Home Financial responsibility Opinion: Investing in diversity – for Black History Month and beyond

Opinion: Investing in diversity – for Black History Month and beyond


As we recognize Black History Month, it’s a good time to pause and reflect on the financial gaps that put many Americans at a financial disadvantage. While the work that needs to be done will be nothing less than tectonic to truly resolve these challenges, there are actions we can take within our own individual finances to help us achieve our personal goals while supporting the values ​​around the diversity.

If you’re not sure where to start, here are some simple steps to help you align your financial choices with your values, whether it’s focusing on your education, that of your family, or the community at large.

  1. Start simple: set concrete goals.

Having clear and specific financial goals is important for anyone making a solid financial plan, but even more so for Black households considering that many are already starting behind: the median wealth gap of Black families holding 12 cents to $1 of white wealth is largely unchanged. over the past 30 years. On average, black households earn 61 cents for every dollar of income earned by white households. Black college graduates hold an average of $23,400 in debt, compared to $16,000 for their white peers. And financially, this inequality can worsen over time, with white Americans holding an average of seven times more retirement savings than black Americans.

Making progress in your personal finances can seem like an uphill battle, but it’s possible to pursue your personal aspirations while balancing your support for the people and causes you care about. Start by asking your employer about any financial planning or coaching tools that might be available at work. Taking advantage of workplace benefits can help you meet your immediate needs and help free up extra funds to set aside for other larger goals like education, charitable giving, or retirement.

  • Take stock of the resources around you.

Given the unique challenges facing the Black community today, access to financial education has never been more important. And “first-generation” professionals in many fields may not have learned from family and friends how to manage wealth-creating resources like equity compensation or investing.

Demystifying financial empowerment – ​​and providing opportunities for wealth creation – in diverse communities can help spark change individually. Start small: Many workplace financial education modules and sessions aim to help you learn the ropes of basic financial planning, investing, and making the most of all the equity-related benefits you get. Take advantage of these benefits to better understand your own finances, as well as how you can align your money with your values. Also connect with employee resource groups to learn more, share more, and understand how some of these issues play into broader social issues.

Participating and educating yourself is the first step: putting it into practice is the next. Bring what you learn back into your community, whether through volunteering, mentoring, or recruiting efforts for your business.

  • Make investment a top priority.

Investing can help protect your future, which puts you in a stronger position to help the people and causes you care about. In a 2020 survey, just 36% of black Americans said they had money in the stock market — including in a 401(k) or other retirement account — compared to 60% of white Americans.

Explore the retirement plan options available to you at work and take advantage of any employer matches. Also consider other investment options that can help you build wealth over time. For example, you can work with a financial advisor to build a portfolio of investments that focuses on companies that promote workplace equality, access to capital, and products and services that benefit diverse communities, while avoiding exposure to companies with a poor diversity track record. Your benefits can help you access financial coaching or advice to help you get started.

Make your personal financial stability a priority

Individual financial choices can help make the difference. Putting yourself in a stronger position gives you more room to help lift diverse families and communities. Prioritize your personal financial stability and plan first, and don’t hesitate to plug into support through your workplace benefits when looking for ways to turn your values ​​into action.

Rodney Bolden is Vice President, Financial Wellness at Morgan Stanley at Work.

This article has been prepared for informational purposes only. The information and data contained in the article were obtained from sources outside of Morgan Stanley. Morgan Stanley makes no representations or warranties as to the accuracy or completeness of information or data from sources outside of Morgan Stanley. It does not provide personalized investment advice and has been prepared without regard to the individual financial circumstances and goals of those who receive it. The strategies and/or investments discussed in this article may not be suitable for all investors. Morgan Stanley recommends that investors independently evaluate specific investments and strategies, and encourages investors to seek the advice of a financial advisor. The suitability of a particular investment or strategy will depend on the investor’s individual situation and objectives..

By providing links to third-party websites or online publications/articles, Morgan Stanley Smith Barney LLC (“Morgan Stanley”) does not imply any affiliation, sponsorship, endorsement, approval, investigation, verification with third parties or any monitoring by Morgan Stanley of any information contained in the articles or websites. Morgan Stanley is not responsible for the information contained on third-party websites or your use or inability to use such sites. We also do not guarantee their accuracy and completeness. The terms, conditions and privacy policy of any third-party website may be different from those applicable to your use of any Morgan Stanley website. Information and data provided by third party websites or publications are current as of the date they were written and are subject to change without notice..

Where Morgan Stanley Smith Barney LLC, its affiliates and Morgan Stanley Financial Advisors and Private Wealth Advisors (collectively, “Morgan Stanley”) provide “investment advice” with respect to a pension or benefits account, a Individual Retirement or Coverdell Education Savings Account (“Retirement Account”), Morgan Stanley is a “trustee” as those terms are defined in the Employees Retirement Income Security Act of 1974, as amended (“ERISA”) and/or the Internal Revenue Code of 1986 (the “Code”), as applicable. Where Morgan Stanley provides investment education, accepts orders on an unsolicited basis, or does not provide “investment advice”, Morgan Stanley will not be considered a “fiduciary” under ERISA and/or the Code. . For more information on Morgan Stanley’s role in relation to a retirement account, please visit this site. Tax laws are complex and subject to change. Morgan Stanley does not provide tax or legal advice. Individuals are encouraged to consult their tax and legal advisors (a) before opening a retirement account, and (b) regarding any potential tax, ERISA and related consequences of any investment or other transaction made with respect to a retirement account. retirement..

Important information about your relationship with your financial advisor and Morgan Stanley Smith Barney LLC when using a financial planning tool. When your financial advisor prepares a financial plan, they will act as your investment advisor with respect to the delivery of your financial plan. To understand the differences between brokerage and investment advisory relationships, you should consult your financial advisor or see our brochure Understanding Your Brokerage and Investment Advisory Relationships available at Important Information about Your Relationship with Your Financial Advisor and Morgan Stanley Smith Barney LLC when using a financial planning tool. tool. When your financial advisor prepares a financial plan, they will act as your investment advisor with respect to the delivery of your financial plan. To understand the differences between brokerage and advisory relationships, you should consult your financial advisor or consult our brochure Understanding your brokerage and investment advisory relationships available here.

You have full responsibility for making all investment decisions regarding the implementation of a financial plan. You can implement the financial plan at Morgan Stanley Smith Barney LLC or at another company. If you engage or have engaged Morgan Stanley, it will act as your broker unless you instruct it in writing to act as your investment adviser on a particular account..

© 2022 Morgan Stanley Smith Barney LLC. Morgan Stanley at Work services are provided by Morgan Stanley Smith Barney LLC, Member SIPC, and its affiliates, all wholly owned subsidiaries of Morgan Stanley.