Latinos in the U.S. are on track to accumulate $113 trillion in wealth by 2050, according to a report from Finhabits. In the past decade, Latino wealth in the U.S. has seen a growth rate exceeding 12% per year, amounting to approximately $4.24 trillion, according to the report. "The collective growth of the Latino market is huge," Finhabits Founder & CEO Carlos Garcia tells Yahoo Finance, but "you have to adjust, as a financial institution, you have to adjust the way you engage with that population." Garcia believes, in the future, Latinos will account for a significant portion of the high-net-worth individuals in the country thanks to their contributions, ranging from family-owned businesses to homeownership.
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RACHELLE AKUFFO: Well, according to data from the Federal Reserve, Latino wealth has grown around 12% annually for the past 10 years. That's almost twice the rate of non-Latino white wealth, and has the potential to reach $113 trillion by 2050. But even with that high rising projection, our next guest says traditional banks aren't meeting the Latino population where they need it, and that's a missed opportunity not only for Latinos, but sectors across the economy as well.
Enter Finhabits, a financial wellness platform dedicated to help Latinos grow their wealth with investment accounts, insurance, and education. Thin Habit's founder and CEO Carlos Garcia joins me now. Appreciate you taking the time to join us this morning. So I first want to talk about this number, this $113 trillion that you're looking at estimates there for 2050. Talk about where we are now among the Latino community and what's going to get it to that point.
CARLOS GARCIA: Well, what we've seen over the last 10 years is that the wealth growth of the Latino market is-- it's almost twice as fast as the non-Latino, so it's at 4.5%. Today the Latino collective wealth is at $4.2 trillion, but if you continue to see that same wealth growth, you will have $113 trillion by 2050.
The collective-- the collective growth of the Latino market is huge, and what we see that it's interesting is that most financial firms are not looking at that opportunity. We at Finhabits, we take care of that because we've been able to meet the demands of that consumer, and we help them start building wealth over time.
RACHELLE AKUFFO: So, Carlos, is it that some of these bigger banks and traditional lenders are just not willing to-- it's not even taking a chance, but they don't seem to be tapping into the opportunity. Is it that they don't see the value in it or they're not willing to dedicate the resources to it?
CARLOS GARCIA: Well, traditionally, right, the financial institutions and their wealth management groups, they look at individuals that have more than $1 million of net worth, and that's kind of the definition of wealth management clients. But that's a problem, because you're not seeing the actual growth that is happening in the country, and that growth is coming from the Latino market.
When you look at how the Latino population is growing in numbers, right, in population growth, how the Latino market is growing in business, and how the Latino market will be responsible for the majority of home ownership, new home owners buying houses in the country, that's coming from the Latinos.
So what we believe is that you have to adjust. As a financial institution, you have to adjust the way you engage with that population. You have to make sure that you can engage with them when they're growing their wealth as it-- as it is now, because that's the future of high net worth individuals in the country.