Evaluating our money mindset and changing the way we talk about money with the next generation are crucial steps to building wealth.
On August 30, Angeles Investors and The Alumni Society hosted the exclusive Wealth Creation Series: Stanford Edition featuring two members and Stanford alumni: Victor Arias, managing director at The Diversified Search Group, and Hernan Saenz, global head of performance improvement practice at Bain & Company. Suma Wealth CEO and Cofounder Beatriz Acevedo moderated the discussion.
Here are key takeaways from their conversation.
- We Can All Contribute in Some Way
When it comes to investing, everyone has something to give, and it doesn’t necessarily mean financial. Giving can entail doing things such as providing encouragement, sharing a connection, and purchasing from a small business. Latinos as a community have a lot of room to grow, and so supporting each other and making it our life mission to open as many doors as we can is critical.
2. Let Go of Guilt
Latinos need to evaluate their thoughts on money and realize it’s okay to have financial wealth. Panelists noted that sometimes people think if they have money they’ll become a horrible person, and that is simply not true. And if you still can’t get over your suspicions of wealth and wealthy people? Consider using wealth to get involved in charitable endeavors.
3. Rethink What We Teach Children
The mentality of keeping one’s head down, working hard, and being grateful for your prosperity are amazing values, but they do not necessarily serve the next generation. We need to teach Latino children that their voice matters and that they need to be paid equitably. Older generations can provide great advice, but they should be constantly reexamining that advice. Additionally, parents should stop instilling a sense of guilt over money into their children. Instead, they can rethink how they’ll give their children gifts during occasions such as Christmas. In addition to presents, parents can buy children stocks in a company they love and teach them about being a shareholder.
4. Investing Is for Everyone
It’s time to invest in our communities, and investing is not just for millionaires or billionaires. Investing is open to everyone and investing in one’s community can be rewarding. But also think about what kind of investor you are and your profile as far as risk. We save differently to buy a house and differently to save for the education of our children. It’s important to take a step back and think about our goals and how much wealth we want to generate and how much to put in living, education, retirement, and so forth. Some of these are conservative categories where you don’t want to take too much risk.
5. Investing in Entrepreneurs
There are many things to keep in mind when considering which entrepreneurs deserve investment. Factors include the market, whether the service is something society needs and will continue to need, the company’s strategy and whether they are filling a market niche, and financials.
6. Latinos as Entrepreneurs
Latinos are the most entrepreneurial group in the US, and they are starting businesses faster than any other demographic, and yet they are not being funded enough. What’s more is that Latinos do not know how to ask for funding and the market doesn’t actively provide that funding. Additionally, Latinos who can make those connections have found a discontinuity in the market where they can probably make excess returns. The opportunities are there to invest in Latino-owned businesses, but many banks and venture capitalists are either not seeing those opportunities or are not comfortable investing in them. For this reason, accredited investors are encouraged to get involved in Latino-owned businesses.