Finhabits, a financial technology platform used by more than 680,000 U.S. Hispanics to invest and access financial education, released a new report on the growing wealth and investment behaviors of Hispanics, predicting that The Latino community will reach a collective wealth of $113 billion by 2050.
The report, “The $113 Trillion Invisible Hispanic Wealth Opportunity,” offers insight into the impact of fastest growing demographic group in the country in the financial sectoras well as your own financial well-being.
“Hispanics currently represent almost 20% of the US population. Over the past 10 years, their household wealth has grown at a CAGR of 12.5% (compared to 6.8% growth among non-Latino whites),” the Finhabits report says. “At this rate, Hispanics are on track to reach $113 trillion in collective wealth in 2050. By comparison, the total wealth of American households in 2022 was $140 trillion.”
According to the analysis, increasing adoption of microinvestment options by Hispanics is driving this collective wealth. These small, regular and often automated digital deposits into market securities, such as stocks or bonds, mark a shift away from reliance on home and business ownership as a path to wealth.
“In the coming years, we will see how This 20% of the population influences how 99% of Americans save“says Carlos Garcia, CEO and founder of Finhabits. “Technology-enabled investing, in particular, will pave the way for a focus on ‘power in numbers’ for your wealth accumulation and financial gain. To take advantage of this significant growth opportunity, banks and financial institutions will need to innovate on legacy investment models that were created for the top 1%.”
Highlights from the report include:
Microinvesting is leading Hispanics to allocate up to 6.5% of their total income to retirement investments. This compares to 5% of revenue contributed through other approaches.
By investing just $50/week in Finhabits accounts, Hispanics are redefining how they (and other Americans) will grow their wealth in the long term.
Between 2020 and 2040, the majority of new homeowners will come from the Hispanic community, adding 4.8 million new Hispanic homeowners. In Finhabits’ user base, Hispanic homeowners earn 2.7 times more than non-homeowners, making them not only a rapidly growing audience, but also in an attractive audience for the financial sector.
To maximize your wealth potential, Latinos should invest in market values, not just in homes and businesses. During the last 40 years, US median home prices have increased approximately 500%, while the S&P 500 index grew more than 2,800%. Hispanics who diversify their investments away from homes and into financial assets, such as stocks, will benefit from this force multiplier in their wealth generation.
For more details of the study and its methodology, go here.
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