The average income for Asian Americans is among the highest in America. For 2022, the median Asian American household income is roughly $80,000 compared the the median overall U.S. household in America of roughly $64,000.
Asian Americans make up roughly 5.6 percent of the total American population as of 2022. The Asian-American population is expected to continue growing rapidly over the years.
The largest ethnic groups represented in the census were Chinese (3.79 million), Filipino (3.41 million), Indian (3.18 million), Vietnamese (1.73 million), Korean (1.7 million), and Japanese (1.3 million).
The Many Different Types Of Asians
Below is a more detailed racial breakdown by the Census Bureau.
Asian American Population Growth
The U.S. Asian population grew 72% between 2000 and 2015 (from 11.9 million to 20.4 million), the fastest growth rate of any major racial or ethnic group. As a result, more and more corporations, universities, think tanks, and politicians are trying to figure out how to best address the growing needs and tastes of Asian Americans.
Average Wealth For Asian Americans
Despite being one of the smallest minorities in America, Asian Americans are on pace with White Americans in terms of wealth per the Federal Reserve.
Average Income For Asian Americans
According to the Census Bureau, Asian median household income leads the way at roughly $80,000, or 30% higher than White median household income at $64,000.
Hispanic American income is roughly $45,000, while African American income is lowest at roughly $38,000. A 100% spread between Asian American income and African American income begs the question: why such a massive difference?
Before answering the household income difference question, it’s important to realize “Asian American” consists of dozens of different types of Asian people. Let’s take a look at Pew Research’s study on Asian income by Asian type below. It helps us ascertain the true average income for Asian Americans.
Their overall annual household income corresponds with the Census Burea, but within the matrix, you can see a wide variation with Indian income at $100,000, or 3X higher than Burmese income and 35% higher than the overall Asian American income.
This fact may be due to a higher proportion of Indian workers in the high tech and medical industries. The other surprising income datapoint is Filipino income second highest at $80,000. This may be attributed to better communication skills given English is widely spoken in Filipino culture, as well as a propensity for self-employment.
Racial Makeup Of Personal Finance Readers
To understand the racial income difference, let’s look at the makeup between personal finance readers and the overall racial population. The hypothesis is: those who read more about personal finance will have higher income and net worth overall.
Based on my survey of roughly 3,000 readers of Financial Samurai, one of the largest personal finance sites in the world with over 1.5 million pageviews a month and a nine year running history, here are some interesting statistics:
- There is roughly a 30% overrepresentation of Asian readers (35% FS readers vs. 5% of US population)
- There is a 5.3% underrepresentation of African American readers (7% FS readers vs. 12.3% of US population)
- There is a 11.3% underrepresentation of Hispanic readers (5% FS readers vs. 16.3% of US population),
- There is a 15.7% underepresentation of White readers (48% FS readers vs. 63.7% of US population).
Overrepresentation Of Asian Americans Who Care About Money
A 30% overrepresentation of Asian readers on Financial Samurai is startling. Perhaps some of this can be explained by my site’s name and the fact that I’m Taiwanese/Polynesian American. Everybody tends to gravitate towards people most similar to themselves.
Just look around at all your friends, everybody in senior management at your firm, the people Presidents choose as their cabinet members and so forth. Homogeneity reigns supreme because we’re all biased for those who look and talk like us.
But since 70%+ of Financial Samurai’s traffic is from search engines like Google with traffic coming from all over the country and the world, and only 5 out of 1,397 of my article’s have titles with “Asia,” “Asian,” or “Chinese,” one can assume a smaller percentage of the 30% overrepresentation is due to the site’s name and my race.
If my site had less than 10,000 pageviews a month, my site’s name and my background will have a bigger impact. But my site generates over 100X that and is therefore, statistically significant.
Feel free to peruse my most popular articles and see for yourself. The most popular articles relate to retirement savings, investing, and earning more money. These topics are relevant to all races.
Underrepresentation Of Black And Hispanic Readers
As Black and Hispanic Financial Samurai personal finance readers appear underrepresented and correspond with Census Bureau-provided lower income and wealth figures, and as Asian readers appear overrepresented and correspond with higher income and wealth figures, it seems clear there’s a correlation between higher income/wealth and reading personal finance articles.
The Solution To Improving The Financial Health Of Our Country
Read more personal finance sites to improve your financial health. It’s that simple. Reading a personal finance site like Financial Samurai keeps you abreast of all the topics. This site will also challenge you to build more wealth.
Anybody who started reading Financial Samurai since its 2009 beginning has probably crushed the average American in terms of wealth creation. We’ve been talking about investing in the stock market, bond market, and real estate market all this time.
Even as the stock market marched to new record highs, you could read articles talking about investment ideas at the top of the market to let you make even more money. You would have likely also started building your passive income portfolio to give yourself more options versus others who just rely on a day job income.
If you bought property in SF, NYC, Denver, Vancouver, Toronto or most big cities in 2012 with a 20% downpayment, your equity is up over 300%. Meanwhile, the S&P 500 is up over 120% during the same time period. You could have also learned to save a lot on mortgage interest expense by not taking out a 30-year fixed mortgage as we enjoy a permanently low interest rate environment.
The same cannot be said for everyone who disagreed with my 1/10th rule for car buying. You can literally read hundreds of comments from people who missed out on investing in this massive bull run because they had to drive a $50,000 truck that equaled 100% of their annual gross income.
Yes, we can hypothesize that those who are already financially savvy care more about financial information than those who aren’t. But we should also conclude that over time, those who read personal finance websites tend to get richer than those who do not.
Education Will Improve Financial Health
You don’t have to be rich to get a great education because access to information is now free. Soak up as much information as you can and share your favorite articles with as many people as possible. I’m absolutely positive we’ll see a tremendous improvement in our finances over the next generation.
Once you have your finances sorted out, you can focus your attention on more important things such as family, health, and happiness. And when your finances are really good, you can even spend your time and money helping other people.
Achieve Financial Freedom Through Real Estate
As an Asian American, you may be naturally drawn to real estate. Real estate has always been a favorite asset class to build wealth among Asians because it is a tangible asset. Further, real estate is less volatile, provides utility, and generates income.
By the time I was 30, I had bought two properties in San Francisco and one property in Lake Tahoe. These properties now generate roughly $150,000 in annual passive income. As an Asian American, I wanted to invest as much as possible so I no longer had to deal with gatekeepers.
In 2016, I started diversifying into heartland real estate to take advantage of lower valuations and higher cap rates. I did so by investing $810,000 with real estate crowdfunding platforms. With interest rates down, the value of cash flow is up. Further, the pandemic has made working from home more common.
Take a look at my two favorite real estate crowdfunding platforms.
Fundrise: A way for accredited and non-accredited investors to diversify into real estate through private eFunds. Fundrise has been around since 2012 and has consistently generated steady returns, no matter what the stock market is doing. For most people, investing in a diversified eREIT is the way to go.
CrowdStreet: A way for accredited investors to invest in individual real estate opportunities mostly in 18-hour cities. 18-hour cities are secondary cities with lower valuations, higher rental yields, and potentially higher growth due to job growth and demographic trends. If you have a lot more capital, you can build you own diversified real estate portfolio.
Manage Your Money For Free
The best way to build wealth is to get a handle on your finances by signing up with Personal Capital. They are a free online platform which aggregates all your financial accounts on their Dashboard so you can see where you can optimize.
Before Personal Capital, I had to log into eight different systems to track 33 different accounts to track my finances. Now, I can just log into Personal Capital to see how my stock accounts are doing. I can check how my net worth is progressing and where my spending is going. You also get your net worth amount sent to your inbox weekly.
One of their best tools is the 401K Fee Analyzer which has helped me save over $1,700 in annual portfolio fees I had no idea I was paying. You just click on the Investment Tab and run your portfolio through their fee analyzer.
They’ve also come out with their incredible Retirement Planning Calculator. It uses your linked accounts to run a Monte Carlo simulation to figure out your financial future. You can input various income and expense variables to see the outcomes. Definitely check to see how your finances are shaping up as it’s free.
About the Author
Sam began investing his own money ever since he opened an online brokerage account in 1995. Sam loved investing so much that he decided to make a career out of investing by spending the next 13 years after college working at two of the leading financial service firms in the world. During this time, Sam received his MBA from UC Berkeley with a focus on finance and real estate.
FinancialSamurai.com was started in 2009 and is one of the most trusted personal finance sites today with over 1.5 million organic pageviews a month. Financial Samurai has been featured in top publications such as the LA Times, The Chicago Tribune, Bloomberg and The Wall Street Journal.
He is the author of the bestselling book, Buy This, Not That: How To Spend Your Way To Wealth And Freedom. Pick up a hard copy today. It’s the best personal finance book on the market.