How Black People Spending Habits are Keeping them Poor – [Watch Video]
Black people spending habits are keeping them poor as they tend to place more value on luxury goods and less on assets.
A July 2008 study revealed that blacks spend more on luxury items (clothes, cars, jewelry) than their white counterparts. Indeed, the study’s authors found that even though blacks often have fewer means, they spend 28 percent more on those types of goods. On average, blacks will outspend whites by $1,900. Granted, whites consume more luxury items, thanks to their higher incomes, but the fact remains that even with smaller budgets, black people are sacrificing significant chunks of money to the luxury gods. Read more about this on Fashionista.com.
Nielson’s “The State of African-American Consumers “report, projects that Blacks will have a collective buying power of $1.1 trillion in 2015. A study by Target Market, a company that tracks Black consumer spending, found that many Black consumers chose to use this power by spending money on luxury goods with no asset-building potential.
In 2002, Target Market reports that the Black community spent $22.9 billion on clothes, $3.2 billion on electronics and $11.6 billion on furniture. In addition, African-Americans account for 12 percent of the population, but make up 30 percent of all Scotch whiskey sales.
The Ariel Mutual Funds/Charles Schwab 2003 Black Investor Survey comparing Blacks and whites making the same income showed that whites saved for retirement 20 percent more than Blacks. The survey also found that 30 percent of Black people earning $100,000 a year barely had $5,000 in retirement savings.