Planning for Prosperity
By Melissa Rondon
Luis Hernandez, better known as Wicho, knows what’s important to Latino families when it comes to planning for the future. He talks financial security and well-being, and how to make your finances serve your family’s best interest.
Latinos and Planning for the Future:
● 80% of Hispanic families are involved in making long-term financial decisions, and 63% feel confident doing so.
● 68% say that saving as much as possible is a high priority
● 31% are developing a detailed financial plan
Source: 2018 MassMutual State of the American Family Survey
Luis “Wicho” Hernandez has been helping Latino families achieve the American Dream for years. As Managing Partner of MassMutual Miami, a MassMutual general agency, Hernandez has helped thousands of Latino families plan their futures and achieve their long-term financial goals. Family interests propel Latinos’ financial decision-making in powerful ways: according to the a recent study by 2018 MassMutual State of the American Family SurveyMassMutual, 76% of Latinos prioritize having a stable source of income for the family in the event of the unexpected, and Latinos are more likely to consider extended family and friends in their definition of family than non-Hispanic whites. Nearly half of Latinos believe that they can achieve financial wellness, the heart of the American Dream.
Despite these good intentions and an optimistic outlook, Latinos remain among the least financially prepared for an unexpected interruption in their ability to work, with 27% of Latino families having less than a month of expenses saved for emergencies. Just 21% of Latino families have 6 months or more of expenses saved. Latinos as a group face unique problems: they represent the lowest household income of the groups surveyed in the study and have fewer opportunities to build generational wealth than non-Hispanic whites.
This gap in financial wellbeing is the heart of what Hernandez seeks to improve in his work with MassMutual. Hernandez knows the importance of understanding his clients’ motivations, the focus of the MassMutual study. “It’s not about going out there and pushing a product,” he says, “but it’s truly going out there and understanding what are the goals, what are the objectives that the customer is trying to achieve, and seeking to understand that first.” He applies this philosophy to his work with his clients, having a direct and honest conversation with them about what their specific needs are before discussing how to financially prepare to provide for those needs.
Credit is a common topic among his clients: paying down debt is a priority for 73% of Latino families, yet Hernandez finds that many of his clients don’t have a clear understanding of their credit and how it affects their financial wellbeing. “Credit is almost as important as having money,” he says, and “having good credit and managing that credit is second to none when it comes to … building a strong financial future for yourself.” Hernandez works to educate his clients on how to manage their credit, and finds it often comes down to something as simple as making a budget: after all, “if you can’t manage your income relative to your expenses, typically you’ll see that flow into having poor credit decisions and having poor credit,” he says, which can drastically affect how much you’ll pay on a home, credit card debt, and other expenses.
One of the biggest priorities among Latinos is educating their children, a fact that doesn’t come as a surprise to Hernandez. “I feel like I’ve lived it,” he says, “but it’s nice to see that it’s confirmed … 61% of Latino families consider paying for their child’s college a financial priority.” He continues, emphasizing, “I know in my house it was not one of the financial priorities, it was the priority.” That sounds good on the surface, but Hernandez says that laser focus on education can sometimes be a problem. “Having enough life insurance to protect your family, having enough money put away for your retirement, should be equally important because, if those things aren’t in place, you’re putting them and … education side also in jeopardy,” he says, and he’s right: if you find yourself unable to pay your bills, financing education is out of the question.
Making A Financial Plan
“Take an inward look at yourself and try to truly understand what’s important to you and to your family. What are your priorities? … What are your motives? What’s important to you?”
One of the findings of the study is particularly hopeful: 46% of Latino parents are actively educating their children about finances, saying that they wished their parents had done more to teach them about finances. More and more Latinos want to learn to become financially savvy and teach their children good financial practices, a trend that Hernandez hopes to help advance both through his work with MassMutual and through this study of the financial motivations of Latinos. “Their priorities are their priorities, and we’re not going to change what they think is important,” he says, adding, “we want to empower them to think that. We also want to shed light on understanding the big picture.” And that, at its heart, is what this study seeks to illuminate: a holistic approach to financial security and well-being for Latino families.
Luis Hernandez is a registered representative and investment advisor representative of MML Investor’s Services, LLC Member SIPC. Supervisory address: 1221 Brickell Avenue, Suite 300, Miami, Florida 33131 Phone: 786-491-7700.
Mr. Hernandez is licensed to sell insurance in CA, FL, HI, MA, NC, PR, VA and WI. CA Insurance License # 0G10758 CRN202012-240607