It’s the quintessential narrative of the American Dream: finish school, find a good job, make a respectable salary and you’re all set for financial success. But for many Americans, this narrative is no more than a myth. Income does not always guarantee financial resiliency. Wealth, on the other hand, does. Income is what you make, whereas wealth is what you have—what you own minus what you owe. Someone may have significant income, but if they don’t save, they won’t be able to accumulate wealth. Wealth is a truer measure of a household’s long-term financial stability.

Liquid Asset Poverty

According to the 2018 Prosperity Now Scorecard, 37 percent of all Americans are living in liquid asset poverty. This means that they do not have enough saved to live at the poverty level for at least three months if they lost their job or fell ill. In other words, their long-term financial well-being would be in jeopardy. In short, being in liquid asset poverty means living one crisis away from financial ruin.

Prosperity Now

For families of color, financial security is even more elusive. For example, only black and Latino households with an advanced degree have middle-class wealth or higher, whereas white households, on average, need only a high school diploma to attain that same level of wealth. Overall, roughly 70 percent of black and Latino households fall below the $68,000 wealth threshold needed for middle-class status, compared to only 40 percent of white households.

Prosperity Now

Although the situation is grim, hope is not lost. Through innovative programs and policy solutions, we can help ensure that everyone in this country, especially children and families of color, can improve their quality of life by buying (and keeping) a home, starting a business, earning an education and building a better life for themselves and for generations to come.

Four Ways to Drive Prosperity

  • Protect working families by contacting Washington. Use tools like Prosperity Now's Advocacy Center, where you can sign up to stay informed; call, tweet or write your member of Congress.
  • Expand free tax services through the Volunteer Income Tax Assistance program, which saves low-income consumers hundreds of dollars each year while promoting other financial capability services.
  • Invest in Children’s Savings Accounts, which put postsecondary education within reach by enabling kids to build college savings and establish positive educational expectations.
  • Learn about income inequality and the widening of the racial wealth divide. Start your research at Giving Compass and Prosperity Now.


Original Contribution by Dennis Medina, Development Associate, and Ana Maria Argudo-Lord, Senior Manager of Donor Experience & Engagement at Prosperity Now.