Wealth-Building Strategies For Latinos

Financial planner Louis Barajas' newly revised book, The Latino Journey to Financial Greatness, advises Latinos to not only create wealth for themselves, but to build prosperous futures for their families. He speaks with guest host Jacki Lyden.

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JACKI LYDEN, Host:

I'm Jacki Lyden, and this is TELL ME MORE from NPR News. I'm sitting in for Michel Martin.

We're continuing our observance of Hispanic Heritage Month in this part of the program. In a moment, we'll explore some of the culture's Caribbean sounds and the artists behind them.

But first, it's time for our Money Coach feature and we're taking a look at matters of personal finance in the Latino community. Eight years ago, personal finance expert, Louis Barajas, wrote the book, "The Latino Journey to Financial Greatness." It outlines 10 steps on how to create wealth and happiness for you and your family. Now, he's revised the book, including translating it into Spanish. And today, he's making it available online.

Louis Barajas is a frequent contributor to Money Coach and he joins us now to tell us about "The Latino Journey to Financial Greatness." Welcome back to the program and congratulations.

LOUIS BARAJAS: Thank you, Jacki.

LYDEN: What motivated you to write this book?

BARAJAS: Well, the motivation was, you know, I grew up in East L.A., in Boyle Heights in a barrio, a tough neighborhood of East Los Angeles, California, and made it out of the barrio. You know, when you're in that kind of community, the big time is I started working with really super wealthy clients on a national basis, went to some of the best schools in the country.

And then, about 21 years ago, I had personal tragedy in my life. My grandmother who raised me passed away, my uncle who was my mentor of books committed suicide about a week and a half later, and then my first wife gave birth to my daughter. And the day that my daughter was born, which was a week after my uncle had committed suicide, I met this man in a coffee shop in Lake Forest, California who transformed my life in a 20-minute conversation.

And he spoke to me 21 years ago about a "Purpose Driven Life." Made me think about what I was really destined for and I quit my job. Just went back on Monday, gave them a four-hour notice and, full time, went to try to change the mindset of a certain community that I thought really was lacking substantial help, especially when it came to personal finances.

I had all this financial information and yet it wasn't - I couldn't break through. And as I started listening to the people in the community that were in a survival and struggle stage, I realized that no amount of financial literature was going to help this group. What we needed to break through was certain mindsets, certain cultural barriers that were actually stopping them from achieving abundance.

LYDEN: So when you originally published this book in 2003, "The Latino Journey to Financial Greatness," a lot of things have changed since then, given the economy. What are some of the biggest changes, other than the fact that you've now brought it out in Spanish?

BARAJAS: Well, you know, the biggest change is that I think that when I brought the book out, the economy was doing really well. Everybody was expecting that real estate was going to go up forever. Everybody was thinking that employment was going to always be there.

And it's a tough global economy now and people have to look at life very differently. In fact, we're in a new world and it's a global economy. And we're also, since then, you know, Latinos are now the fastest demographic growing in the United States. So, there's been a lot of changes.

LYDEN: If you're just joining us, this is TELL ME MORE from NPR News. I'm Jacki Lyden.

And for our Money Coach feature, I'm discussing the book, "The Latino Journey to Financial Greatness," with its author, Louis Barajas. He recently revised it, including a Spanish translation. Now, in this book, you talk about some of the barriers in the Latino community that they need to overcome. And one of them, you call scarcity and abundance, the pie fallacy. Tell us about this.

BARAJAS: Well, the problem is, when you have people who are in a survival or struggle stage, they see the world as a pie. They see the economy as a pie, that there are only so many pieces. And they do whatever they can to take their piece and not worry about other people. When in reality, when you meet the really super wealthy, the people who always constantly feel like there's always enough and there's a lot for everyone.

They don't think of the world as a pie. They think of it as a pie shop, like, you know, well, we ran out of pie. Go ahead and have my pie. I'll make another pie. But people who are living day-to-day see that there are only so many pieces, so I better do whatever I can to get my piece now. And it really kind of limits them from growing.

LYDEN: So, you say that, also, another barrier you call, me compadre, consulting non-experts. What do you mean with that phrase?

BARAJAS: Well, fortunately for a lot of people in communities, especially Latinos who are in the barrios, don't know a lot of professionals out there. And so, they go to what they call, me compadre, their friends, their, you know, uncle, somebody who's successful in their community for financial advice. And they usually go into non-experts. And we see that time and time again.

All you have to do is drive through any kind of low-income community and you're going to see a one-stop shop, the person who does your taxes, sends money to their country, you know, marries you, divorces you, sells you phone cards and a whole plethora of other things. And what happens is that people in these communities go to this type of people for advice. And most of the time the advice they're getting is not really good.

And so, what we need to do is we need to let them know that there are professionals out there, like certified financial planners, there are CPAs. And they don't even know what they are. When I tell them, do you know what CPA is? It's a certified public accountant. And they go, no. What's that? They'll go to a local bookkeeper.

Do you know what an attorney is? Because in these type of communities, especially Latino communities, they go to notaries. And notaries, in Latin America, are attorneys. Here, they're just people who actually just witness somebody signing something. And they think they're attorneys. And so, they're going to the wrong people for, really, sometimes really bad advice.

LYDEN: So if you had to summarize, Louis, what would you say is your overarching message that you want the Latino community and maybe others to learn from this in this book? You obviously feel really dedicated to the community.

BARAJAS: I'm especially dedicated to the community and to people out there who are struggling. I want them to know that, you know, there's an opportunity out there to be extremely successful, that everybody has everything they need. The problem is that more and more people are writing more and more books on financial literacy and it's not really doing anybody any good. We need to understand that the way we are thinking is stopping us from achieving success and we sometimes need to see it from someone else.

And that's what I've done is I've written a book that shows how Latinos are thinking in these communities and how we can then see. You know, like they say, you can't change what you don't acknowledge. I want us to just at least now acknowledge that what our thinking is doing is stopping us from achieving success in the United States. Once we acknowledge that and we can try to change that, then all the financial literacy tools will work.

LYDEN: Louis Barajas is a personal finance expert and author. And his book, "The Latino Journey to Financial Greatness," has been updated, translated into Spanish. It's online today. Thank you so much for joining us.

BARAJAS: Thank you, Jacki.

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