Hispanics On Track to Reach $113T in Collective Wealth by 2050, According to New Report

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Finhabits' Analysis of the investing habits of 90,000 everyday Hispanic savers reveals how this 20% of U.S. population will influence financial sector innovation for 99% of Americans

NEW YORK, Sept. 28, 2023 /PRNewswire/ -- Finhabits, a financial technology platform that more than 680,000 U.S. Hispanics use to invest and access financial education, has released a new report on Hispanics' growing wealth and investing behaviors. The report, "Power in Numbers: The $113 Trillion Unseen Hispanic Wealth Opportunity," offers an in-depth look at the impact of the country's fastest-growing demographic on the financial sector, as well as its own financial well being. The complete report is available here.

Hispanics currently represent nearly 20% of the U.S. population. Over the last 10 years, their household wealth has grown at an annual compound rate of 12.5% (compared to 6.8% growth among non-Latino Whites). At this rate, Hispanics are on track to reach $113 Trillion in collective wealth by 2050. By comparison, the total household wealth in the U.S. in 2022 was $140 Trillion.

According to the new report, Hispanics' growing adoption of micro-investing options are fueling this collective wealth. These small, regular and often automated digital deposits into public market securities, such as stocks or bonds, mark a departure from a reliance on home and business ownership as a path to wealth. 

"Over the next several years, we'll see this 20% of the population influence the way 99% of Americans bank," said Carlos Garcia, CEO and founder of Finhabits. "Tech-enabled investing, in particular, will pave the way for a 'power in numbers' approach to their wealth accumulation and financial gain. In order to tap into this significant growth opportunity, banks and financial institutions will have to innovate on legacy investment models built for the top 1%."

Highlights from the report include:                                                                                 

• Micro-investing is driving Hispanics to contribute up to 6.5% of their total income to retirement investments. This is compared to 5% of income contributed through other approaches. By investing as little as $50/week into Finhabits accounts, Hispanics are redefining the way they–and other Americans–will grow their long-term wealth.
• Between 2020 and 2040, the majority of new homeowners will come from the Hispanic community, adding 4.8 million new Hispanic homeowners. Across Finhabits' user base, Hispanics who own homes make 2.7 times more than non-homeowners, making them not only a fast-growing audience, but also an attractive one to the financial sector.
• To maximize their wealth potential, Latinos must invest in public market securities, not just homes and businesses. Over the last 40 years, average U.S. house prices have risen approximately 500%, while the S&P 500 index grew by more than 2,800%. Hispanics who diversify their investments beyond homes and into financial assets such as equities will benefit from this force multiplier on their wealth generation.

"Banks and financial institutions have successfully won over Hispanics in providing basic checking accounts but have not been able to translate this success into winning over Hispanics as they accumulate wealth," added Garcia.

For this report, Finhabits analyzed the financial investment behaviors of 90,000 investment clients who contribute to Hispanic wealth creation. The company's analysts based their financial projections on publicly available census data to identify trends in retirement, savings, home ownership, and Hispanic-owned businesses.

About Finhabits
Finhabits is a fintech platform used by over 680,000 U.S. Hispanics to invest and access financial education. Created by Latinos for Latinos, Finhabits focuses on enabling its community to grow their collective wealth. Through its bilingual financial wellness platform, Finhabits empowers business owners and workers to invest in their futures, learn smart financial habits, and enroll in affordable health insurance.

Fast Company recognized Finhabits with an Innovation by Design award for its Money Journeys personal finance series.

Investment advisory services are offered through Finhabits Advisors, LLC, an SEC-registered investment advisor. Registration does not imply a certain level of skill or training.

For more information, visit Finhabits.com.

SOURCE Finhabits