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Washington Post

THE LEGACY OF SLAVERY MADE MY GRANDMOTHER FEAR INVESTING. It takes more than a financial workshop to overcome a lifetime of anxiety that you could lose everything you ever worked for with just one misstep.

By Michelle Singletary

Dear Reader,

My grandmother was fanatically frugal and a stupendous saver. Big Mama, as she was called by all her grandchildren, showed me the power of having a well-stocked emergency fund. But for all her financial shrewdness, she did not teach me to invest in the stock market. She taught me to fear it.

When my first employer introduced a 401(k) retirement plan, I sought advice from Big Mama. But she actively discouraged me from “gambling” in the stock market. “That’s for White folks,” Big Mama said. “They can afford to lose money.”

My grandmother trusted financial institutions to keep her rainy-day money and park her paycheck until she paid her bills, but that was it.

She didn’t even trust the U.S. Postal Service to deliver her bill payments on time. Big Mama would spend half a day every month riding around Baltimore paying her utility bill, mortgage and car loan. She made a habit of writing down the name of whoever took her cash, warning the person that if the payment wasn’t posted promptly, there would be hell to pay.

“I’ll be back,” was originally Big Mama’s line, not the Terminator’s.

My grandmother didn’t understand how the stock market worked. She wouldn’t invest in bonds, even those issued by the U.S. Treasury. Fear drove her to save, but it also kept her from growing her wealth by investing in the stock market.

Big Mama eventually put aside about $20,000 for her retirement. But she kept it all in a simple savings account. The bank teller couldn’t even persuade her to put the money in a short-term certificate of deposit. “No, ma’am,” Big Mama told her. “Leave my money right in the savings account.”

Federal Reserve data from the 2019 Survey of Consumer Finances found that Black families are far less likely than White families to have retirement investment accounts.

“Among middle-aged families — who have the highest rates of account ownership — 65 percent of White families have at least one retirement account, compared to 44 percent of Black families,” the Fed said.

Those who like to pigeonhole Blacks as financial illiterates argue that the disparity results from the failure of Blacks to comprehend the importance of investing. This viewpoint ignores the history of slavery and its enduring impact on the descendants of enslaved people.

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