The Truth About Latino Wealth in the USA

As we celebrate?Hispanic Heritage Month in the US, it’s the perfect time to reflect on the incredible contributions our community has made.

But more importantly, it’s also a time to bring awareness to areas that still need attention, and improvement. One of these areas is Latino Wealth. If you’ve been living in the US for a while, you’ve probably heard (and noticed) that the Latino population isn’t as wealthy as other communities, and the salary that we earn on average is lower as well. But how has that gap been evolving over time?

That’s exactly what we’ll cover in today’s post:?Are Latinos really getting richer in the U.S.??

To answer this question, we reviewed the recently published 2024 LDC U.S. Latino GDP Report , which offers groundbreaking insights into the immense economic power of the U.S. Latino community, and The State of Hispanic Wealth Report , an annual publication that analyzes how the Hispanic community is faring in terms of building wealth.

In short—yes, and in some very significant ways! From skyrocketing contributions to the U.S. economy to increasing homeownership and business success, the numbers tell a powerful story. But there’s more to the picture, especially when you look deeper into Latino wealth dynamics and some lingering challenges..

Let’s explore the findings from these reports to really see where we stand today!

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The Latino Population: Who We Are

Did you know that there are?63.5 million Latinos in the U.S.? We make up?19.1% of the total population, and here’s the kicker—we’re young. The?median age for Latinos is just 30, compared to 38 for the overall U.S. population.

This means we’ve got a long runway ahead to continue building wealth.

In fact, according to the reports, our relative youth, combined with strong labor participation, makes us a?key driver of economic growth?in the U.S.

But despite these strengths,?myths about Latino wealth?continue to persist, often painting a misleading picture of our economic contributions.

Myths vs. Reality: The Truth About Latino Wealth

One of the biggest myths I often hear is that Latinos are falling behind when it comes to wealth. But when you look at the data, this simply isn’t true.

According to the?2024 State of Hispanic Wealth Report (SHWR),?Hispanic household wealth has more than tripled since 2013. In fact, Latino households now boast a median net worth of?$63,400, a major leap from the?$20,700?in 2013.

But here’s where things get real: While our wealth is growing faster than that of other groups, we still have some catching up to do. The average net worth of a non-Hispanic White household is still around?$283,300, and this wealth gap remains significant.

Another misconception is that Latinos are stuck in low-paying jobs with little opportunity for financial growth. While there are certainly challenges, the?2024 LDC U.S. Latino GDP Report?debunks this myth. Latinos contribute?$3.6 trillion?to the U.S. economy, making our collective GDP the fifth largest in the world. That’s bigger than the entire economy of the United Kingdom!

This means we’re not just holding jobs—we’re starting businesses, creating wealth, and fueling growth in virtually every sector!

Understanding Latino Wealth Through the 2024 LDC U.S. Latino GDP Report

The?Latino GDP?is the heartbeat of our economic story. According to the?2024 LDC U.S. Latino GDP Report, Latinos are?outpacing the broader U.S. economy?in growth. With a workforce that is younger and more dynamic, our participation in the economy is rapidly growing. The report highlights how?Latinos are crucial to the future labor force, especially as other demographics age out of the workforce.

Here’s a key takeaway from the report: Latino economic growth isn’t slowing down anytime soon. In fact, the Latino workforce is expected to make up?one of the largest shares of the U.S. labor force in the near future, propelling industries like healthcare, education, and technology forward.

Entrepreneurship and Business Ownership: Latinos Leading the Way

When it comes to entrepreneurship,?Latinos are starting businesses at a faster rate than any other demographic. From 2017 to 2021, the number of Hispanic-owned employer firms grew by?26.1%, far outpacing the 2.6% growth rate for all businesses.

At ALPFA Boston, we’ve been fortunate to see this happen first hand. We’re seeing a lot of our members taking the plunge and transitioning from a regular 9-to-5 job to building their own business. Whether it is sharing their local cuisine, passion for arts or professional expertise, our members are thriving—just like so many Latino entrepreneurs across the U.S.

However, despite these successes, there are still barriers.?Access to capital?remains one of the biggest hurdles for Latino entrepreneurs, with only?1.5% of venture capital funding?going to Hispanic founders.

The good news is that with more awareness and targeted support, this tide is beginning to turn.

Wealth Growth and the Power of Homeownership

If there’s one sure way to build wealth in the U.S., it’s through homeownership. And Latinos are increasingly becoming homeowners. The?2024 SHWR?shows that the?Latino homeownership rate reached 49.5%?in 2023, and it’s projected to hit?50%?soon.

Owning a home provides more than just a place to live—it’s an asset that appreciates over time, building generational wealth. In fact, Latino households that own their homes have?26.4 times more wealth?than those who rent. This is a game-changer for families looking to secure their financial future.

But let’s not forget the challenges. The housing market is tough, especially in high-cost areas like Boston, where home prices continue to rise. Latino buyers often find themselves priced out of neighborhoods.

Despite this, Latinos are purchasing homes at younger ages than their non-Hispanic counterparts, giving them more time to build equity.

How Latino Professionals Can Seize Opportunities for Wealth Growth

If you’re an early or mid-career Latino professional in a place like Boston, you’re probably thinking about how to take advantage of these economic trends. Well, here’s the good news: the opportunities are there, and they’re waiting for you.

1.?Invest in Real Estate

Real estate has been a major factor in the growing wealth of Latino households. If you’re not already in the market, now is the time to start thinking about homeownership or even investment properties. According to the?2024 State of Hispanic Wealth Report,?Latino homeowners have 26.4 times more wealth than renters. That’s a staggering difference!

What’s even more impressive is that?Latinos tend to buy homes earlier, which means we’re building equity sooner than other demographics.?44.8% of Latinos who bought a home in 2023 were under the age of 35, compared to 39.9% of non-Hispanic buyers. This early start is one of the key reasons why our wealth is growing faster than other groups.

Whether you’re looking to buy your first home or invest in rental properties, consider this: the longer you wait, the more you could be missing out on the opportunity to build wealth through real estate.

2.?Start or Grow a Business

Latinos are already leading the charge in entrepreneurship. But if you’ve ever thought about starting a business, there’s no time like the present. Hispanic-owned businesses are?growing 10 times faster?than businesses overall, and?Hispanic entrepreneurs are creating more jobs and generating more revenue?than ever.

Now, here’s where the challenge comes in. As exciting as it is to start a business,?access to capital?can still be a hurdle. The?2024 SHWR?revealed that Latino entrepreneurs are less likely to apply for loans, and when they do, they’re less likely to get the full amount they need.

But that doesn’t mean you should be discouraged. There are plenty of resources out there, from community development financial institutions (CDFIs) to government-backed loans designed specifically for minority entrepreneurs. If you’re thinking of launching your own venture, look for programs and networks that provide not just funding, but mentorship and support for Latino business owners.

3.?Diversify Your Investments

This might be one of the most crucial steps in building long-term wealth.?Only 43.7% of Latino households?own non-cash financial assets like stocks, bonds, or retirement accounts, compared to 68.2% of the general population. This is a huge gap, but also a huge opportunity.

The Latino community tends to invest heavily in real estate and business ownership—both excellent wealth-building tools. However, we’re missing out on the benefits of?compound interest and diversified portfolios. Investing in the stock market or a 401(k) can provide that extra boost to grow your wealth in the long term.

If you’re unfamiliar with investing, don’t worry! Many financial institutions are recognizing the untapped potential of Latino investors and are rolling out educational resources to help bridge the gap. As the?2024 SHWR?highlights, banks and fintech companies are increasingly offering user-friendly platforms and personalized financial products designed for our community.

A Bright Future: The Latino Wealth Boom

So,?how wealthy are Latinos in the U.S.??We’re on an upward trajectory, making significant contributions to the U.S. economy, growing our personal wealth, and making strides in homeownership and entrepreneurship. But there’s still work to do.

As Latino professionals, we have a unique opportunity to harness the momentum that our community has built. Whether through real estate, business ventures, or diversifying investments, the time to act is now.

Our collective wealth has tripled over the past decade, and with smart planning and intentional investing, the next generation of Latino professionals—that’s us—will be even more prosperous.

At ALPFA Boston, our mission is to build the #1 community for Latino professionals in the Boston area. If you’re looking for a way to build your network with other ambitious Latinos who are looking to grow, then become a member today !

We can’t wait to see the progress of our community!