Black Women and Investing

In recognition of Women’s History Month, the SEC’s Atlanta Regional Office (ARO) and the Society for Education and Professional Development, Inc. (SFE&PD) hosted a webinar to inform Black women on the best ways to invest.

Founder and President of SFE&PD Ted Daniels, who also serves as secretary for the SEC Investor Advisory Committee, joined ARO Director Nekia Hackworth Jones for a discussion on Black women and financial education and investing.

"The income gap between white women and Black women is closing, as Black women are now earning 85 percent of what white women earn, but are not maximizing their income possibilities," said Daniels.

Jones added that the Black community has a spending power of over $1 trillion, but most of it flows through the community (i.e., spending it) rather than being contributed in a 401(k) or invested in wealth generating strategies. Nearly 60 percent of Black women are not invested in anything, said Jones, and this creates a problem not just for the current generation, but subsequent ones as well.

The income gap between white women and Black women is closing, as Black women are now earning 85 percent of what white women earn, but are not maximizing their income possibilities.

Ted Daniels, Founder and President of SFE&PD

Jones also said that there are three main reasons that Black women do not invest: lack of money, lack of confidence and knowledge, and aversion to risk. "There is a perception that you need an entire salary (for example, almost $50,000 in extra income) to invest, which is not the case. For example, a research study noted that if someone invested $30 per month into the S&P 500 index over the past 120 months, their initial $3,600 investment would have grown to $8,000, a 122 percent rate of return." Daniels told the audience not to be afraid of risk. "The way to generate wealth is to put money in the market, not just certificates of deposit or savings accounts," he said.

According to Jones, financial literacy has dropped by nearly 10 percent since the Great Recession but there are many tools available from the SEC to help. Investor.gov gives first-time and seasoned investors good advice on how to invest safely, and tools such as EDGAR can give people information on company performance to make seasoned investing decisions.

Daniels closed out the discussion by noting that, while earlier is better for investing, "it’s never too late to build up a retirement account, no matter your age."