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This is part one of a two-part series. Part two will appear next week.
I’m one of the 45 million foreign-born individuals who now call the U.S. home. I moved to this country over 25 years ago to pursue a degree in computer science. I knew enough about budgeting, but struggled with financial decisions from day one, as this was a completely new system to me.
There were simple questions, ranging from banking to credit history to car loans. Like any newly arrived immigrant, I relied on the network of friends that I was making (mainly fellow immigrants), to figure things out.
A big challenge revolved around the language, specifically the financial terminology, used in the U.S. versus my home country.
After my first degree, I got a job in the high-tech space on a work visa. I moved into a higher income bracket, but it raised more personal finance questions as practiced in the U.S.
My group of first-generation Americans are typically mass affluent based on their income. The other characteristics common to this population includes those who are:
1. Most likely to be the first in their family to migrate to the U.S.
2. Likely to have come to the U.S.
a. to pursue higher education and will most likely be in the STEM space (Sciences, Technology, Engineering, Math)
b. or they came to work in one of the above fields under different work visas, like H-1B, L-1, E-3, TN etc.
3. Making high income (six figures). If married, most likely only one partner is working, while the rest of the family is on dependent visas.
4. Often in the tech space and have equity compensation as part of their pay structure.
5. Likely to pursue permanent residency and possibly citizenship, but it does not stop them from wanting to have some type of investments in their home countries.
6. Potentially stuck in immigration limbo (for years, depending on their country of origin), where they have applied to get a green card, but their priority date is not current.
When this group starts working, a common theme revolves around the implications of a non-immigrant visa for things like stock options, health insurance or assets overseas.
In addition, we need to know what needs to change if we change our status to become a permanent resident. On average a million immigrants become permanent residents every year. It’s question that impacts a lot of people.
Sadly, there is sense of shame associated with not knowing how personal finances work. This is especially painful when one assumes that this should be common knowledge, or it’s something that should have been taught in school.
Immigrants are trying to fit in, and anything that magnifies the difference between them and native-born individuals is likely to affect them negatively. The internet is helping narrow this gap, but it increases the confusion from information overload; it is specific to one’s individual situation.
It’s not easy to figure out who is a trusted resource. Stories like this gentleman who worked with a lot of folks from India but ended up defrauding them magnify the challenges foreign-born families face finding the right people to help them.
My spouse (an immigrant from a different country) and I have visited different advisors. Every one of those visits left us very dissatisfied.
None of the advisors ever talked to us about our background and how that would impact our financial plan, especially when we were still on work visas.
In retrospect, some of the issues that were important to us were never addressed: our long-term plan with respect to retirement (we probably have a few more options than native-born families), college funding (attending school outside the US is a possibility for our kids), overseas guardianship, and non-US accounts/investments and their tax implications.
I needed help with the implications of being new in the U.S. with cultural and financial ties to my native homeland, and how to navigate that as our family grows and we become more and more integrated into the U.S. financial landscape.
In the next article, I’ll address the actual cultural and technical issues to keep in mind to have a successful relationship with these clients.
Jane Mepham is the founder at Elgon Financial Advisors, a registered investment advisor in the state of Texas. She started the firm to work with foreign-born individuals after working at a well-known national planning firm. Prior to the financial planning career, she spent over 17 years working in the high-tech field. She holds a master’s degree in information technology and a bachelor’s degree in computer science in addition to being a CFP candidate.
Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.
