Asian Americans make up roughly 5.6 percent of the total American population as of 2021. Despite the small population of Asian Americans in America, Asian Americans have the highest average net worth and highest average income. Let’s look at the average net worth and income for Asian Americans today.
The largest Asian ethnic groups represented in the census were Chinese (3.79 million), Filipino (3.41 million), Indian (3.18 million), Vietnamese (1.73 million), Korean (1.7 million), and Japanese (1.3 million).
Below is a more detailed racial breakdown by the Census Bureau. It’s important to understand that Asian Americans is not a monolith if we are to determine the average net worth and income for Asian Americans.
The Average Net Worth For Asian Americans
Take a look at the Asian American and White American wealth. Asian Americans averaged a $673,000 net worth in 2013. In 2020, Asian Americans average net worth has surpassed the average wealth by White Americans.
Average Income For Asian Americans
Now let’s look at the income by race data provided by the Census Bureau. Asian median household income leads the way at roughly 30% higher than White median household income.
African American and Hispanic incomes are lower, which correlates with the retirement savings by race chart by the Urban Institute.
A 100% difference between the highest income ($78,000) and the lowest income ($38,000) is significant.
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.
Here is another great median household income chart by race. Notice how the Asian household income is highest at $76,667, followed by Native Hawaiian and Pacific Islander households.
Racial Makeup Of Personal Finance Readers
What’s interesting to note is that based on my survey of roughly 3,000 readers of Financial Samurai, one of the largest personal finance sites in the world with over 1.5 million pageviews a month, there is roughly a 30% overrepresentation of Asian readers (35% FS readers vs. 5% of US population) here.
There’s a a 5.3% underrepresentation of African American readers (7% FS readers vs. 12.3% of US population), a 11.3% underrepresentation of Hispanic readers (5% FS readers vs. 16.3% of US population), and a 15.7% underepresentation of White readers (48% FS readers vs. 63.7% of US population).
A 30% overrepresentation of Asian readers on Financial Samurai is startling. Perhaps some of this can be explained by my site’s name and the fact that I’m Taiwanese/Polynesian American.
But since 70%+ of Financial Samurai’s traffic is from search engines like Google with traffic coming from all over the country and the world.
Asian Americans Read More About Personal Finance
Feel free to peruse my most popular articles and see for yourself. The most popular articles relate to retirement savings, investing, and earning more money. These topics are relevant to all races.
As Black and Hispanic Financial Samurai personal finance readers appear underrepresented and correspond with Census Bureau-provided lower income and wealth figures, and as Asian readers appear overrepresented and correspond with higher income and wealth figures, it seems clear there’s a correlation between higher income/wealth and reading personal finance articles.
Asian Americans Seem To Care More About Their Finances
Given the vast overrepresentation of Asians on Financial Samurai, it is a logical conclusion to say that a greater percentage of Asian Americans care about their personal finances. Therefore, the more you can read and learn about personal finance, the better it is for your wealth.
Anybody who started reading Financial Samurai since its 2009 beginning has probably crushed the average American in terms of wealth creation because we’ve been talking about investing in the stock market, bond market, and real estate market all this time.
Benefits Of Reading Financial Samurai
Even as the stock market marched to new record highs, you could read articles talking about investment ideas at the top of the market to let you make even more money.
You would have likely also started building your passive income portfolio to give yourself more options versus others who just rely on a day job income.
If you bought property in SF, NYC, Denver, Vancouver, Toronto or most big cities in 2012 with a 20% downpayment, your equity is up over 300%. Meanwhile, the S&P 500 is up over 100% during the same time period.
You could have also learned to save a lot on mortgage interest expense by not taking out a 30-year fixed mortgage as we enjoy a permanently low interest rate environment.
The same cannot be said for everyone who disagreed with my 1/10th rule for car buying. You can literally read hundreds of comments from people who missed out on investing in this massive bull run because they had to drive a $50,000 truck that equaled 100% of their annual gross income.
Yes, we can hypothesize that those who are already financially savvy care more about financial information than those who aren’t. But we should also conclude that over time, those who read personal finance websites tend to get richer than those who do not.
Asian Americans Have More Education
You don’t have to be rich to get a great education because access to information is now free. Soak up as much information as you can and share your favorite articles with as many people as possible. I’m absolutely positive we’ll see a tremendous improvement in our finances over the next generation.
Once you have your finances sorted out, you can focus your attention on more important things such as family, health, and happiness. And when your finances are really good, you can even spend your time and money helping other people.
Asian Americans Build Wealth Through Real Estate
I truly believe one of the biggest reasons why Asian Americans have the highest average net worth is due to investing in real estate. In many Asian cultures, real wealth is about owning tangible assets such as real estate. Real estate is less volatile, provides utility, and generates income. By the time I was 30, I had bought two properties in San Francisco and one property in Lake Tahoe. These properties now generate a significant amount of mostly passive income.
In 2016, I started diversifying into heartland real estate to take advantage of lower valuations and higher cap rates. I did so by investing $810,000 with real estate crowdfunding platforms. With interest rates down, the value of cash flow is up. Further, the pandemic has made working from home more common.
Take a look at my two favorite real estate crowdfunding platforms.
Fundrise: A way for accredited and non-accredited investors to diversify into real estate through private eFunds. Fundrise has been around since 2012 and has consistently generated steady returns, no matter what the stock market is doing. For most people, investing in a diversified eREIT is the way to go.
CrowdStreet: A way for accredited investors to invest in individual real estate opportunities mostly in 18-hour cities. 18-hour cities are secondary cities with lower valuations, higher rental yields, and potentially higher growth due to job growth and demographic trends. If you have a lot more capital, you can build you own diversified real estate portfolio.
Track Your Finances Diligently
The best way to build wealth is to get a handle on your finances by signing up with Personal Capital. They are a free online platform which aggregates all your financial accounts on their Dashboard so you can see where you can optimize.
Before Personal Capital, I had to log into eight different systems to track 33 different accounts to track my finances. Now, I can just log into Personal Capital to see how my stock accounts are doing. I can also check how my net worth is progressing.
One of their best tools is the 401K Fee Analyzer. It has helped me save over $1,700 in annual portfolio fees I had no idea I was paying. You just click on the Investment Tab and run your portfolio through their fee analyzer with one click of the button.
They’ve also come out with their incredible Retirement Planning Calculator that uses your linked accounts to run a Monte Carlo simulation to figure out your financial future. You can input various income and expense variables to see the outcomes. Definitely check to see how your finances are shaping up as it’s free.
About the Author:
Sam is an Asian American who worked in investing banking for 13 years at GS and CS. He received his undergraduate degree in Economics from The College of William & Mary and got his MBA from UC Berkeley. In 2012, Sam was able to retire at the age of 34 largely due to his investments that now generate roughly $250,000 a year in passive income boosted by his investments in real estate crowdfunding. Financial Samurai was started in 2009 and is one of the most trusted personal finance sites on the web with over 1.5 million pageviews a month.