Hello and welcome to Somos Hispanos.

I am your host, Christiana Malacara Today we are going to explore the world of financial literacy.

As there has been a proven gap in financial literacy in the Latino community.

We'll be talking with two financial advisors to learn more.

Welcome guys, thank you for sharing your expertise to the community of Somos Hispanos.

And really just honing in on something that we saw has a gap.

There's a financial literacy gap, period.

But especially in the Latino community.

When we're talking about financial literacy, why not bring in two financial advisors.

So thank you for being here.

Hector and Amadeo, I appreciate it.

Thank you so.

And thank you for having us.

Of course.

I, first wanted to say financial literacy.

Financial advisor.

So some of those words may be foreign to us.

Some of those words we never grew up with.

What is what does a financial advisor do?

Great question, and I think there's a lot behind that question that a lot of people don't understand, specifically Hispanics.

So, Christiana, I would say to the average person who is not aware of what a financial advisor does.

We basically project and forecast and make sure that those that want to understand the math and how to prepare for retirement or a situation in life that they will be able to prepare for it properly.

So we make sure the math works and that they're ready to start a plan.

Do you have a similar definition Amadeo of financial advisement and essentially literacy of finances?

Yeah, absolutely.

I think echoing Hector a little bit.

The idea of being a financial advisor, ultimately our goal is to help families reach their long term financial planning goals, whether it's saving for retirement, saving for big ticket purchase items along the future.

Essentially helping that person create a roadmap along the way.

When it comes to mapping things out, what inspired you to do what you do?

Did we just wake up one day and say, I'm five years old and I want to learn about money?

I would say there's two sides to finance.

There's the, defense and offensive side.

And when it comes to the defensive side of finance, a lot of people ask for money in the forms of loans or credit cards and when they need it.

Well, we decided that we wanted to help out individuals, our clients, by preparing on the offensive side.

The offensive side is the fun stuff.

That's where we help them set up, an investment account or prepare with some sort of product, help in a tragic event of some sort.

So when it comes down to specific situations in life, because life happens as we know it.

What I wanted to do and what we decided to start was a, service advisor group that would eventually or essentially help out those to prepare and be their own bank, so to speak, versus having to ask for that, help down the road on their roadmap.

Amadeo, why did you want to be a financial advisor?

Yeah, I think, a lot of it really goes back to like my beginning days of, you know, growing up, you know, watching my family struggle.

You know, watching mom or dad, like, you know, not really have the opportunity to have these conversations and growing up in the metro Detroit area.

I realized, like, this was actually something pretty common with other families, too.

And, you know, there simply aren't people like us knocking on doors or going out and meet in the face of these individuals and having these conversations with them.

So when I first had the opportunity to hire my financial advisor, you know, we did some really good work together.

I appreciated a lot of the values he brought me and some of the things that he opened up to my perspective.

And I knew right from there that so it's something that, you know, I wanted to eventually do one day.

Opening doors for others, essentially.

Absolutely.

Being the teacher.

Hector, how about you?

Why did you want to be a financial advisor?

Well, in our market, the Hispanic community, typically one and four, are lacking in the knowledge.

So when it comes to financial literacy, we were to ask them five basic questions.

Typically, 25% of those are going to be able to answer that.

Out of that 25%, even less actually have a plan closer to about 12 or 13%.

So when it comes down to impacting the area, the community, the people we wanted to I wanted to make sure that we get a message across that this isn't a one size fits all scenario or plan.

This is something that everyone can do.

And if everyone can at least take one small step towards it, whether it's, a monthly basis or going to be on a long term path, like we said, that roadmap is really important because consistency is what's going to make it happen for them.

Let's go ahead and teach them a little bit of knowledge, they can be consistent.

And then, build their budget from there.

So let's talk a little bit more about the plan, the roadmap.

We get things done in a list, right?

Sometimes directionally, sometimes a little more organically.

But it goes down to show that you don't know what you don't know.

So for our viewers out there who are tuning in and just like, okay, these this is why these guys are financial advisors, why should I incorporate this into my lifestyle?

Why should I have a financial advisor?

What is one tip that you would just hone in on to share them, to share with them, to start that plan?

I think one of the biggest tips that could resonate is, you know, when we meet with professionals along the way, you know, one thing that we hear often is, you know, I'm not sure if I make enough money to meet with a financial advisor or planner yet or, you know, I'm not sure if I'm in the capacity to be able to and start putting myself on a consistent saving goal.

And a lot of, you know, really, at the end of the day, some of the best people who create successful, you know, wealth strategies aren't the individuals who are, knocking the cover off the ball.

They're really individuals who are consistent within there saving you know putting an extra two three 400 bucks a month way into their budget, but doing it on a consistent basis.

Let's dive into that just a little bit.

Is there a minimum amount that someone should have to obtain a financial advisor?

Not necessarily.

You know, Hector and I, we pride ourselves on, you know, meeting individuals where they're at, whether they're, you know, making 30,000 a year or 300,000 a year.

Each plan, be individualized, is going to be tailored to the individual's needs.

The cool part about it is, you know, although they may not be in a position where they're saving the most, you know, eventually we'll be able to help them and give them the guidance to get them their one day.

Hector, what should be the first step when someone's seeking out a financial advisor?

Ask questions.

Find out what it is that your goal is going to be.

What what you want your goal to be.

Is it to retire early?

Retire later to make sure you have a certain amount of income in retirement?

Is there a specific, maybe vacation you want to hit along the way?

You know, you don't need to be, let's just say retirement rich and live poorly.

There's a there's a healthy balance in between.

Just like a work life balance.

There is a budgeting balance that you can prepare for.

But I would say just to add on to it is if there's a question that they should ask directly, it's probably going to be, you know, if something were to happen to me, who's going to help me take care of this?

And that's how you find out if the person you're talking to truly has it in their heart to actually help you.

Or is this just another client?

We we what we consider what we do is called integrated planning And integrated planning is a little bit more expansive.

And if that person truly has their best interests, their best benefit, their goal in mind, they'll help them integrate whatever that plan along the way is into their long term financial plan.

So let's unpack this a little further.

We're creating a plan.

And what would be maybe 2 or 3 of the you must know this to move forward.

Number one is going to be what your savings model.

We can help you develop the savings model and help you create the product or where to put it.

What's the saving model?

Savings model is going to be it's going to be a portion of your income, whether before or after tax that you were putting away percentage wise.

Well, a lot of people tend to follow like the 60/20/20 rule or the 50/30/20 rule, where regardless of what model you follow, that 20% goes towards savings.

And if they can't put the 20% towards savings because life is different for everybody, that's fine as long as you consistently follow a portion of that to into some sort of an account.

So the product that would follow that is going to be your typical savings money market account, maybe a permanent life insurance account of Roth or investment account of some sort.

And it has to make sense for that person and their goal.

Do you see that the Latino and Hispanic population are doing this?

Absolutely not to the scale that they should.

Why might you say that?

There is there's about.

26% that are ready for a financial for an, an emergency in the home.

And that's prepared with about $2,000 or less.

There are 13% that actually know they should prepare but are not ready for it.

So if you have a furnace go out or you have a water heater, or you have a situation outside of the home where you need to come up with some quick cash.

You know, the other roughly 87% just simply are not going to have it.

And that's for a small emergency.

An estimated 2,000 or or less.

Amadeo, you started out by saying you became a financial advisor because you saw the lack of knowledge in your own home.

Can you empathize with what Hector's explaining that is still happening today?

Yeah, I think a lot of the common scenarios I'm running into just working throughout my, you know, Latino community right here in the metro Detroit area is, you know, we make recommendations to families on what they should be doing, aligning with their goals.

But, you know, a lot of it comes with a trust factor of, you know, things saying like, you know, we don't really know somebody who does this or, you know, is this truly going to be effective long term?

And, you know, not nothing is necessarily guaranteed.

But, you know, they gotta understand the knowledge basis of, you know, historically over time.

Here's what happened in the past.

Now, this may not happen within the future, but you know, saving something versus nothing is always going to be more effective at the end of the day.

I like that piece of advice.

That seems like a good one to follow.

So, besides, what Hector had mentioned as far as a service that you would just topnotch recommend?

What is something that you would recommend to someone who's just moving into the financial advisement world?

I think the first value add you could bring in is helping someone understand a budget plan.

You know, helping them walk through and understand exactly what their means are, you know, what they're able to save.

You know, if they're spending too much on their daily lifestyle or, you know, playing a simple game of keeping up with the Joneses.

I think it's important to also realize within the budget strategy, it also creates ideas for, you know, what is debt optimization look like?

How could we effectively work good debt versus bad debt essentially?

I'm good debt, meaning like, you know, low interest rates, things we can afford, things that are going to help boost our credit.

But then bad debt, like, you know, high interest credit card rates or unfavorable car loans that are in the, you know, higher teens.

Being able to help someone walk through that and understand, like, you know, opportunities to refinance with some of the local banks or you know, putting them in a position where they can ultimately save more money to, you know, start paying themselves a little bit more.

I like that idea, this is, news to me essentially, too.

I don't think that there is a cap on, you know, too much about finances.

It feels like this world of financial literacy is evolving changing and growing.

When we narrow this down to the Hispanic Latino population, I should mention that Amadeo is representing the metro Detroit area and Hector is representing the Great Lakes Bay region area.

Within those two areas, do you see that the Hispanic Latino population has any differences or similarities when it comes to financial literacy in making this map?

Statistically no, but there are differences on the surrounding area that they work with.

So obviously, in the Great Lakes Bay region, we're going to have a smaller demographic population in the Hispanic market compared to metro Detroit.

However, the percentages they are across the board, right on target, I can say through experience that that 25% people that do understand the financial literacy questions and how to roadmap their their budget, they it's a it's extremely accurate.

There's no question about it.

So how do we impact how do we get in front of the other 75%.

And I think that's with exposure.

It's talking about it.

And it's just basically asking questions.

Find somebody you trust in the community and get started with.

Who do you work with?

Who do you know and how can I get to where you're at?

How do you feel about that?

I think the biggest commonality I see between, you know, both communities culture is a little bit different.

But the big similarity also, you know, comes back to this basic idea of trust, like you know, both communities essentially, you know, want to work with people they like and trust at the end of the day.

And if you can help them take this complex situation and, you know, simplify it for them, based on a, you know, plan that they could understand, essentially, that's how we can be the most effective.

So let's talk a little bit about the end game to this roadmap.

I'm sure a lot of our viewers are thinking, what about retirement?

Because I'm just about done.

And that might be on their personal roadmap or their mental capacity.

But when we're looking at retirement in the specifics of Latino Hispanic population across the state, are we making these plans?

Are we preparing?

And if so, if you're if not, what can we do?

I'd say absolutely.

You know, looking at, you know, Mount Everest, for example, you know, climbing up the mountain is definitely very hard, but arguably it's just as difficult, if not harder to, you know, actually make it back down to the mountain.

A lot of it goes with planning for retirement.

You know, we go on this wealth accumulation journey and we've done really well for ourself.

And, you know, at this point we're at the top of the mountain.

You know, who do we work with or how can we trust someone to, you know, work to unpack these assets and help us be able to spend these down and not have to worry about, you know, are we going to run out of money, you know, at some point in our 80s or 90s, or are we gonna be frugal on how we spend and essentially cheat ourselves out of our retirement years and not spend enough, working with the financial planner or an advisor really helps create a plan that is that roadmap for unpacking the assets, but doing it in a way to where, you know, we could be tech savvy or strategic.

So let's even go further down this road map, end of life, which is something that the, Latino culture honestly celebrates.

But once we're there and the the family is gathered, there's always this cloud of now what what do we do with the finances that are left behind, if that is, I guess you can answer this better than me.

But, if at the end of life there's there's debt, if we're in the the redder we're here in the green.

What is something that you would advise to that family before we get there?

I think that goes into the legacy planning side.

And I would say, how do we prepare for it?

Sometimes it's just simply having a conversation with your family members, whether it's, you know, the grandmother, grandpa or the grandkids, great grandkids.

It's finding out, do we want to leave something behind?

Are we going to leave the house to somebody?

Are we going to have a will?

We're going to have, something in writing just, ready for them to take all of our belongings and share it so that our memory lives on.

The Hispanic community is really big about leaving a legacy.

And having those memories passed on.

So how do we impact the next generation as best as possible?

We help them have a plan so that they're not burdened by taxes or burdened by a, a lack of planning, such as preparation for death benefits and what we would say is part of the endgame is that endgame is different for everybody if it's not a one size fits all.

Some people have an endgame of just retiring, and some people have an endgame of making sure that their grandkids are taking care of.

Can you add to that in any way?

I believe it's important to address the underlying factor that everyone's going to pass away at some point.

It's something that's a given.

And going back to the idea of, you know, the first question we ask all of our clients when we first meet them is, you know, what's important for us to cover for you?

You know, whether it's, you know, making sure if you pass away at the end of the day that, you know, Little Susie or little Jimmy, make it to college or have that college taken care of for them, or leaving a legacy to the family, or we put ourselves in a situation where we do have a lot of debt.

How do we create a plan to where if we were to pass away tomorrow, all this debt is taken care of and essentially working with a client to help them understand that and helping them find the right types and amount of life insurance is going to be important.

So I'm going to ask it again, is the Latino and the Hispanic population doing this?

Are we making this happen?

on a very small scale, very small percentages.

We can we can do better.

I think that's that's where it starts, is find somebody you trust.

I like to ask, are you open minded to every client?

Because I think that'll tell me whether you are willing to not only listen to the advice, but actually implement it.

And implementing is going to be a big piece of how we can help out the best.

The knowledge is free.

The education is free.

It's out there.

Talk to somebody.

Can we do better and increase those percentages?

Absolutely.

So we're talking about closing this gap.

There's a generational gap that has been happening for over 100 years.

The lack of financial literacy and planning and creating the roadmap.

But we're tossing around this word a lot, trust.

How is it that each of you establish trust with the Latino population?

Trust simply comes from you're going to meet the family in person, you know, helping them create this financial plan at the dinner table, not necessarily, you know, taking care of things or asking them questions over a phone call or not having the integrity to, you know, actually go meet them and help them understand, you know, where are these questions coming from?

Or how can we better help understand your situation?

Essentially, simply, at the end of the day, I mean, they work with who we like and trust and the better you build a relationship with, you know, families in the community, the more likely they are to, you know, refer you to their family.

And, you know, family is something we really pride.

That's important to us as given the business that we're in.

So I believe it's definitely important, as families do trust us to, you know, help us introduce us to more of their families.

Do you have anything to add to that?

Absolutely, I build it on three morals.

It the trust is a big one and then it's honesty and respect.

Integrity is built in automatically because we are fiduciary to what we do and whether the best interest of our clients is with us or somewhere else, or with another idea.

We're going to let them know that right up front.

And we're also going to let them know that we're here as a resource and a long term value, financial planner for them.

So when it when we start a meeting, we ask them, you know, we have sort of three rules, you know, let me know what you're thinking.

Please be honest.

Don't hold back.

Let's share networks because the people you care about, we want to help.

Care about them with you.

And then three, if there's anything that you have a question about, please interrupt us, because I want you to get your answer and let's not jump over it.

Let's let's make sure that we understand each other.

And for wonderful.

So now that myself and all of our listeners are just fueled up and want to get started, what would you recommend is the very first step?

Let's find out what's important to you.

Talk about it with your spouse, your mother, your father, parents, your kids, really any stage of life.

And let's let's see if we can help you.

You can Google it.

You could ask a friend, ask a teacher, ask a mentor, ask your clergy.

Somebody knows somebody that is willing to help you.

You just have to find out and ask questions.

Be open minded.

Have that, have that scope just lens wide open.

Don't.

Don't shy away from it.

Don't be scared.

I hate to say it that way, but a lot of people pride themselves on.

I know what's best for me.

And reality there's too much information out there for a single person to know how to get started or save, in the long term.

So yes, just have an open mind and make sure to ask about it.

Amadeo, what is one piece of advice that you would pass along to someone who is going to check the website or give a call?

What would you tell them to ask you?

I think the most important part in the beginning stages is, you know, one setting up that conversation to be had.

I think it's important to find someone you like and work with, but have that initial conversation of, you know, here's what's important to me.

Here's what I want to be able to accomplish over the next five, ten, 20 years, whatever the timeline is.

And then essentially, you know, nailing down the budget sheet in the budget sheet is, one of the biggest backbones of a financial plan, because it helps an individual like myself understand, you know, where we're meeting this person at in their life.

Wonderful.

Well, thank you both for coming on to Somos Hispanos and sharing your expertise as financial advisors.

Hector, representing the Great Lakes Bay region and Amadeo, representing the Metro Detroit area.

I appreciate you guys coming on and I can't wait to learn more.

We appreciate you having us.

Thank you again.

Absolutely.

Thank you.

Thank you for joining us on Somos Hispanos, on Delta College Public Media.

To learn more about establishing a firm financial plan, gaining economic mobility, and closing the financial literacy gap in the Latino population.

Visit the website or call the number below.

I'm your host, Christiana Malacara, Thank you for watching and we will see you next time on Somos Hispanos.