Why Asian Americans Are Going to Be the Richest People in America
Asian Americans are the best-educated and fastest-growing racial group in the U.S. and if current trends continue, they may also soon become America’s wealthiest racial group.
Families of Asian Americans have seen the most significant increase in wealth in the past two decades, even eclipsing Caucasians in median incomes, according to the most recent study by the Federal Reserve Bank of St. Louis.
One of the factors experts have been looking at is the group’s high rate of college education, Bloomberg reported.
Sixty-five percent of Asian Americans aged 35 to 39 are college degree-holders. In the same age demographic, the figure for Caucasians is only 42%, 26% for African Americans and 16% for the Hispanics.
Fed researchers even point out that younger Asians’ relatively higher educational attainment rate suggests that their surpassing whites in net worth in the next decade or two is not far-fetched.
However, aside from educational attainment, another factor seen to have an impact in wealth disparity is the ability to make better financial decisions. This is where the wealth disparity gaps actually start to widen and generally matter.
According to the report, African-Americans and Hispanics are observed to be under twice as much debt as Asian-Americans and Caucasians. It further suggests that this is due to “Hispanics’ and blacks’ investing in low-return assets like housing, as well as to borrowing at high interest rates.”
The Fed researchers also checked savings rates, credit-card balances, debt-to-income ratios and missed payments to measure their financial health scorecard.
On such metrics, both Asians and Caucasians did much better than Hispanics and African-Americans. A wider gap is even revealed when the comparisons are restricted to middle-aged, well-educated families.
Regardless of income and educational attainment, Asian-Americans have managed to do better in avoiding debt and saving money, showing much better financial health than African-Americans and Hispanics overall.
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