A young son sits on his grandfather's lap at the dining table as they operate a laptop together

When it comes to investing, time is your greatest ally. The longer you give your investments to grow, the larger your nest egg is likely to become. Similarly, more time devoted to financial education may result in a more secure financial future.

Research reveals Americans’ understanding of basic financial concepts has been in steady decline since 2009, creating urgency for better, more effective approaches. This is doubly important among Black and Brown individuals, who face greater barriers standing in their way of building generational wealth. At Ally, we not only encourage open dialogue about money, but also support financial education in diverse communities. Our summer Stock Market Challenge provided students from historically black colleges and universities (HBCUs) investing experience and insight on navigating the stock market.

By nurturing young people’s interest in investing, we can help them succeed with their financial journey.

Early Financial Conversations Creating Pathways to Success

A strong connection exists between youth financial education and long-term monetary well-being. For instance, students who are required to take personal finance courses starting in elementary or high school are more likely to pay for college out-of-pocket or through scholarships and grants, and are less likely to rely on expensive private loans or high-interest credit cards.

Early financial education doesn’t have to be difficult — nor does it require an official curriculum. Families can have conversations at the dinner table, asking about everyone’s financial goals in the next few years. Simple can be successful. These dialogues can lead to impactful change.

In 2019, a survey by Ariel-Schwab found that only 18% of Black Americans under age 40 discussed the stock market with their families growing up, but those who did have conversations were more likely to start investing. In contrast, 23% of white individuals reported they had early talks with their parents. Yet there’s hope, as evidence exists of growing engagement in the stock market by younger Black Americans in 2020. Sixty-three percent of African Americans under the age of 40 now participate in the stock market, which is equal to their white counterparts.

This shift toward investing could be due to the ease of investing online, the rise of fad stocks popularized by social media, and more open dialogues about money occurring in homes during 2020/2021 stay-at-home mandates.

Once financial conversations become the norm, it can be helpful to do some research and discuss what type of investment strategy makes the most sense based on goals and risk tolerance. At Ally Invest, we make it easy to gain helpful information about investing without the confusing jargon and complicated tactics. Regardless of your experience level, we offer a wide selection of investment choices and digital tools to help you make the most of your investments.

Addressing difference can lift us all.

As of 2019, fewer than half of Black and Brown Americans owned stocks, compared to almost two-thirds of white Americans.

We recognize significant systemic barriers have prevented certain communities from accessing financial education and subsequently reduce opportunities for wealth building. Because of this, we are committed to making investing as accessible as possible. This starts by first acknowledging these inequities and having honest conversations about filling wealth gaps. Transparency can ultimately lead to bringing us closer in helping one another achieve our financial goals. The Stock Market Challenge allowed us to leverage the support of others, which led to participants feeling empowered about financial concepts.

“I really enjoyed bouncing things off of one another,” said challenge participant Emanuel Perez. “Although we all come from different walks of life, we were all able to support each other through some of the more challenging stages of learning more about stock market strategy. Because of that, I know we’re all feeling more confident about gaining our footing in investing.”

A secure future starts today.

Financial success isn’t achieved overnight. But we can start constructing the foundation. Every step that’s taken now — no matter how large or small — has the potential to impact the future. We are still on an uphill climb before we achieve parity in financial education. But Ally is intently focused on our mission to inspire and encourage people of all demographics and backgrounds to participate in the act that, for many, is integral to building wealth: investing in the capital markets.

“I already had an idea of the importance of investing to make a bit of extra capital,” said Jonnathan Coji, one of the student participants in the Stock Market Challenge. “But I really learned more about how making my money work for me will impact every aspect of my future.”

Learn more: Read about closing the racial wealth gap.