Saving And Investing For Latinos - The Huffington Post

Most white Americans trust the financial system to help them build some security for their families. They understand that crucial decisions such as buying a house, sending their children to college and having a decent life in retirement depend on saving and investing all along their working lives.

They are also more prepared to confront critical economic moments they face through no fault of their own, such as the recent economic recession, a study by the Pew Research /Social and Demographic Trends found.

?? The median wealth, or net worth, of U.S. households fell from $96,894 in 2005 to $70,000 in 2009, a drop of 28 percent. The precipitous decline in wealth was not evenly distributed across groups. Minority households?Hispanics, blacks and Asians?experienced far steeper declines than white households,? the study says.

In 2005, the median net worth of white households?$134,992?was the highest while Hispanic households had median net worth of $18,359. Hispanics? median net worth fell 66 percent to $6,325 while the drop in white households was modest in comparison, falling 16 percent to $113,149 in 2009.

The difference? Most Hispanics net worth is based on their home equity. A number of Latino families fail to build basic financial assets, do not have a net worth to rely on nor are prepared to face these crucial decisions. Homeownership rates are lower among Hispanics, college attendance rates?although increasing?lag behind other groups, their access to health care or other type of insurance is also lower than other populations, and Latinos are more dependent on Social Security benefits than whites or Asians.

The largest minority group projected to reach 25 percent of the U.S. population by 2050, Latinos financial savings and investment habits and their economic vulnerability are a source of concern for federal and state governments as they depend more on public assistance and social programs, and contribute less in taxes through lower skilled, less paying jobs.

Saving and investing ?S? se puede!

What are the hurdles and obstacles Latinos face that keep them at the bottom of the food chain?

?In my many years of acting as a financial advisor, I have come to the conclusion that there are cultural values truly hard to overcome for Latinos. However, many of my clients were not rich when they started planning and now they have achieved financial independence,? Louis Barajas, author of The Latino Journey to Financial Greatness, told VOXXI.

Barajas, an acclaimed national author of multiple financial literacy books and sought-after speaker, believes cultural barriers among Latinos that keep them from achieving financial stability include depending on others to care for them?such as providing for their children way into their adult years, the elderly depending on their children or the working family depending on their employer or patron (boss), a figure seen as powerful and wealthy.

Another cultural barrier is to store their money instead of investing it?mostly because they do not trust the financial institutions nor they trust what they don?t ?see.?

?Las costumbres (the customs) say that we are a ?cash? culture, we budget well, we manage and we even save to send some home, but we still do not understand the power of investing and saving for a safety net or the future. I believe it is an instant gratification versus late gratification mind set,? Barajas said.

?Many do not understand what the pain is going to be like down the road.?

?I don?t earn enough to save or invest?
When Elena?s oldest daughter entered her junior year in high school, Elena was concerned that she had no room in her budget for her daughter?s college education. At 45, Elena, a single mother raising two teens, was working full-time in a publishing company making around $30,000 a year in gross income, and teaching two nights a week at a community college. Her budget was barely enough to pay rent and bills and buy clothes for the girls. She was also sending a modest amount to help her widowed mother, had no savings, limited health benefits and no life insurance.

She lived paycheck to paycheck.

Two years later, her daughter was accepted to a public university with in-state tuition. Elena applied for financial aid but her income was not enough to qualify for all so her daughter had to apply for additional subsidies and loans.

Elena?s second daughter decided to apply to a community college for two years and then continue in a regular college. Both girls were excellent students and soon received grants and unsubsidized loans.

Elena continued to work and provide for the girls to study but at 52, when the loans started to kick in, Elena found herself in a hole. She was single, with more debt than she could afford, and no savings for her own future.

As many Latino parents, Elena did not understand the value of teaching her daughters to be financially independent because she had not had that education from her parents. Barajas cites in his book comedian George Lopez: ?You know why there aren?t any homeless Latinos? Because Latinos never leave home.?

?Even when families don?t make a lot of money, if they understand the value of saving and investing, they make good financial decisions. Unfortunately, another bad habit in the community is to think that if you are trying to be better or improve yourself, you become a ?coconut? (brown in the outside and white in the inside),? the LA financial planner shared.

Originally published in Voxxi as Saving and investing for Latinos: Breaking cultural barriers

Also on HuffPost:

"; var coords = [-5, -72]; // display fb-bubble FloatingPrompt.embed(this, html, undefined, 'top', {fp_intersects:1, timeout_remove:2000,ignore_arrow: true, width:236, add_xy:coords, class_name: 'clear-overlay'}); });

Source: http://www.huffingtonpost.com/2013/01/18/saving-investing-latinos_n_2502208.html

masters leaderboard frozen four joe avezzano kanye west theraflu joey votto the masters live mega millions winner