How Does Family Wealth Make a Difference?

Meet Byron Green and Max Holland. They're about the same age, work for the same company, and make the same income. They even live in the same neighborhood. But if you compare their net assets, Max has twice as much wealth as Byron. Why is there such a big difference?

Byron is Black and Max is white. What roles have race and wealth played in their life stories?

Byron's Family
Max's Family
#1 - Starting Out: The Parents Buy a Home
In 1951, The Greens bought a two-story duplex in one of the areas of Chester, PA, that would rent or sell to African Americans. The Greens scraped together $1,000 for the down payment and mortgaged the $5,500 remaining balance.
The Hollands married in 1948. A financial gift from their parents and a low-interest government VA loan allowed the Hollands to stretch their resources and move to a new suburban development on Long Island. In 1952, they bought a home in all-white Merrick for $21,500.
#2 - Making a Living: The Parents Find Work
Job opportunities for Black people were still very limited. Mr. Green worked as a lab attendant at a nearby refinery. He'd say, "Black men were the last hired and the first fired." Mrs. Green provided domestic help for white families in the middle-class suburbs. Mr. Holland financed his college education through the GI Bill. After graduating, he got a job as a "management trainee" for a big New York textile firm, where he worked for the next 15 years. The sales, technical, and management staff were entirely white.
#3 - For Better or for Worse: The Neighborhood
When manufacturing crashed, many people left Chester, and the area became increasingly segregated. Those who stayed faced higher taxes to maintain public services and schools. While their income remained the same, the Greens saw their expenses climb and their neighborhood begin to deteriorate.
Property values were good and getting better. Max and his brothers enjoyed good schools, parks, libraries, etc. In 1965, Mr. Holland started his own business by tapping into his home equity and borrowing money from an uncle. His business did well and he sent all three of his children to private colleges.
#4 - Leaving the Nest: Growing Up, Moving Out
Byron received an academic scholarship to an Ivy League school. Because of his family's uncertain financial situation, he has always exercised a conservative approach to his personal finances. Max's personal "wealth-building" began at the age of 13 with Bar Mitzvah checks from friends and relatives. By the time he was 18, Max could use his savings and money from his parents to travel, explore his interests, and go to college worry free.
#5- Cashing in: Selling the Family Home
In 2000, the Greens sold their home for $29,500 - a negligible increase in value considering the remodeling and improvements they put into it over 40 years. This amount has not gone far to provide for Byron's family in old age. At the time of the sale, Chester's population was 76% Black.
In 1991, the Hollands sold their home for $299,000 - 14 times what they paid for it - and were able to retire comfortably to the Berkshire Mountains. They also helped all their children with down payments on their own homes. At the time of the sale, Merrick was still 95% white.
#6 - Inheriting the Future: Byron and Max Today
In 1994, Byron financed the purchase of a condominium and continues to make monthly mortgage payments today. He also needs to look after his parents' finances and must be ready to pitch in whenever unforeseen expenses arise.
Max bought his own house in 1985. His parents are financially secure and his home is all paid for and appreciating in value. Max is free to focus on the future - to provide a safety net or launching pad for his own children.


This tale was based on a true story. Byron and Max are real people (their names have been changed). They are the directors of California Newsreel, the company that produced this television series.

As you can see, in one generation, discrimination makes a big difference in the relative wealth of these two people. In 1995, the average white family had eight times the wealth of the average nonwhite family. Even at the same income level, whites have, on average, twice the wealth of Black families.

Wealth isn't just about luxury. It's also the starting point for the next generation. Until the wealth gap is addressed, whites will continue to have an advantage over nonwhites, generation after generation.

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