Minority Wealth Magazine - Bethesda, MD - What are the methods that minorities are using to build wealth? Are minorities in the U.S. comfortable that they can build wealth through the traditional means of retirement planning and saving? A survey released by Minority Wealth Magazine reveals some surprising results.
When minorities were asked, "which of the following do you think provides the best opportunity to build wealth," and given the following choices: Save in a retirement plan, Save outside of a retirement plan or Play the state lottery, the number one response from minorities was playing the state lottery.
Nearly twice as many minorities surveyed admit that they have a higher confidence in building wealth through playing the state lottery, rather than contributing to a retirement fund. (Minorities surveyed consisted of 48% African Americans, 41% Hispanic Americans, 5% Asian Americans, and 6% other minority.)
These results express the lack of confidence that minority groups have in the traditional methods of saving and investing. Overall, Minority Americans have a low degree of confidence in their ability to build wealth by saving within retirement plans and general saving outside of a retirement account.
This difference in confidence level can be attributed to a lack of experience and information available to those minorities surveyed. Of those surveyed, over sixty percent stated they had a higher degree of understanding and more information was readily available to them on their state lottery as opposed to retirement and other types of saving. "The survey findings suggest that even though Minority Americans have made significant progress in terms of wealth building, there is still a lack of confidence in the traditional savings and investing methods in the minority community," says Kizzie Bozeman Brown, Executive Editor of Minority Wealth Magazine. "Until we address this issue of a lack of understanding and education about on financial planning, Minority Americans will continue to find more comfort in activities like playing the lottery than in basic financial planning tools as a means to build wealth."
In terms of age, contributing to a retirement fund, understandably, is most prevalent for those approaching retirement. Thirty one percent of minorities surveyed between the ages of 45 and 54 contribute to a retirement fund versus an average of only 24% for those ages 18 to 44.
The only age group surveyed that claimed to save outside of a
retirement fund more than play the lottery as a way of building wealth were minorities ages 25-34, the age associated with young
In terms of ethnicity, more Asian Americans surveyed claimed that they preferred saving outside of a retirement account instead of playing the lottery as a method of wealth building. Of the Black Americans and Hispanic Americans surveyed, over 40% of each group claimed that they played the lottery in order to build wealth. This response was over 10% higher than those claiming to actively save outside of a retirement plan. "We suspect this is due to the fact that historically, Black and
Hispanic Americans have had limited exposure to financial education material," said Tyson Q. Bellamy, Chairman of the Board for the Coalition of Financial Educators of America, Inc.
A larger percentage of men surveyed stated they felt playing their state lottery was the best way to build wealth, as compared to women. Although the non-retirement savings response levels between the genders was even, forty-eight percent of minority men preferred playing the lottery over savings as a wealth building method, compared to forty-one percent of minority women surveyed.
These finding are part of an annual wealth building confidence survey which is conducted by a joint effort between Minority Wealth Magazine and the Coalition of Financial Educators of America, Inc. The purpose of the survey is to gauge the confidence and attitude of Minority Americans toward various methods of wealth creation. The survey was conducted in December 2004 and January of 2005 with 2,000 individuals (1062 women and 938 men) age 18 and older in the United States. The survey was conducted through an online survey questionnaire.
The survey includes over sampling of minority groups, specifically Asian, Black, Hispanic, Indian, and Native Americans. Black Americans whom spoke Spanish as their first language were categorized under the ethnicity of Hispanic American.
Possible sources of error include the refusals to be interviewed and other forms of non-response, the effects of question wording and question order, and screening. While attempts are made to minimize these factors, it is difficult or impossible to quantify the errors that may result from them.
In surveys conducted where one of the factors is ethnicity, there is a chance that certain individuals are a combination of ethnicities. To address this issue the survey question concerning the ethnicity of the respondent was formed to ensure that the participant selected the ethnicity that they most closely identify with, as their selected ethnicity.
Source: Minority Wealth Magazine