Rafael Salinas had no concept of what the stock market was while he was in high school. As a result, he now serves as a financial advisor for his family’s investments.
Salinas’ parents were dirt-poor when they were kids growing up in California. The financial structure in the United States was utterly unfamiliar to them as the offspring of Mexican immigrants. Salinas claims that his father didn’t learn about credit scores until he was 60. The only thing his mother, Christina Corona-Salinas, has to say about investing is that they never even contemplated it.
Salinas, a 29-year-old entrepreneur, believes that “many individuals have decades of investment behind them.” In contrast, “those like myself, individuals who grew up in less fortunate circumstances, especially those who are first- and second-generation immigrants—we simply don’t have it.”
No, Salinas doesn’t hold his parents responsible for not teaching him how to invest in the stock market as a child. Before the internet, investors had to call a stockbroker and ask them to make their transactions on their behalf. There were no fractional shares as there are now, so investors had to know what to ask and have the money to invest (as little as $1 worth of a company may be purchased).
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Educating the next generation is a logical next step given the influx of young people entering the market.
When Salinas finished college, he saved up some money from part-time jobs and living at home, so he decided to invest it. It wasn’t long before he was sifting through financial terminology on Twitter, reading blog after blog on supporting ideas, and joining online trading forums.
Now, in the same way, his parents taught him to tie his shoes and ride a bike, he’s educating them about investing.
When a kid takes on the role of a schoolteacher
While his father is supported by the disability benefits he received while serving in the armed forces, his mother, now 68 years old, intends to continue working for another five years. Their son’s assistance has allowed them to improve their financial situation dramatically, despite their late start in investing.
“The stock market’s workings are terrifying. It’s important to be cautious and educated, and I didn’t have any of that information,” Christina Salinas, her son’s mother, tells the New York Times. “Seeing how my retirement savings may increase was eye-opening.”
Salinas’ generation has a far lower barrier to entry into the stock market than his parents’ had. Additionally, there’s a lot more information for the average person who doesn’t have access to a financial advisor. Online resources like YouTube, Twitter, and Reddit have made it easier for average investors to learn about investment methods like purchasing a dip or tracking which meme stock is trending.
However, this has significant drawbacks, such as the fact that novice investors are taking on riskier assets like bitcoin and financial misinformation is rife on the internet. In contrast, it may be a boon for those who have no family history of investment. They wish to pass it along to their children and grandchildren in many situations.
Salinas and his parents meet once a month to review their financial portfolio. Despite her reluctance to take risks, his younger sister has invested for the last two years. Other members of the family now like to visit Salinas.
Children and grandchildren of immigrants often play this function. They realize that they can take part in the stock market in a manner that their elder relatives never imagined was conceivable for them.
Nicholas Antunes, a native New Yorker raised by Portuguese immigrants, felt stock market trading was “something only affluent people did.” Until he went to St. Benedict’s Preparatory School in Newark, New Jersey, for his senior year of high school.
To Antunes’ surprise, an instructor at school told him that he could get started for as little as $10. He wanted to show his parents what he had learned about personal finance, but it proved more difficult than he anticipated.
That investing in the stock market is like gambling and that the most significant thing you can do is put all your hard-earned money in savings accounts was not quickly dispelled by Antunes’ parents. In addition, they only recognized Antunes as a child due to his age (even if he could explain to his father what the Nasdaq and S&P 500 were as they watched the evening news).
Antunes’ parents started entrusting him with more of the family’s money once he graduated from college, and he has since taught them the importance of investing for the long term. Because of his guidance, they now have a better grasp of what an IRA is and why they should put in as much as they are able. He just helped his father file for Social Security, and the two of them are working together to split that income and invest it in stocks, bonds, and savings.
When I can do that for them, it’s a great feeling.
After the financial crisis of 2007, it took a long time for Ariel Wu’s parents to regain confidence in the stock market. COVID-19 then struck.
As a young child, Wu’s parents moved from Taiwan to the United States and had limited access to the stock market. They witnessed their hard-earned money go from the stock market after the 2008 meltdown and sold all of their holdings.
‘Our equities are worthless; we can only rely on cash,’ they reasoned,'” Wu claims.
That is why Wu’s family didn’t benefit from the recovery of the economy and market.
Once again, reluctantly investing in stocks, Wu’s father made a little bit in March 2020 when the market collapsed. He wished he could get his hands on all of it once again.
As an adult in her mid-twenties, his daughter — who was only a middle schooler during the 2008 market crisis — has spent a lot of time reading books on investment.
Her family had already started to invest, but Wu was the first to learn about intelligent investment practices. She claims that her father’s investment strategy resembled gambling.
Because her parents’ portfolio was “a bit of a jumble,” Wu decided to re-allocate some assets to index funds. Currently, the portfolio is composed of 80% stocks and 20% bonds.
Immigrants find it challenging to navigate the financial system in the United States. According to the Brookings Institution, foreign-born people are far less likely to utilize various financial services, including savings and checking accounts, business loans, and mortgages.
Wu recalls the awkwardness of educating her parents. As much as she realizes this isn’t always the case, she believes that all of her friends whose parents grew up in the United States were taught some fundamental money management skills. It was a whole new system for her parents, made more difficult by a language barrier, making it much more challenging.
A feeling of duty came from the knowledge that Wu’s peers were learning about the system simultaneously as he was, he adds. Even though your parents know so much, “half the time you forget because you’re the one educating them about America,” says the author.
This is where first-time investors view themselves as educators attempting to delicately delve into their parents’ financial affairs, which is never an easy task.
It wasn’t until years after working in corporate finance and helping her parents with their money from afar that Bulgarian-born Tess Zigo understood how much she wanted to assist other families. Consequently, she obtained a CFP and today works at Emerge Wealth Strategies in Lisle, Illinois.
Many of her customers are members of the sandwich generation who must care for their children and elderly parents. When they’re ready to retire, their parents generally haven’t saved or invested enough.
Zigo’s goal is to assist her customers in providing a secure financial future for their migrating parents.
To be able to give back to people who have worked so hard their whole lives, she adds, “feels extremely nice.” “They give so much of themselves for their loved ones.”