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Latinos seek to be part of the democratization of Wall St

Latinos risk being left behind as the stock market opens up to more accessible trading by the public. But these Latinos learned how to become financially literate and secure their longterm future. (Leer en español)
Publicado 2 Ene 2022 – 09:43 AM EST | Actualizado 2 Ene 2022 – 10:14 AM EST
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David Maris / Univision

Gabriela Berrospi thought she had made it when she got her first media job after attending New York University on a scholarship.

She started saving and took out a small retirement account. But hanging out with friends working on Wall St made her realize something was missing.

“They were young, they were making money. But they had no ceiling for their income,” she said.

She recalls sitting at her desk one day looking at her meager paycheck. “I had a breakthrough. ‘You could make so much more. But I’m not going to do if I stay here,’” she thought to herself.

She started looking around and taking courses in stock trading. “It was intensive. There was a lot of homework,” she said.

She vividly remembers her first trade. After hearing SuperBowl talk in the classroom and in her circle of Wall St friends, she invested in Buffalo Wild Wings, a staple diet for fans of American Football. When the stock exploded she cashed in. “It opened my eyes and changed my perspective,” she said.

Her only regret. “I wish I had kept the stock. I believe in the longterm, you make much more money. That’s one thing I’ve learned,” she said.

Berrospi’s story is emblematic of a new wave of Latino entrepreneurs hoping to democratize Wall Street and expand the financial opportunities beyond the traditionally monied class loaded up with mutual funds, pension plans and 401K employee sponsored retirement accounts.

Hispanics excluded

The nation’s 60 million Hispanics are the principal driver of U.S. demographic growth and will soon make up about 30% of the U.S. workforce by 2050, according to the Pew Research Center. But 47 percent of Hispanics Latinos reported not being investors, compared to 29 percent of whites in one recent study by the FINRA Investor Education Foundation and NORC at the University of Chicago. The study found “a fundamental lack of investment knowledge” among many non-investors.

“We don’t see African-American or Hispanic/Latino households or individuals accessing capital markets to the same degree we see Whites and Asian households,” said Angela Fontes, with the University of Chicago, who studies household finance and investor decision-making. She put that down to various factors, but principally “it’s an issue of resources.”

But there are signs she said that industry is beginning to address it. “There is a really great market for them where there’s a potential for folks to invest. But it’s kind of untapped,” she said.

A growing number of Hispanics are participating in the financial industry as a way to build wealth outside the traditional job market and banking system, which has historically discriminated against them.

While some financial experts caution about the risks involved in diving unprepared into the often volatile financial markets and hoping for instant rewards, Berrospi and others say it should be open to all, given the proper guidance and preparation.

“You don't have to wait until you have all this crazy money to invest. If you just have a couple of hundred [dollars], maybe you can just buy a share or two shares. It's really not about buying one share. It's about what it does to your mentality. You don't have to just spend that money, you can invest it, and then you can see what happens to that money with time, and then that'll give you more confidence to put a little more next time and so on,” she said

Learning from struggle

Rather than become a professional stock trader, Berrospi decided she wanted to teach other the lessons she had learned.

She was haunted by the memory of watching her family struggle after her father invested everything in a seafood business only to see it all go after he was swindled by his partner. “That’s when I found my purpose, my mission,” she said. “I didn’t want other people to go through that,” she added.

Her father, a college educated man, ended up emigrating to the United States looking for work to support the family.

“I realized, nobody is teaching the basics, saving for retirement, how to prepare for a recession, not to have all your eggs in the same basket,” he said.

She also noticed that none of her friends on Wall St, or her classmates in her trading courses, were Hispanics. “I decided I was going to do something for Latinos. We are being statistically left behind,” she said.

Latino Wall Street

In 2019, Berrospi teamed up with her partners, Alan Burak, a Mexican-born hedge-fund manager, and software developer, Tony Delgado, to found her own company: Latino Wall Street.

“The mission is to educate and empower the Latino community to learn about investment and finance, because I know those things are missing in the traditional educational model,” she said.

“And I don't think it's fair that you can pay a fortune in a school like I did and not learn anything about that stuff. You know, it's just not included … they don't know the most basic thing, which is to buy one share,” she added.

The arrival of Bitcoin

Wilberto Rodriguez, 37, has no college degree and instead took an automotive vocational course after graduating high school in Massachusetts. But that didn’t stop him becoming a successful in the financial world.

“I think through struggle comes success. You have to fail. I am no longer fearful of failing,” he said.
His Puerto Rican father was in the military and police and is now retired on a pension. His parents are separated and his mother struggles to make ends meet.

Rodriguez grew up partly in Puerto Rico playing cuatro in a Pentecostal church band with his cousins, all self-taught musicians. But after educating himself with the help of some key mentors he worked his way into the financial world and in 2013 became an early investor in Bitcoin, watching its value leap from $100 to $20,000 over the next four years.

In 2017 he lost 70% of his Bitcoins in an investment scam and has since set about rebuilding his finances. “You live and learn. I learned never to go all-in,” he said. With Bitcoin now valued around $50,000 Rodriguez would be a multi-millionaire if he hadn’t fallen for the scam.

He worked earning commissions selling insurance and mortgages for a time, before setting up his own healthcare company which now has more than 100 employees.

NFTs

He recently graduated to NFTs (‘Non-Fungible Token), one of the newest and most innovative digital assets, involving units of computer data associated with unique works of art - photos, videos, and audio - which can be bought and sold.

Rodriguez came across the Wall Street Bulls, a community of NFT investors in a series of 10,000 graphic images of icons from the financial world. He bought six in October and has seen them roughly triple in value.


Now he takes time to do his research. “I used to buy car magazines to look at the images. Now I’m a big reader,” he said. Among his favorite books: ‘ Think and Grow Rich,’ the 1937 bestseller by Napoleon Hill, and the 1936 self-improvement classic ‘ How to Win Friends & Influence People’ by Dale Carnegie.

His credits his financial success to his mentors who opened his eyes and steered him on a new path.
“I think of it as exposure. I saw they carried themselves a different way. I realized I had to change if I was going to be like them,” he said.

He considers social media and celebrity-driven pop culture a distraction. “If you only care about celebrities you won’t have time to do other things. Where your attention is, that’s where your focus is,” he said.

His cousins, with whom he is close – they will be performing traditional Puerto Rican classic songs with on Día de Reyes (Jan 6) - used their $700 covid relief checks to buy new cars and TVs, rather than investing it. “Now all the money’s gone,” he lamented.

'Mayo' the pharmacist

Another Wall Street Bull investor, Santiago Gonzalez, a 35-year-old father of three, is a pharmacist by day in Albuquerque, New Mexico. But at night - after his children are in bed – he switches to his alter-ego, ‘Mayo’, to conduct investment research, often reaching out to others in the ‘Bulls’ community for advice. (Some members of the Wall St Bulls use condiments as their nicknames.)

He came across ‘the Bulls’ in October on Instagram. “I loved their take on the financial market and democratization of Wall St. capturing meme culture and poking fun at Wall Street,” he said.

Gonzalez grew up in a lower middle-class household after his parents emigrated from Guadalajara, Mexico. He grew up thinking investments were for older people well into their careers and lucky enough to have disposal income, such as mutual funds and pension plans.

His father, now a retired hospital pharmacist, kept his savings in a 401K account , trusting professionals to invest it wisely.

He recalls growing up believing the same. “It was this ivory tower that you had to have someone else to make it into more money, otherwise you were going to work all your whole life,” he said.

But his thinking has since evolved, realizing there are other way to grow your money. But that had nothing to do with his biology and chemistry degree at the University of New Mexico.

“While my education provides me with a disposable income for trading, what is most valuable for me being successful is having a community that’s behind whatever you are getting involved in,” he said.

The advent of phone apps like retail trading platform Robinhood has made the stock market more accessible to smaller traders, enabling them to bypass brokers.

“You may not have $5,000 but you can download Robinhood and start with $500. You can have a 20% gain. You can still grow your account in a meaningful way,” said Gonzalez. “There’s totally no barrier to entry to this,” he added, pointing out that even expensive stocks like Tesla, or digital currencies like Bitcoin and Ethereum, can be bought in smaller, fractional “slices.”

Gonzalez said he knew nothing about trading until he joined Wall St Bulls. He now has six Bulls, and estimates they have already risen about 35% in value.

The group has 17,500 members, not all NFT owners, who freely exchange investment advice and stock tips. One of the group’s mottos is WAMI (We’re all going to make it together). “If you have a bad day they help you out with a tip. It’s all very much about helping people,” he added.

“They taught me how to set up a cryptocurrency wallet. They walked me through the entire process,” he said.
Since then Gonzalez has learned how to look at indicators and market health. “We believe we should be able to do what the big banks and brokerages are doing,” he said.

Now he’s planning for his family’s long term financial health. “I have seen the value of a road map. These Bulls are going to be my kid’s inheritance. They are only going to increase in value exponentially,” he said.

Covid boom

Berrospi, now married to one of her partners, Delgado, is pregnant with her first child. They moved the company to Puerto Rico to take advantage of tax incentives.

When covid hit the demand for Latino Wall Street’s online courses exploded. The company offers classes for as low as $99 a month as well as a free weekly ‘Master Class.’

“We teach them to do fundamental analysis. If you study the stock before you come in you are going to have the statistics in your favor,” said Berrospi.

Like many experts she is wary of the ‘casino culture’ that has seen many new investors pour their money into risky stocks. She tries to steer people away from a ‘get rich quick’ mentality. “We have so many people interested in enjoying our services for the wrong reasons. We had to educate them that’s not real life. You want to stay long term, forever,” said Berrospi.

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In its first two years the company has enrolled 120,000 customers in its courses, paying between $450 and $900. Berrospi hopes to launch an app early in 2022 as well as an NFT, with the goal of taking the company public in the future.

In July the company staged a live event in Times Square with celebrities like Gabriel Soto the Mexican telenovela actor.

“It's really been life changing. We’ve built a very profitable business. But it’s really about being able to change people's lives and have them make money because we wouldn't be successful if people are losing money, and not learning,” she said.

“The reason why we succeeded and had this exponential growth is because people are getting results. They're learning, they're getting results,” she added.

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