Half of wealthy Black Americans say the United States is better off today than it was five years ago, compared to 18 percent of the general population surveyed who believe similarly. As for personal finances, 62 percent of wealthy Black Americans feel better off now than they did five years ago, more than double the 29 percent of overall survey respondents who share this sentiment.
The findings come from Northern Trust’s recent Wealth in America survey, which provides insights into the financial attitudes of wealthy Americans.
Black respondents said that market stability and the re-election of President Barack Obama are the two principal reasons for their positive outlook.
“This optimism about the future of the country and their personal finances has contributed to wealthy Black people feeling more confident in achieving their long-term financial goals," said Darrell Jackson, executive vice president of Northern Trust. “We believe that investors should review their outlook, investments and liabilities regularly with their professional advisors and make sure they are clearly aligned.”
Business owners looking ahead to continued recovery
Black entrepreneurs surveyed also voiced optimism about the future growth of the economy. Respondents noted these plans for the next 18 to 24 months:
Sixty percent of Black business owners identified increasing revenue as their main focus. Other key areas of importance to their businesses include:
Many respondents report accumulating wealth from earnings
The majority of wealthy Black survey participants say 63 percent of their total household assets come from earned income; only 11 percent comes from investment returns. This compares to findings among the general population surveyed who indicate 44 percent of their total household assets come from earned income and 22 percent from investment returns.
“Wealthy Black Americans are often first-generation stewards of wealth. Many are business owners who consider their hard work as a key to achieving their financial goals,” said Linda Nolan, a Managing Director at Northern Trust. “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.”
Growing wealth: main investment objective
Half of wealthy Black Americans (51 percent) say their primary investment objective is to grow wealth, compared to only 16 percent who say their main goal is to preserve capital. According to the survey, 27 percent believe it is important to have a written financial plan, but only 11 percent of wealthy Black Americans have established such a plan. They reported taking these steps to achieve their goals:
Family plays a role in financial decisions
The majority (80 percent) of wealthy Black respondents say they involve their spouse or partner in household financial decisions and discuss financial matters at least monthly, discussing topics such as goals, business planning and charitable contributions. More than half (65 percent) say it’s important to speak to their children about their wealth and 72 percent say they have already done so.
Charitable giving continues to be of major component of financial planning
Wealthy Black Americans continue to contribute to charitable causes, donating an average of 87 hours in 2011. Helping the less fortunate (94 percent) and contributing to a cause in which they personally believe (93 percent) are cited as the most important reasons for giving. The top recipients of their donations are human services organizations, educational institutions and religious organizations. In addition, 83 percent indicate it is very important to them to help their children develop an appreciation for giving.
“The survey’s findings continue to show the depth of commitment Black Americans have for giving back – both in terms of time and money,” said Jackson. “In addition to giving to charitable organizations, many wealthy Black Americans surveyed also report contributing to educational expenses of extended family members.”
Northern Trust’s nationwide survey of wealthy individuals seeks to highlight important wealth-management issues. The online interviews were conducted by Phoenix Marketing International and NIA Enterprises between Nov. 16 and Dec. 17. The data contained in this report came from 1,700 online interviews and has a margin of error of +/- 2.4 percentage points at a 95 percent level of confidence.
Northern Trust is a premier wealth-management firm that specializes in goals-based financial advice, offering clients insightful perspectives and creative thinking, backed by innovative technology and a strong fiduciary ethos. Northern Trust is ranked among the top 10 U.S. wealth managers with $206 billion in assets under management as of March 31st, 2012, and more than 70 wealth management offices in the United States and abroad. The Financial Times Group has named Northern Trust Best Private Bank in the USA for four consecutive years. In 2012 Northern Trust was also was named Best Private Bank globally for Innovation and Best Private Bank for Socially Responsible Investing.
About Northern Trust
Northern Trust Corporation (Nasdaq: NTRS) is a leading provider of investment management, asset and fund administration, banking solutions and fiduciary services for corporations, institutions and affluent individuals worldwide. Northern Trust, a financial holding company based in Chicago, has offices in 18 U.S. states and 16 international locations in North America, Europe, the Middle East and the Asia-Pacific region. As of March 31, 2013, Northern Trust had assets under custody of $5.0 trillion, and assets under investment management of $810.2 billion. For more than 120 years, Northern Trust has earned distinction as an industry leader in combining exceptional service and expertise with innovative products and technology. For more information, visit www.northerntrust.com or follow us on Twitter @NorthernTrust.