As the son of two hard-working immigrants, I grew up watching my parents manage their limited resources to make sure that we stayed afloat during difficult moments. They were really good at managing our finances, but their strategies didn’t go beyond basic budgeting to meet our immediate needs.

These childhood experiences planted the seed for my interest in the financial industry. Though I initially pursued college to uplift my family, that goal evolved as I saw the gap in financial literacy across different income levels when I was working as a bank teller. I saw how my community lacked the knowledge and resources to stay afloat, and my dream expanded to making an impact in my broader community.

After I entered the financial planning profession, I realized that there was a significant gap in accessibility to financial planning within my community. That led me to start my own firm, where I could make an impact by working with my demographic and other first-generation wealth builders.

Key Considerations for Planning with First-generation Wealth Builders

I typically work with first- and second-generation wealth builders who are in the first decade of their careers. They are earning a decent income, but may not have enough assets for traditionally priced financial planning services. Here are a few things I’ve learned about serving this often overlooked demographic.

Be Prepared to Provide More Extensive Financial Education

It’s important to gauge a new client’s sense of financial literacy. Many individuals in this segment haven’t had exposure to concepts like FDIC insurance or high-yield savings accounts. In addition, they may have misconceptions about money and financial planning. Common misconceptions that I see include the belief that all forms of credit are bad and that investing is a form of gambling.

I take the time to break down complex financial concepts and explain the reasoning behind my recommendations clearly and transparently. This both increases their understanding and enables them to actively participate in shaping their financial future. My goal is to equip them with the knowledge they need to navigate the complex financial landscape and feel confident in their decisions.

Foster the Confidence Needed to Set Goals

Many first-generation wealth builders have been in a scarcity mindset for a long time. Setting goals and dreaming beyond their immediate needs can seem like a distant concept. My approach to planning aims to break through these barriers by providing stability and fostering the confidence to dream big.  I emphasize values discussions to map out where they want to go and help them realize their potential for pursuing meaningful goals.

Be Mindful of Overly Conservative or Overspending Tendencies

Individuals from lower-income households often grapple with either a scarcity mentality or overspending tendencies. On one end of the spectrum, there’s a fear of losing hard-earned money, leading to hoarding and reluctance to spend, while on the other end, there’s a drive to compensate for childhood desires through excessive spending. As a financial planner, it’s essential to help them navigate the delicate balance between enjoying their present lives and securing their financial futures.

Meet Clients Where They Are

When it comes to serving first-generation wealth builders, it’s crucial to meet your clients where they are. Clients who are unfamiliar with the intricacies of financial planning may be working on navigating and understanding their financial and money mindsets. Take the time to understand their unique situations, especially if you haven’t worked extensively with first-generation or minority clients before.

Help Build Habits and Confidence Over Time

Avoid pushing clients to save beyond their comfort level. Instead, focus on taking small steps that can compound over time, leading to progress that doesn’t overwhelm them. Encouraging clients to take measured steps, such as gradually contributing to retirement plans or slowly investing available funds over time, can also help prevent knee-jerk reactions to market fluctuations.

Making a Broader Impact

There’s a common theme in my community where you aren’t just supporting yourself and your children, but also your parents or your siblings. By making it my mission to provide real financial planning to first-generation wealth builders, I’m not just impacting one person—I’m indirectly impacting many other lives in the community.

If you’re looking to make a broader impact—whether with first-generation wealth builders or another underserved audience—my advice is to drive your work with passion and intention. We all need an income, but your passion will be what drives your path forward in this industry.

DISCLAIMER: The eMoney Advisor Blog is meant as an educational and informative resource for financial professionals and individuals alike. It is not meant to be, and should not be taken as financial, legal, tax or other professional advice. Those seeking professional advice may do so by consulting with a professional advisor. eMoney Advisor will not be liable for any actions you may take based on the content of this blog.

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