“What indicates if a particular person is likely to be an investor? A new survey in the United States suggests that for whites, it is typically age. And for blacks, it is more likely to be wages,” writes Paulette Thomas in today’s Wall Street Journal.

“That is according to the latest survey by Ariel Mutual Funds, a black-owned firm, and Charles Schwab Corp., which examines the disparities in how African-Americans and whites invest.”

“The study, in its fourth year, shows more African-Americans than ever are investing in stocks. While the percentage of whites who own stocks has stayed flat at about 80%, the percentage of African-Americans increased to 69% this year, compared with 57% in 1998 when the surveys began. Read the full text of the survey by Ariel Mutual Funds and Charles Schwab. To read the report you will need Adobe Acrobat Reader software, available free.”

“But this year’s survey, in which 500 whites and 500 blacks across the country, each with household incomes of at least $50,000, were interviewed in January and February, unearthed intriguing cultural differences in investing. African-Americans are more conservative investors, and compared with whites, are more wary about volatile instruments such as stocks. Even after controlling for things such as income and education, African-Americans are still 35% less likely to invest than whites.”

“And in the most intriguing racial disparity, personal income level is a far greater influence on whether African-Americans invest in stocks than it is for whites. A black person earning $100,000 annually is nearly three times as likely to own stocks as a black person earning $75,000 a year. That didn’t hold true for whites, who are only slightly more likely to be investors as their income rises.”

“For whites, age is a stronger influence. A white person between 35 and 44 years old is nearly three times as likely to invest than a white under 35. On the other hand, age didn’t show up as an influence on African-Americans in the survey, except that those older than 65 were less likely to invest.”

” ‘Investing is a rite of passage for white investors,’ says Carla Arnold Foster, vice president of specialized segment marketing at Schwab. ‘Whereas a certain income level is what makes the bell go off for black investors.’ “

“The survey demonstrated the degree to which the blacks surveyed, who had an average household wealth (net worth excluding their home) of $158,000, compared with $273,000 for the whites surveyed, hold a more conservative attitude toward investing. Some 83% of whites agreed with the statement: ‘The stock market continues to be the best place for long-term investing.’ Only 59% of blacks agreed.”