CHICAGO — The Census Bureau’s 2022 five-year projection shows an average poverty rate of 17.2% for all Latinos and an overall poverty rate of 12.5% in the U.S. In terms of where people live, 34 percent of Latinos are “Stuck in Place” compared to eight percent of whites, according to a study published in March of 2024.

“These are some of the hardest workers and laborers in the United States,” said Steven Alvarado, a co-author of that study, titled The Echo of Neighborhood Disadvantage: Multigenerational Contextual Hardship and Adult Income for Whites, Blacks, and Latinos. “People who are up at dawn and home at dusk to try to achieve that American dream and are being cheated out of it.”

Even those with more resources don’t always succeed in building wealth for their children. And those starting from less face even steeper obstacles.

As Latinos’ economic strength in the U.S. grows, so does the urgency to turn that momentum into lasting generational wealth while navigating a financial system that often feels unfamiliar or unwelcoming.

Historical Barriers

Alvarado, an associate professor of sociology at the University of Notre Dame who specializes in Latino studies, cited segregation and underfunded schools as key factors that “inhibit, or at least delay the accumulation of economic stability and or wealth” among Latinos.

A 2024 Stanford University study found that Latino business owners are 1.7 times less likely to receive thorough feedback after being denied funding compared to their white counterparts. Historically, many Latinos have lived in redlined neighborhoods with limited access to credit, and many also send remittances to relatives in their countries of origin.

These challenges persist today, especially for more recent waves of immigrants who often arrive with fewer resources than those who came decades earlier.

Deep Distrust

Despite cultural differences across Latin America, experts say many Latinos share values that can both support and complicate wealth-building.

“Culturally, a lot of [Latino] countries have had poor financial institutional experiences,” said Lizzy Diaz-Ortiz, a diversity, equity, and inclusion strategist at the bank BMO. “This holistic distrust of the financial system is pretty prevalent amongst Latinos.”

Another challenge: prioritizing both nuclear and extended family while trying to stretch a limited income.

“The family being the center is pretty universal in Latino culture,” said Diaz-Ortiz, the daughter of two Puerto Ricans who moved mainland in the 1970s. “Our financial decisions are based on what the family considers right.”

Janie Cervera, a second-generation Mexican American who works in wealth management at BMO, said Latinos tend to be conservative financially.

“Great savers,” she said. “Not great investors.”

A Clear Pattern

After years of working with clients from different backgrounds, Cervera, 50, noticed a clear pattern: while white families often set up funds for their children early on, in Latino families, it’s usually the children who help their parents prepare for retirement.

“Much of the problem is that many immigrants feel isolated,” Alvarado noted. “They feel they can’t turn to somebody when they have a question.”

Cervera has spent years trying to fill that gap. She hosts wine nights for her cousins that often lead to one-on-one conversations.

Both Cervera and Diaz-Ortiz also teach their children how to budget.

“They need to see you doing it,” Cervera said.

And for financial institutions?

“It’s like dating,” Diaz-Ortiz said. “You’re going to have to court us for a long time, but once you have us, you have us, our ‘tia,’ our mother, our sister. Everybody comes along.”

About the Author

Carolina Baldin is a freelance journalist from Brazil with experience in law, policy, and regulation. She graduated from a master's program at Northwestern University in 2023.

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What We’re Reading

Sen. Von Hollen’s Tweet: Here is what was posted on Thursday night.

And this as well.

U.S. Citizen Held for ICE: As the Florida Phoenix first reported, “Juan Carlos Lopez-Gomez, a 20-year-old U.S. citizen, was being held in the Leon County Jail Thursday, charged with illegally entering Florida as an ‘unauthorized alien’ — even as a supporter waved his U.S. birth certificate in court.”

Since then, Lopez-Gomez has been released.

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