, and 60s, but the Federal Housing Administration weren’t able to gain equity. So, now, just 60-80 years later, just 2 generation’s later, unsurprisingly we see a whole lot of inequality in wealth building when you look at the black people  vs the white people.

My grandparents were poor first or second generation immigrant families. My mother’s parents never purchased property. She was able to move up in economic class by marrying my father. He came from a lower middle class family as well, a large working class family. But that family was able to purchase a house and send their kids to a good public school which got most of them into college where they obtained good jobs and were able to then get loans for their own houses in the suburbs and continue to move up economically. Now, I am able to do the same. This is a privilege.

Today, not only are we still segregated, we have extreme gaps in poverty and education opportunities. Yes, some kids from lower income areas are able to overcome adversity and end up at Harvard or Yale or Stanford with a well-deserved scholarship. These kids are the outliers. Most don’t even graduate high school. If I went to the schools they go to, I doubt I would have graduated high school.

Students of color in the largest 100 cities are more likely to attend schools where most of their peers are poor or low-income (source.)  Local property taxes pay for schools, and when local property taxes are low, so are the funds to pay for a decent education.

Researchers have found that the single-most powerful predictor of racial gaps in educational achievement is the extent to which students attend schools surrounded by other low-income students.

Sadly, when you have a situation like this that feels inescapable, when you have communities held back by the racism that has torn apart their people for generations (I haven’t even mentioned a little thing called slavery which we had here in the US not that long ago) you end up with people who feel stuck and seek other ways to escape. There are criminals of all colors and at all ends of the class spectrum (plenty on Wall Street) but the ones that are punished the most by our police and legal system are those who have no way to support their own cases. Black men are sentenced to more time for the same crimes compared to white men (source.) This is not to say that we should not prosecute criminals, but we need fair and equal treatment regardless of skin color.

Black men constitute 6 percent of the US adult population but are approximately 35 percent of the prison population and are incarcerated at a rate six times that of white males.

In federal courts, the average sentence during 2008 and 2009 was 55 months for whites and 90 months for blacks.

Then, we have events like what we’ve witnessed these past weeks:

George Floyd –– whether or not he tried to use a fake $20 bill to buy cigarettes is irrelevant. He was murdered by 4 police officers for maybe using a fake $20 bill. Really? What kind of justice is that? They murdered him in broad daylight. Many of us have seen the video. He called out for his mother. It is heartbreaking. Many other black men and women have died at the hands of police without being documented on video. We have a major problem with our police system. I support the police and think there are good cops but there are many bad ones and there needs to be psychological testing and training and misconduct reviews and firings to stop this mistreatment and murder.

Breonna Taylor — a bright young 26 year old EMT, who was in her own apartment when the cops came busting in, in the middle of the night, with a no knock warrant for someone who didn’t live there. Her boyfriend thought they were robbers, he shot at them in the confusion, they shot back and shot Breonna 8 times. She died. The cops have not been arrested.

Ahmaud Arbery — a 25 year old black man went jogging to get some exercise one beautiful day in Georgia and three white guys chased him down and murdered him. They were not arrested immediately because they claimed self defense and said he matched the profile of a robber in their neighborhood. They hit him with a truck and then shot him point blank.

This is the story of George, Brenna, and Ahmaud. It is also the story of every black man and woman who have to live their life in fear because us white people are too scared to get a little uncomfortable and admit there is a problem. A big problem. The system is set up to protect us. Yes, there are horrible cops who will be assholes to people of all colors. But the numbers don’t lie. Black people are the target of more police brutality and violence than any other race.

Between 2013 and 2019, police in the United States killed 7,666 people, according to data compiled by Mapping Police Violence, a research and advocacy group. Once these figures are adjusted for the population size and demographics, in nearly every state, African Americans face a significantly higher risk of being killed by police officers than white Americans (source.)

So what can we do? I’m asking myself that everyday. I don’t know the answer. I post articles like this, because it’s important to educate ourselves. I’m looking into organizations to donate to, like CampaignZero, to fight a lack of police oversight. I’m having conversations with every person who will listen. There’s so much more to do, but this is a start. This isn’t a democrat vs republican issue. This is a human rights issue. This is an American issue. And everyone deserves the same opportunities and same freedoms and same protection from police as everyone else. That isn’t how things work today. And we have to do something to change that.

Have an idea how we can make a difference? Leave your thoughts in the comments below.


Middle Class? Not So Fast. A Tale of a Downwardly Mobile Society

With election season starting to heat up, so is reporting on the so-called “middle class.” Apparently, 9 in 10 Americans consider themselves “middle class” (I’m no math genius but something tells me medians and averages don’t work that way.) Given most Americans are middle class in their minds, and middle class today isn’t what it used to be, in short, everyone is freaking out.

Ok middle-class math, why does America hate you so much?

“The middle-class label is as much about aspirations among Americans as it is about economics. But a perspective that was once characterized by comfort and optimism has increasingly been overlaid with stress and anxiety.” — Telegram

I see. So most Americans aspire to be middle class, as everyone has been sold this dream of working hard to get the basics in American life — a decent house, backyard, education, healthcare, maybe vacation once a year. No one is expecting to afford regular Gucci on a middle class income. We were just all told work hard and you too can be middle class, and quite frankly upwardly mobile from your parents lifestyles. Yet, even if you’re doing exactly the same thing your parents did, you’re actually worse off today. No wonder we’re all anxious.

“A recent report from economists at the Federal Reserve Bank of St. Louis concluded that “families that are neither rich nor poor may be under more downward economic and financial pressure than common but simplistic rank-based measures of income or wealth would suggest. The study, conducted by William R. Emmons and Bryan J. Noeth, found that one reason many Americans viewed themselves as struggling was that their real incomes had not advanced significantly beyond their parents’ even when they reached higher educational levels, while those who matched their parents’ achievements were actually worse off.”

The New York Times published an article this week titled “Middle Class, But Feeling Economically Insecure.” That headline, brilliant, sums the middle class anxiety up to a T.

Continue reading Middle Class? Not So Fast. A Tale of a Downwardly Mobile Society

Check Out My “Expert Interview” on Mint.com

As many of you know, one of my favorite budgeting tools is Mint.com – so I was a little giddy when their PR team reached out to me to include me in their “Expert Interview” series. I went to town answering questions on my networth goals, progress, ups and downs.

I’ll post the introduction to the article below, and then if you’re interested you can read the rest of the Q&A here. I am actually very proud of this Q&A because the answers really reflect the personal finance advice I would give to anyone at this point in my life!

Imagine retiring with $2 million in the bank. Now stop imagining that goal and make it a reality.

With Her Every Cent Counts, readers get all kinds of tips and encourage to start building a net worth they can be proud of. That’s not to say there isn’t a lot of hard work involved. In fact, the woman who started the site (who prefers to be anonymous) had a net worth of $250,000 by the time she was 30. She plans to grow that number to $2 million by the time she retires.

Her net worth tracker can be found on her website where readers can track her progress. This serves as an inspiration and real-life glimpse into what is possible when saving money.

To learn more about reaching your own financial goals, take a look at the helpful information in the interview [here.]

The Things #YesAllWomen Know

Unless you’ve been living under a rock, you’ve heard about deranged killer Elliot Rodger going on a shooting spree in the quiet, upscale college town of Santa Barbara because, in his own words, he was a virgin and women wouldn’t sleep with him. Even though he clearly had some serious issues, some people are taking to the internet to pity him for his inability to get women. Women, however, are bringing the misogyny behind this statement to light, noting that it’s not ok for men to think they have any “right” to women… and this sentiment is getting worse, not better.

The challenge of being a woman living in 2014 is that feminism seems too past tense, yet it’s clear that women are not treated the same as men in our society. For example, how many men know what it’s like to walk down the street and have a creepy guy in a truck lean out the window and whistle at you or say something to make you extremely uncomfortable? Reading some of these articles and blog posts popping up after this attack, I feel fortunate that I was never the type of girl that got a lot of male attention (despite being upset about it at the time) — it’s terrifying to hear of girls turning down date proposals to prom only to be stabbed over it. Continue reading The Things #YesAllWomen Know


This post is dedicated to the 27 people who lost their lives in the senseless tragedy in Newtown this week. To the children, ages 6-7, and to the brave educators who were accidental heroes that day. To the survivors who will forever be changed. To the parents who have lost their loved ones. To the family where a mental illness ran deep, and clearly no one thought to or was able to reach out to help.

Events like these certainly put everyday problems into perspective. Any day could  be your last, and at that point who cares if you have $5 or $1M in  your bank account. But this week’s events also speaks to an issue I’ve discussed here before – mental health awareness and access to quality mental healthcare.

I’m lucky in that I would never hurt another soul. I don’t have it in me. But there are days when I consider hurting myself. I haven’t yet, and I probably won’t, but sometimes the world becomes so overwhelming that you just want to find some way to feel like you’re in control. It seems for males especially, this control they seek becomes a fantasy of violence and destruction. For women, it’s more often hurting oneself, through cutting, or binging, or even suicide.

People who are healthy will roll their eyes at you, say to pull yourself together. To grow up. But it takes more than growing up. For some, there’s an actual chemical imbalance. For others, their environment shaped them to be the way they are. No matter how they got to the point where all feelings of normal control and stability are lost, it’s important that the person gets help.

I’ve spent a lot of time, like most in this country have, about the 27 innocent victims in the tragedy this week, and about the killer, who maybe was not evil since birth, or who could have been helped. I’ve wondered, like many of you have, what his childhood and life was like, if his mother pushed him too far, if she pulled him out of school and isolated him from others because he was too autistic  to handle being around others, or if a decision to pull him out of school and isolate him led to the tragedy this week. I don’t know, and I’m not sure anyone will know. But I want to believe that deep down there was some good in this kid. That there is good in everyone. I’ve learned, however, that evil is real, and some people are born with a penchant for chaos and destruction.

I’m fighting my own battles, my inner demons, alone as I find therapists who take my insurance are not taking new patients. Therapists that don’t take insurance cost $250-$300 a session. I end up seeing a new therapist — splurging on treatment — when I feel myself breaking down. When I seep from a rush to depression, when my Bipolar II takes a turn for the worse, every so many years. But I usually know when it’s “that time,” and I find help. I can’t say any of it has cured me, or been overly effective, but instead of hurting myself, I had someone to talk to, and it got me through to the next week.

But how many people don’t have the ability to access quality mental healthcare? How many are either unable to afford it or have parents who don’t want to put their children into therapy because of the stigma around it? It took a note that referenced suicidal ideation that I sent to one of the school counselors for advice for my parents to bring me to a psychologist. But I was depressed for years before that. They thought I was just being a typical moody teenager.

Today, the 27 innocents are in my thoughts. I can’t imagine the pain that everyone around their town and those closest to the victims are feeling right now. I am worried that the next tragedy is just months, or even weeks away. As more people see how much chaos others can cause, they may be inspired to act out on their own plans. They may want to see how much more destruction they can cause. It becomes a twisted game and I’m terrified of what evil is lurking in the corners. Is it safe to go to the mall? To the movies? To a school? To work? How does one protect themselves and their loved ones from evil?

Making Sense and Losing Cents of the Economy

Like everyone else who has a dime or more invested in equities, I’m concerned about the future of the stock market. Whenever the market looks so bleak, everyone is concerned. And that’s usually the best time to invest. Yet with my yearly investments becoming more sizable, this feels a lot like Las Vegas. Even with diversification, it doesn’t help when all (or most) stocks are on red.

After receiving my paycheck for the past months and reimbursed expenses, I realized that I’m sitting on $16k liquid in my checking account. Part of me hates writing about this because I know I’m so lucky to have the luxury to ask the question “where should I invest?” But this may also be a temporary income boost and I want to invest wisely.

Yesterday, I pulled out my social security statement and studied my yearly income since 2002. Other than last year, I made somewhere between $0 and $25,000 each year. Last year, I broke $60k for a full year’s worth of work. This year as of Sept 1, even with 2 months of unemployment (unpaid), I have earned around $70k this year. And with the way some contracts are shaping up, I expect to make an additional $10k to $30k by the end of the year. So now I face the unlikely problem in a time of economic crisis – what do I do with all this money?

The easy answer is: spend it. Not on wasteful purchases, but things that I need or will need soon. I could buy a new car, or a “new” used car. Or I could invest in property somewhere (though that requires stable long-term income, which I am not confident I’ll have, especially with my plans to go back to school in the next two years.) So where do I put the excess cash?

I’ve already maxed out my IRA and will, within this month, max out my 401k (no match, bummer.) I will likely put another $2000 in my HSA which is invested in very low-risk funds. My IRA is in Sharebuilder and I bought 5 funds – the gold ETF, the silver ETF, two high-dividend ETFs and a REIT ETF. My 401k is invested in a mix of equities and bonds, and I’m not clear what is in it exactly. With a large chunk of my savings this year going into my 401k, I’m concerned that in the next ten years we’ll have deflation, high taxes, and my 401k will turn to mush.

But I’m willing to take that risk with $16.5k because it could be a very good time to invest as well. I’m just not sure I can stomach taking that risk with more money. Not without understanding the real economic situation in this country and the world. History doesn’t always repeat itself, or even if it does it may take a longer time to turn around. I’m young now, I can handle that, but if the next 5-10 years will be lost decade #2, why should I play?

The whole media fueling the fire is disturbing as well. I can’t tell how much of the stocks slipping these days is all the fear stories about how bad the economy is doing. It’s a domino effect that goes in a circle downward. What if all the news resources lied and said the economy was turning around and there’s a ray of sunshine close ahead? If people would invest and spend money than… well, that seems to be the only way to dig ourselves out of this mess right now. I don’t know if I agree with that, but what else can we do? We need people spending again so companies will start hiring again. That’s how capitalism works, right?

But it will take a long time to trickle down to lower and middle classes. The media couldn’t lie for that long. News would get out that the future is not so sunny. And everything would crash again.

Or you can just – apparently – print money until the cows come home and thus make every dollar worth less and less and less. That can’t be a good thing.

Right now lots of big names in economics are saying that we may have a “double dip recession” or – worse? – a depression… because we never actually recovered from the first recession. I wish I understood economics jargon more so I could make sense of this, this, this and this … and the thousands of other economic gloom and doom stories I’m reading.

Any feedback from those of you out there who are more economically savvy?

What is Poverty? Haiti Reminds Us.

Watching or reading the news lately, one cannot avoid images of Haiti’s poverty. The poorest nation in the Western Hemisphere, many in Haiti, even prior to the earthquake, resorted to eating mud because they could not afford rice or other staples.

The reminder of that kind of poverty makes me question how anyone, myself included, can live a life of such relative wealth without guilt. While I am generally opposed to religion, one good thing that comes of certain religious organizations is the idea of charity, giving, tzedakah, etc. Of course one can lead a life without God and be inclined to give time and money to those in need, but it seems that without God reality is tied to science, where the genetic reality is “survival of the fittest” and to care only for ones’ self and offspring.

On NBC, Conan and Leno are fighting it out for a time slot when they can make America laugh. These comedians poke fun at life so we can get by it. Because regardless where you stand on the food chain, life is ultimately scary and meaningless. You can have all the money in the world and even moments of happiness but that means nothing. You can spend your entire life being Mother Theresa 2.0 and give and give, but that also means nothing. You can be in poverty, trapped by economic forces greater than any talent or skill you have, and that ultimately means nothing too.

Yet as I work as a widget in the machine known as capitalism, I have dual, painfully contrasting purposes in my mind, like two opposing notes sung by the shrillest of voices in attempted and failed harmony. One part of my mind wants wealth. Not stuff, per say, but “money” in the bank. Lots of money. To save and to have. Maybe to buy some stuff. This is what America instills in us as values. If we do not make money, if we chose poverty, we are failures. If we work hard (and use birth control and can obtain health insurance) there is “no excuse” to be poor in this country. Not poor like those in Haiti, anyway. No one in America has to eat mud cookies to survive.

The other contrasting note plaguing my ears is that of the desire to help others. To make a difference in the world. But the pain is so great. And the difference one can make is so small. You can feed a child, you can help a family in a third world country eat for a few days, or even a year. But how much can one person help?

Is there even a way for the world — everyone in the world — to live at a level above poverty (the US standard of poverty) if wealth exists? Doesn’t the wealth of one rely on the poverty of another? And we know communism, the ideal of equality, doesn’t work, because humans are genetically greedy.

So what can one person do? A part of me wants to donate all of my savings to Haiti right now. Of course, I won’t. I’ve never donated money before in my life. Which is terrible of me. But I’m afraid to part with money. I’m afraid any difference I could make (with the exception of donating all of my income to charity or spending my life as an atheist missionary) is too small to be a difference at all.

Is Materialism the Devil Incarnate?

My fondest memories of childhood involve spending hours in the dressing room at the mall, with my mother bringing in yet another outfit to try on, then leaving each store with a few bags in hand, filled with my purchases for the day.

This is capitalism at its finest.

Are humans born innately greedy? Not all of us want to possess lavishly adorned lifestyles, but accumulating something provides a security blanket, plus something to show to lure in our partners.

My boyfriend has no desire to be rich or to buy new things (except the occasional expensive tech gadget). He wants to save up enough money so he can quit working, live on a commune, meditate, stare off into the mountains, and I’ll admit his lack of motivation to achieve materialistic wealth drives me nuts. Why? Because I am a materialistic person. I was raised that way.

Of course I can change. I can be happy with nothing or very little. I don’t need a new pair of shoes, but lord knows I want them.

All of this, dear readers, is in response to a post over at Get Rich Slowly entitled: 84 Year Old Social Worker Saves $1.4 Million.. The woman was frugal, but only because she didn’t care about fancy possessions. She paid for her house in cash. She drove a 30 year old car. She didn’t care about having the latest and greatest. Those who grew up during the Great Depression tend to live this way. Case in point, my boyfriend’s grandparents, who horde everything they’ve ever obtained, have a house that’s falling apart, drive cars that should be breaking down… any… minute… barely use any electricity, and while I don’t know for a fact, I’d bet they’re worth a small fortune. They worked. They didn’t spend. They saved.

That leads me to a related topic: Dubai. What on earth does Dubai have to do with all of this, you ask? I read a very interesting (and very long) article last night titled “The Dark Side of Dubai” – a controversial opinion piece published in The Independent. Don’t let it’s novel-length scare you, it’s worth reading from top to finish.

Dubai – at least from this writers point of view – is capitalism (minus the democracy) at its worst. Those who are rich become very rich, those who are poor are indebted and end up in jail or are basically unwilling indentured servants. Dubai is a surreal city that has been built to be an adult playground. The party capital of the middle eastern world, no longer an oxy-moron. Shopping malls and hotels piercing the sky. Luxury at its finest.

While Dubai may be an extreme case — if the article is true — this type of upper class gets richer and lower class gets poorer has been going on for decades. Even as I write this, I have workers being paid $2 per hour on the otherside of the world completing projects for me. When it comes down to it, capitalism is about cutting costs as much as possible so those who have can have more, and those who have not never shall have. It’s a vicious cycle. Democracy helps swing the pendulum in the direction of “fairness.” Human rights groups protest cruelty to citizens of the world. People who are hurt by people who don’t want to drive 30 year old cars.

Granted there are many shades of gray when it comes to greed. But we’re all guilty of it. If we weren’t greedy, our society as we know it would collapse. We need greed so jobs can exist. So innovation can occur. Buy now, go into debt, pay later, and on and on.

I’m not caught up in the debt cycle, fortunately, but still feel this strong urge to spend. I drive past the day laborers every day on my way to work – who are likely illegal immigrants from Mexico waiting around for a job. Loitering. They are free not to do this (the main difference between America and Dubai here) but still… when people are hungry, when their families are hungry, they need the work. So they wait. I drive past the hordes of men who look to my car waiting to see if I will stop with a job. I head off to my cushy office and middle class-paying job where I’ll never work as hard as they would between dawn and dusk. I accept my greed, feel uncomfortable spending time with people lacking this greed (my boyfriend) and those who are extremely greedy and superficial (those who just want to make money to buy the world).

I am afraid that the horrors of Dubai and the greed that built the city are within my cultural DNA. I’ll save and I’ll spend, and I’ll use the resources of the world to get ahead. And I wonder if that is so terrible – when so many people out there do this without stopping to think that this whole equation might be wrong.

4 in 10 Americans Don’t Know When They’ll Retire

With a mix of a morbid stock market and American’s not understanding just how much money is needed for retirement, the country is filled with people who may never get to enjoy a retirement.

A study that came out today from ING Direct reports that 40% of Americans expect to retire much later on or not at all. Americans will be chained to their jobs longer than ever before just to keep up with their bills and ensure food is on the kitchen table. The survey results also noted that over 60 percent of Americans are significantly more concerned about saving enough money for retirement and having the right type of retirement plan than they were six months ago.

Some other interesting stats from the survey:

· Nearly half of all Americans (47 percent) have “no clue” how much money they need to retire;

· Despite nearly two years of economic turmoil, 65 percent of Americans have not adjusted their retirement investments;

· One in five Americans (19 percent) are still banking on Social Security to be their main source of retirement income; and

· One-fifth (21 percent) of Americans are contributing less to retirement than they were last year

This is pretty scary stuff. The only thing that I go on is that retirement is maybe not a necessity. Well, at some point when I can no longer move or think I’ll want to retire, but I hope I’m well into my 80s at that point. I enjoy working, and can’t imagine enjoying retirement. I’d be bored silly. Maybe my mind will change by then, but still — my biggest fear is not having enough money to take longer vacations and travel in between being professionally productive. I’m definitely not banking on social security to be my main source of retirement income.

The national online survey of 1,223 adults was conducted by Harris Interactive on behalf of ING DIRECT between February 18-19, 2009.

On the Dawn of the Obama Era

I vaguely remember Clinton’s presidency. It was before I could vote. I remember people seemed to like him, so much as forgiving him for having a lusty affair with his intern. I didn’t know enough about politics then to judge, but he seemed like a good prez.

Then came eight years of Bush. I feel bad for Bush, even though I dislike him. As soon as he stepped into office 9/11 happened, and everything went downhill from that. I disagree with the decisions he made to go to war with Iraq, but with such an attack on the US he had to do something. And then over the last four years, our economy has run out of gas. We’re spending trillions of dollars on a war we probably shouldn’t be fighting, and in our own borders people are going hungry, losing houses, and living without health insurance.

I doubt Obama can really bring the “change” he promises. But there will be plenty of change with the new democratic government. Change that we need. Hopefully. I expected the worst of Bush and I got it. I’m afraid to expect too much of Obama because he is, after all, a politician.