Affluent Latinos: Living the dream and living it up

In this two-part series, I'll look at the buying power of Latinos and the different segments of this evolving market to debunk common myths

With a buying power currently estimated at $1.3 trillion, and an exponential population growth that continues to drive stronger representation for its community within the U.S. consumer base, Latinos have become an undeniable force.

Realizing its potential, brands and marketers have become increasingly adept at tapping into different segments of this sophisticated, ever-evolving market. There are still, however, fascinating trends (and opportunities) that might be hiding behind a few myths that should be debunked.

Myth #1 – Latinos are of meager means

Underestimating the reach of the Latino wallet, and focusing marketing budgets away from this customer segment when it comes to high-end products or services, might be a costly oversight.

About 6.7 million Latinos in the U.S. have reached the “affluent” mark. With annual earnings of $100,000 or greater, this group represents about 12.2 percent of this community’s total and is contributing to 40 percent of the entire annual consumer spend of $1.3 trillion.  Even more impressive is the fact that, according to Ad Age, the affluent Latino population is growing at a faster rate than its non-Latino (and much older) non-Hispanic counterpart.  In only one decade, Hispanics earning ≥ $100,000/year grew 221 percent as compared to 87 percent for total U.S. households with incomes ≥ $100,000/year. I think there are also some other stats with regards to $500K+, etc.

Where is this trend going? Up.

Living the dream. Well.  

A study by the United States Hispanic Chamber of Commerce and Geoscape, concluded that Latinos who own their own businesses are 3X more likely to have household incomes of $150,000+ than the rest. [1] With Latino-owned businesses growing 15X the national rate, and with their revenue jumping 88 percent in under a decade, Latino buying power (and the community’s overall financial clout) can only be expected to continue to rise.[2]

More education = More money  

More education usually translates into better jobs and higher salaries. If this concept holds true, the buying-power forecast for this group looks promising from this angle too- according to the Pew Research Center, “In 2013, 2.2 million Hispanics were enrolled in college, up from 728,000 in 1993 – a 201 percent increase. By comparison, college enrollment increased by 78 percent among blacks and 14 percent among whites over the same time period. Today, Hispanics are the largest minority group on U.S. college campuses.”

Luxury imports

Adding to this segment’s galloping growth is the influx of foreign-born rich newcomers. The violence, insecurity, financial and political instability in Latin America, have driven wealthy immigrants north.  In Dallas for example, according to an article in Time, the surge of immigrants on EB-5-Visas has poured $45 million into the area since 2010: “The visas are for sale, though the price is steep – creating 10 jobs and investing a cool million, or, if the candidate chooses to put his or her money in a high-unemployment area, a bargain $500,000.”

A 2012 article in The Dallas Morning News caught up to this wealthy-migrant exodus early on, “Call them migrantes fresas — high-end migrants — a phrase coined by some of the new arrivals and their hosts to separate them from previous waves of immigrants from Mexico”[3]

A similar phenomenon is taking place in Florida where wealthy Latin Americans are looking for a place to invest their money.   An NBC news report highlights that “..,nearly 30 percent of international real-estate transactions in Florida are made by Latin Americans. Venezuelans make up the largest group of buyers at 14 percent, followed by Argentinians and Brazilians, each at 11 percent. Colombians account for 8 percent and Mexicans for 5 percent.”  According to the same story, the multi-million dollar purchases made by Latin Americans have a competitive advantage compared to others: they are made in cash!

To read part-two of this series click here.

[1] Geoscape and the United States Hispanic Chamber of Commerce,Hispanic Businesses & Entrepreneurs Drive Growth in the New Economy”, 2013
[2]Geoscape and the United States Hispanic Chamber of Commerce,  “Hispanic Businesses & Entrepreneurs Drive Growth in the New Economy, Third Annual Report”, 2015
[3] Corchado, A. “High-End Migrants from Mexico Lead New Wave to Dallas Area”, The Dallas Morning News, November 25, 2012