When Rafael Salinas was in high school, he had no idea what the stock market was. Now, he helps his entire family manage their investment accounts.
Salinas’ parents grew up in California extremely poor. As the children of Mexican immigrants, the U.S. financial system was completely foreign to them. His father barely knew what a credit score was until he was 60, Salinas says. They never even thought about investing, his mother, Christina Corona-Salinas, adds.
“A lot of people have generations of investing behind them,” Salinas, 29, says. “But people like me, people who grew up less fortunate, particularly first- and second-generation immigrants — we just don’t have that.”
Salinas certainly doesn’t blame his parents for not learning how to invest in the stock market. When his parents were his age — back before the internet — investors had to pick up a telephone and ask a stockbroker to make their trades for them. Investors had to know what to ask, and have the money to actually invest (there were no fractional shares like there are today, which let you buy as little as $1 worth of a stock instead of the whole thing).
Times now, of course, have changed. In the 1990s, the internet opened the door to the financial world, allowing investors to buy and sell stocks and funds online. Now, investing is as easy as opening up a trading app on your phone and making a few seconds-long swipes. Around 31% of millennials with taxable accounts started investing before they were 21 years old, compared to 14% of Gen Xers and 9% of Baby Boomers, according to 2018 data from the FINRA Investor Education and Foundation and CFA Institute. A recent study also found that 15% of U.S. stock market investors got their start in 2020, and their median age is 35 (compared to the median age of 48 of those who began investing before 2020).
With so many young people piling into the market, it makes sense that they would now become the teachers.
When Salinas graduated from college with some disposable income from jobs and living at home, he threw himself into learning how to make that money grow. He spent hours scrolling through Twitter for new finance terms to learn, read blog after blog on investment strategies and joined online trading groups, which led to him to eventually invest in stocks and cryptocurrency.
And now, just as his parents taught him how to tie his shoes and ride a bike, he’s turning around and teaching them about investing.
When the child becomes the teacher
Salinas’ father lives off of disability compensation from his time in the military and his mother, now 68, plans to work for another 5 years. But even though they got a late start with investing, having their son’s help has significantly improved their financial lives.
“It is frightening how the stock market works. You have to be very careful and informed and I didn’t have any of that knowledge,” Salinas’ mother Christina says. “It was eye-opening to see how my money can grow for my retirement.”
The barrier to entry for investing in stocks is significantly lower for Salinas’s generation than it was for his parents’. Not only can investing be done via laptops and smartphones from the comfort of your home, there’s also a lot more information out there available to everyday investors. The internet has made it possible for everyday investors to quickly learn about investing strategies like buying the dip on YouTube, or take to Twitter and Reddit to see which meme stock is being bought up. Of course, that comes with its downsides — like the fact that inexperienced investors are taking on risky investments like cryptocurrency, and financial misinformation runs rampant on social media. But for people who didn’t inherit investing knowledge from their families, it can also be a gift. A gift that, in many cases, they want to pass on to their families.
Salinas and his parents check in on their investment portfolio together about once a month. His younger sister, who is so risk-averse that it took years to convince her to get a credit card, has been investing for two years. Salinas is now the go-to for other family members.
It’s a common role for the children and grandchildren of immigrants. They see that participating in the stock market is possible for them in a way it never seemed possible for their older relatives.
Growing up in a working class family of Portuguese immigrants, Nicholas Antunes, 32, thought investing in the stock market was “something only rich people do” until he attended high school at St. Benedict's Prep School in Newark, New Jersey.
“I had a teacher at school tell me you can start with just $10 — that was revolutionary to me,” Antunes says. He wanted to share his new knowledge about personal finance with his parents, but found it was harder said than done.
Antunes’ parents weren’t quick to dispel their beliefs that investing in the stock market is the same as gambling, and that the best thing you can do is save all your hard-earned money in savings accounts. Plus, they just saw Antunes as a kid — because he was (even if he could explain to his father what the Nasdaq and S&P 500 were as they watched the evening news).
It wasn’t until Antunes’ went off to college that his parents began trusting him with more of the finances, and since then he’s taught them why investing for the long term is important. He’s helped them understand what an individual retirement account (IRA) is and why they should contribute the maximum amount if they can. He recently assisted his father in filing for Social Security and they’re working together to divide that income distribution and place it into stocks, bonds and savings.
‘It feels really good to be able to give that to them’
It took a long time for Ariel Wu’s parents to trust the stock market again after the 2007 financial crisis. Then COVID-19 hit.
Wu’s parents immigrated to the U.S. from Taiwan when she was three years old, and their exposure to the stock market was limited. When the market crashed in 2008, they watched the hard-earned money that they had put into the market disappear, and sold all their shares.
“They thought, ‘Our stocks are worthless, we can only trust in cash,’” Wu says.
So as the rest of the economy and market recovered, Wu's family didn’t.
After a few years, Wu’s father hesitantly began to buy stocks again, but when the market crashed in March of 2020, that small bit of trust in the market was broken. He wanted to pull all of the money out again.
His daughter — now an adult in her mid twenties who has pored over books on investing versus the middle schooler she was during the 2008 market crash — stopped him.
While Wu wasn’t the first one in her family to invest, she was the first one to learn about how to invest strategically. The way her father was investing was, she says, akin to gambling.
So Wu dove into her parents portfolio (which she says was “a bit of a mess”) and reallocated much of the money to index funds. Now, it’s a balanced, 80% stock, 20% bond portfolio.
The U.S. financial system is in many ways inaccessible to immigrants. Foreign-born residents are much less likely to use a wide range of financial services — like savings and checking accounts, business loans and mortgages — than those born in the U.S., according to the Brookings Institution.
It felt strange to be the one teaching her parents, Wu says. Although she knows it’s not necessarily true, she felt as though all her peers whose parents grew up in the U.S. were taught some basic knowledge of how to invest money. For her parents, it was a completely new system, made more difficult by a language barrier.
“Knowing they were learning the system around the same time I was learning it gave me a sense of responsibility,” Wu says. “It’s weird because you know your parents know so much, but half the time you forget because you’re the one teaching them about America.”
And this is the crux of where first-time investors see themselves: Educators tactfully trying to wade into their parents’ finances, which is never an easy thing to do.
Years after Bulgarian-born Tess Zigo worked in corporate finance and helped her parents with their finances from afar, she realized she wanted to be able to help other families who are struggling in similar ways. So she became a certified financial planner and currently works at Emerge Wealth Strategies in Lisle, Illinois.
Many of her clients are part of the sandwich generation — those responsible for taking care of both their children and their aging parents. They often find that by the time their parents are preparing for retirement, they haven’t saved or invested enough.
Zigo wants to help her clients set their immigrant parents up with a stable financial future.
“It feels really good to be able to give that to them because they’ve worked so hard all their lives,” she says. “They sacrifice so much for their families.”