How many Latina millionaires are there in the US? In the world?
Not enough. In the US, Latinos start businesses more frequently per capita than any other race, but receive less business funding (any kind of funding- VC, private, or business loans), than our white counterparts.
As a Latina entrepreneur, this is really frustrating to me. And as a white Latina, I know that I’m in a more privileged position than others.
So I want to outline my plan to become a Latina millionaire in the next 10 years, in the hopes that it can help other Latinas on their own wealth building journey.
Step 1: Income
For anyone to build wealth, you need income. Income is the money we earn from our jobs or side hustles, and to build wealth, we have to turn our income into assets. That’s one of the basic principles of capitalism.
Ok then: my income comes from my business Bravely Go. I work for myself full time and have since 2019.
I will not lie, building this business has been weird, hard, and easy all at different times! The beginning felt very hard, then there was a period of two years that felt easy and consistent, and now I’m back to hard. That’s the ride of entrepreneurship baby!
My business revenue passed $100,000 for the first time in 2020, and here is an article all about how I got it to that point.
It’s important to note: revenue is not equal to income. Revenue is the total amount earned before taxes and business costs, like paying for this website or paying my accountant.
Getting your income set is crucial to wealth building. And increasing your income over time is also important, since as well are all well aware, life gets more expensive over time. There’s inflation, corporate gouging, kids, huses, medical stuff… the list goes on and on!
Step 2: Cash
The next step is to set up your emergency fund. An emergency fund is money in a high yield savings account that is set aside for “oh shit” moments. You know what I mean: car accidents, unexpected medical bills, your cat eating something weird.
This is a must for anyone, but it’s really crucial for people who want to build serious wealth. Why? Without an emergency fund, when an emergency happens, you will either go into debt or have to sell an asset. Selling assets is not generally the path to long term wealth, and debt is a pain in the ass for anyone. (Here’s an article about how to pay off debt!)
Aim for 4 months of your bare living expenses in a high yield savings account. Add up basic things like rent, childcare, utilities, transportation, groceries, and health needs. Leave out things like Netflix, restaurants, or concerts. Multiply your number by 4 and that’s how much you should keep in your emergency fund!
For Latinos, I’d say an emergency fund is SUPER DUPER important. For so many of us, our money is tied into our family. Some of us support our parents, some of us support siblings, and the family expectations can be different from the white American family model.
So having a pile of cash on hand for those disaster moments is a little padding for our communities to be able to support ourselves and our loved ones. Here are a few tips to lower spending and increase saving.
Step 3: Investments
Time for the big guns. In my quest to become a Latina Millionaire I have become obsessed with investing.
And because I’m a sustainability nerd, I have become obsessed with sustainable investing. I personally don’t invest in fossil fuels because they are also single-handedly responsible for the climate crisis we’re in. We have a guide to sustainable investing right here.
But like…I’m trying to get this money. So what’s my investment strategy?
1- Prioritize retirement accounts. I always max out my IRA in the first quarter of the year. That’s partly because earlier in the year is when my business is busiest but it’s also because it allows me the peace of mind to know that every year, I am putting away money for future me no matter what.
2- Have a financial independence timeline. Part of my quest in becoming a Latina millionaire is that I want to achieve financial independence. Meaning, I want to be able to step away from work and know that I have enough money to take care of myself.
Part of my wealth building plan is having a timeline to that goal. Right now, that age is 42. This plan has been in the works since I first started investing at age 27. That’s a 15 year timeline to become a millionaire, which is pretty fast. But I think it’s doable because…
3- Be very aggressive about investing amounts and allocation. I am an aggressive investor. Meaning, when it comes to “spending” my income, I don’t do a lot of shopping on things like clothes, concerts, or home decor, and instead I invest that money.
It’s not a choice a lot of people want to make and that’s ok! This is just my path to $1 million. I want to get there quickly, and I know that being an aggressive investor is the easiest way to do it that also aligns with my values.
Step 4: Real Estate
This is the final boss of my plan to become a Latina millionaire, because real estate is expensive to buy, expensive to maintain, and expensive to sell.
I’m not a huge lover of real estate as a wealth building tool. I know many people are, I’m just not. However, I do want to buy a piece of property that has both land and a house on it as a part of my journey to financial independence.
Why? Because as I mentioned above, I need to have a home for family members to be able to live in in the future. It’s just a truth to my family’s financial life. As my friend Berna would say, I’m the Alpha Daughter, and that means having property that can house people.
I also want to have a piece of property for some of my hobbies. I want to garden, I want Tbone to have a tiny house that can act as his music space. I’m a homebody and I’d like to have a home that I can use exactly as I please, without a landlord or HOA breathing down my back.
A house is a part of my financial plan, but it’s not a huge part. When I do my projections, most of my wealth will be in the stock market. And that’s simply due to the numbers of today’s housing market and my own personal belief that housing shouldn’t be commodified.
And that’s the plan to become a Latina millionaire! What do you think? I’d love your feedback, your questions, give it to me in the comments!