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.
