Financial role models help young people learn about money and make good financial decisions. They can be a big help in encouraging people to do things like invest, save for retirement, and understand financial risk.
But having someone to look up to and learn from isn't the whole story. Having a relatable financial role model can help young people learn and internalize financial lessons.
To find out more about this idea, The Motley Fool surveyed 2,000 Americans about whether they had a financial role model when they were growing up, whether that role model was relatable (i.e., shared a racial or ethnic group, ability status, gender, sexual orientation, or other social identity), and how that affected respondents' financial views.
Survey results showed that less than 50% of Americans had a financial role model growing up, and less than a third had a role model they felt was relatable. Americans belonging to underrepresented groups were even less likely to have a relatable financial role model.
As part of the Investors Like Me series, The Motley Fool is highlighting the importance of relatable financial role models, particularly for underrepresented groups, as well as some investors who could serve as inspiration for others.
Key findings
- 45% of white Americans had a relatable financial role model, the highest percentage of any racial or other group.
- 60% of Americans who didn't have a financial role model growing up say having one would've made them more likely to invest.
- 58% of Americans who had a relatable financial role model owned stocks, compared to 54% of those with an unrelatable role model and half of those with no role model.
- Among some underrepresented groups, respondents that had a relatable financial role model were more likely to trust the financial industry and stock market.
- Not having enough money was the top reason that non-investors haven't started investing (27%), but not knowing how to invest was a close second (21%).
- Investors who grew up talking to their parents about money were generally more likely to have a retirement account and feel like they're on track with their investing goals
How The Motley Fool chose the categories used in this study
The racial and ethnic categories used in this study (Arab, Asian, Black, Hispanic, Latino, multiracial, other, and white) were taken from the demographics used by our survey provider, Pollfish.
We also asked each respondent if they identify as part of the LGBTQ+ community, as well as if they identify as differently abled or disabled.
Underrepresented Americans are less likely to have a relatable financial role model than white Americans
Members of underrepresented groups are less likely to have a financial role model -- and less likely to have a relatable financial role model -- in their youth than white Americans.
(Editor's note: In the survey, a financial role model was defined as "someone you looked up to and learned about finances from." A relatable financial role model "might be someone of the same race, ethnicity, gender identity, sexual orientation, ability, or other social identity group as you." For ease of reading, we'll call role models either "relatable" or "unrelatable.")
While 45% of white Americans had a relatable financial role model, about one-third of respondents among most underrepresented groups reported having a relatable financial role model growing up.
Arab respondents were most likely to have a financial role model among all groups, with white respondents a close second (56% and 53%, respectively).
Notably, LGBTQ+ respondents and differently abled respondents were more likely to have a relatable financial role model than non-LGBTQ+ and not differently abled respondents.
Group | Percent of respondents that had a financial role model growing up | Percent of respondents that had a relatable financial role model growing up |
|---|---|---|
Arab | 56% | 32% |
Asian | 44% | 29% |
Black | 48% | 33% |
Hispanic | 33% | 26% |
Latino | 45% | 29% |
Multiracial | 48% | 32% |
Other | 42% | 27% |
White | 53% | 45% |
LGBTQ+ | 51% | 34% |
Non-LGBTQ+ | 45% | 31% |
Differently Abled | 50% | 33% |
Not differently abled | 46% | 32% |
All respondents | 47% | 32% |
Having a relatable financial role model may foster investing
Investing is a pillar of long-term financial success, but many Americans in underrepresented groups didn't have a relatable financial role model growing up to steer them toward investing.
Among respondents who didn't have a relatable financial role model growing up and had no non-retirement investments, 60% said having one would have made them more likely to start investing.
Group | Non-investors who believe a relatable financial role model would have made them more likely to start investing |
|---|---|
Arab | 50% |
Asian | 57% |
Black | 64% |
Hispanic | 71% |
Latino | 53% |
Multiracial | 60% |
Other | 54% |
White | 74% |
LGBTQ+ | 59% |
Non-LGBTQ+ | 61% |
Differently Abled | 56% |
Not differently abled | 63% |
All respondents | 60% |
Across all underrepresented groups, at least half of those surveyed said that they would have been more likely to start investing if they had a relatable financial role model.
More proof that financial role models are crucial to beginning the investment journey is the fact that nearly two-thirds of respondents with a role model learned about investing from them.
Most Americans who had a financial role model own stocks
Among Americans who had a relatable financial role model growing up, 58% own stocks, compared to 54% among those who had an unrelatable financial role model, and 50% who did not have a financial role model.
In some underrepresented groups, having a relatable financial role model corresponds to a higher likelihood of stock ownership.
The correlation between having a relatable financial role model and stock ownership is most pronounced among white Americans. 80% of white Americans who had a relatable financial role model growing up now own stocks, while just 54% of those who didn't have a financial role model own stocks.
Group | Percentage of respondents with no financial role model who own stocks | Percentage of respondents with an unrelatable financial role model who own stocks | Percentage of respondents with a relatable financial role model who own stocks |
|---|---|---|---|
Arab | 45% | 53% | 52% |
Asian | 50% | 57% | 63% |
Black | 59% | 50% | 54% |
Hispanic | 45% | 34% | 32% |
Latino | 52% | 55% | 54% |
Multiracial | 50% | 52% | 52% |
Other | 47% | 43% | 46% |
White | 54% | 74% | 80% |
LGBTQ+ | 51% | 56% | 60% |
Non-LGBTQ+ | 50% | 54% | 56% |
Differently Abled | 49% | 56% | 60% |
Not differently abled | 51% | 54% | 56% |
All respondents | 50% | 54% | 58% |
It's worth noting that white Americans hold 90% of all stocks and are likely to have a higher-value portfolio than underrepresented groups.
Among white Americans surveyed, 65% own an investment outside of a retirement fund. By comparison, around 50% of respondents in underrepresented groups reported owning an investment outside of a retirement fund (Hispanic Americans being a notable exception with 41%).
For some underrepresented groups, having a relatable financial role model correlates with more trust in the financial industry and stock market
Arab, Asian, Hispanic, Latino, LGBTQ+, and differently abled respondents with relatable financial role models were more likely to trust the financial industry than members of those groups who didn't have a financial role model growing up.
Percentage that trusts or somewhat trusts the financial industry
Group | With no financial role model | With an unrelatable financial role model | With a relatable financial role model |
|---|---|---|---|
Arab | 51% | 57% | 53% |
Asian | 62% | 61% | 64% |
Black | 61% | 57% | 61% |
Hispanic | 66% | 55% | 68% |
Latino | 47% | 55% | 59% |
Multiracial | 50% | 51% | 50% |
Other | 48% | 58% | 56% |
White | 56% | 76% | 77% |
LGBTQ+ | 52% | 58% | 60% |
Non-LGBTQ+ | 57% | 61% | 62% |
Differently Abled | 53% | 60% | 63% |
Not differently abled | 57% | 60% | 61% |
All respondents | 55% | 60% | 62% |
Black, Hispanic, LGBTQ+, and differently abled respondents were also more likely to feel that it's safe to keep money in the stock market if they had a relatable financial role model growing up.
Percentage that thinks it is safe or somewhat safe to keep money in the stock market
Group | With no financial role model | With an unrelatable financial role model | With a relatable financial role model |
|---|---|---|---|
Arab | 56% | 53% | 53% |
Asian | 61% | 54% | 57% |
Black | 62% | 59% | 66% |
Hispanic | 59% | 60% | 65% |
Latino | 54% | 48% | 49% |
Multiracial | 48% | 54% | 55% |
Other | 45% | 45% | 49% |
White | 46% | 75% | 78% |
LGBTQ+ | 52% | 51% | 54% |
Non-LGBTQ+ | 55% | 60% | 65% |
Differently Abled | 51% | 54% | 58% |
Not differently abled | 56% | 59% | 62% |
All respondents | 54% | 57% | 61% |
The difference in trust in the financial industry and market based on whether or not a relatable financial role model was present while growing up was the most dramatic among white respondents.
Among those without a financial role model, 46% said it is safe to keep money in the stock market and 56% said they trust the financial industry. Among those with a relatable financial role model, 78% said it is safe to keep money in the stock market and 77% said they trust the financial industry.
Of course, "safe" is a relative term. But Sallie Krawcheck, CEO and co-founder of Ellevest, wishes she would have taken more risk in the past: "My first real experience with the stock market was the crash of 1987, so for many years I anchored in that and thought investing in the stock market was riskier than it has actually been. In fact, the stock market has historically gone up by about 9.8% annually since the 1920s."
Learning these kinds of lessons from financial role models can help people make good investing and other financial decisions earlier in their lives.
Lack of money and understanding are the most cited reasons for not investing across race, ethnicity, sexual orientation, and condition
Lack of money and understanding are the main barriers to investment cited across race, ethnicity, sexual orientation, and condition.
Interestingly, 40% of white respondents said they did not have enough money to invest, more than any other group.
What is the main reason you do not invest?
Group | I'm not interested in investing | Other | I don't know how to invest | I don't have time to invest | I don't have the money to invest | I don't trust the financial industry | I don't feel like the investing world is for me |
|---|---|---|---|---|---|---|---|
Arab | 13% | 18% | 19% | 10% | 15% | 15% | 10% |
Asian | 16% | 9% | 22% | 11% | 22% | 10% | 10% |
Black | 12% | 8% | 22% | 10% | 29% | 12% | 8% |
Hispanic | 8% | 4% | 33% | 10% | 29% | 5% | 12% |
Latino | 7% | 12% | 15% | 6% | 25% | 15% | 19% |
Multiracial | 11% | 7% | 23% | 6% | 34% | 8% | 11% |
Other | 13% | 11% | 18% | 6% | 30% | 10% | 12% |
White | 14% | 2% | 22% | 5% | 40% | 9% | 9% |
LGBTQ+ | 10% | 11% | 19% | 10% | 22% | 15% | 13% |
Non-LGBTQ+ | 13% | 8% | 23% | 7% | 31% | 8% | 10% |
Differently Abled | 11% | 10% | 18% | 8% | 25% | 13% | 14% |
Not differently abled | 13% | 9% | 24% | 8% | 29% | 9% | 9% |
All respondents | 12% | 9% | 21% | 8% | 27% | 10% | 11% |
A sense of not belonging in the investing world is another barrier for certain groups.
Nearly a fifth of Latino respondents cited the feeling that the investing world isn't for them as the main reason they don't invest, a higher percentage than any other group. LGBTQ+ and differently abled respondents also registered relatively high feelings of not belonging in the investing world as the main reason for not investing.
Having a relatable financial role model can help overcome some of these barriers, but not all of them.
There are countless circumstances -- some structural -- that can make setting aside any money for investing seem impossible. "I grew up understanding not only the impact earning money could have but how difficult it was for Black communities to have money and wealth," says Kathryn Finney, founder and CEO of Genius Guild and general partner of the Greenhouse Fund. "I carry that knowledge of how capitalism has been twisted to exploit Black families like mine," she continues (don't miss the other great insights in her Investors Like Me interview).
Figuring out how to invest and what to invest in can seem like a daunting task. Especially for groups that face significant systemic barriers. It's clear that the culture around investing has turned a significant percentage of underrepresented groups away.
It's important to remember that there are easy-to-understand resources for those interested in starting to invest, that you can invest any amount of money no matter how small, and that the investing world is enormous and there's space for people from all walks of life.
Investors who talked regularly with their parents or guardians growing up are more confident that they'll meet their investing goals
Parents and guardians can serve as important role models -- and they were the most cited source of financial knowledge by respondents across nearly every underrepresented group.
Damien Peters, founder of Wealth Noir and entrepreneur-in-residence at Citi Ventures, says money was often a topic of discussion in his household growing up. And although he started his investing journey later than he might have wanted, he mentioned both of his parents and his grandmother in describing his journey to becoming an investor.
Based on findings from this survey, those family discussions may have played a significant role in Peter's financial trajectory.
Respondents who spoke regularly with their parents about money and finances were more likely to have a retirement account and feel as though they'd meet their financial goals than those who didn't.
Yet 23% of respondents say they talked to their parents less than monthly about money or finances growing up, and another 21% said they never talked to their parents about those topics.
Group | Parents/guardians talked about money or finances daily | Parents/guardians talked about money or finances weekly | Parents/guardians talked about money or finances monthly | Parents/guardians talked about money or finances mess than monthly | Parents/guardians never talked about money or finances |
|---|---|---|---|---|---|
Arab | 19% | 20% | 22% | 22% | 16% |
Asian | 16% | 21% | 19% | 23% | 21% |
Black | 17% | 19% | 17% | 26% | 21% |
Hispanic | 12% | 18% | 17% | 26% | 27% |
Latino | 20% | 22% | 29% | 15% | 15% |
Multiracial | 19% | 18% | 16% | 24% | 23% |
Other | 14% | 18% | 19% | 22% | 26% |
White | 19% | 19% | 20% | 23% | 19% |
LGBTQ+ | 19% | 21% | 21% | 21% | 19% |
Non-LGBTQ+ | 16% | 18% | 19% | 24% | 22% |
Differently Abled | 20% | 21% | 21% | 21% | 18% |
Not differently abled | 15% | 18% | 19% | 25% | 23% |
All respondents | 17% | 19% | 19% | 23% | 21% |
The benefits of talking to parents or guardians regularly about money and finances is apparent in the fact that, across nearly all groups, respondents who talked to their parents or guardians regularly felt more confident about meeting their investing goals than those who didn't.
Percent who are confident they will meet their investing goals within their desired timeline
Group | Talked to parents or guardians less than once a month about money and finance | Talked to parents or guardians at least once a month about money and finances | Talked to parents less than once a month about investing | Talked to parents at least once a month about investing |
|---|---|---|---|---|
Arab | 15% | 38% | 20% | 32% |
Asian | 26% | 41% | 27% | 40% |
Black | 31% | 39% | 32% | 38% |
Hispanic | 39% | 36% | 37% | 37% |
Latino | 18% | 43% | 33% | 29% |
Multiracial | 26% | 32% | 32% | 26% |
Other | 23% | 27% | 24% | 26% |
White | 23% | 55% | 25% | 52% |
LGBTQ+ | 18% | 43% | 20% | 39% |
Non-LGBTQ+ | 28% | 38% | 32% | 35% |
Differently Abled | 16% | 40% | 19% | 40% |
Not differently abled | 29% | 39% | 34% | 34% |
All respondents | 24% | 40% | 28% | 36% |
It's important to note that parents and guardians don't have to be investors or have a history of great money moves. "I consider myself lucky in that my parents did not come from money," says Yohei Nakajima, general partner at Untapped Capital. "[T]hey taught me at an early age to manage money carefully while not actually having to worry whether we would have food on the table."
Nakajima's father eventually helped start a venture capital firm, but the point stands -- parents and guardians don't need to be financial experts to encourage good financial habits. (To learn more about Nakajima's past -- and read a great Bruce Lee quote -- be sure to check out his Investors Like Me interview.)
For some underrepresented investors, talking regularly with parents and guardians about money and investing correlates with positive retirement habits
Saving for retirement was the most commonly cited goal for investing among respondents, and those who talked to their parents or guardians regularly were more likely to be invested in a retirement account, regardless of race, ethnicity, sexual orientation, or ability.
Percentage of respondents who own a retirement account
Group | Talked to parents or guardians less than once a month about money and finance | Talked to parents or guardians at least once a month about money and finances | Talked to parents or guardians less than once a month about investing | Talked to parents or guardians at least once a month about investing |
|---|---|---|---|---|
Arab | 86% | 93% | 87% | 92% |
Asian | 76% | 86% | 72% | 90% |
Black | 74% | 80% | 69% | 85% |
Hispanic | 57% | 71% | 56% | 76% |
Latino | 88% | 90% | 78% | 98% |
Multiracial | 72% | 79% | 72% | 80% |
Other | 78% | 78% | 72% | 85% |
White | 63% | 86% | 63% | 91% |
LGBTQ+ | 79% | 89% | 78% | 90% |
Non-LGBTQ+ | 71% | 80% | 68% | 86% |
Differently Abled | 79% | 89% | 78% | 91% |
Not differently abled | 72% | 79% | 67% | 85% |
All respondents | 74% | 84% | 71% | 88% |
The relationship between regular conversations with parents or guardians and feeling on track to retire by age 62 is less clear among underrepresented groups. The positive correlation, however, remained strong among white respondents.
Percentage of respondents that feel like they're on track to retire by age 62
Group | Talked to parents less than once a month about money and finance | Talked to parents at least once a month about money and finances | Talked to parents less than once a month about investing | Talked to parents at least once a month about investing |
|---|---|---|---|---|
Arab | 57% | 51% | 53% | 53% |
Asian | 53% | 53% | 44% | 61% |
Black | 55% | 52% | 52% | 54% |
Hispanic | 39% | 62% | 42% | 63% |
Latino | 58% | 58% | 60% | 57% |
Multiracial | 43% | 50% | 43% | 51% |
Other | 45% | 45% | 38% | 53% |
White | 48% | 69% | 51% | 70% |
LGBTQ+ yes | 55% | 55% | 47% | 61% |
LGBTQ+ no | 47% | 54% | 47% | 55% |
Differently Abled | 47% | 57% | 49% | 56% |
Not differently abled | 51% | 53% | 46% | 58% |
All respondents | 49% | 54% | 47% | 57% |
More frequent conversations with parents about investing and finances correlate to stock ownership and trust in the market and financial industry
In another sign that parents and guardians play a role in shaping their children's relationship to money and investing, respondents who spoke with their parents or guardians at least once a month were more likely to have investments than those who spoke with them less often.
They were also more likely to believe that it's safe to keep money in the stock market and trust the financial industry.
Group | Talked with parents or guardians about investing daily | Talked with parents or guardians about investing weekly | Talked with parents or guardians about investing monthly | Talked with parents or guardians about investing less than monthly | Never talked with parents or guardians about investing |
|---|---|---|---|---|---|
Percent that own investments | 58% | 55% | 56% | 50% | 47% |
Percent that believe it is safe to keep money in the stock market | 57% | 60% | 57% | 54% | 50% |
Percent that trust the financial industry | 60% | 58% | 60% | 57% | 53% |
Finding an investor like you
The importance of financial role models that are relatable, as well as regular conversations with parents or guardians about money, cannot be overstated.
For members of most underrepresented groups, those who had a relatable financial role model are more likely to own investments, have a retirement account, and feel confident about meeting their investment goals.
Respondents reported an even stronger positive relationship when they spoke regularly with their parents about money and finances while growing up.
Challenges remain, however. A sizable percentage of underrepresented groups said they feel as though they don't belong in the investing world. Lack of money to invest and understanding of how to get started investing is a persistent barrier across all groups surveyed. And systemic and structural factors continue to make it difficult for members of underrepresented groups to build up the reserves to invest.
Finding a financial role model that's relatable and having open conversations with parents and guardians about finances aren't silver bullets, but they do lay a foundation for future financial wellbeing.
Methodology
The Motley Fool surveyed 2,000 American adults on January 3, 2022. The respondents were 47.25% male and 52.75% female. Respondents were 14.3% Arab, 14.3% Asian, 14.3% Black, 7.15% Hispanic, 7.15% Latino, 14.25% multiracial, 14.25% identified as "other," and 14.3% white. 35.55% of respondents identified as part of the LGBTQ+ community. 38.75% of respondents identified as differently abled or disabled.
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