Don't Blame Your Family For Their Lack of Wealth...Blame The Government
I study a lot about wealth and it's relationship with real estate and this article will dive a little deeper into the historical elements of that relationship. Wealth isn't something most people gain in a short period of time or even a lifetime, but do you know how long it takes to accumulate wealth? Wealth is usually accumulated through multiple lifetimes and generations, so when I see so many people with absolutely no wealth, this makes me concerned. This concern led me to a book entitled The Color of Law: A Forgotten History of How Our Government Segregated America by Richard Rothstein. This book details how government policies over the last 80 years prohibited groups of people from reaping the benefits of wealth accumulation via real estate. The book contains countless examples of how the government did not follow through with it's responsibility to protect it's citizens and because of that, many were not allowed to take part in wealth accumulation through real estate.
The first example takes us back to the 1930's. During this time, the economy was fully submerged in the Great Depression. People were moving all around the country for work, but not everyone was affected the same. Most African Americans were forced to work as sharecroppers for plantation owners and were unable to obtain an education due to the necessity of working to survive. The difference maker was land ownership. African Americans who owned their land were able to grow their own food and were not forced to work for other farmers. This was the 1930's so although slavery was abolished, African Americans were still being killed, jailed and discriminated against. There were many cases where white people would simply threaten to kill (lynch) the African American land owner if they didn't give up their land for free and the government allowed this to happen. Depending on the location of the land owner, their fate was simply up to chance. The theft of land, livestock, property, etc from African Americans was a very common occurrence and they could not call on the police or any governmental entity to protect them. In fact, those governmental entities even promoted these actions.
The next example takes us a few years forward to a city by the name of Richmond in California. Today, this is known as the San Francisco Bay Area. In the 1940's, we were fighting in World War II. President Franklin D. Roosevelt had passed the "New Deal", which was a number of federal programs, public works projects, and financial reforms and regulations enacted in response to the Great Depression. One thing many don't know is that FDR had to gain the support of southern senators so his economic reform excluded all industries in which African Americans dominated, like agriculture. The government again failed to protect it's citizens and explicitly discriminated against African Americans via their policies in ways that specifically harmed them economically. This continued into the public housing sector as well. Public housing for whites was further inland, closer to residential areas, sturdily built and permanent. The housing for African Americans was poorly constructed, temporary and located closer to railroad tracks and shipbuilding yards. A Richmond suburb "Rollingwood" built by federally approved bank loans required that none of the 700 houses be sold to African Americans. Due to these policies, African Americans were not allowed to purchase homes and as a result were forced to rent and live in public housing, which over time became "ghettos", with no way for African Americans to escape. African Americans were even arrested and jailed if they were in the city of Richmond and could not prove they were employed.
This final example keeps us in California, but we move to an area known today as "Palo Alto." The Ladera Subdivision near the Stanford Campus was being built with federally insured loans with a requirement that no home be sold to an African American. Even African American veterans couldn't purchase homes. Many African American World War II veterans didn't apply for government-guaranteed mortgages for suburban purchases because they knew that the Veterans Administration would reject them because of their race. Those veterans then did not gain wealth from real estate property appreciation as did white veterans, and their descendants could then not inherit that wealth as did white veterans' descendants. With less inherited wealth, African Americans today are at a significant disadvantage. This particular area where this discrimination took place is prime real estate now. Properties in these areas are possibly worth millions now and African Americans were not allowed to own any of them.
These are just a few examples but the book goes on describing countless areas in particular where the government severely cheated African Americans out of massive amounts of wealth. I speak with many people today who dream of becoming homeowners. Unfortunately they recognize that they come from a lineage of poverty. They work themselves around the clock attempting to break the cycle while they have no idea why their parents and grandparents were poor. They blame their situations on poor choices or lack of hard work or financial planning, but those are all false. This is a systemic situation. The government has a responsibility and we as citizens cannot allow them to walk away from that responsibility. They created a caste system in this country, with African Americans kept exploited and geographically separate by racially explicit government policies. Although most of these policies are now off the books, they have never been remedied and their effects last even today. So to all those hard working people believing you or your parents or your grand parents made a bunch of wrong choices, I say to you, don't blame your family for their lack of wealth...blame the government.