(NNPA)—Although most Sunday school children are warned against the “love of money,” by adulthood it is the lack of it that becomes the source of many problems. When finances are so fragile that even a small shortfall presents a big problem—a few hundred dollars might as well be a million—you do not have what you need.
Now new research finds that the ability to reach some level of financial security or well-being can be like a chicken and the egg question: Which comes first—the problem or the lack of money?
To determine how family financial assets changed over time, researchers at Brandeis University’s Institute on Assets and Social Policy interviewed a group of families in 1998 and again 12 years later. The original sample of participants was evenly split between Blacks and Whites. All were working or middle class, had children ages three to 10 years old, had similar life aspirations and were selected from the same three cities.
At the beginning of the study, the wealth gap between Blacks and Whites was clearly evident. In 1998, the median net financial wealth, excluding home equity, for Blacks in the sample was more than $16,000 lower than for White families. Additionally, the gap in median net worth, which does include home equity, was $108,000.