News Analysis: ‘Gay People Earn More and Owe Less’
Here comes another survey about gays and their money sponsored by a financial institution; seems like a river of these things has sprung from a well and flowed across the media like pearls of wisdom. In the end they are each only press releases to garner attention in the content hungry media.
This recent Prudential survey reports that gays earn more, save more, owe less and have more equity in their homes than the average American. The survey goes on to report we are more likely to have a job than the general population which likely makes a major contribution to all of the above. Yet, the survey goes on to report that LGBT persons are only half as confident about their financial preparedness as the general population. I freely speculate that the noted lack of confidence is expressed financially yet probably stems from a general sense of insecurity of our true place in this American society.
This Prudential survey is mirrored closely by other studies conducted by the Census Bureau and Experian though it appears to run about as contrary as possible to the Gallup survey I wrote about recently in LGBT Studies Are As Skewed As Presidential Polls. In that survey we were dumb and broke while Prudential now pronounces us well educated, higher earners and better savers. All because we tend to live in higher cost areas, also known as gay ghettos, with access to better jobs because of the concentration of population in dense metropolitan areas. And of course the ever present unstated rationalization that our disposable income is higher because we don’t raise families.
This perception that LGBTs do not raise families is an old stereotype, like many that have yet to die. LGBTs do raise families, many with children, some with spouses and some with parents. The finding that we live in high cost areas also debunks the rationale that we have more money because we live in areas with a concentration of high paying jobs, as high living costs readily consume higher incomes.
I do particularly appreciate one comment in the Prudential survey: “Uncertainty about the future of gay rights likely also prompts many members of the LGBT community to be especially prudent with their money.” Ain’t that just true!
Since the U.S. Supreme Court has finally agreed to hear two cases relevant to gay marriage, read full civil rights for homosexuals, observant gays are well advised to keep their powder dry. If the decision comes down on the wrong side of discrimination those most prepared to vacate the premises for greener pastures will be those with some cash in hand and little baggage to unload prior to the flight. Should the high court decide to legalize discrimination history can already tell us the rest of the story.
There is little question that the LGBT retiree, the soon to be retiree community and those LGBTs with significant wealth are a largely untapped and probably profitable financial management opportunity for financial institutions. When it comes to financial planning, because of the ‘complexity of their finances and unique needs’ based primarily on the structural inequities resulting from legalized discrimination, managers of LGBT assets require a specialized knowledge of law, taxes and inheritance.
In the end this survey done by Prudential seems to lead to the same place. It reports that there is a lucrative market of untapped gay money to be managed. If only main stream money managers could figure out how to convince LGBT persons that they have any idea of what the future will bring and within that knowledge chart a valid course for investing our gay assets they may also find their entrée.