A Latin Impact on the Finance Industry

Category : News

Financial Institutions are a fantastic business model to learn from when considering ever changing market conditions. Their traditional target markets are stable, but, the needs of an emerging market, the Latino market is extremely underserved. It is certainly not for lack of money. Many Latinos have zero debt and healthy saving habits. The question arises, are financial institutions doing enough to serve this population? Are they adapting to the Latino needs? The answer is complicated.

There are two types of Latinos in the USA. One is the immigrant seeking a better life and wanting the American dream, whether they came through the proper channels or not it is irrelevant. The second, are the Latinos that are born here. These are two very different groups of people with different needs and goals. Most immigrants bring their culture, traditions, and customs with them to the US. Those born here develop a blended culture that is both Latino and American.

Financial Institutions are taking notice and making strides to accommodate this very economically influential population. The main reason is that there is a lot of investment in education and developing trust. An untold detail is that in Latino countries, people do not trust banks and financial institution because of corruption. Everything is paid in cash and there are no debt or traditional credit scores. This means that the Latino community have cash, probably stored under their mattress or in a shoe box. This is very dangerous considering that a house fire could burn an entire life savings. Another scenario is they could become a target for robbery. This is a foreign concept for Americans. What is happening is a huge learning curve, educating them on the process of building credit, saving their money in a financial institution, getting loans (mortgage, car, etc.), and most important having trust in the financial institutions.

The younger generations that are born here learn from their parents and surroundings. There is still a disconnect from the importance of financial products, building credit, and how that process works. Many of these young people are just translating for their parents, explaining financial products, and become an intermediary for conducting business. You will notice an increase in bilingual support at many financial institutions for this reason. There is still a lot of work to do in this regard, and this process will take time.

However, more and more financial institutions are offering products specific to Latinos. Information is becoming available in Spanish and more financial institutions are hiring bilingual and multi-lingual speakers. It will be interesting to see how we as a country adapt to this important demographic. It is truly an untapped market that has an important function in our economy for growth and stability.


Tips On How To Spend Your Windfall Income

Category : News

As individuals, especially workers we sometimes get windfall incomes in forms of bonuses, profit shares, etc. However, a lot of the time the temptation is to spend the money on acquiring a new car, new clothes, shoes, new phones, among other things. While acquiring these things in themselves is not a bad idea, it is wiser to use windfall incomes for things that will have long term positive impart on our lives especially because we do not have a full grabs of what tomorrow will bring.

For workers just starting off or in mid level careers, it is really important not to squander windfall incomes on non-essentials.

Many years ago during the mid 2000s, when the banking and telecommunication really became big industries, many banks and telecommunication companies paid bonuses and profit shares to their staff on a yearly basis. Most new staff and mid level staff squandered their money on buying cars, renting new apartments in high brow areas and changing their wardrobes almost every 3 months. Nite clubs were packed every Friday night with each person almost trying to out do the other in terms money spent.

Today, the story is different. The global economy is almost comatose. Banks are no longer giving huge bonuses, neither are telecommunication companies doing any better. The oil industry is in shambles. Every industry is operating lean.

Windfall incomes will not come all the time as the economic realities have now shown us. So if you are fortunate to get a bonus or profit share that amounts to something reasonable, here are a few tips on how to spend wisely:

1) Invest in real estate: As much as this sounds like really over flogged, it is a wise counsel. A businessman once said, “the only Estate that is Real is Real Estate”. Real estate is big business. There is a huge demand for rental apartments especially mini flats and 2 bedroom flats. There are several real estate companies offering instalments payment options for those interested in buying land. You can invest your windfall income in buying a half plot or full plot of land. I will advice you buy from a real estate company rather than directly from the community especially if you do not have funds for immediate development.

The simple reason is that the real estate company usually would have sorted out community settlement issues with the land owners and so you can be rest assured that you land is at least secure from land grabbers. Also, by buying from a real estate company, you will benefit from quick capital appreciation of your investment and rapid development of the locations since there will be several people also buying and developing their property in that location. Another advantage of investing in real estate is that after developing the property, you can put it up for rent if you do not wish to reside in that location and use the rental income to pay for your rent in your desired location.

2) Invest in a part-time business: If you already have a business that you can run part- time alongside your full-time job, you should invest your windfall income in that business. You can buy the needed equipments or register for a training programme that will increase your expertise in that business area. If you do not already have business idea, you may want to consider doing some research to see what part-time business to invest in.

3) Invest in education: You can invest your windfall income in further education that will boost your profile and give you a better chance at a higher paying role in your industry or another industry entirely. You an also invest in the education of your loved ones like your spouse, children or siblings (if you have this responsibility thrust on you)

4) Invest in Marriage: Yes! you read me right.

This is for those who believe in marriage. If you have a partner and your really desire to spend the rest of your life with the person, then invest your windfall income towards settling down. You can start making down payments for some critical items on your list. Marriage is an investment in your lifetime happiness.