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Housing and Wealth Inequality

· housing,inequality

When you hear the saying the rich get richer, it's a phrase that people hear and assume to be true but never question why. Maybe, they suppose, the system is stacked in favor of the rich. Sure, that certainly seems true that those with the most resources can shape and influence laws and regulations (which a recent Princeton study actually proved), but beyond that, what are the individual causes that Rich Dad or Mom might take that lead to even Richer Kid?

If we are to address income inequality, we have to begin to address those simple and obvious causations first. For example, it was discovered fairly recently that the language and achievement gap among disadvantaged and wealthier communities can be bridged by parents simply reading to their kids early and often.  By stimulating the brain early with words and language, this produced greater results than tutors or enrichment classes and cut across race or income or geography.  Basically, reading to one's kids is standard practice for many families and totally foreign to others.  But it's a practice that is now being promoted in minority communities to help bridge the achievement gap and ultimately, alleviate inequality.

Another example might be parents helping their children navigate the college admission process.  That statement alone ignores the fact that many families have parents that never went to college.  Having access to counselors that proactively reach out to help college bound students prepare for the process is essential to reducing that inherent inequality.

Finally, inequality certainly plays out in the case of housing. Buying a home is a difficult process to manage, and even more intimidating for individuals that don't have a parent or mentor with experience to navigate the process. Ultimately, the burden lies with us as financial advisors to promote worthy content and solid advice that can resonate with people who are mostly uninterested or intimidated, and help guide them to solid financial decision making, for their futures and the general good. That general good is significant and the benefits are plenty. That is further illustrated here.

As a mortgage banker, we are on the front lines of wealth creation and inequality. Helping the struggling middle class purchase their first home sets people on the most accessible path toward building equity, forced savings, tax deductions, and financially enriching themselves rather than continuing to pay rent and enriching investors. That's a story that's not often told about bankers but it's a story worth noting. Bankers have been getting a pretty bad rap for the last decade, and it's nice to realize that we can do important work that is about helping everybody, not just the rich.

- Brian Nguyen is a senior loan consultant (NMLS 659743) who learned more about this stuff than he ever intended to. The opinions expressed here are solely his own.

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