Income by race is an especially interesting topic during these times of social awareness and racial injustice. Let us breakdown income by race based on the latest U.S. Census Bureau data.
Before we begin, I want to emphasize that your day job income should be only one source of income. You must build multiple income streams if you want to eventually achieve financial independence sooner.
Further, you should continuously invest due to inflation. Depending on the government or a pension to save you is not a prudent long-term financial strategy.
In this post, we’ll first address income by race. Then I’d like to talk about some factual and some personal reasons why Asian income is the highest in the United States. Race-related debates seem to be constant in America, yet Asians are largely left out of the conversation.
Instead of just making comparisons between Black and White or Black, White, and Hispanic, it’s import to include Asians as well.
Income By Race: Asian Income Is Highest
The most interesting data about income by race comes from the latest Census Bureau’s survey in 2019 (for 2021). Notice how there’s been an acceleration of income for every race starting around 2013.
Asian: $98,174 ($29,471 or 43% higher than overall median)
White: $76,057 ($7,354 or 10.7% higher than overall median)
All races median household income: $68,703
Hispanic: $56,113 ($12,590 or 18.3% lower than overall median)
Black: $45,438 ($23,265 or 33.8% lower than overall median)
What’s great about this latest income by race data is that all races have seen a healthy rise in income since 2013.
However, there is a widening income gap between the median Asian income, the median income for all races, and the median Black income.
Asian median household income is more than double the Black median household income and 75% higher than the Hispanic median household income.
Why Is Asian Income Pulling Away?
Here are some reasons why Asian income is accelerating at a faster rate than income from other races. I’ll share my personal perspective as a Taiwanese-American down below.
1) Smaller population, less “weight.”
Asians account for only ~6% of the American population. One stark example of the benefits of having a smaller population is to take a look at Singapore and Malaysia.
The per capita GDP in Singapore is an impressive $56,000, partly because its easier to take care of and mobilize 5.4 million people than it is to take care of 30 million Malaysians, whose GDP per capita is only $11,000. They used to be one country until Singapore split on August 9, 1965.
2) Asian immigrants who can afford to come to America tend to be wealthier.
It costs money to flee a country for better opportunity. My ~22 year old neighbor from China who bought a $2.25M house is an example. If you’re poor, you’re stuck. Because the US is viewed as having some of the best universities in the world, many wealthier Asian parents send their kids here, Australia, and the UK.
If you can afford to pay US private school or out-of-state tuition, you are probably wealthier than the median person. There is much less financial aid for international students. In fact, many colleges purposefully try and court international students because they pay top dollar.
Take a look at the Asian American Pacific Island population breakdown in the chart below. It shows that out of the total AAPI population in 2017, 56 percent were foreign born. Foreign born AAPI tend to have more resources and hold higher-paying jobs.
3) Tremendous focus on education.
Education is emphasized more than anything else in the Asian household. Get good grades, go to college, or else be a disappointment. Ever wonder why there are so many Asian dentists, doctors, and lawyers? More education is correlated with higher income and wealth.
A 2013 Nielsen Research Report found that Asian American households have a median net worth of $89,300 compared to $68,800 for overall US households, a 30% difference. Meanwhile, roughly 49% of Asian Americans have Bachelor’s degrees vs. 28% of the general US population, a 75% difference.
4) More working people in each household.
How do people afford to live in expensive Hawaii where there are few high paying jobs? Multiple incomes under one roof. It’s not uncommon to see a father, a mother, an adult son and his wife all live together and work.
It’s common to see multiple generations under one roof in the Hispanic community as well. Family versus independence from family is highly emphasized.
What Is Considered Asian?
The biggest pushback from academics and Asian people is the classification of the word “Asian.” Thai culture is very different from Chinese culture. Japanese culture is different from Filipino culture.
Every Asian race has its own language that can’t be easily understood by another Asian race. Meanwhile, some Asian countries like India have 22 official languages and 150 languages spoken by a sizable population!
Academics are afraid of the “model minority,” which unfairly puts pressure on different Asian races who may not fit the mold.
Can you imagine being an Asian who doesn’t do well in school and isn’t in a profession that requires a graduate degree? Expectations can hurt people’s happiness and pride.
The Many Different Types Of Asians
Check out how many different Asian people there are from this Wikipedia chart.
Pew Research has also allowed us to see the breakdown of the various different types of Asian income. It’s interesting to see Indian income at $100,000, or about 35% higher than the median income for all Asians.
This may be due to a higher proportion of Indian workers in the high tech and medical industries. But if you are Burmese, Nepalese, Bangladeshi, or Indonesian, you may resent the stereotype that Asians are the highest income earning race.
Now that we understand not all Asians are the same, I want to share my personal thoughts on income by race from a Chinese American person who came to the United States for 9th grade and never left. My father was born and raised in Hawaii, as were his parents. My mother was born in Taiwan, and met my father in college.
Growing Up As An Asian-American
With language and cultural headwinds Asians face in America, why is the median Asian American income so much higher than other races?
There’s no proof Asians are any smarter or harder working than other races. I quit math after junior year in high school because I hated math and didn’t see the practical use of taking Calculus in day-to-day life. Kicking back came easy to me.
I can’t speak for all Asian-Americans, but I can provide some perspective as a Taiwanese-American who grew up in four different Asian countries for 13 years before coming to America for high school and college.
I was born in the Philippines and lived in Japan, Taiwan, and Malaysia. In college I studied abroad in China for six months. In the workplace, I took business trips to India, Thailand, Hong Kong, Japan, and Indonesia for 13 years in a row from 1999 – 2012. I’ve lived in the States for the past 25 years.
Experiences That Shaped The Soul
When I was in the 4th grade in Taiwan, a white kid tripped me on the pitch and proceeded to yell racial slurs after I fell to the ground. He kept on barking obscenities until I swept his legs and stomped on his solar plexus in retaliation. He began to cry and we were both sent to “face the wall” for the entire afternoon recess period.
While we were squishing ants climbing on the brick just inches away from our faces, my assailant surprisingly turned to me and apologized. I was touched and apologized right back. We never fought or played dirty on the pitch again.
Chinese vs. Americans
The soccer game was between “Chinese” vs. “Americans” while I was attending Taipei American School in the early 1980s. I was placed on the Chinese team due to my ethnicity, instead of my nationality. I was too young to understand that I had just experienced my first racial conflict.
Racial Encounter At Denny’s
When I was a sophomore attending The College Of William & Mary in Williamsburg, Virginia, I had another very memorable racial encounter.
My girlfriend (who is half-Asian and half-White) and I were eating some midnight waffles at Denny’s, of all places when a group of offensive linemen came barging in. They sat in the booth next to us and told us to “get the fuck out you chinks” or else they’d beat the crap out of us.
By this time, I was already used to racial conflict as a 20 year old Asian American living in Virginia for the past seven years of high school and college. I always spoke up when there was an injustice, but this time I was outnumbered four-to-one.
Although I mentally strategized on how to debilitate my oppressors, my girlfriend and I decided to leave as we were just about finished with our food anyway.
The Motivation To Reach Financial Independence
I felt ashamed I couldn’t do anything to fight for my girlfriend’s honor. A week after the incident, I made myself a promise to be financially independent as soon as possible so I would never have to take abuse from anybody again.
If my loved ones encountered racial hate, then I wanted to have financial means to solve the problem beyond my fists. As a result, I focused on saving to invest in as many passive income sources as possible.
Why Asian Americans Save And Earn So Much
Building wealth starts with savings. There is no such thing as investing, buying a home, or building alternative income streams without savings.
Let me share with you reasons why I think Asian Americans save and earn more than the overall median. Again, this is just one person’s point of view on income by race.
1) Asians are allergic to debt.
Taking on debt to purchase a car, a piece of property, or stocks is a relatively new concept for many Asians. We’ve been taught the tenet, “If you can’t pay for something in cash, you can’t afford it.” This tenet runs counter to the heavy consumerism culture in America.
If you go to any property developer in China, it is common for 80%+ of the units to be purchased with cash compared to less than 40% in America. The same trend continues in India. Debt is slavery. Cash is freedom.
Before the pandemic, the US personal savings rate was roughly 6% according to the US Bureau Of Economic Analysis compared to 30%+ in places like China and India.
2) Lots of historical uncertainty and upheaval.
When you have political instability and war, people tend to save more for their uncertain futures. Over the past 100 years or so, there have been a lot of tragedies in developing Asia. The Cultural Revolution and the Nanjing Massacre are two such tragedies in China. The ongoing heavy hand of the government may be another.
The Taiwanese are perpetually paranoid the Chinese will invade. The Japanese have been aggressively saving since their bubble collapsed in the 1980s due to deflation.
The 1997 Asian Investment Crisis destroyed the wealth of millions of Thais, Indonesians, Malaysians, and South Koreans. Meanwhile, America has enjoyed a much more stable path of growth thanks to our Democratic system. Having better expectations of the future gives you more confidence in spending more money.
3) Few Asians in leadership positions.
When there are hardly any Asian American politicians, actors, and CEOs, it’s more difficult to visualize yourself in such positions as a kid. After all, the Asian population is small. When there are few examples to aspire to, there’s a tendency not to even bother.
Instead, Asians may just decide to be their own boss through entrepreneurial endeavors e.g. restaurants, convenience stores, laundromats, landlording, online businesses, etc. Entrepreneurship tends to be much more lucrative than being a median income worker over the long term.
4) Family finances.
It’s common to see post-college Asian adults still live at home with their parents. Why pay rent when you can live with the parents and save money for a downpayment, is a common way of thinking. There’s also the traditional aspect of living at home until one gets married, unlike US culture, which encourages independence as soon as possible.
If you save $30,000 a year in rent for 8 years until age 30, you will likely be better off financially than average. Personally, I could never imagine living back home with my parents after college.
Related: A Massive Generational Wealth Transfer Is Why Everything Will Be OK
5) Sports is not a realistic way out.
Only a tiny percentage of the population ever become professional athletes. But the odds are even starker for Asian Americans in athletics, an area where meritocracy reigns supreme. There are hardly any Asian American basketball, football, or baseball players for example. And these three sports are a part of Americana where the best athletes are revered as heroes.
Even for non-contact sports like tennis, there have only been a handful of Asian athletes who have risen to the top of the global ranks. You’re only making $100,000 – $150,000 a year before travel expenses as the 100th ranked tennis player in the world. Without the hope of athletics, the only way left is in the field of academics and the arts.
6) Academics is the main level playing field.
If you study harder, you will likely get better grades. Better grades will likely get you into a better university. If you get into a better university, you’ll likely get a better job and make more money.
In academics, it doesn’t matter if you’re only 5 feet 1 inches tall, you’ve got the same opportunity as someone 6 feet 10 inches tall. Even if you are poor, so long as you have a stable household you can still study as long as someone who is rich.
There is nothing more important to the Asian American population than academics. Parents will do absolutely anything to help give their kids a chance to excel in school – from after-class tutors every day to Sunday school.
Unfortunately, many magnet schools like Thomas Jefferson HS and Lowell HS have done away with their admissions exams in favor of a lottery system. Further, colleges like Harvard seem to have more stringent standards for admissions for Asian candidates.
7) Lower divorce rates.
Asian American families divorce at roughly half the rate of other Americans. There is a stronger social stigma against divorce in the Asian community. Although most marriages occur due to love, practical reasons for marriage may be more common.
For example, arranged marriages can be found in Indian and Chinese culture to a lesser extent. I have Asian friends who aren’t romantically in love with their husbands, but stay together due to social pressure and convenience.
If you have a more stable household, finances tend to be stronger and children tend to have a better chance of going to college and finding a better paying job.
7) The Realization Nobody Will Save Us
Given Asian Americans account for only ~6% of the US population, many Asian Americans realize that nobody is going to save us – not the government, not our colleagues, not the NBA, not the majority. Asian Americans are often ignored by the media, as evidenced by the lack of support during the Asian American attacks post pandemic. Even if every single Asian American was brilliant and physically intimidating, we’d still get crushed by everybody else as such a small minority.
The only people Asian Americans can count on are our immediate family and education. This is why you see such a concentration of Asian minority groups in various urban settings e.g. Chinatown, Koreatown, Japantown. It’s a similar concept to why schools of fish swim together in the great unknown ocean.
Related post: Three White Tenants, One Asian Landlord: A Story About Opportunity
Accepting The Way The World Is
My father explained to me after my fight on the pitch that this sort of racial conflict would keep on happening as I grew older. He was absolutely right. He taught me that in order to stop getting picked on I would have to fight back with my mind because there’s always going to be someone physically bigger and more intimidating than me.
And even if I was a hulk with a black-belt in martial arts, a pip-squeak with a gun could end everything in a hurry. With his advice in mind, I started taking school much more seriously.
When I graduated from college and got my first job in NYC I decided to save as much money as I could. After the first year, I maxed out my 401k and saved 20% of my after-tax income.
Yes, it sucked sharing a studio with my high school buddy as a 23 year old, but these are the types of sacrifices I had to make in order to save. Getting in at 5:30am and lasting until 7:30pm in order to eat the free cafeteria food wasn’t so bad.
After my third year of work, I was regularly saving 50% of my after-tax income because all I could think about, when it was dark coming in to work and dark leaving work was how wonderful financial independence would be. My goal was to make the most money as soon as possible in order to break free.
Burn Your Boats To Find A Way To Boost Income And Wealth
Perhaps it’s easier making and saving money as a minority in America because there’s so much urgency to get ahead thanks to a tiny safety net. Going through consistent racial adversity and seeing so much poverty in developing countries really motivates one to aggressively work.
There’s a saying that if you want to succeed, you should burn your boat. Once you’ve got no way to leave, you’ll simply do your best to thrive. But it’s hard to burn your boat when you’re living on SS America, a luxury cruise liner with all you can eat buffet 24 hours a day!
The income by race data from the U.S. Census Bureau should be eye-opening for all. Life is certainly not fair. But I hope through Financial Samurai and other free finance publications, we can help all races make a higher income and amass greater wealth.
Once you have financial freedom, you will have infinite courage to speak out against wrongdoings. You also will feel empowered to live a life that’s true to your values.
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Recommendation To Build Wealth
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Build Wealth Through Real Estate
real estate is the favorite way to build wealth for Asian families. Given real estate is a tangible asset, Asians view real state as a more trustworthy way to get rich. This is why you see so many Asian landlords.
Given interest rates have come way down, the value of rental income has gone way up. The reason why is because it now takes a lot more capital to generate the same amount of risk-adjusted income. Yet, real estate prices have not reflected this reality yet, hence the opportunity.
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.
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.
Both platforms are free to sign up and explore.
I’ve personally invested $810,000 in real estate crowdfunding across 18 projects to take advantage of lower valuations in the heartland of America. My real estate investments account for roughly 50% of my current passive income of ~$300,000.
Wow amazing article! Great breakdown of the factors of being Asian that contribute to wealth. As a black man, the statistics can be discouraging sometimes.
Interesting articles.
However, micro-level statistical evidence shows that within the same college majors and from the same colleges, Asian American graduates earn the lowest salaries among all races one year, three years, and ten years after graduation. The difference between the median Asian salaries and the top median salaries could be 10% to 25%.
How do we reconcile between the two facts? Asians have the highest household income and they have the lowest salaries within the same majors and schools. I have 2 hypotheses: 1. More Asians go to colleges to earn the college income premium. 2. Asians major in high-income potential majors, STEM, business etc. So even though Asians earn less than other races for the same majors and schools, in aggregate, their median income is higher because of the above 2 reasons.
FS, great article and some flip side to the Real Income article. All of these play a role – even though it’s the emphasis on education that sticks with me. Staying married, pursuing business endeavors, entrepreneurship, allergies to debt and realizing there is no safety net all play a big role. Having more earners and starting with more are also great helps especially for the entrepreneur.
As a white man I don’t know the experience of racism for the most part. But I do know that it’s real and spending on the degree it can motivate or destroy. You have demonstrated ways in which it motivated you; I am sure there are people who could aptly write about how it dismantled their lives – after all once the difference in degrees becomes too great, it becomes a difference in kind. Still, no-one should be bullied as you were and definitely not with racism.
Asian Amerikans do have a pretty harsh record of treatment in this country until after WW2. The rise of Japan and other Tigers changed a lot of attitudes in the latter half of the 20th century. Hopefully, something similar will come out of Africa- it own’t end racism but it may eclipse it.
Sam, I’ve been reading your blog posts now and then for a while now. You do offer a perspective that seems unique in the personal finance world. And I’m familiar with a lot of what you’re saying because I’m Taiwanese American, too.
But I think you and your readers need to remember that not all Asians and Taiwanese Americans are like you or think exactly like you do. I feel your whole vibe is excessively “Confucian” and overly oriented towards making and saving a ton of money, to the exclusion of other enjoyment in life. It does make sense that you were born in Asia and are a Third Country Kid. But I’m surprised your dad seems to be at least 3rd generation Chinese American from Hawaii – is that right? Your whole worldview does sound very Asia Asian and less like the typical Asian born and raised in the US.
There are plenty of Asian Americans who are much more relaxed about money and personal finance than you are. My own family doesn’t care much for wealth or prestige. We value personal happiness, interests, developing our mind and passions, relaxation, nature, the arts, humanitarian efforts, and spirituality much more. My parents are content with “just enough,” and so are my brothers and me. My parents weren’t Tiger Parents, didn’t make me or my brothers go top schools, didn’t make us go into that narrow set of professions, never told us to earn a lot, etc. There are plenty of Asian parents who are relaxed about all that. I think people need to remember that Asians aren’t a monolith, including Asians within any ethnicity.
I see a lot of rude and horribly stereotyping comments in this blog post – same as everywhere else on the internet. Asians aren’t that small a slice of America – the 5.5% (increasing all the time) is way higher than the very low 1% that’s Native Americans. Yet Native Americans are way better known and have much higher cultural capital in the US. Asian Americans’ lack of visibility, acceptance, and inclusion has a lot to do with racism, zenophobia, and subconscious biases that’s rampant in the US. As Asians, we still have an extremely long way to go, especially now, with all the anti-Asian abuse from coronavirus.
Anyway, I just wanted to counter the pervasive stereotypes and emphasize that not all Asian Americans and Taiwanese Americans are as hardcore about money, investing, and saving as you are. Many of us are much more relaxed about it and prize giving back to the world, personal development, and being good people above all else.
Sounds good. I hope people realize everybody is unique and there is no one size fits all.
Do what’s good for you. I decided to leave work at 34 and it’s been what’s good for me, especially now with two kids. Freedom has created a tremendous amount of personal happiness.
Everything is rational in the end.
No 70% out of wedlock births.
IQ
japanese/chinese average iq is 105
higher then whites
way higher then african american
Average IQ differs between ethnic groups, and parallels income.
It’s shameful that this article did not mention this fact.
Either IQ is irrelevant or wrong, in which case the State should stop forcing taxpayers to fund State university psychology and sociology departments who keep producing such rubbish; or IQ is relevant and the State should stop forcing people to fund State university psychology and sociology departments who remain deafeningly silent on such important information. …Either way, the State and it’s hallmark coercion should be defunded.
Not the whites who stormed the Capitol Building.
Most whites are dumb wage slaves who get to where they are due to a system that enables white mediocrity and shames minority excellence.
That’s why whites who are strung out or die from stupidity get a laugh from me.
Did someone say “Taipei American School?” Great high school! I live in Taipei (Neihu, not far from the current US Embassy-that-ain’t-an-embassy) and have attended church services a few times at TAS. They do robotics and all kinds of stuff I never heard of back in the 17th century when I was in high school. TAS grads end up in top-notch universities.
Yep! I want to TAS when it was in Shi Lin, the old campus. I wish I could go back and check it out. Very fond memories!
they dont get paid any more than anyone else,most of them came here with money.i work in silicon valley and there are asians everywhere unlike 30 years ago,they have totally changed the culture here for the worst.i dont see them being better employees at least not at my job,alot of them do alot of nothing,but they have their mickey mouse college degrees that justify them doing so.so your theory of them being the best and brightest just doesnt fly.silicon valley was paradise before the asian hordes arrived.i find at work the asians wont look at you or talk to you so my relationship with them at work is non existant.most of them are from foriegn countries and they all drive new cars,like i said they came here with money your average piss on in chinaman cant afford to move to america,so dont kid yourselves these asians do what they have always done ,cheat the system.either that or they were brought over for their particular skills and paid well,but i dont see the point as there are many americans who can be trained to do these jobs.wafer fabrication isnt rocket science,although a complicated process anyone can be trained to do it.so i just think you are wrong i think they have money because they just dont spend their money like water like americans going out to eat,expensive hobbies,and other money wasting habits,the asians are so tight they squeak.they would never offer to take you out to lunch or anything like that,its just not done.so i long for the silicon valley of the 80’s and am now a foriegner in my own home town stared at everywhere i go because im white.so all this asian prosperity you brag about has come at the cost of the american worker,who ran silicon valley like a fine tuned machine for decades until the globalist replacement.i will be retiring soon and i dont know what im gonna do i wanted to stay in my home town but feel that just wont be possible as i dont fit in here anymore,so thanks asians for all your success in making america a better place,bujt the people you pushed out wont look at it that way.because innovation of silicon valleys best new technology still comes from white men,where there ideas are soon stolen and marketeed back to us from communist china.this would not have happened if most silicon valley workers werent communist chinese and indians.america throws away its secrets and asians have a track record of tech theft and its caused my company to face fierce competition from overseas.they also work at places like lawrence livermore lab handling top secret projects,america has to get smart and understand theyre being suckered,why spend millions in research and development when one of your chinese operatives can just steal it.there i got that out,but im not impressed by your article its just not true, how you make them out to be victims “nobody is going to save us”lol,oh yes they would.america loves its asians,5.6 percent is the biggest understatement,that 5.6 percent must all be in the bay area because they are like mosquitos over here swarming on everything.jabbering in chinese and drivce asian cars only,whiteys cars are inferior i guess.lol.
Unless you are a jew, being the average non jewish white is nothing to brag about. Why do you think there are over 2 million homeless people across the country, and a good proportions are white. I have never seen so many homeless white people before and the number is growning.
Slavic guy here is jealous with Asians who are better than him. This is why America is the way that it is now. Vlad my advise to you is go and better yourself. You spent too much time commenting long sentences you must have nothing better to do
Aight… aight. Since you’re so tight up your ass about us “asians”, you done caucasian ? I only had to read one grammatically incorrect sentence of this caucasian to figure out that this caucasian is just jealous. He/She is literally neck – deep in jealousy. “Whitey cars'”, gosh dang, even i’m not that immature. Wanna know why we’re living the life, and all you caucasians just suck ass and beg on the roads, in front of our “asian”, “chinese” cars ? I am just so freaking glad you feel like that, that you feel so jealous, like, damn that feels nice. After all those years of racism, you caucasians sure do deserve the streets, house’s are not even close. That’s how all those Chinese people felt, that’s how all those Indians and other Asians felt when they came to the so called “free” nation, why though, just cuz we’re so “asian”. I get so sick of looking at ya’ll’s pathetic asses, pathetic caucasian asses if you wanna go more specific. Like, hello, God gave us the same freaking brain, but ya’ll caucasian people just haven’t found a way to use it, like all of us. Lol, it’s just so freaking hilarious to see ya’ll’s racist broke ass selves getting jealous with us. Most of these Asians came here with nothing, okay caucasian ? They came here, went through the struggle just like everybody else. They didn’t just sit there with their fat white asses doing nothing but being racist, they actually did hard work to achieve their dreams. Ya’ll’s inability of not being able to use the slob of a brain inside of that caucasian head is not our fault.
You make a good point, but Asian also bust ass. They have no ability for hard physical work and in my experience are not eager to have head-on conflict, even in business. This being, they study like mad men. My god, I have never seen a group of people study so much. Though, I think it hurts them in the long run. They get to like the 100 – 200k$ range pretty easy, but when you spent your entire life studying and memorizing, you lose some of your creativity. I have a lot of respect for them, but I do notice, often times they don’t really think outside the box and have trouble drawing connection between unrelated things. People who make real impact don’t just know how to perform basic analysis, they can solve unsolved problems and aren’t afraid to go outside what they have been taught.
That was a lot of words to say you’re incapable of competing with people on fair grounds because of your personal inadequacies.
Hahaha vlad hurt your ego so bad. That just shows truth hurts.
This is capitalism, don’t blame asians or anyone for importing jobs overseas to cut profits. Also if you’re getting countries to source and produce all your products and paying them below minimum wage with insane overtime hours, then I really can’t see the issue of blaming China/India for stealing IP. Please go outside and talk to people instead of coming up with ideas of how asians are by observing them.
Asians who came to the US before the wealthy Asians started coming for education already earned the title of “model minority” by opening small businesses like convenience stores, laundromat, and restaurants and squeezing dollars to send their children to college and make them doctors and lawyers. I believe this was possible due to the very frugal nature of Asians and of course the emphasis for education. Many believe that you need to earn more in order to have a lot of money, but I really believe that saving (and investing those savings, primarily in real estate in the case of Asians) is the key to having a lot of money unless you can push your income to 7 figures.
I also believe that Asians love money and they really go the extra mile to chase opportunities. There are Asians (mainly Chinese people) doing business in all corners of the world. For instance Chinese people migrated to Indonesia and Malaysia and are the wealthiest people there today.
About wealthy Asians, I know from experience that most wealthy Asians go back to their country to succeed family business or open their own biz in Asia, so I think they are not a significant income contributors on the chart. Those Asians you mentioned that buy 2M apartments here are spending rather than earning money here. This only makes sense because they can live like kings in Asia. They have great connections in Asia with family ties. Why bother enduring racism and building things from ground-up here? Even if they make professional-grade wage here, it’s not a lot to their family’s eyes after tax and expenses.
One of the reasons why I wanted to go back to Asia to work is because when I was living in Asia for 13 years, it felt pretty good to be part of the majority. There was none of this discrimination and stereotyping as we have here in the United States. Unfortunately, I never got to go back and work. I only went back every year for 2 to 4 weeks at a time for business trip.
But living in San Francisco is great. We are a wonderfully diverse city and I love it here.
San Francisco is not America. San Francisco will be expelled or conquered soon. Anglo-Saxon and Asian culture is fundamentally incompatible:
twitter dot com/Luke_Turner/status/1303321341387509761
blog dot jim dot com/politics/why-east-asians-vote-democrat/
We are warriors and place intellectual and philosophical pursuits higher than just living. We would rather die than live as slaves to a crammed-in-like-sardines mediocrity and oligarchy. Asians prioritized concubines and reproduction over trade and networking:
steemit dot com/philosophy/@anonymint/geographical-cultural-ethos-science-is-dead-part-2
Einstein observed this:
nextshark dot com/einsteins-travel-diaries-reveal-shockingly-racist-views-asians/
Asians think life is the most important that is why their religions are about a cycle of reincarnation. Anglo-Saxons believe in ascendancy to a higher idea which is heaven above this pitiful Earthy existence.
I lived in the Philippines for most of the years from 1990 to 2020. I am not going back!
with government funded loans.ensuring their success.
lol, don’t be so salty bro! Work hard, save money, invest properly, and maybe you can be on par with everyone else :)
That’s really the answer, and that’s what we did. We were on the lower end of the totem pole of professions, but managed to do well enough to live comfortably and save enough for our retirement. I majored in Accounting, and my wife was an RN. We raised two sons, and they both did well in school. The oldest graduated summa cum laude, and the young son graduated magna cum laude. I worked in management and business consulting for 80% of my working career, and did well enough to travel the world and retire early. I’ve been retired since 1998, and we live in Silicon Valley. Our investments thus far YTD has increased by over $100,000. I’ve traveled to 132 countries, and made friends in many of them. Having studied macroeconomics and microeconomics have helped me to understand what to expect for the long term. I don’t listen to financial pundits who predict the next Great Recession. They are just fear mongers, and don’t know what they are talking about. Economics is not science; nobody is able to predict the economic future of our country or the world’s.
Nice to find an article so related to my own life experience as well. Growing up as a Gen X Asian American (Thai-Chinese Asian American), we all know how hard it is to find anything related to us in the public media. Along the ‘if you can’t afford it for cash, you can’t afford it’ tenet, I wholeheartedly agree. I’d go further to say that so many of us also believe and live according to ‘even if we can afford it for cash, we still can’t or at least shouldn’t afford or show it’ along the old Confucian ‘gold hidden in rags’ way of thinking. I used to dream of driving a shiny black Mercedes as a teenager, but as an adult, I tell myself that that shouldn’t be a reality until I have a net worth of more than XX million. So me and my wife happily drive our run of the mill Toyotas until that day comes (and it might not come, but oh well).
I suppose I’m the black sheet in my family. All my family members from oversea have a master degree but U.S. is land of opportunities. I am a sales professional and I earn more money than 5 MBA (cousins/brother) comebine together and my income increases by 40% each year.
Sorry, but I am not sorry. I don’t care about title or status. Being a Doctor, Engineer, lawyer, CPA is over rated. I need to be able to expressive myself freely.
I agree with most of your points, I think another main thing for us asians is our sense of family and being responsible for our families whether its our kids or taking care of our parents at a young age.
I dont know how it is for the wealthier asians that came here as my family wasn’t one of them when we arrived but from my pov I was taught to just work harder then everyone at everything, my mom told me when I was a kid that if I plan on being anything in this world you have “quick hands and quick feet, work twice as hard, be twice as smart and twice as fast as white people to have the same opportunities as them”, she let me know that nobody is going to give me SHIT, you have to take it.
This kinda mentality that was implanted in my brain at a young age attributes to the success I’ve achieved in pretty much anything Ive done whether its sports (yes I was an amazing asian athlete, specifically basketball and football not fucking table tennis lol), running the streets or now with the companies I own. If i was a burger flipper i’d be the best damn burger flipper you have ever seen.
I see this same type of work ethic in many asian people although I’ve seen it most in China, I deal with many factories and businessmen there and I can tell you whether its the owner of the factory or the workers THESE PEOPLE HUSTLE HARD and I dont mean rappers talking about how hard they hustle, Im talking about day in and day out quick hands and quick fucking feet, keeps their heads down and just does what needs to be done in order to achieve their dreams and provide for their families.
So to answer your question, family, sense of responsibility and work ethic (quick hands and feet).
Sorry for the profanity….. but not really :p
Would you agree significantly higher proportion of asian population lives in high wage areas / cities, coastal, etc?
Perhaps geography is another correlation in why the stats are what they are?
I’m 27 and make around $300k. It’s honestly not that difficult to make a few hundred thousand dollars if you know how to spot opportunities.
How
I’m African American intelligent and from a middle class family.
However, I’m stuck making about 40k.
I want to step out of my comfort zone and make more money.
My dream is to get a PhD in 5-10 years but my family scoffs@ this idea.
What are the secrets to obtaining wealth?
This was never taught to me by my family of origin.
You’re probably not going to read this, but here goes nothing.
I think the middle class believes that the way to achieve financial independence is through education. Nope, getting more educated will just lead you to the academia career path, if that’s what you’re interested in. One thing is for sure, student loans!
The FAST route:
If you want to be rich, you need to SELL A LOT!
The best things to sell = solutions to the most frequently occurring problems.
Sell your solutions as a product or service, whichever is more effective to solve this problem (or appears to solve).
e.g. Bulletproof coffee is just coffee + butter + MCT oil, nothing out of the ordinary or revolutionary. However, it gives people the idea/belief that it will be the one solution for weight-loss. This stuff is expensive but people buy it in the
bundles and has been marketed by Youtubers for many years. Was it truly effective?Hmmm….
If that is too difficult, then choose the SLOW route:
1. Get a job with a great ROI ( fullstack dev,front end, backend, mobile dev, pharmacy, nursing, electrical/mecha engineering).
2. Start with 10% paycheck investment every month or couple weeks in growth blue chip tech stocks (e.g. Tesla, Amazon) and just hold on to it. With every paycheck increase, just devote all of it to the stocks till you have about 50% invested every month.
3. Delay car purchase. Live close to public transport and commute everyday to work. If you are lucky enough to get one from your parent/friend, use it. Realize that a $20k car does not grow in value at all. A $20k tech stock investment might grow 50% in a year, making you $10k profit – taxes in profit after a year. No maintenance or insurance, just wake up one day and realize how rich you’re now. Now that’s REAL passive income right there.
4. Stop smoking and drinking, unless offered at an event for free.
5. Chill out on the wedding. Stagger your expenses and splurge later on your anniversaries/honeymoon/travel, which I think is more romantic.
6. Hit 6 figures in annual income before you have a baby, (especially important if you’re in the Bay Area). Once you have a kid, many optimal career moves tend to be sacrificed for the sake of the kid.
7. Go easy on traveling. I regretted spending so much money on traveling in my early 20s. I don’t remember much of it. Spending on experience is NOT REALLY WORTH IT.
8. Once your tech stock portfolio = annual paycheck, apply for a car loan (a 5 year 0% APR loan, 0 downpayment). Make sure you only get a car that’s 10% of your portfolio and use it to finance the car. Sell off some of your tech stocks every year to pay the annual car expenses.
NEVER EVER BUY A CAR WITH YOUR CASH. THESE FINANCIAL GURUS FORGET ABOUT “OPPORTUNITY COST” OF A CAR PURCHASE (i.e. could have invested that money in stocks, crap…)When you buy a car like this, it’s like getting a free car( paid off by the profits of your investment). This is called smart working.
8. Once you have a portfolio in stocks big enough for a house downpayment, unload your tech stocks and apply for 30 year loan. This ends your renting expenses. Devote all renting expenses to mortgage loan now. Keep on investing 50% of paycheck in tech stock.
9. Buy a second house once you have enough tech stocks to unload for a downpayment. Put house under your kid’s name. Rent out some rooms in that house and collect rent. Use rent to pay off mortgage on second house. Now your kid has a house, even before he/she is married. Ideally, the kid can live in the house during college years. Let kid maintain the house and act as landlord. It’s a good experience for him in dealing with people, and no money is leaving the family. Call it an early inheritance.
10. Once your kid needs to go to college, unload more tech stocks every time he/she needs to pay for tuition + living expenses (every semester/quarter). No stress on paying for tuition = better grades and college experience.
11. In between all of this, stay healthy! Exercise regularly, sleep 8 hours a day, and cut down on carbs. Don’t skimp out on dental expenses especially : a filling is MUCH cheaper than a root canal.
On Charity:
Chinese people only help family members. PERIOD. Sorry church, temples, charities, office friends, high school friends, sugar babies, homeless guys. You ain’t getting a single dollar from me. However, if you want to apply for a loan from me, that’s a different story.
Not true. There are plenty of Chinese and Taiwanese Americans who donate generously to religious groups, charities, nonprofits, homeless, Goodwill, etc. My parents have always donated plenty of money/time/items to various groups and individuals.
And there are nonprofit founders/humanitarians such as Andrew Yang.
Don’t make blanket statements that are untrue. There’s so much stereotyping going on in the comments of this blog post, and so much of those are wrong.
Not all Americans live on a luxury cruise ship. Wondering why blacks don’t own businesses? Look up the Tulsa Race Riots. It helps when whites don’t target you for destruction. Yes, you worked hard, but you were also GIVEN the opportunity.
Totally agree. Most any success I have was given to me or based on luck.
It’s why I continue to save as much as possible because my luck will eventually run out.
Further, it’s why I continue to publish regularly on Financial Samurai and grow this site after my baby boy was born. Got to provide and take as much advantage of my luck as possible so my boy can have a better life.
What are some of your lucky breaks or things you did to work hard for?
Related:
What Are You Saving And Investing So Diligently For?
Perpetual Failure: The Reason Why I Continue To Save So Much
Sweet Dreams Of Becoming A Millionaire Again
I try my best to be grateful for things taken for granted, like having stable parents, good health, etc. I work hard but I acknowledge that America has allowed my family the opportunity. If hard work were all it takes, then we would be able to work hard in our own country and make the same gains. Fact is, in America the door was opened to us to earn a cut of the wealth that was built on the backs of slaves, on land stolen from native Americans, two factions that are shitted on to this day. Equality is a myth in America.
Excuse my french, but you are salesman.
Exchange rate and purchasing power what are matter. Do you make
like 5 Sams at his old job ? He is an MBA.
I could of sent my son to the high ranking university in Old country and it would of cost me $2 thousand a year(as a foreign student,room and board included). I heard a lot of wining: “college experience” etc. But my friend’s son did this after his graduation from U Mass(Boston) and endless attempts to make a living for 5 years as a salesman-broker-whatever . Another 5 years of education and now he works as a programmer in Boston. Sam calls it Geo arbitrage.
You should look up the Chinese massacre of 1871 and the santa ana chinatown riots of 1906.
I found it interesting that some believe Asians have genetics that give them an advantage in education. I don’t believe this because the Asians I know spend more time with the books than others. For example, even with something as difficult as math, wouldn’t it make sense that someone who spends two hours learning it will do better than if he only spent one hour? Education is the only path to success for most Asians. I’ve never know any Asian who wanted to try sports, acting, art, etc. as a career.
Asians are very hard-working and wise about money. This explains 100 percent why they are wealthy.
European Americans, Cuban Americans, Nigerian Americans, Asian Americans, Caribbean Americans: all revere family, education and hard work. Others do not. Problem solved.
I like that you noted that sports is not the way for secured future. in america, there is too much emphasis on sports in school. School should be for education and not focused on sports at all. teach our kids about finances and investing in all schools, everyone will be better off.
A a fellow Taiwanese American, I am surprised by you consistently calling yourself Chinese American. I personally don’t have a problem with you calling yourself whatever you want to. After all, it is your identity, not mine. Simply surprised. However, you stated your mother is from Taiwan, and you grew up in Taipei prior to high school (like me), but then you go back to referring “Chinese culture” when you refer your upbringing, etc. That causes even more Americans who are reading your article to confuse Taiwan and China. I don’t necessarily support the Taiwanese Independence Movement, as we technically are already our own nation in terms of government, regulations, policies, etc., and I will never deny that the roots of Taiwanese culture lays in China, but there are some of us who still prefer to be referred to as “Taiwanese” and “being from Taiwan”. Taiwan is already a tiny country with very little population, so please do us a favor and don’t confound Taiwan with China, particularly when you’re speaking to an American audience, as that makes them even more confused. Do you know frustrating it is to be constantly asked about communism and certain Chinese practices as a Taiwanese living in the states? Thank you.
Sorry things of been so difficult for you. If you can just focus on bettering yourself, everything will be all right. Eventually, the small stuff won’t bother you because you’re too busy doing your own thing. Best of luck!
Most Asians only live in big cities, such as LA, NYC, SF, Seattle, Houston, Chicago, where salaries and house price increase are much higher than the rest of U.S cities, making higher income and net worth.
In my experience, compared to other races, Asians on the average have stronger work ethic and are more positively perceived by others, which can lead to greater opportunities and wealth. I’m more surprised when I come across a lazy Asian person. Additionally, the Asian personality is typically subdued, collegial, respectful and doesn’t make waves, which may be some traits that hold them back from big positions, but also helps them gain respect and likability which can lead to further success.
Why isn’t there more emphasis on IQ and race?
The lower the IQ, the lower the ability to save, plan for the future.
Genetic differences with impulse control, time preference, etc.
The myth of ‘systemic racism’ is simply a cop out in that the Cultural Marxists don’t want to discuss genetics and race.
“a group of offensive linemen came barging in.” They certainly were offensive, weren’t they?
Race is difficult to address without upsetting someone. I think you’ve done a fine job discussing the issue without invoking negative stereotypes. It helps immensely to be a member of the race you’re talking about — you give us the insider’s perspective. Thank you for the insight.
Best,
-PoF
Stuff like this happens ALL THE TIME to minorities. Many have learned to just live with it and take no offense, or use it as incredible motivation for financial independence.
While some stand up, fight back, and create a movement. We must be grateful to those who refuse to be mistreated.
Hispanics are the definition of what development academics say is the institutional factor. Is incredible that a lot of them come from really dangerous places (like Northern Mexico, Guatemala or El Salvador) and they get to the states and they become much more productive in economic terms.
Also, with hispanics, you have the low bar problem when you analize them. They don’t need much capital to go to the states as Asians, Africans or Europeans need. And for hispanics that needs them (from far countries like Chile or Argentina), their incomes tend to be higher than the average american and closer to whites.
They’re quite a paradox.
Asian American/ Canadian here! I was born and raised in the in prairies of Canada. In elementary school I was the only non-white kid. I was blessed that I didn’t have too much racism bullying against me (as expected I was called chink or a jap..but I took it stride). I mixed in well with my white friends and played hockey everyday, had sleep overs, and just hung out. My folks came to Canada/ US when they were teenagers..and I would definitely describe them more westernized than Asian. For example they never pushed me for education…in fact my dad always highlights that being too educated you then set yourself for higher entitlements with a job; it was his way of saying that we need to be humble (maybe this is an Asian trait) . The one Asian value they instilled in me was that they wanted me to work and earn money. At age 12, I was a paper boy, age 15-16 I was a bus boy/ dishwasher, age 17-18 I worked in dep’t store, cook etc…My grades were just average…and I wanted to go to university (and work at the same time). My folks paid for the first year…but by my last year I was paying for most of the tuition. While in university, I noticed the library was always filled by students from China, HK and Taiwan, while my white friends were busy chugging beer at a bar/ dorms on a Friday night.
I grew up thinking I was a cooler Asian (CBC or ABC) than the FOBs…this was further galvanized when I took a trip to California and hung out with other cool ABCs. And we made fun of the FOBs.
Through my travels, I realized that wherever a community of Asians lived, the housing property prices tends to go up. (e.g. SF, Vancouver, Toronto, NY).
Fast forward now, from being an ignorant CBC/ ABC …I’ve now become a FOB. I bet my career that Asia was the place to be (have been living in Asia for 22 years), I bought some property in Shanghai would pay off (it did), I hated going to Chinese school and now I can speak some Chinese and I married a woman from Shanghai.
Moral of the story: Asians (FOB, CBC, ABC..etc) are adaptable creatures. You will always find a Chinese restaurant in every country! Chinese diaspora cannot be stopped.
I agree with the overall picture, but disagree on your point about Asians not working harder than everyone else. I think, on average, they work a lot harder than your average American of any race. Obviously, I have observed exceptions, but not many.
I agree with the point on low divorce rates leading to better finances. To that I would add having kids out of wedlock is even worse. Asians, not surprisingly, have a low out of wedlock birth rate whereas it’s about 40% for America as a whole. No wonder America’s middle class is shrinking! The 40% out of wedlock birth rate is the elephant in the room nobody wants to talk about.
If you believe Asians in general work harder than everybody else, then is the simple solution to increase incomes among all races is to work equally as hard? I do wonder if it is that simple.
There was a recent Time Magazine article covering nine families that delved into why all the children in those families are successful. Some of the common elements include unconditional love which creates a stable environment and also having a parent that was an educator. The article resonated with me because I’m a mentor for Take Stock in Children which is a really well organized program that matches mentors with 7th grade students at risk of not graduating high school. One of the requirements is low income. Other considerations include single parent households, incarcerated parent, etc. Take Stock in Children provides an activity book for the mentor and student to complete each week that allows both individuals to get to know each other better and, hopefully, form a friendship. The program has an academic advisor that monitors each students’ grades so the mentor’s job is actually to provide emotional support. There you go, a program that supports education and love which is no wonder they claim that high school graduation rates for these students went from 47% to 94%. The other commonalities that Time Magazine cited for success was having a loved one who experienced a brush with death, siblings had more freedom than their peers, intense sibling rivalry, and immigrant parents.
As a child born in America to Vietnamese immigrants I agree with the post. What I’ve noticed is that many Vietnamese people are altruistic. For example, our family of six lived in a 700 sq ft house with two bedrooms. My parents’ friends noticed that we didn’t have a proper place to eat family dinners so they lent their labor in building a dining room for us. Another example are wedding gifts. It’s not uncommon for wedding guests to gift at least $200 per couple attending. I’ve known plenty of Vietnamese newlyweds that came away from their wedding with tens of thousands of $s in wedding gifts. I’ve seen some use the money to start a restaurant, business, or down payment on a house. Gifts like these can create a launch pad for success and more wealth.
This is amazing post, it is true that Asians always tops in their income and it is truly mind blowing how they manage their expenses and the way they educate their kids is the thing which everyone should adapt from Asians culture.
It is also true that they migrate to other countries and increase the wealth of their home countries via money transaction. This actually increases the GDP.
The biggest reason why Asians are more dedicated towards their careers is that they focus on things they love from their childhood.
We expect much more posts like this in future too. Have a good day.
Hi Sam,
This is my first visit to your blog. Great post with fantastic insights.
Divorce is the probably the worst destroyer of wealth.
Also, stable home means children are secure and free from anxieties associated with divorce.
This enables children to focus on academics which leads to a better education / career / life.
–Michael
Spot on analysis. Pakistani and Indian families will pay anything when it comes to education. I believe I read this from Ramit Sethi too. he mentioned that his parents weren’t wealthy but they would spend whatever they could on SAT prep classes and the like. I see myself becoming like this with my son too. It will be interesting if this lasts because entrepreneurs who never finished college make the news all the time. And I am noticing a mild anti-college sentiment because of the high costs.
I’ve always been put off by the ‘race’ bubbles on tests, applications. Which one to fill in? Now, with digital forms, it gets worse; you can only pick one!
I grew up in a part of New York with significant East Asian-origin families. There ‘Asian’ meant East Asian. I have parents of Indian origin (both of whom are NOT immigrants), and around us in NY, the ‘Indians’ were not the ‘Asians’ nor the ‘Native Indians’. The bubble labels on ‘scantron’ tests never fit. Now I am married to another American, born in Puerto rico, of mixed race origins. Our children could logically fill in every bubble ever presented.
Racial and ethnic classification in America (for citizens OR residents) is archaic. It divides more than it aids in data collection. A more scientific approach to your same topic could be to do a linguistic-origin analysis as discussed in this article I coincidentally came across today.
https://ideas.ted.com/5-examples-of-how-the-languages-we-speak-can-affect-the-way-we-think/
Asian means anyone of Asian origin. I am Indian, living in New York and I definitely count myself as Asian. Why you do not, is a mystery to me. If your spouse is Puerto Rican, the possible mix is White, Black and Native Indian. However, most Puerto Ricans tend to lie about their background.
NY has tons of Caribbean-Indian Americans, those of Indian origin that come from nations outside South Asia (and haven’t lived in South Asia for generations). That might be the confusion here.
Influence is a strong factor here. We eventually become what we are used, costumed and exposed to. Thus the asian culture from first generations is strong but over time will diminish as we pass through several generations. Being Asian we are exposed to different work and survival culture, thus coming to USA we flourish only because we value one more than the other. We don’t mind spending time to earn money vs our non-asian colleague who might do something else at those times. We have tighter goals because we are alone here, and tend to gravitate to becoming like our parents, hold money tighter and invest better if not more. I tend to do the same with my kids, I have already created passive income revenues that will pay for their college versus touching the capital. Although they are too young to understand, they are definitely different vs their non-asian buddies. I have saved up more money than their parents for their college. We are the same professionals, yet the mode of thinking is different.
Jack donoghy quote (30 Rock) ☺
“We are an immigrant nation. The first generation works their fingers to the bone making things; the next generation goes to college and innovates new ideas. The third generation snowboards and takes improv classes.”
Interesting socioeconomic proposals from your readers as to why this difference in the Asian attitude towards money! I think there’s also a pure economic (in as much as anything in economics is pure) perspective at play here too.
First generation Asian parents (I’ll speak about Indian parents since that’s what I know) have memories of borriwng rates of 20% in India in the 90s. The Indian economy was essentially closed throughout the 80s and 90s and foreign currency was tightly controlled – you couldn’t borrow for a house even if you wanted to! In emergencies people would borrow from family members (perpetuating a feedback loop of family bonds being both nice and necessary in an environment where there is no government safety net).
There are still not very well developed credit markets in India stemming from the fact that rates are very high (even now the prime rate is 9.5%) and there isn’t a well developed system to price credit risk ( like the fico score). This leads to a situation where every family has a basic fear and hatred of debt because if you ever do have to borrow its at typically usury rates and there is no real regulation of the market for debt. Every family has a story of someone who gets ruined by this and people are determined not to get sucked in themselves!
Also, not mentioned is the fact that large purchases often happen partially within the black market and people with wealth tend not to borrow because they have black money with which they need to purchase assets since they can’t keep that cash in a bank). Today, even though the government is cracking down in this, often a home purchase involves 50% black money (cash) and only 50% of the purchase price is done through legal channels. You literally show up yo a purchase with a suitcase of cash (this is to avoid high taxes etc)!
When raised in that kind of environment I think Indian folks become naturally cautious and less willing to live on leverage. You mentioned education as an important factor – I agree. Education is something within an individuals control – unlike interest rates and a countries inflation rate and regulatory environmeny . it is the one leveler in a country with brutal competition for scarce resources.
Good variation of “from rice paddy field to rice paddy field in three generations”!
The good thing about Indian interest rates is that Indian deposit rates are even higher than inflation. Make money in the US, send back to India, make 7%+, repeat. Not bad!
Sadly my parents gave been screwed enough on volatile fx rates when converting back to USD that they have become leery of this trade ;)
I enjoy you discussing median household income census data. Can you do a post on how the median household income could get ahead in San Francisco & Los Angeles or even a game plan for the median household earner discussing:
1. Starting off with zero (not including 150k windfall from magic stock). Making a budget including current rents.
2. How to allocate savings (if any after rent)
3. How much to put down and how long it would take to get there.
4. Using redfin affordability calculator to see how painful it is for a median income earner in terms of what they can qualify for in today’s market
5. house shopping with said budget.
6. Discussing HOA fees because I’m guessing a house is out of the question. Weighing the HOA fee in terms of mortgaging 400 dollars more for a house instead of buying the “cheaper” condo with $400 HOA.
I gave you this link to household income in San Fran before, but I don’t think you responded:
https://statisticalatlas.com/place/California/San-Francisco/Household-Income
I don’t understand how the first time home buyer can enter this market at all (which is why I would love to see a gameplan for today’s market). I do understand that current sales are most likely attributed to selling of inflated assets and moving up to another inflated asset.
By some of your articles you say its easy to make six figures yet our median household income which comprises of all incomes in a single residence doesn’t even come close to that mark. Technically speaking every household should be making 200k by your rosy picture of the job market today. I do agree with your assessment on maximum happiness of 200k per individual, but I only agree with this number because of how high cost of living is. Lets bump interest rates back to ten percent and forget about the minimum wage increases. The fed is dragging this economy along and leaving the median wage earners in the rear view mirror.
I want to own a home and would greatly appreciate the gameplan mentioned above so that I can think through it more logically. Throwing down 100k to leverage into a condo doesn’t sound like the right move…. However, I would like to at least be neutral the housing market as you put it.
Check out these posts:
A Massive Generational Wealth Transfer Is Why Everything Will Be OK – Multi-generation income statements and balance sheets are buying younger folks property today in expensive cities.
No Wonder Why Millennials Don’t Give A Damn About Money
Also, check out the income chart I added in the post about tech workers. $250 – $350K on average. After 5-10 years, they have no problem coming up with a downpayment. Combine forces, and they definitely don’t have problem.
If you’d like me to work with you, check out my consulting page in my about page. Cheers
Being in school, as an economics major, I had many Asian classmates. Taking the few finance courses that I did, there were just as many there (although not the same ones). I never once thought that any of them were any smarter overall or had some predisposition to be good at math that I didn’t have — side note, I actually tutored three Asian brothers from Japan that were taking Calc II.
The only thing that I thought my Asian classmates were good at, more so than most of my other classmates, was that they gave a damn and they showed up to class every single day. Even the ones who were like me and had been studying economics since they were in high school because they enjoyed it STILL showed up everyday, and they STILL studied material they already knew for the exam. That was the difference. I got mostly straight A’s through college – usually in the 94% range. Those Asian kids that studied the material they already knew also got mostly (or all probably) straight A’s through college – usually in the 98% range.
I skipped class a lot to go drinking with friends, and went to go party rather than go home and study. I would ask some of the A+ students to come along because “they were wasting their time” learning material they already knew. They were always mortified that I could shirk my responsibilities. I always found it fascinating. In my mind, we both made A’s, and we both got the same GPA. In their mind the 4% made all the difference.
Wow! You tutor calculus II? I never even got to calculus 1 and quit junior year in high school after trigonometry and math analysis.
I’m also impressed you went to community college. I’ve always believed that going to community college for two years and then going to a four-year university is a wise financial move. What were your reasons for going to community college and what do you do now?
Thanks for putting this together. I’m sure I’ll refer back to this article a number of times.
As an Asian myself, I’m also in favor of “burning the boat”, in the sense that, if you have mortgages, you’re more inclined to pay off the debt, and thus end up paying off the mortgages rather than fighting (and losing) the urge to spend the liquid asset on stupid things like cars.
Incidentally, we’re also considering buying a condo in an up&coming area in SF. It’s in Mission Bay facing the creek (new development). Do you think it’s absolutely the worst time to buy such “high end” condos? I get that the political landscape brings about instability in the market, but we love that area so much.
Thanks Sam! An avid, yet ghost reader since 2012.
Hi Ryan,
Good to see you’re no longer a ghost. Getting involved is so much fun isn’t it?
I think it is a BAD idea buying a condo in Mission Bay right now. I’d wait until 2018.
There is a growing oversupply of condos now. It will be like this for a couple years until we see some big IPOs. Be patient. And if possible, focus on buying a single family home. Barely any are being produced now. All existing stock.
Related:
https://www.financialsamurai.com/take-advantage-of-unfair-situations-plan-to-buy-property-due-to-ipo-delays/
While not Asian my wife had similar demands. Her parents were both born in Iran and she was “allowed” to become either a doctor or lawyer. Anything less than that was considered a failure. While I grew up in the typical white household where studies were important but I was allowed to be anything that I wanted to be. BTW…I chose to be an accountant so I’m not considered a total failure in her parents eyes.
Based on your analysis above it got me thinking if there are any studies comparing the income level of children of immigrants vs. the average U.S. citizen? Curious to you thoughts.
Not sure about the study. What is “average US citizen”? In the end, we’re all immigrants. So perhaps children of first gen versus children of 3rd+ gen might work.
My parents didn’t force me to be anything. But my dad did teach me about the stock market in high school, and my mom studied biology so I had an interest in science. I just was never good at math and science. OK, but not good.
I just found my own interest. I think a parent should just guide their children’s interests and talk about the pros and cons of everything. I know I will do that. Might make my kids read a post about the whole subject!
Sorry I meant the average US income by family and obviously didn’t convey the right terminology. Totally agree we’re all immigrants :)
I am an Asian American. I can relate to the author’s six points. I was born in a poor country calls Cambodia, born to a poor farmer’s family, born during a civil war. I came to America, being discriminated against, bullied by.., and suffered cultural shocks. I don’t care much, I just suck it up just like the Army has taught me to do in hard time… I like it like that.. :)
I got a BA in Economics and Digital Graphics, these are my weapons to do battle (I don’t need my military skills anymore “10 years veteran of the U.S. Army”). I read the Art of War, Between Facts and Norms, On the Origin of Species, the 10 Commandments, the 4 Noble Truths, and the 8 Fold Paths. These are all my weapons to do battle in the civilian world where people treat each other badly.
Good post which resonated with me as an Asian-American. I really related to your memories regarding racism. I’m sure it’s true of any person who’s been the subject of ridicule, but I clearly remember my first childhood encounter with racism. We lived in central Pennsylvania (definitely not many Asians out there) at the time and I was just walking my dog by some construction workers who yelled out, “Look at that chink walking his dog!” I felt so ashamed and scared, and quickly ran home afterwards. People don’t realize what an impact racism makes on an individual. You remember it your whole life.
Now that I live in a large diverse and multicultural city in Texas, I haven’t encountered any racism since I’ve lived here for nearly 20 years. Not sure how much it’s changed, but I still think portions of the Northeast and South, which are predominantly white, are still somewhat ignorant. Kind of amazing in this day and age. Another random factoid, I was vacationing this summer in Vail, CO and was astounded by how “white” it was. It felt like we were the only Asians there that week. Fortunately, people there are educated and we never encountered anything negative. Maybe a future topic for you, how some people are constrained geographically because of their ethnicity. For example, I can’t imagine living in Omaha, Nebraska no matter how low the COL is and good the job market is. My brother who also experienced similar racism in PA, now lives in Orange County and absolutely loves it (despite the high COL). The OC is like Asian American nirvana. =D
Not too related to the financial aspect of your post, but just some thoughts on Asian-American racism.
Thanks for sharing. A lot of folks have suggested to just move to a lower cost place of living in retirement or if you want to save money. What they forget is that it may not be that easy or comfortable for a minority to move to the Midwest or South for fear of discrimination.
Virginia is considered the South, but not the deep south. It was fine, but not ideal compared to San Francisco or New York City because it lacked diversity and was less tolerant of different cultures. I like the South a lot. Great charm. Lots of hospitality. Terrific mannered people. I can take the occasional racist comment or gesture, but I’m worried about my kids getting harassed. Hopefully chances are small something bad will happen, but it is still risk I’d rather just avoid.
I’ve read FS for what seems like a long time and have seen these posts about racism a few times. To me – it seems like both of these situations were guys just being bullies. They pick on someone who seems to be different. It could be based on race, whether you’re skinny or overweight, wear glasses or even an item of clothing that would make you appear different. My guess is that the Denny’s crew has a different target every weekend.
I’m curious on your opinion of URMs in the tech field? When I read posts about the efforts of Google or Intel trying to increase women, Hispanics and blacks in the workforce, it seems that the imbalance is that Indians and other Asians are over-represented? (Google’s data = 57% white, 37% Asian, 3% Hispanic, 3% 2 or more, 1% black. Intel = 53% white, 33% Asian, 3.5% black, 8.4% Hispanic) It seems like there is a huge bias in favor of Asians within tech?
Maybe. But when you use racist terms to try and intimidate, threaten, or harass, I would call that racism.
But if you’ve never experienced racism, I can understand why it might not seem like racism or be a big deal. A good exercise is to go to a country for an extended period of time where you are not the majority.
Those moments of racism are never forgotten but I don’t let them define me. I believe that America is the best nation in the world. As my Vietnamese immigrant father impressed upon me, we should be grateful for the life that America has provided for us. America is fair and rewards hard work and effort where some other countries are political as far as who can be successful. Heeding my father’s sentiment to be and show our gratefulness, my sister and I volunteered at a hospital one summer while in high school. We took the bus both ways on our volunteer days. The bus stop was a bit of a walk along a busy street. One day, a guy in a pick-up truck yelled out his window for us to “Go back to your country.” We were shocked and scared since we could hear the hatred in his voice. From that day on and throughout the rest of the summer, we found a back road to get to the bus stop. Needless to say, we didn’t return to that hospital to volunteer the following summer. On the bright side, the volunteer opportunity influenced my sister to become a wonderfully caring nurse.
Lower divorce rate among Asian American families and strict parenting are also a big forces. I came to the US when I was 10 years old, literally didn’t even know my alphabets and attended one of the worst school distinct in the US, Oakland CA. As ghettos as it can get. The school population are Blacks, Hispanics and Asian refugees from Vietnam, Laos, Cambodia, Chinese immigrants from lower social economic class. Like other first immigrant families, our parents work 12 hours per day to provide for us but they expected us to do our homework, study, zero tolerance toward drugs and delayed sexual intercourses. Without messing up our life at an early age, majority of Asians went to college including the Black and Hispanic kids that hangs out with us. Fast forward 15 years later, we all raise out of poverty, have decent jobs, brought houses in nice neigborhoods in the Bay Area and have above the national average saving.
Now that’s a great point you’ve brought up about divorce. I just found a great graphic that I will add to the post. Thanks!
An interesting article with good points. The only two disagreements I have is your assertion that Asians are not harder working or that sports is not a realistic career paths. As a group, Asians may not work harder once they’re in the professional world, but Asian students in U.S. mostly do work much harder compared to other students, probably due to family expectations. As a result, they get into better colleges which is disproportionate to their overall populations, which allows them to get better paying professional jobs compare to students from other ethnic backgrounds. This obviously leads to higher incomes on average.
As for sports, if Asian families focused on athletics more, I will guarantee this trend can change. Golf, Boxing, baseball, basketball, NASCAR, and football come with high pay in the professional levels in US. If Asians American families focused on these endeavors, similar to Asian families abroad, you’ll start to see far more dominant Asian American players. Some examples… Golf has many Asian champions, Pacquiao, Ichiro, Jeremy Lin, and despite the stereotype Asians can probably drive well enough to be competitive in NASCAR if enough efforts were focused in the sport. As side note on effort and focus, just look at amount of white players from Europe in the NBA vs white American NBA players. It’s the effort and focus which makes the difference.
James, how do you know Asians students work harder compared to other students? Has there been some sort of study done? If so, I’d love to see it. Or, is this a stereotype? I felt I worked hard in school, but I think plenty of people did to get into William & Mary, and while at William & Mary.
I agree w/ you on more Asians getting into professional sports if Asian families focused more on athletes. Those are good examples. Less violin and piano, more basketball, baseball, football, tennis, and golf!
I’m unaware of any studies which shows Asian American students work harder specifically. However, every data consistently shows that Asian American students outperform other ethnic peers in standardized testing, get better grades, and are overrepresented in the top universities relative to their population. Unless these Asian students cheated in greater numbers to obtain their better academic performance, they had to have outworked their peers. There’s simply no other explanation.
Also in L.A, NY, and SF bay area, schools which are overwhelmingly comprised of Asian descent such as Cupertino district, Lowell in SF, Stuyvesant in NY perform so much better academically compared to other non Asian majority schools. Furthermore, go to any libraries on top college campuses or any community libraries, you’ll see tons of Asian students there all the time, goofing off too, but studying very hard more so than other ethnicities. Thus, unless there’s some magical Asian academic genetic advantage, I believe Asian American students as a group work much harder academically, at least during the school years.
Reasonable assumptions, as I don’t believe there is some genetic advantage in academics as a whole.
Very nice post Sam!
Today I learned a lot of things I didn’t know about Asian mindset.
The only section of your post that disturbed me is the “Smaller population, less weight” and the Singapore-Malaysia example. Using the “Reductio ad absurdum”: if smaller nations are guaranteed to be wealthier, why aren’t we as humanity exploiting this yet? I don’t think that smaller is necessary better. A lot of costs scale better with bigger population.
I think it’s because there’s an inherent desire for people to Empire build. Other examples of small nations that are doing well include Hong Kong, Austria, and Monaco.
Why do you think smaller countries have a higher GDP per capita?
I guess these days small countries are usually good at becoming “attractive” for foreigner investors/taxpayers.
They can experiment with lower taxes and/or financial benefits for investing there. They’re like parasites that survive thanks to the existence of the big beasts.
I know by heart, since I live in Switzerland and invest in Luxembourg.
Also they don’t even try to have a world class military and instead focus on developing the banking sector since they are likely protected by bigger beasts.
Imagine what the US would be like if we didn’t spend much on a military.
Hi Sam,
Good stuff here! I’m Asian and from my family and extended family’s experience, education has always been stressed (A/P classes, 4.0 GPA, in-demand majors, etc.). My parents are not very well educated (and have lower income jobs) and they’ve always said that education is the key to financial success. They grew up overseas and we moved to the US when I was 3 years old. The same is true for many of my relatives. I guess when you don’t a whole lot to begin with, you want to put your kids in the best position to succeed…..thanks Mom & Pop!
I was just talking the other day to a friend that if he wanted to learn about finance start hanging around Chinese people. Many of my friends are Chinese and we always casually talk about investments, savings, business, retirement, taxes, etc when we hang out. It has greatly helped me get on track. Most whites I know think its rude to talk about money and are not financially literate so I appreciate the open conversations I can have with my Chinese friends.
Want to be friends, rofl?
Very few of my white friends enjoy discussing those topics lol. But I have a few who do here or there. For the most part, you are correct though. They avoid those topics like the plague and it’s often the same in the households.
I know everything about my family finances personally though, but my brother and sister know nothing. I feel you really have to dig on the other sides of the cultures (I’m a mutt-hispanic/white), to get families to discuss these topics because most don’t want to which for the most part hurts the financial well being of the children and their children etc because they aren’t financially literate.
It’s often not discussed because the savings rate is close to 0%, therefore, there is nothing to invest.
A low savings rate is a great reason to invest. Why keep money in a bank at 0%?
Haha I am a Korean and I think it is a lot to do with their home education while they are growing up under frugal parents and grand parents and great grand parents etc…
For example, my father can kick Scrooge’s butt in a sec.
In my opinion, the two biggest factors which explains the higher Asian incomes are: 1) cultural emphasis on education 2) pessimistic belief that no one will take care of us if we fail
The emphasis on education helps us a lot. Our culture rewards us when we do well academically (our peers will get jealous and try to compete, our parents tell us we’re not good enough while secretly being proud of our achievements). This is a huge advantage. In other cultures, you might get made fun of for having good grades and being a “teacher’s pet”. In Asian cultures, we thrive on it.
The downside to this is TOO much emphasis on grades and little else. We end up being socially crippled, with low self-esteem, and being inept with networking. This holds us back when it comes to climbing the corporate ladder and starting businesses.
Our anxiety about failing and not being taken care of motivates and drives us to working insanely hard. Which helps us get ahead. But it also causes depression and missed opportunities because we’re too afraid to take risks.
So it’s a double-edged sword.
Wow, such a strong sweeping generalization. I’m sure there are Asian people in Western societies who posses the negative traits you paint with broad brush, but that can be true of any people. I doubt Asian people have higher instances of suicide, depression, and lower self esteem compared to people of other ethnic background in U.S. or in Canada.
The primary reasons why Asian people as a group in U.S. and Canada hit a glass ceiling is because they’re such as tiny minority in these societies. Unless someone can invent the next great technology or become super successful entrepreneur, Asian people, nor any other minority, as a group won’t be the top decision makers in a society where they’re not in position of power already. It has nothing to do with having stereotypical Asian cultural traits you ascribed.
White men aren’t in top positions in China or Japan and Asian nor any other minorities as a group won’t be in many top positions either since majority of people prefer to be around with their own ethnicities.
Fascinating post, Sam! As a fellow Asian American, it’s interesting to read your take on this. I do believe culture has a lot to do with the income disparity amongst races. As you mentioned with education and a few other areas, Asian families are typically hyper focused with their children being successful in this regard, and it transfers over into higher paying jobs. I see it within my own family, as well as friends that are Asian American as well. Interestingly enough, the Asian American kids seem to rise to the expectation (even if begrudgingly).
As a 3rd generation Asian American, I don’t feel like these expectations were as stringent as they were with my parents or grandparents. I find that an incredible blessing because I also didn’t have the typical resentment my friends had with their parents pushing them too hard. There needs to be a balance in my opinion and I’m contemplating these very thoughts with my wife as we begin to raise our children. Where is that perfect balance of expectation and letting a child find himself freely? Hmmm…
I think the key factor here is education and (most in most cases) speak at least one more language on a native level. Education is the best investment you can ever make in your entire life. If you write a post about income levels of different educational degrees, it would be interesting to see how good investment college fees actually are.
This could be a post in itself –
What does rest of the world think about US when it comes to finances?
Americans would be shocked.
And the rest of the world would be shocked even more if they knew the Truth of US, against their perceptions.
US citizens are so secluded and isolated from the world.
Even if someone were to elaborate here, it would not get global exposure.
We are still at an infancy stage to connect the world.
Unlike these “supposedly” richest race in US as Asians, folks back home think that US is richest in general.
None have any idea about the true state of affairs within US. They think of US as NY sky scrapers, none think of 1000 mile no-man land drive through Wyoming, they think of US as easy and tons of money, none have any idea of the folks sitting on the couch collecting food stamps, or others working their ass off in multiple jobs.
There is a HUGE misconception about US citizens around the world.
If you were to ask me, the folks on this site work their ass off to seek financial freedom, which rest of the world thinks we get it too easy.
United States is the MOST workaholic country in the world.
No body sees our hard work.
They see us as nation of fun, nude bars, tall buildings.
I definitely believe genetics is a large part of it which wasn’t really mentioned. Someone said it above that genetics drive cultures, which I’d agree with. Certain genetic traits will naturally lead to certain behaviors and tendencies/stereotypes. I may not necessarily agree with stereotyping people but they do exist for a reason.
I too am an Asian, but I am certainly not fresh of the boat. I am more or less 3rd or 4th generation since my family immigrated to the western world. But my family stuck to our culture roots, especially when it came to marriage even after leaving the homeland.
The poll is certainly interesting, 30% of your readers are Asian! Considering that only 5% of the US population is even Asian. It certainly proves that the other stats are not far off in how in general Asians have a higher median income. And shows asians certainly spend more time reading financial blogs and any thing money related.
We are on a financial website, seeking financial freedom, and you forced me to think as to when, how and why ethnicity got confused between region and skin color. Asian is based on Geography, White and Black on skin color, and Latino based on language. No consistency I say, hence I could be anyone. I speak English better than most whites I have met in America, my daughter tops her Spanish class, my son is fairer than most white, and I am darker than blacks. Who am I? :-)
We are who we choose to be, the environment we are given, the lessons we have been taught, and the hard work, or lack of it, that we do.
We are humans, with the same RBC, WBC, and platelets.
So, it is just the environment and our own inclination that teaches us how to think and act.
It is NOT the difference of the Race – as your title suggests – and ends up giving reasons for it. But the difference of how one is raised, how much one works harder, the values and virtues – that is the true definition that divides us.
I have not been raised in US. But I love the values this adopted country of mine represents, foremost – Freedom.
More later. But I just dont like correlation between Language, skin color, and Region with Income.
I think it’s not just income. The saving rate is a lot higher in Asian families which makes it more obvious as well. Most Asian families emphasize only buying stuff when you really need something and first looking for coupons or a sale before purchasing something. Also, it is very typical for immigrants to borrow and share items that aren’t used daily basis with other similar background immigrant friends instead of buying that item for solo use.
When I got older, and saw real estate transactions by Asians, many of them would make a lower end offer. If it never went through, they looked elsewhere or just waited. Eventually, if the seller didn’t find another buyer, their offer was accepted.
True. I do mention the savings rate in India and China to be 30%+ versus just 4-5% here in the US.
In SF, Asians come out in FORCE to buy property. My neighbor owns 30+ properties in SF. That is NUTS, especially if the median price is $1.3M. You would never have guessed by his old truck he drives.
One must realize this – Financial Freedom has never been, and will never be for “an individual”. 100% of the people who reach financial freedom, have done so for their family – Kids, parents, spouse.
Therein lies the key difference in “Culture” towards achieving Financial freedom.
Of course Sam, with your possibly $10M in assets, you can still sleep on floor if need be, or eat a $1 burger. There is no surprise that your neighbor who owns multiple properties in SFO drives an old vehicle.
Such folks do NOT seek financial independence because they enjoy money.
In fact, none of the financially free people enjoy money or what money can buy. They just like the sense of freedom. Of being content.
If I were to explore, I would find how does a person feel financially free or content when s/he has an old aged parent in another country?
Life is not as simple as amassing $5M. Its just one facet of the puzzle.
At some point in time in your life, you would realize that finance, emotions, health, and family (not just you – parents, kids, spouse) – are all interlinked.
Of course if you were Mahatma Gandhi – it goes beyond, and world becomes the family.
Why is Medical cost so high in this country? I face this situation with my non-US citizen parent now.
Too many variables in life.
“Get good grades, go to college, or else be a disappointment” that was really funny to be for some reason :p
As a fellow Asian American (Korean) I agree with the majority of your statements. Back in Korea, when I met at family gatherings, my uncles, aunts, and grandparents would always end with “do well in school and listen to your parents.” It’s just a different environment than in the US. If I’m told to do well in school and have it ingrained in my brain by having it repeated to me over and over again, I’m going to do well in school (graduated with a 3.82 GPA in college).
I’m glad that I was born in another country before coming to the US, it gave me a difference perspective and I consider that to be one of my biggest differentiators to someone else today. It allows me to think in two terms (one perspective from Asia and one perspective from the US). I’m not anywhere near the median income level of Asians but I am aspiring to get close to it / beat it :) great post as always, Sam!
Time to get cracking! :) But, perhaps you’ve only recently graduated and the median income would correspond to the median age in the US of ~35?
Do you feel pressure to make a lot of money as a Korean American? What type of pressure do your parents give you nowadays?
Yep, I’ve only recently graduated but with so much opportunities to side hustle nowadays, I should get cracking on increasing my income.
I don’t feel the pressure at all. My parents knew I worked a lot during college and they actually wanted me to work less. I worked because I enjoyed working so I think the desire to make money and be financially secure came from within. Nowadays, my parents still don’t give me any pressure, I think they understand where I want to go and they agree with my direction so they just let me do my own thing.
Coming from an East Indian perspective here. We are first generation here and literally came here with 200 dollars and a bachelor’s degree in engineering. We came from middle class back in India and education in the stem fields is really pushed hard.
When I was growing up I did not want to be an engineer but my parents pushed me into by having regular conversations and explaining the importance of choosing a field that would pay well. I really thank my parents for that.
I agree that saving comes much more naturally to us and my dad always said we should be saving a minimum of 25% of your income.
That’s a good savings rate. I wonder how many parents say this to their children. My Indian friends who’ve recently come from India all do not want to take out a mortgage here in the US.
Yes taking debt on even for buying house is not common in India. My parents and in laws all buy property with cash.
My husband had a really hard time taking a loan to but our primary residence. To this day except for mortgage (primary and rental ) we do not have any debt. Even big purchases like cars we buy with cash.
When I was travelling to Memphis, I met a fellow Indian who sat next to me. He said – It is against his religion to participate in any transaction involving “interest” – I was shocked. I was like – Do you have a bank account? And he said – No, I dont believe in paying or taking interest. It is against my belief system. I let it go, because I did not know where else to take it to.
The reason Indians are against Loans is not because they do not know how to leverage debt, but because the current savings rate for Indians in India can be as high as 10.5% that US can never dream of.
Lending rate? Can ashame Credit card lenders.
Why then?
Remember its not all about culture, and thinking, but the environment that one grows in. If the loan lending rate is 20% in US, will anyone take it, or amass cash to pay for it?
Humans are intelligent everywhere.
That is probably due to religious restrictions. My muslim friends tell me that it is against the scripture of Islam for a muslim to keep the interest. Instead they donate it to charity.
I’ve often felt very sorry they can’t keep it especially since my neighbour down the road is in her 70s and still forced to work so she can eat, pay bills and keep a roof over her head instead of using the interest to take care of herself. She’s had such a hard life and is in poor health. Her father died young and as the eldest daughter, she’s been working since she was a kid to help her mother and bring income into the family. It just breaks my heart.
But that isn’t my case. I love compound interest. My own ancestors left India about 150 years ago. I suppose we were the last bunch of kids that had education and discipline hammered into us though there are a few families that still maintain the culture. Most kids these days are lazy, whiny and self entitled.
I think it all boils down to raising children because I’ve seen both sides of the diaspora; sides that caved to the “western” culture and sides that maintained the “Asian culture” (in a biracial family no less!) and the difference is night and day!
Maybe it all boils down to having an Asian (grand)mother as the root of the Asian culture. From the previous article, I can’t believe that an ethnicity as diverse as Asians has one thing at its core, the stereotypical strict Asian mother!
Persian ( Iranian ) here, technically an Asian from continent of Asia, I remember how my grandmother got upset when I told her White people charged their kids who moved back home after college. She said something like: What kind of parents take the money that their children are supposed to spend on buying their own home away from them?
Most of my family members fled a revolution and a war( yeah pretty much happened at the same time) with nothing but clothes on their back and now live very comfortable lives in Bay area, some of them even made it very rich in silicon valley. I honestly believe a lot of it came down to the fact that we had nothing to lose and everything to gain out of immigration. And not only we did not have family money or support to rely on, a lot of us still have to take care of our parents in many ways ( everyday communication, financially ,etc..) .
But that’s mostly all immigrant stories and what has made this country great and hopefully will continue to do so…
Asians are only 5% of the US population, but make up 28% of your readership. That about says it all – they are disproportionately passionate about financial matters.
I’m half Asian: my mother is Filipino, my dad is white. A lot of what you wrote hit home for me, everything from the anti-debt, pro-education family, down to the random racism my family encountered when we were in Western PA.
I can’t exactly say why the numbers are so different across the groups. A strong focus on education seems like the most likely root cause, at least to me. If there’s a stronger correlate to higher income, I haven’t seen one.
Great post Sam. As an Taiwanese Canadian (hence the name Tawcan), I totally agree with all of your points. Many “developed” Asian countries were still developing 10, 20, 30 years ago (Japan, Taiwan, China, etc). If you’re from one of these countries, you probably have heard hardship stories from either your parents or your grandparents. The lessons that they learned through the hardship definitely get passed down to you throughout your life.
Ah, so that’s how Tawcan came about! Was wondering for a while.
I would speculate that the strong emphasis on family in Asian cultures is a big piece of the puzzle. And it’s more than just a sense of family cohesion— it’s the sense of family honor. It fits together with your theory, Sam, about “no one is going to help you”, so the family— the tightest, most elemental social unit, the only group that you can absolutely trust 100%— has to stick together.
Going hand in hand with that is the importance of maintaining the family “honor”. You must not do anything to bring dishonor upon the family; therefore, it is your duty to get yourself educated and work hard.
I offer this speculation from the perspective of an American of Irish-German descent, so there’s no authority behind it, merely observation. :)
I’ll be REALLY curious, though, to see how this idea of family duty and obligation holds up with the young generation of uber-wealthy Chinese, some of whom you’ve described so vividly, Sam. It’s human nature, regardless of race, to slack off when life is easy. What motivation is there to work hard when everything is handed to you?
I’m convinced that this is part of the malaise we suffer in modern America— we have been SO fortunate in the wealth this country has achieved since WWII that later generations have become lazy and entitled. Then you toss in the welfare state and the disintegration of families, and it’s small wonder that the very idea of hard work and self reliance has “fallen out of favor” to such an extent here. There is a lot to be said for the “hunger” of immigrants who come here and work hard, versus the “soft” Americans who have had things so easy for so long that they’ve forgotten what it’s like to be hungry (metaphorically speaking).
“Burn Your Boats”
Love it.
Sometimes we do just need that sense of urgency and motivation that only comes around when there are no alternatives to success.
https://en.wikipedia.org/wiki/Point_of_no_return#Related_expressions
I’m fascinated by the cultural values that have led Asians in America to become the “model minority.” In fact, immigrants in general seem to care a lot about academics. Nigerians are just like Asian Americans in terms of caring about academics. It’s fascinating to think about. Perhaps we should fund study abroad opportunities for disadvantaged minority groups in the US to show them what it’s like elsewhere
yeah right waste more white taxpayers money training asians to beat our own kids,good idea buddy you are definiteely a milennial .
There is a lot of selection bias for immigrants. If you look at socio-economics for black immigrants, it is fascinating at how successful they also are. You don’t get off your butt, go through the immigration process and move around the world unless you have some motivation. People with motivation end up wealthier than those who don’t.
Let me go at this from an FOB East Indian perspective. I came to Canada for Masters degree in Chemical Engineering back in 2009. Most of my East Indian friends( me included) are millionaires on paper but you wouldn’t be able to tell that from the way we dress or from the cars we drive:). I am yet to see an East Indian whos dirt poor. And you have to understand that none of us have any relatives or support structure here to guide us or anything and when you are fresh off the boat like me you literally start from scratch no matter how well off you were in India cause the exchange rate(1 CAD = 55 Rupees) would not make sense for you to fund your life here unlike the Chinese Yuan.
But of course you are right on the savings part and we had rather die than take out a loan from a bank to fund our purchases. I have also noticed that even the east indian guys/gals who have not that good a job do have splendid saving habits.. I remember going along with an East Indian engineer friend of mine to sell his Camry since he wanted to upgrade to a Honda-CRV and gal who bought it was an East Indian chick) also FOB like us) who worked at Tim Hortons and she paid for the Camry in 20k cash. That actually made me think deeply about my own savings situation.
Another thing going for us is the culture of education. I am yet to meet an FOB East Indian who does not have atleast a bachelors degree from their home country. There is a heavy emphasis on STEM education and to tell you the truth if you are not studying engineering or medicine back home in India you are considered dumb and are looked down upon. Even people who do a Bachelor’s in Commerce(B.com) are looked down upon and the way they usually get over that stigma is by doing an MBA. So this heavy emphasis on STEM education does help us out in the long run.
Now the manufacturing company I work for is 97.2% white,2% East Indian and 0.8% black. The 2% East Indian comprise mostly the engineering, middle(I m in here) and upper management. The floor workers are entirely white and a few blacks. When I look around at other companies too nearby most of the upper level management(read CEO/VP level) have East Indians in them so there is no dearth of role models.
Interesting stuff and thanks for sharing! It’s interesting how much you guys hate debt. What do you think the reason is?
Are there no other types of Asians besides East Indians at your firm? I’ve never heard of 100% of the Asians working at the firm being East Indian.
May I ask whether it is common for Indians to refer to themselves as West, East, North, South Indians and why? How are the Indians from each region perceived? When someone asks where I’m from, I usually just say America. Only when they ask where in America do I say San Francisco. I don’t say West America, or even California.
I read this on Quora:
East Indians or East Indian Catholics are an ethno-religious Roman Catholic community, based in and around the city of Mumbai and North Konkan district in the present state of Maharashtra, India. These people are of the original small communities from the North Konkan regions mainly Kulbis, Samvedi Bramins, Kolis, Wadvals, Agris and Somavamshi Kshatriyas which had been evangelised by the Portuguese.
West Indians or Carribian People are the inhabitants of Carribian Islands. The archipelago is popularly known as West Indies.
Confused……East Indian people live in Western India near Mumbai and West Indian people do not live in India et al’.
All this confusion started due to voyagers like Columbus & few others who started their sea voyage from Western Europe to discover the Sea route to India and instead reached Americas. The first land/islands that they reached, they thought that it is India and thus the inhabitants of this land were termed as ‘Indians’.
Hi Sam,
England reached India as “East India Company”, to do business, before they colonized it.
Indians do NOT refer to themselves as East Indians, it is ONLY needed in Americas to differentiate from NATIVE Indians. In US, we refer as Asian Indians, while in Canada, he is referring to as EAST Indians.
If we just say “Indians”, we can confuse with native Indians who occupied Americas.
Given that, to your point, and I am sure you deal with a lot of Indians in Bay area – Every Indian has a perspective! :-) Because India is SOOOO freakin Diverse. 22 official languages is just a part of it. Different food. Different clothes. Different language that even another fellow Indian cannot understand.
Did you know that India is second largest population of Muslims in the world after Indonesia. India has more Muslims than Iran, Iraq, Pakistan, Turkey – that are all over the news. And we live fine “within”.
India is not just diverse on languages, skin color, food, habits, way-of-life, clothes, values, but also on religions, and whatever comes with it.
India is also THE largest democracy. It is common for Indian men to pee on a wall, or a tree in public. It is a democracy which allows her citizens to be totally free to abuse it sometimes, if I can say when in US! When I was in China in Jan, 2015 – I was shocked as to how least-democratic I felt. It was a nightmare with me and my 10 year old son at the airport with the folks who looked like soldiers, than airport people.
What is seen in US for Asian Indians is NOT India.
You see Engineers, Doctors, Scientists at NASA, Professors.
But majority of Indians are poor, and farmers. Thus, remain in India – not here in Canada or US.
We must be careful in using the words like – India, Indians, and Indians in US/Canada. They all mean drastically different group of people.
More later.
Oh I guess I gave u the wrong impression when I mentioned the term East Indian…here in Canada the entire Indian community is referred to as East Indian so as to distinguish us from the natives who are simply referred to as Indians(not sure how it is in the U.S)…n by the East Indians in my firm I meant people from the entire Indian subcontinent…n there is a Chinese guy in the firm but he’s an intern here for a few months.
As for hating debt, I guess it has a lot to do with upbringing.
My personal story is different cause I grew up seeing my dad spend like crazy and not bother saving a dime whereas my mom on the other hand would secretly stash away cash in order to invest in real estate and so on. Anyways on reaching Canada I would witness first hand how my buddies who were a lot richer than me back home would scrooge and save up every dime that came their way and I was just lucky to learn from them and amend my ways.
Fellow Asian here, can confirm the validity of the post opinions. I am a chinese immigrant who came to the US when I was 9. After I crossed 5mm networth, I decided to move back to Asia mainly to avoid those racism that I encountered in the states. It didn’t matter how successful or integrated I become, it’s hard to be fully accepted in the US.
Sorry to see you go! Where were you living in the US and where did you go back to? How did you amass your $5M and at what age was that? So many questions!
No desire for collecting the Social Security $ you paid into?
Went to school @ UC Davis but lived mostly in La Jolla and Los Angeles. To be fair most of the racism was not encountered in California but other parts of the US during my travels and it just made me realize that I felt more comfortable being back in Asia plus I could save a ton due to the Foreign Earned Income Exclusion. Currently floating between Hong Kong, Shanghai and Taipei.
I am still a US Citizen and haven’t given that up yet so still on track to collect social security. Just turned 32. I have my own digital media company that owns various content based sites.
Will you be going to Fincon this year?
Great observations, Sam.
One thing that stuck out to me in your article was the 4th grade encounter in Taiwan that you mentioned. Specifically, you said, “we were both sent to “face the wall” for the entire afternoon recess period.”
Maybe it’s a little thing, but in-school discipline has changed considerably over the years. When I was in school in Texas, teachers could still paddle kids. Today, making kids “face the wall” would probably get school administrators in trouble. And the kid who used a racial slur would probably get expelled.
Instead, the situation was turned into a learning experience. He had to spend time being punished with you and that led to an apology and maybe a realization that what he did was wrong. Instead of building up resentment, going forward hopefully he would be less inclined to look at others solely based on their race.
I’m not sure that has too much to do with why Asians have a higher income growth rate, but it did get me thinking.
Thanks,
Dave
School administrator chiming in – yea, having kids face the wall would not go over well in my state! But for the record – there were still 19 states that allowed corporal punishment at the end of 2015… As an educator, what I see is that family dynamic (no matter the race) plays the huge role in the success of the young student and this tends to end up shaping what happens to kids as they go through their school years. Parents who value an education no matter their race or income level have kids who are more likely to excel. I was the first one to go to a 4 year college in my family and my parents always wanted us to have it better than them. And I have worked with parents who struggled themselves in school – but want their kids to do better. I also work with some families now who have no time or interest in helping their kids and all they do is bad mouth teachers and education. Some people even try to prevent their kids from learning more than they ever did so that they won’t leave the family “network”. Sounds crazy – but it’s true.
Hi Dave and Vicki,
Is facing the wall for 30 minutes really bad nowadays? I used to get smacked in the hands with extra long chopsticks by my mother whenever I did something wrong. Now that was painful and kinda scary. But face the wall.. not so much.
Sam
In today’s world, any “punishment” administered by a school on a child is subject to a great deal of scrutiny. Parents are unwilling to allow any form of discipline for their children whether it comes from the school or even from themselves.
We’ve changed from a society where kids were regularly disciplined (sometimes harshly) to a new belief structure that parents need to coddle their children. But instead of protecting them, this coddling leads to a lack of self-discipline and a lack of self-accountability for many children.
There is nothing wrong with failure. Doing the wrong things is what allows us to learn and grow. But if we aren’t told when we do wrong things or if the punishment is so severe (i.e., school expulsion) that there is no coming back, then we will not grow and learn from our mistakes.
So no, facing the wall as a form of punishment is not bad. It’s everyone’s reaction to facing the wall punishment that’s bad.
I think the culture in a community (regardless of race, genetics, or location) is a very powerful force. Even in mixed communities there can be a strong cultural norm that drives the whole. I grew up in a very small town (under a 1000) that had a very strong culture. I met up with an old friend from high school and after catching up with what is happening with everyone, her husband (who was from another state) said, “Is everyone from your school ridiculously successful?!?” I think there were a lot of factors in that tight community that helped create an environment of success. From what you said, it seems the Asian community has strong cultural norms that promote behaviors that naturally lead to success in the US.
A lot of the work I do mentoring teenagers is helping them see how their family culture is promoting behavior to either help or hurt their chance of success. No matter the race, there can be a culture of poverty that keeps folks stuck in it generation after generation.
Very interesting story about your small town being so successful due to a strong culture. I totally agree. When you have multiple people pulling for you to go to college, get through college, get a job, etc… life becomes easier.
So the question is: why is there such a large gap in income among other races? After studying Spanish for 8 years and living in the Spanish House, I know family and culture is very strong, for example.
By a strong culture, I don’t necessarily mean conducive to success, but rather, a cultural norm that is promoted, accepted, expected, or participated by 90%+ of the population. If the cultural values promote success in the US, then it’s great. But they can also be values that prevent success here. In Italy, it seemed every business either opened late, closed early or took twice the posted lunch break. Maybe that works ok there, but it would not be helpful for success in the US. In our community there are pockets of people who in their immediate and extended family are strong norms of drug use, constant alcohol use, domestic violence, sexual abuse, unemployment, not valuing education, distrust of the government. For kids growing up where that is the norm, expectation, and accepted behavior it’s tough to find any measure of success in the US. That is the extreme, but each cultural pocket has things that it promotes. I had members of my family that thought reading books was a waste of time, and only for lazy people who didn’t want to do real work. It’s hard to push against those norms and believes. It is far easier to swim downstream in a culture that promotes things that will make you successful. It’s great if your family has a strong positive culture, but even more powerful if it’s an entire community. I think the Asian culture not only has a great mix of helpful cultural norms, but also has a tight community to help reinforce those. It makes it much easier to go with the flow and do the right things.
Great piece. I’m pro-white, but I recognize there are a lot of things about Asians and Asian culture to admire. I wish more of my own people–European-Americans–would learn a lesson or three here.
“…if we’re basically all the same?”
That’s the problem right there. We are NOT basically all the same. The races differ on a vast range of variables, most of them biological or genetic. Culture, after all, flows from race.
Racial egalitarianism is the great lie of America. It prevents people of all races from taking a hard, clear-eyed view of themselves and their situations, and improving themselves.
I agree that culture stems from race. Also genetics are key to Asian economical prowess in the same way that they drive African athleticism. There are mathtarded Asians and gravity-challenged blacks but those are outliers. This is why I dislike dwelling on race. You can’t do much with the knowledge that a typical Jew is better equipped at finances than white Bubba from WV.
Agreed. The idea that we all can be Micheal Jordan or Warren Buffet is a myth since genetics plays a major part. But we all can be in good shape and financially free if we put our will to it.
Can you elaborate on what you mean by pro-white? I guess I’m pro-white too, but I’m pro every race and anybody who wants to seek financial freedom and give back to the community.
I too am confused as what he means by pro-white? I’m white, but I don’t only support/care about whites? Maybe he meant that in today’s day and age it seems that the media is almost anti-white, (for ex. Only showing white on black crimes, considering a white kid shooting 3 people to death a ‘mass shooting’ to push gun control while I see very brief news story about a Hispanic who killed like 5 of his kids and his wife and that’s not considered a ‘mass shooting’) to push their agenda politically. I swear I know a few white people who are so far left that it seems that they literally seem to dispise their own race and are willing to call anything out as an act of racism/prejudice and be constant social justice warriors and it’s really strange to me. People tend to gravitate towards people who look like them and practice the same ideas because, well, it’s comforting obviously. It’s not racist, it’s not caused by hate of others that are different (normally, obviously there are racists) and it’s totally okay to feel comfortable around people that are similar to you. Some of these people say that I (a white kid who’s parent are from Eastern Europe in the country of Romania and am barely American other than being born here) should pay reparations to people who are fairly far descendants from their ancestors whom were slaves, treat them like they are above us, and never question racism that is spoken from the mouth of someone who isn’t white because ‘only whites are racist’ even tho I, or any of my descendants for that matter, participated in the cruel, animalistic, inhumane treatment that was slavery. None of my descendants were here even, but because I’m technically white because of European descent, I should be ‘ashamed’ of myself and feel absolutely terrible for the people who are alive today (in non-slavery Times). They didn’t even experience that trama, nor did anyone they know. Not even their grandparents did. I understand that it was terrible (I don’t truly understand, because I did not experience it first hand, but either did anyone alive today!)
I know that racism is still very much alive, and that it HURTS to be disliked strictly for your skin color. I can’t even imagine going through that terror of being someone’s literal property—to treat however you please. Heck, our pets today have more rights than the slaves did and it is SAD. The people back then are the problem, most of the white people alive now are embarrassed and disgusted by slavery even being in our recent history, but we have no control and we can’t chamge the past, only the future. People constantly claiming racism and asking for repetitions are only keeping racism alive longer. Hasn’t anyone ever heard that constantly speaking about it, keeps it alive? Heck, it’s nasty when the news constantly runs stories on a serial killer or a really bad person and it almost makes them famous. If we didn’t talk about them constantly other than the obvious tell everyone that it happened, I believe things would change. If we wouldn’t constantly talk about racism, and privilege [I do believe privilege exists, especially when it comes to dealing with the law—blacks undoubtably have it worse. They’re ~four times more likely to be prosecuted for a crime as a white man who commits the exact same crime, especially in the south (have first hand experience being friends with an African American on a trip and he got pulled over and I couldn’t believe the questions the officers had for him, the overall treatment they gave him compared to myself, and the fact that we were searched for literally no reason. Being alone I have never experienced an officer thinking I’m a criminal for a tale light being out, but we got pulled out of the vehicle and searched because the officer claimed it smelled like weed in the car—which was obviously false as when he asked to search we let him because we had nothing to hide and he obviously found nothing but was making it obvious he wasn’t hoping to make an arrest for no apparent reason other than hatred for a persons race and it is messed up and needs to change. Idk how we can change this, but constantly talking about it and further dividing races and also political groups even further isn’t going to help anything. I’ve spoken to black people who literally believe every whites person is racist and thinks they are better than them because of skin color, and it’s really sad to have such a delusional idea. Racists make up a fairly small amount of the population (all races) but the media makes it seem like it is almost as bad as it was back in the 50s which is false. I don’t even really know anyone who is truly racist and hates someone for strictly skin color. People who are openly racist normally get doxed on social media platforms or the news.
Two thoughts which seem incongruous with your assertions.
1) P2P lending is very fast growing in mainland China. The thinking is that traditional banks don’t do a good job loaning money to people who need the money. Regardless of the reason, it indicates there is a pent-up demand for debt in China.
2) More anecdotal is the Asian propensity for gambling. If you have been to Macau, you know it eclipses Las Vegas in gaming volume. Furthermore, my trips to Las Vegas lead me to believe Asians are over-represented at the gaming tables…particularly at the higher stake tables.
Howdy Dan,
1) Introduce anything new from 0 and adoption will be rapid. There’s a real FOMO culture growing in China b/c the wealthy are highly visible and the accent has been rapid. The attitude towards debt is changing/loosening, I agree. But the borrowing culture is nowhere near like it is in the US.
2) Yes, Asians love to gamble. Poker tables, crap tables, pai gow, baccarat are dominated by Asians as well. I think part of it has to do with Asians loving money. Just look at the survey at the bottom where ~30% of the readers here are Asian, even though they represent only 5.5% of the US population. And the FS readership covers the entire nation and globally as well.
Another way to look at Asians and gambling, especially at the higher stakes tables is this: you need money to be able to gamble. you definitely need LOTS of money to play at the higher stakes table. Given these facts, there should be a correlation with wealth and gambling. If you are poor, you can’t afford to gamble your savings away. If you are rich, gambling becomes a form of entertainment.
The media likes to paint gamblers as poor, or going broke. There are certainly cases. But I believe people who gamble are richer than the median because they have money to burn.
“[Chinese] attitude towards debt is changing/loosening…”
If that is true, I wonder if in 10 years or a generation, the differences between Asian culture as cited by you and “American” culture will disappear. What you describe today seems to have been generations in the making w.r.t. Asian attitudes towards debt and money. Is it being eroded?
re: gambling – essentially you are saying wealthy Asians view gambling as a form of entertainment and that Asian value education highly. Just as one would expect to pay for a ticket to a concert or sporting event; the amount lost at the gaming tables is the price of that entertainment. However, anyone who ever took a statistics class knows that the odds are in favor of the house. Similarly, all gamblers know that if you play long enough, the house will come out ahead. If I accept the “cost of entertainment” theory at face value, why don’t wealthy Asians play lower stake tables where essentially you get the same “entertainment” at lower cost?
This intrigues me because when I go to Vegas, I always play the $5 & $10 minimum tables. I view an hour of blackjack as entertainment much as you describe. My mind gets at exercise in math & statistics calculating the card count & whether I should split or double, etc. I don’t expect to make money but it’s a way to spend an hour with the possibility of coming out ahead for that session. At the $5 table, $50 can last an hour. I never think of playing the $25 or $100 minimum table because I would need 5x or 20x the bankroll to get the same entertainment.
Dan, that’s exactly right. If you are worth multi-millions of dollars, playing $5 – $10 minimums doesn’t provide any thrill anymore. You’ve got to move up in stakes to feel the fear and pain of losing. That’s part of the fun in gambling. If you can still get the same thrill playing $5-$10 while being worth multi-millions, then that’s a great combination.
What’s your estimated net worth?
For the record, I enjoy playing $1/$2 no-limit holdem up to $2/$5. The thrill is plenty for me. But any more and it feels too intimidating. When I play at my dad’s 1 cent / 2 cent games, it is absolutely no fun b/c everybody shoves all in with their maximum $3 buy-in!
I don’t play games other than no limit poker.
“You’ve got to move up in stakes to feel the fear and pain of losing. That’s part of the fun in gambling.”
That does not sound like entertainment; it sounds like addiction.
From the Wikipedia article on Problem Gambling – https://en.wikipedia.org/wiki/Problem_gambling
“In order to be diagnosed, an individual must have at least four of the following symptoms…Needs to gamble with increasing amounts of money in order to achieve the desired excitement”
Every time I sit down at the gaming table, I expect to lose my stake. If at the end of the session, I still have money left I feel like I came out ahead. If I pay $60 for a baseball ticket, I’m still down $60 at the end of the game. Gambling is the only form of entertainment where you may come out ahead at the end.
Ironically, I suspect these people (Asians in this post but really any ethnicity) don’t apply that sliding scale to any other form of entertainment. As their net worth goes up, they have to gamble more to get the same level of “entertainment.” Do you think as their net worth goes up, they move from bleacher seats to field level behind home plate seats? Do they go from Economy to First Class airline seats? Do they go from Toyota Camry to Lexus LS? Probably not because if they did their net worth wouldn’t be higher than average. Yet in this area, they justify their higher wagers as the only way to achieve the same thrill level.
I can likely afford to play $25 or $100 per hand. $100 is less than 1 beep for me so I could lose 10,000 straight and still have positive net worth but that’s besides the point. That runs counter to your assertion. When I see someone wager $100/hand and that’s what it takes to move their needle then their net worth is likely less than $1,000,000. $100/$1M = 1 bps. $1000 per hand is no more than 10 beeps for a millionaire. Losing or gaining 10 bps of my net worth does not give me fear or joy; it’s noise.
There is a topic for you – at what level do you have a gambling problem? In other words, if you are betting 0.0001% of your net worth per wager, you probably don’t have a problem. At what percentage do you have a problem?
For me though, if I am expecting to lose 100% of my bankroll, why play at a table w/minimum stakes that requires me to have a higher bankroll?
Yes. As your net worth goes up, you tend to spend more on nicer things. It’s what we call in the personal finance space, “lifestyle inflation.”
People are very logical and over the long term will only gamble what they can afford to lose.
The gamblers are much, much more wealthy than people realize.
As an Asian American myself, I think I see a few reasons for the higher Asian income.
You’re spot on about entrepreneurial endeavors. My dad came to the US fresh off the boat (ok – it was a plane) with no education and no money to his name. He couldn’t go and get a regular job in an office like other people would. He didn’t speak english, couldn’t read of write anything. All he could really do was try to figure out a way to make money outside of a traditional employer-employee setting. He ended up saving up money from working in a Chinese restaurant, and of course, like many Chinese immigrants, started up his own Chinese restaurant that did pretty well. After saving up some more money, he ended up buying some real estate in a large city that have turned out pretty well. This was back in the era of white flight to the suburbs, so these properties have turned out to be pretty good returns on investment.
The second factor, again, as you pointed out, is emphasis on education. There’s no doubt that education makes it easier to get the better paying jobs out there, if you aren’t going the entrepreneurial route.
The third factor, I’d argue, is slightly less discrimination. Not to say that Asians are not subjected to discrimination – we absolutely are – but since we’re considered the “model minority” I find that many employers will hire Asians. It doesn’t mean you’ll advance to the top of a company. As you pointed out, there aren’t a lot of Asians in leadership positions in the US, and part of that has to do with the concept of the “bamboo ceiling.” Basically, Asians are thought of as good workers, but not leaders. But, being thought of as a good worker means we can get good jobs that pay decently well. This isn’t necessarily true for other minorities.
So you combine good education, with good savings rates and ability to get good jobs (even if not leadership jobs) and that equals Asians doing pretty well for themselves. Just my quick two cents anyway, taking purely from my own anecdotal observations. You could probably write a 1000 page book on this topic.
Very interesting read! The cultural emphasis on education, savings, and aversion to debt alone would probably be financially beneficial in most cases.
Sam I want to thank you for your great posts. Makes my day go by just a bit faster. Always a great read and provides a refreshing perspective to my normally cynical self. Much appreciated.
No prob. What’s to be cynical at, except for everything?
“The Realization No One Will Save Us”
That’s powerful right there. I cannot tell you how many people I run across that expect, if not demand, salvation. One of my hobbies is backpacking. I love walking deep into nowhere and appreciate that it’s just you, your friends, and your prior preparation and planning that will determine your success. I still treasure the dawning realization on my cousin-in-laws face when as we hiked into Denali I iterated exactly how FAR off the beaten path we were. I think it was good for him!
Meanwhile, back in civilization, I’ve seen people (especially attractive Caucasian women) flag down my cop car and demand transportation to destination X. My line of “I’m a criminal investigator/public safety tool” is boldly countered by “Nuh-uh ‘Serve and Protect’ take me there.” Wow.
Also your point of cohabitation is a significant wealth factor. My in laws were lovely enough to float my wife and I for a few years in exchange for us buying a house with a down payment significantly faster than I would have been able to otherwise. Family is a very powerful societal structure that s unfortunately glossed over a lot in American culture. We seem to be distracted by government, friends, and or own individual power and neglect the ancient strength of family.
Hah! Funny about your cousin-in-law. So awesome you have the health and energy to go way off the beaten path. I enjoyed my time in Denali national park as well. It’s magical up there! Went fishing in a lake up in the mountains with nobody around. Surreal.
Maybe the women were just flirting with you because you are a sexy beast?
Lol. As a Big City cop, all I would see is a hot lawsuit. No thanks!
These stats don’t surprise me at all. The majority of asians seem to have very high work ethics, heavy focus on education and many know the value of investing in tangible assets (precious metals, real estate etc) over paper assets. They seem to understand the concept of cash flow in personal finance and keeping expenses low. Just a few observations that I have noticed over the last 20+ years.
It’s hard to read about your racist experiences and it’s even harder to comprehend the hate that some people hold against other races, religions, orientations. On the other hand, there is something to the old saying that we are shaped by our struggles; you clearly were. I’ve always held Asians to a very high regard – growing up, I had to work hard to keep up with them in school. And to your point about sports, I was a figure skater, and Asians dominate my sport. I also have a huge respect for the Japanese school system having had an opportunity to teach there for a year. And several public schools in my state now offer dual Chinese immersion. So while there’s probably always going to be bigots, I do feel like things are changing for the reasons mentioned in your article.
The hate and racist encounters is ongoing, it just gets internalized amongst minorities. Ask any minority whether they’ve felt some sort of racial slight or hate over the past 12 months and I guarantee the majority have. We just get used to it and move on. Some folks, like me will write a post about it, and get really motivated.
I wonder why Asians dominate figure skating?
Excellent work ethic and lithe bodies. :)
Agree. Very interesting article.
Asians did not dominate figure skating before 1990s. During the time of US and Russian dominance and cold war, judging was so political that it was impossible for Asian skaters to rise to the top. And 50% of the score was from figures and not the free style you watch these days. Also people in skating world thought that Asians had short legs and could never be good in figure skating. LOL
There were so few role models until Tiffany Chin, Kristy Yamaguchi, Michelle Kwan and Midori Ito came along. With changes in scoring, focus on technical over artistic, it has more level playing field than historical. Additionally, figure skating does cost a lot so economic development of countries like Korea and China to have ice rinks, people to afford lessons, skates have contributed.
Not to detract from your experience but to offer another perspective, I am white and have been the target of racial attacks. Growing up in a poor neighborhood I was called racial slurs by african americans who tried to harrass and rob me. One they saw I was ready to fight back they let me go.
Another but less extreme example is that I am often ignored in Chinese restaurants while Chinese patrons are well attended to. Then there are the higher prices that I pay when I travel to Asia. And being refered to as Gringo, Bule, or the equivalent whenever I travel abroad.
The frustrating part is that its not called racism when white people are on the receiving end because whites are in the position of power. For economically disadvantaged white people that creates resentment.
I too was motivated to not be poor. I am not FIRE yet but I have more choices than I did growing up.
They didn’t call you bai guai or “white devil” too? That’s a common favorite among Chinese folks.
Your example is why affirmative action should be based on income and wealth, not race. Do you agree?
There’s a big White community in America that lives on the median house hold income or less and is completely getting ignored and falling behind.
At least with the Asian community, there seems to be some economic advances despite being ignored.
Haha. I often joke about the white devil label with my asian friends. One guy I met in asia had never seen a white person before and was afraid to look at me. It was kind of funny.
I completely agree with you that affirmative action should be based on income. I recall you mentioned that before. Many black and hispanic people are doing well financially and many whites are in poverty. Race based programs dont make sense and only further division and resentment.
I have lived here my whole life and have never seen someone be racist against an Asian. Mexican – yes. Black – yes. White – yes. Asian – NO. It sounds like bull-shit to me. All the Asians I know talk shit about Mexicans and Blacks. LOL. I don’t understand when Asians say they are discriminated against. Like you said they are the highest earning race in the USA. You are pedalling rhetoric.
Got it, so you are saying that we should disregard the discrimination experiences Asians experience?
How can you do so if you do not walk in their shoes?
What is your background?
Just a thought but I wonder if the higher income is also because many Asians tend to live in coastal large metropolitan areas with a higher cost of living.
That is probably true as well. Living in Virginia for 8 years was OK, but I didn’t love it like I loved living in NYC and SF due to the diversity.
So when folks tell minorities they can just lower their cost of living by moving to the Midwest or South, they don’t realize that part of the reason why we may not want to go, besides the weather, is due to less diversity. Folks have a natural affinity to hang around people who are more like them. That’s why all our bosses at work look alike.
As you said, education is the key.
By emphasizing education, Asian cultures are guaranteeing more success for their children.
I think all cultures know education is incredibly important to future success, yet Asians seem far more focused on it. I know there are a lot of factors that prevent many people from pursuing academics more vigorously, but that should be the focus for anyone who wants to succeed financially and otherwise.
I am glad that you expressed this issue. This is a tough issue to write. The racial matters are very difficult to raise in this country. People are not open to talking about the racial matters except the Republican presidential candidate.
I live in the Latin community and have no family members and friends with an advanced degree. Many of them (more than 90%) don’t even have a college degree and barely have a high school diploma. The academic environment is not really important to many of them. The parents don’t understand the importance of education as much as Asian parents do. This is something the Latin community needs to change as the population grows.
I used to work for one of the largest global corporations and observed that many worker-bees (like engineers, consultants, developers, etc.) were Asians. My previous employer had only a black HR manager. In fact, I have never had a single non-white manager in my life. I am not sure if the race makes any difference in superiority or not. But this is the fact.
I’ve had a lot of contacts throughout the entire strata of Californian society and I absolutely believe “race” makes very little difference while the individual “culture” or perhaps “ethos” changes everything.
As you stated, many in the Hispanic community may not have degrees, but my wife’s (Hispanic) family came to the US two generations ago with nothing but had an ethos valuing hard work and education. Last generation was a crop of doctors, my wife’s generation are lawyers. Goodness knows what my children will be but we already have them working hard!
What do you think are the reasons why education is not as emphasized in the Latino community? The Latino community is seeing explosive population growth and is a force to be reckoned with!
I studied Spanish for 8 years and lived in the Spanish House during college. Me encanta la cultura española. Tanto amor.
More emphasis on education and stronger work ethic (on average).
And it might be a stereotype but potentially being better in math. I believe that people who are better at math tend to have higher incomes.
Sorry about the brutes at the restaurant. Too bad they aren’t people you know who graduated with you. Otherwise you could go back to a reunion and ask them how working at Denny’s for the past two decades has been. ;)
I really don’t think Asian people are genetically better in math than other people. It’s more an emphasis on math and science from our parents that make Asian kids focus a lot more time studying math and science.
I looked up who the linemen were from 1998 on W&M and found some names. But I forgot to reach out over LinkedIn or social media to see what they were up to. Could be fun!
My observation is that because many Asian immigrants are not proficient in the English language, they gravitate toward the math and sciences which utilizes a universal language of numbers and symbols.
I had racial run-ins with swim team members. They actually did really well, one is a physician and another is a marketing director at a software company. :-)
the entire history of standardized testing show that your are not correct – from early kindergartners to elderly people, whether data from tests that rely on preparation, or testing that one does not prep (new tests), East Asians do better than all the other “races” (“white,” “black,” “Hispanic,” “East Asian,”) in quantitative testing. Within each of these categories of races is great diversity of course, and if you drill deeper, more specific statements can be made, but to say Asians are no better in math than others is an inaccurate statement.
In my field (pharma / biotech industry), just a cursory look at the inverorship on patents on file (either pending USPTO action or granted) with many companies has a huge component of Asian scientists as inventors. Those scientists will be earning upwards of $100k for sure, perhaps much more. I could probably do an analysis with some software tools at my disposal and I’d bet a chunk of change a very large percentage of inventors will hail from outside these shores and of Asia origin specifically. Yes, it is just one industry (albeit a big one that pays very well) but you get my point hopefully.
Lots of great points and food for thought. It certainly is true that there are a lot of different cultures within the Asian race. It does seem that prioritizing education and grades is a huge part of the general Asian culture as well as multi generational living.
It sucks you had to go through those discriminatory experiences. But it’s great you didn’t let them stop you or slow you down. Instead you found ways to propel yourself forward and do greater and greater things!
I believe there is an inherent selection bias for immigrants. In general you are not going to legally be able to migrate somewhere with today’s laws unless you are successful. Also the whole reason youve migrated is likely to take advantage of an opportunity. To work hard to get through the process only to ignore your opportunities would not make much sense. Meanwhile if you made it in you likely have the traits needed to succeed as you previously did so. Motivation plays such a huge part in one’s success, burning the boat is a significant motivation . This motivation is likely passable to kids.
I think you are right. What kind of idiot would uproot his/her entire family to a different country for opportunity and then slack off all day? Ridiculous!
Here’s the thing though. When does that fire FADE since everybody is an immigrant in America?
From rice paddy fields to rice paddy fields in three generations.
In the case of Europeans, I think it depends on the ethnicity Sam. Some nationalities stressed higher education, others not so much. In the not so distant past, the Northern Europeans tended to do better than those from the South. Protestants tended to do much better than Roman Catholics. My husband escaped an East European country in the early 70s, age 19, with little more than the clothes on his back and the equivalent of $2.00 in his pocket. Not speaking a word of English he’s made his way. We made our fair share of financial mistakes but are at peace with our income and expectations. Our daughter will be graduating university and has a reputation for hard work and output. She Wants to live at home to get her financial ball of freedom rolling. War, financial upheaval, political uncertainty are all drivers. One of the most important things parents can teach their children (through modeling the behavior!) is the importance of faith, personal honor, family, avoidance of debt at all costs, and financial freedom. All the best! You’re an inspiration to so many—-your parents raised you well!
I have always had so much respect and admiration for the Hispanic and Asian people I worked for/with while I was growing up.. whether it was the millionaire bakery owner of Cantonese descent who works 20 hours a day at age 45 (according to himself), or the immigrant Central American men working in the kitchens of restaurants for well over 10 hours a day, I felt inspired by their effort.
That is inspiring! It is so easy to just relax and let yourself go on the SS America cruise liner. Life is almost too good here to bother killing yourself 10-20 hours a day. The new Iphone 7 is out after all! Gotta buy, post selfies, and have some fun :)
20 hours a day? For how many days? Definitely inspiring but hard to believe that’s sustainable. Even if it were possible, I’m not sure if it’s worth the money unless he really loves baking which I assume he does.
Well he owned multiple “chinese” bakeries in Manhattan as well as a half dozen ice cream shops in the suburbs. He would visit many of the stores he owned throughout the day, and purportedly slept 2-4 hours a night (he would nap while supervising me basically every day). I wouldn’t call him a baker, just an educated accountant-turned ice cream shop entrepreneur.
He would tell me stories of walking into an expensive steakhouse in his dirty t shirt (he dressed like a color-blind teenager) and the host would tell him that he can’t enter due to a button down shirt policy, so he would slip him a $100 tip and was let in. Very interesting man, but seeing the schools his children attended, talking to them and his wife, and seeing images of his house, I didn’t doubt that this guy was immensely wealthy.
I had no reason to doubt he spent well over 15 hours each day between traveling and supervising his stores.. considering I would often show up to my store to open with him at 10 am, then at 9 pm see him at another of his shops.
The funny thing is, there was this kind old lady who would bring groceries to their store one night a week, and he didn’t know how to turn her down. She believed his family was poor. Talk about stealth wealth.
Many of my best friends are actually Asian. I think we banded together as we were all foreigners when we came to university so it gave us some comfort. Many of the Asians I have met throughout my college career were indeed very wealthy but they also had a strong work ethic and academic background. I lived with my roommate who was from Taiwan and his mom would Skype him maybe once a week to check in on school and how his academics were going.
One thing I learnt from the Asian culture is that they also have a long-term mindset. I am not sure if you have heard about “Ghost Cities” in China but they are building cities for people to move into in 2030. They plan way ahead for others, in this case it would be future generations so wealth can accumulate from generation to generation.
I didn’t realize Ghost Cities was for future planning purposes. I thought they were built up cities based on speculation that now sit empty because nobody ended up moving in/buying? There’s this huge China property bubble that’s being discussed. But it has been talked about for 10 years already and prices are up 20% YoY again this year.
I don’t think they are planning ahead for 2030. I think they just underestimated demand. Chinese construction materials aren’t very good, the buildings will look ancient in another 15 years.
Interesting take on this FS. I question one point though: You suggested that asian entrepreneurship as a reason for the higher income.
In my experience, a lot of asian owned businesses seem to be poor ones – restaurants, laundromats, cleaning services, and other business I consider pretty marginal. Businesses not associated with high pay, and have little margin of safety.
Are these the outliers I’m seeing, or are these small businesses really that successful?
These “poor” small businesses are more profitable than you think…There’s a reason why they take cash only. Not everything is being claimed on income taxes. There’s also opportunity for tax write-offs.
Also, a lot of them have the ability to love right above the business. I’ve met countless Chinese Resturaunt owners who live right up stairs. Same with laundromats as well, this saves them a LOT of money. While it may seem that they are lower-income, they certainly aren’t. They just choose to live a simpler life style and in turn are able to be financially comfortable. My dad (Eastern European from Romania, born while it was a communist nation) left home by himself with nothing (to escape the oppression, he even had to sneak out of the country. You couldn’t just leave, even with a passport, like you can presently) and started a VERY well-off business here that he’s still active in even after 40-some years. He told me about trying to get something to drink while on the flight (not realizing it wasn’t included with the cost of the flight), and when the flight attendant gave it to him and said it would be $2 he felt so embarrassed about not having any money that he tried to give her one of his only possessions, his watch. I grew up in a great home with a loving family, VERY upper middle class (according to the IRS anyway ;) but since his business was mostly cash, he’s able to claim a certain amount and obviously keep the rest under the radar—so we were basically at that $200K some odd threshold with my parents combined income to push us into the upper class) and it still baffles me to this day the sacrifices my father has made such as leaving his family with nothing in his pocket, not even knowing English at all yet (he literally taught himself English with the help of children’s television shows like Sesame Street and other fairly old ones. He had already been able to speak Romanian, German, Italian, Spanish, and a usable amount of French from going off to a special boarding school. One good thing about communism is the schools he said lol), working so hard to start up a business and working long hours 6 days/week since well before I was born (I’m almost 24) and STILL does. Anything I have ever needed to succeed in life he has provided because he didn’t want my brother and I to have the same, horrible, poverty stricken childhood he had to endure back home. He grew up constantly working an extremely physical job with his father until he went off to school from 8-14. I don’t have any children yet, but it’s crazy to me the love parents feel for their children, and the sacrifices they are willing to make for them. I always ask my parents why they work so hard and care so much, and they always say that “you’ll understand when you have your own someday, they become your #1 priority and you would do anything for them, even die” and it’s unbelievable the amount of unconditional love parents have for their children.
In my opinion it’s not that these low margin businesses are so successful. I own a restaurant and have a laundromat as a tenant so I can share my perspective. It’s our willingness to grind it out, I’m talking 12 to 15 hour days without a complaint, along with our mindset to save and own real estate.
These businesses make anywhere from 100k to 200k a year which is not alot for entrepreneurs, but compared to the working man, it’s quite good! With a 50 percent post tax savings rate and real estate at all cost, a typical chinese household can reach 1 million in assets in a lifetime. It’s very doable and common.
I’ve represented a lot of folks who have created a nice net worth for themselves out of these types of businesses. I represent one family with a dry cleaning chain who has achieved more wealth than I am likely to ever achieve.
I think all those businesses can be pretty lucrative. Cleaning is not a job that pays very well but if you can build up your own clients and run your own business you might be able to make 20 dollars an hour after expenses instead of the 10 dollars per hour you would make as an employee. You also have the opportunity to hire employees as your business grows and make even more money that way. Restaurants can also make a lot of money if you can be consistent in your food quality and service and build up a loyal clientele.
Your perception of many small Asian businesses being marginal is actually one of the goals and keys to Stealth Wealth. Because many of these businesses are cash business and do very well, they do NOT want any attention.
My neighbor drives a beat up truck for his construction work here and there. But the more I got to know him, the more I realized how wealthy he is. He owns around 30 properties in SF! We’re talking close to $40M in property value after he ran a restaurant for 15 years after coming to SF from HK as a 20-something year old man. He probably has $0 debt as well, even after buying his 40-something year old daughter a home all cash for $1.5M a couple years ago.
Nobody will know his true wealth. And for good reason.
Small Asian businesses may or may not do well but I think generally the immigrant parent starts a business because it is more difficult to find a regular job that pays as well…though their dream for their kids is to go to school and become a doctor, lawyer, engineer, etc…and not open a small business.
Any business that is scalable can make a ton of money. You can buy a small laundromat for $200k that only nets $60-70k a year. Learn how to manage it remotely by hiring the proper staff and increasing marketing online. Then you can take the money and buy other ones. In 10 yrs, you may end up with 5, each of which makes $100-150k per year.
Not to mention many of these successful business owners tend to be super frugal and continue driving 10+ year old cars and buying 2nd hand clothes.
I like that you acknowledge that wealthier starting points likely helps, but is not everything. Your analysis rings true to me. Generational living really saves so much money.
It’s true. If you are born rich, you can take infinite risk to become MORE rich. You can also take basket weaving and major in Art if you are rich.
People need to realize that many Asian immigrants have higher than median wealth/income back home. Unless you win a scholarship, it requires a lot of money to uproot your entire life.
In other words, give less credit to the Asian income numbers or our attributes in science and math, or our work ethic.
On a similar note, you should wrote an article on why most hedge fund managers are of Jewish heritage or even take a poll to determine what percentage of your readership are Jewish . I am just curious why that it. Some of my friends dismiss it as a coincidence but it has to be more that.
I agree with your “What is Considered Asian?” section. Often times, people lump all asian/pacific islanders into the same group. However, as you noted, there is a huge difference.
Have you given any consideration to the university admissions bump that URM students receive? “Asian Americans” do not typically receive this URM bump, however, many “Asian Americans” should, as they are certainly underrepresented in U.S. colleges and universities.
The problem is that “Asians” are an OVER represented minority. UC Berkeley, for example, has 40% Asian student body versus a 15% population in California and 5.5% US population.
Because Universities tend to just lump Asians all together, if you are an under represented Asian, you are kind of screwed. Hence, you’ve just got to try harder to get the same opportunity. There’s really no other way around it unless you write an essay exact about this topic or be your own boss and play by your own rules.
Part of the goal of this article is to help share that Asians are extremely diverse in race.
One of my favorite places in the world is Kyrgistan, where the Kyrgiz have Asian/Mongolian features but speak English with thick Russian accents.
Like the red-haired Ethiopian tribe I ran into, there is more in this world than we like to believe.
I’d add higher expectations placed upon yourself as an Asian- you see all the family members around you who are in academia or medicine so the path of least resistance is to do the same, even if you were a rebel at college and grad school. Eventually, you come around and find out it’s a good place to be.
Higher expectations placed on one’s own self usually lead to higher and stronger results, even if you miss the target you were aiming for. You exemplify this.
-Mike
Good point on higher expectations due to your surrounding family members. My aunt and uncle both have their POST PhDs so I’ve always wondered what type of pressure my cousins would feel. Well, one is at Princeton now playing soccer, and the other is TBD.
I don’t remember my parents pressuring me to be a doctor, lawyer, or anything really. Maybe an entrepreneur since we hung out w/ many growing up in Taiwan and Malaysia. They were so care free, but I remember seeing my mom work so hard and feel stressed after work. I knew I wanted to do well enough so she could stop working ASAP. Unfortunately, I was only about 12-13 then… so still had 10 more years until I could make any real money to help out!
You make some excellent points as to why Asians tend to be high earners and successful. It’s certainly a cultural thing, but it also makes sense that immigrant Asians who can afford to come here may be wealthier to begin with.
Whatever “it” is (the full package that helps Asians be so successful), I wish more people would try to duplicate it.
I agree, Holly. I think it’s sad that so many people limit high-earning potential to being a “cultural thing.” Anyone can adopt the Asian mindset and seek to duplicate it themselves.
In the American melting pot, it seems that a lot of other cultural traditions (hard work and thriftiness of the Dutch, for example) has been lost over the past few generations. People no longer see their identity as tied to their heritage. If it weren’t for my grandfather instilling in me the value of hard work, negotiation, and saving, I, too, would probably just identify as a “normal” American.
@Holy
I think it is more cultural thing and values, understand the importance of saving money as most of Indians came here are from middle class family including Microsoft / Google CEO.
It will be interesting to see how the fourth and fifth generations from asian immigrants do. My parents were not college educated but worked and sacrificed to get us thru school. We lived more comfortably, put our kids thru college, and will leave them a nice nest egg when we pass. My grandchildren will have an opportunity to live well and possibly squander it all!
That’s false! Most didn’t have enough money to come here. They had enough of money in the bank from borrowing from family members to get accepted. Most started from scratch… worked hard and sent kids to school. They worked long hours and harder. Saved money and started businesses. Why? Don’t be stupid… you make more money if you’re successful! They know and taught their kids that getting an education is very important and this is one way of making good money and getting ahead. Most kids didn’t go to tutoring or after school etc. They didn’t have enough money. Only the the ones that could afford it did. It’s the mindset and what we value as important that made the difference! This article is HER OPINIONS and only partially true.
Your boat burning analogy is a good one! There’s the old story, that when Cortez arrived in the Americas, he burned his boats in the harbor so that his crew would be motivated to work hard and conquer the native people because they had no choice. It’s a good story even though it turns out to not have been historically accurate.
I think you are right that immigrants with no safety net have a strong incentive to bust their butts, build a strong financial foundation and take care of themselves – what other choice do they have? If you are too comfortable, you don’t have that same urgency.
My parents fled their home country in 1961 with $7 dollars and a baby. They had to leave all of their possessions behind. I grew up comfortably middle class, but never felt like I had any safety net. If I make it or not, it’s all on me. And if things go south financially, it’s a long way to the bottom. If nothing else, it is motivating!
Cool stories. Having a mortgage and a baby should light a fire under people’s butts to earn and save more. It’s a natural and logical response, which is why I’ve become less worried about society as time goes on because of human will.
I came from Taiwan at age 27. I am making about 200k as an engineering supervisor. I noticed all Asian in my company have at least Master degree, and most of designers which not required degree are white and a couple black. That says it will be impossible for me to get in a big corporate like this if I didn’t have an advanced degree. Being an Asian female engineer, I have to work extra hard to get promoted. Talking about glass ceiling….haha…
I am very lucky without many racial encounters because most of people I know are professional. I did have one that hurts so much until today. When my husband proposed to me, my mother-in-law told him ‘but you are going to have yellow babies….’
I am planning to retire in 2020 at age 49. I wish I could quit today, but I have to save for the college tuitions (estimate 45k*8=360k) for my two kids. Crazy…we need around 100k/year to live a retirement life I want( no debt, a lot of traveling, and leave some legacy to the kids). Yes, Asian makes more money, at least in my household .;)
Christine,
I am not sure you need that much for college. I personally used community college for 2 years then transferred to state college to finish up. Admittedly, going to a more expensive school could have netted me more money after graduation.
But — I would NEVER ask my parents to work harder to pay for my college education. I am sure your kids will feel the same! Just be a good parent and don’t kill yourself for that 360k I bet you can get the same educated children out of the deal for waaaay less than that since they come from good blood.
good job,
DDave
Just by being a California resident with good grades you get tuition and fees reduced by 1/2 to a 1/3 (I’ve been out of the UC program for a decade and hate giving bad numbers)!
You can throw a little bit of debt or cost to your kids just to ensure that have “skin in the game” too!
We started my daughters’ college funds shortly after they were born. Their “job” in school was to study hard, get good grades, and find jobs after graduation.
We didn’t want them dragging around a ball & chain of college debt.
Did you not find suitable guy from your community?
Honestly this is not something I’ve thought much about. I supposed I’m lucky to not have dealt with race issues as a young child. I think your reasons why Asians are successful/wealthy make complete sense and I would dispute them. I also agree in the belief that a strong family structure adds to the ability to be smart and save. I’ve said many times how important it is to me to pass along financial knowledge to my offspring.
While living in China, I learned that Chinese have much healthier view on money than western folks. They also have saying no house, no marriage, which means if a guy doesn’t own a house, he can’t get married. They also buy things with cash or debit card, credit cards aren’t popular at all. Btw, this is a nice way to stay out of debt.
Great saying! Thanks for the reminder. When were you in China and what were you doing? I’ve gone many times since studying abroad for 6 months in 1997. But I’ve never had an opportunity to work out of China.
I think you’ll enjoy this post: https://www.financialsamurai.com/what-is-capitalism-to-understand-lets-first-explore-communist-china/
I was studying at one point and worked for several years on managerial position for a major IT company at another.
Will check the post.
An interesting read (analysis?) Sam. I think this: “decide to be their own boss through entrepreneurial endeavors e.g. restaurants, convenience stores, laundromats, landlording, online businesses, etc. Entrepreneurship tends to be much more lucrative than being a median income worker over the long term.” probably has a huge impact on things because there is just so much wealth-building potential as a business owner.
Folks don’t understand how much wealth is being generated as a “small” business owner. American society doesn’t look up to the mom and pop store due to the lack of education required. But if you looked at their multi-million dollar bank accounts, society would have a different tune of folks running laundromats, vending machines, and other businesses.
Stealth Wealth is strong in this segment.
Also to add is that a lot of the migrants/fobs (middle aged) couldn’t assimilate into corporate America, and weren’t old enough to retire yet, so what opt was there left besides self employment vs min wage? A lot of Asian migrants may have had less labour intensive jobs in office/business/corporate settings back in the Motherland. But once the skill set couldn’t transfer to the new country or language/cultural barrier, it only made sense to run a small business making a more livable income. But being employed is also risk free vs risking personal capital on small business venture, which is also why FOB parents pushed their children to be grud at Engrish so that their kids could achieve the more comfortable American Dream in Corporate America. If Asians are going to hardworking forever, then they’d rather their kid do so sitting in front of the computer in an AC office than over a hot steaming grill and standing on their feet all day. That seems to be the pattern anyway.
On the flip side, and unfortunately, we now have a generation of Asian American guys who grew up in front of a screen, and can’t even fix their own toilet. Financial Samurai is an outlier. :p
Ha! I’m actually really good and proud of my ability at fixing toilets as a landlord for the past 11 years. I’m also an expert at watching YouTube videos, which can teach anybody anything if they are willing to try.
There’s something about getting your hands dirty even if you don’t need to but keeps the appreciation of financial independence alive.
I think your analysis is right Sam. The circumstances for Asians to have made it to America are probably related to their wealth / paying for education etc and generally that just helps them in all walks of life.
There is a similar feeling in Australia too to what you said. The Asians that are here are either cashed up and can afford education, or they’re buying up property with all-cash.
Tristan
Many of my Malaysian friends who went to Garden International School in KL or other private schools ended up going to Australia for Uni. Almost all of them were children of entrepreneurs who made top tier income for the city and country. I was inspired at age 13 to try and be a “businessman” as well.
I can see how some Aussies would really resent wealthy Asians from migrated over and buying up some of your country’s most expensive properties. You’re seeing this in Vancouver especially, and slowly more and more in SF, Seattle, and Portland.
Globalization is socking it to the middle class, which is why we’ve got to figure out ways to keep up and get ahead ourselves.
Huh, Garden International School in KL. We may have a few mutual friends then. Did you go there?
My favorite is “no one is going to save us!” The reality is no one is going to save any of us (with the rare exception of alimony) reguardless of race or gender. The illusion that there is some party waiting in the wings to offer assistance, is just that; an illusion. This illusion gets votes but helps no one. If from day one we were all told to “expect nothing except what was earned” I imagine more would be motivated. That or at least be accountable for their own failures. Either way society benefits.