14-07-2025
How Community Is Helping First-Time Investors Build Wealth
How Investing In Community Is Helping First-Time Investors Of Color Build Wealth
For Black and Brown communities, the path to wealth has often encountered different systematic disadvantages, financial trauma, and a lack of access to generational wealth. However, there is a cultural shift as many first-time investors are beginning their investment journeys. Despite this progress, many still feel uncertain and underserved. According to J.P. Morgan Wealth Management's 2024 Diverse Investor Study, 51% of Hispanic and Latina women and 46% of Black women (46%) only started investing outside of an employer-sponsored retirement plan within the past five years, which is far behind the broader population.
Women in the U.S. are projected to control $30 trillion in assets by 2030, a shift known as the Great Wealth Transfer. Yet despite these promising numbers, the gender wealth gap persists, especially among women of color. The same J.P. Morgan study found that 74% of Hispanic and Latina women and 69% of Black women say building generational wealth is their driving force. However, only 55% of women report feeling confident about their investing knowledge, and 77% describe their investment approach as risk-averse. It is essential to explore what can support Black and Brown communities in continuing to build wealth through investing. One promising solution lies in communities supporting each other to learn, invest, and grow together or what I will call investing collectively or in community.
Emotional Empowerment Is Driving Long-Term Investment Behavior
According to U.S. Census Bureau data, only 1 in 20 Black households had wealth over $1 million, compared to 1 in 5 White households. Conversely, nearly 1 in 4 Black households had zero or negative wealth, compared to just 1 in 12 White households. Households with negative wealth face heightened financial vulnerability and are far more susceptible to economic shocks, creating not only material disadvantages but deeper emotional impacts that influence financial behavior.
These emotional barriers are often overlooked in traditional finance, where guidance is rarely tailored to lived experiences. As of July 1, 2025, more than 81% of all certified financial planners (CFPs) are white, while just 1.9% are Black or African American and 2.7% Hispanic or Latino, according to the CFP Board. That underrepresentation reinforces a gap in culturally relevant financial advice; advice that not only teaches strategy, but understands how trauma, systemic exclusion, and generational financial stress affect people's willingness to take the first step.
'One of the biggest things I truly believe is if you don't believe you deserve to be wealthy, you're not going to be wealthy,' Ashley M. Fox, Founder and CEO of Empify, told me. 'Because if you don't think I'm good enough, your actions are going to reflect exactly how you see yourself in the mirror.' This mindset shift is translating into tangible results within Empify as they celebrate their community, surpassing $10 million in collective investments made by members, who mostly began with little to no experience in investing. 'These are people who once felt overwhelmed by money, afraid to even check their bank balances,' said Fox.
For individuals entering the investing space, recognizing the emotional barriers that have held them back is a key part of their success. But awareness is just one part of the path, they also need spaces that feel safe, culturally relevant, and judgment-free. That is where collective investing environments come in. These are communities where people can ask questions without shame, start small, and grow alongside others who share similar experiences and financial fears.
What Steps Are Making The Difference When Investing In Community?
Being surrounded by others on the same journey, which may have once been a scary path, creates emotional safety and momentum. 'When you see thousands of people doing it, it convinces you, like, hey, maybe I can do it too,' said Fox. 'There's a sense of belonging in that.'
Collective investing can potentially normalize the learning curve and alleviate the pressure of performing well from the start, allowing individuals to start acting. 'Learning the language of money [is]
the exact same thing as learning Spanish,' said Fox. 'In order for me to learn Spanish, I have to speak it. I have to read it and I have to be around people who are speaking it,' she adds.
However, as interest in community-based investing grows, so does the risk of encountering fraudulent schemes that mimic the structure of these models. Scams that often exploit financial literacy gaps and market scams, such as pyramid schemes, gifting circles or unregulated crypto programs, as opportunities for fast-track wealth. These offerings typically promise high returns with minimal effort, lack transparency, and rely on the constant recruitment of new participants to sustain payouts.
It is important to distinguish between these scams from models like investing with the support of a community. Credible platforms prioritize education, transparency, and the use of regulated financial tools. They encourage independent decision-making, not blind participation. So, what steps are making the difference when it comes to investing if the community is involved?
When individuals are surrounded by others who look like them and are actively building wealth, it creates space to reimagine what is possible. The shift in behavior starts with a shift in self-perception. Within collective environments, investors begin to see themselves as wealth builders, even before they buy their first stock, because they are immersed in a culture that affirms they belong at the table.
Collective spaces foster accountability in a way solo investing cannot. They help normalize imperfection and encourage staying the course, especially through uncertainty. 'We cheer on the $5 every single week,' said Fox. 'Every share counts. Every little dollar that you set aside […] we are building.'
The power of collective investing is exponential. Once individuals build financial confidence, they often pass that mindset and knowledge to others, whether to children, peers or extended family. 'What if I just start with an even smaller amount for my children?,' Fox asked. 'Now there's a little bit more hope.' When investing happens in a community, it is no longer just about one person, but it has a community ripple effect.
Investing collectively or as part of a community helps level the playing field for those just starting out. It removes the pressure to have all the answers, replacing isolation with belonging, and allowing people to build financial confidence at their own pace, factors that are crucial in the development of an investor behavior for Black and Brown communities. As more first-time investors shift their mindset, take consistent action, and pass on what they learn, the ripple effect is substantial.
