How Black and Hispanic Millennials Are Looking Outside of 401k’s for Investing

“We almost went bankrupt,” he says. “We lost nearly $ 350,000.” To date, Mr Napoleon has only been able to replenish a fraction of the savings he had put into the business, causing a major setback to his long-term plan to buy property and generate rental income.

“I have always made it my goal to be financially free,” said Mr Napoleon. “My family is dirty,” he said. “Luck gives them stability.” It is now frustrating to realize that his creditworthiness has fallen under the weight of the debt he had amassed when his cash flow plummeted. Now he has to effectively start over.

Mr Napoleon said his Brooklyn family home, where he and his four siblings, one of whom had special needs, grew up has been in foreclosure for more than a decade. “You worked very hard as immigrant Americans to get your home,” he said. “One of the reasons I want to retire early is to spend time with my parents and provide something.”

A sense of obligation to care for parents and sometimes extended families weighs on the finances of many millennials with immigrant roots, said Shellise Rogers, 30, who grew up in Trinidad and New York City and seeks advice from Score. Today she lives in New York and runs her own business as an accountant and business coach.

“It’s more about building for the family than for the individual,” she said. “As someone who works in finance and accounting and has a lot of black customers, I definitely find that a lot of people need instant cash flow,” she said. Compared to reinvesting in their business, “adding to a 401 (k) doesn’t seem as fruitful”.

Mr Duplessi said he had decided to invest money in a 401 (k) when he finally got the chance to open an account two years ago when he was authorized to do so by his union. He said he wasn’t sure how much to trust him, however, as both of his parents lost money in their accounts during the 2008 financial crisis and he couldn’t make any contributions when the hotel he worked at closed during the pandemic.

Many black and Hispanic workers don’t even have the option to open a 401 (k). Federal Reserve data shows that 68 percent of white working-age families have access to employer-funded defined contribution plans such as 401 (k) s, compared with just 56 percent of black workers and 44 percent of Hispanic workers who have access to such plans.