Investing is becoming more accessible, but education must come first.
President Biden announced this year that the racial wealth gap is the closest it’s been in 20 years. The news, gleaned from a 2022 Federal Reserve study, also showed that for every $100 of wealth held by white families, the average Black family held a startling $15. Furthermore, the gap has doubled from 1989 to 2016. As a result, while things are getting better, the absolute value of the wealth gap between white and black families today is wider than ever before.
The Black-White Income Gap, 1970 to 2018
This mounting crisis has to first be addressed in the classroom. Although 27 states require some personal finance curriculum in high school, a vast majority of graduates do not have access to high-quality financial education programs. This leads to graduates leaving school ill-equipped to benefit from financial markets and unable to engage in conversations around wealth, debt, loans, and countless other economic devices that influence their lives.
So why do people avoid financial markets? And where are the gaps in existing education resources that lead individuals to stall along their investor journey? With these answers we can collectively invest in education resources to support stronger financial futures for students.
The Nonlinear Journey Of An Investor
Investing would seem to follow a linear path: an individual opens an account, purchases stocks, and builds a portfolio. But according to the FINRA Investor Education Foundation, the reality is less straightforward.
It starts with contemplating: observing from the sidelines, sometimes for a few weeks, other times for an entire lifetime. “We don’t normally think of that stage of investing,” says Olivia Valdes, Senior Researcher at the Foundation. “But it’s actually a pivotal stage because people are deciding, ‘Am I really an investor, and how does this system work?’”
This stage ends when individuals…
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