editorial
Hispanics in the United States are set to reach a collective wealth of $113 trillion by 2025, according to a report by Finhabits, a Fintech platform. Currently representing nearly 20% of the US population, Hispanics’ growing adoption of micro-investing options is driving this increase in wealth. Micro-investing involves making small, regular, and often automated digital deposits into public market securities, such as stocks or bonds. This marks a departure from the traditional focus on home and business ownership as a path to wealth. CEO and founder of Finhabits, Carlos Garcia, predicts that Hispanics will significantly influence the banking habits of Americans in the coming years. To tap into this growth opportunity, Garcia believes that banks and financial institutions must innovate on legacy investment models designed for the top 1%. Finhabits analyzed the financial investment behaviors of 90,000 investment clients for this report, using publicly available census data to identify trends in retirement, savings, home ownership, and Hispanic-owned businesses. The report also highlights that micro-investing is driving Hispanics to contribute up to 6.5% of their total income to retirement investments. Additionally, between 2020 and 2040, the majority of new homeowners in the US will come from the Hispanic community, adding 4.8 million new Hispanic homeowners. To maximize their wealth potential, Latinos are being encouraged to invest in public market securities, not just homes and businesses. Garcia added that while banks and financial institutions have succeeded in providing basic checking accounts to Hispanics, they have not been able to convert this success into helping them accumulate wealth.
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