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. The Asian population is one of the fastest growing populations in America.
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 (latest for 2022). 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 23-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.
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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.
However, the usage of The Bank of Mom and Dad is increasing to get a leg up. Given our parents have invested the longest during the biggest bull market in history, they are also the wealthiest generation.
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
In order to optimize your finances, you’ve first got to track your finances. I recommend signing up for Personal Capital’s free financial tools so you can track your net worth. You can also analyze your investment portfolios for excessive fees. For retirement planning, run your financials through their fantastic Retirement Planning Calculator.
Those who are on top of their finances build much greater wealth longer term than those who don’t. I’ve used Personal Capital since 2012. It’s the best free financial app out there to manage your money.
Build Wealth Through Real Estate
Among Asian families, real estate is the favorite way to build wealth. 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. around America.
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 fully 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 eREIT. Fundrise has been around since 2012 and has consistently generated steady returns, no matter what the stock market is doing. For most people, investing in a diversified eREIT is the easiest way to gain exposure.
CrowdStreet: A way for accredited investors to invest in individual real estate opportunities mostly in 18-hour cities. 18-hour cities are secondary cities with lower valuations, higher rental yields, and potentially higher growth due to job growth and demographic trends. If you are a real estate enthusiast and want to build your own portfolio, CrowdStreet is a great way to go.
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.
Income By Race In America is a Financial Samurai original post. I’ve been writing about personal finance since 2009.
As a fellow Asian American. I could easily see most of my thoughts aligning with your post. I am also a mother of two (aged 5 & 9) from upstate New York and having been trying to follow the path of financial independence ever since the pandemic began. I have already started to cut down my spending and have been trying to achieve FI in the next couple of years. Thanks for the amazing article.
I can agree to over 90% of what you said on here, being an asian legal immigrant myself, stepping off the airplane back 1980 with nothing but UN donated things. Our family’s view was to work hard and education was our only way out of poverty.
I’ve faced many discrimitations from both blacks and whites along the way (racist people will always exist, never speak for all), but kept my head low and focus on what I needed to do in school.
The advantage I had was a strong family value and support. The rest it’s all in my hands to get me to where I am today. 42 years later I can say, i’m doing quite well. America, land of the opportunity, work hard and you shall be rewarded.
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.
Yup, that’s absolutely devastating the black community! White culture, unfortunately, is trying to catch up.
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.
Ignorant racism on full display in the response above.
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.
Another typical racist response above.
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 NOT an immigrant. My ancestors were colonists. A Big Cultural and Social Difference and a point that you will need to remember.
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.