Like a non-insignificant portion of New Yorkers, I'm a first-generation immigrant of the United States. When I was 16 my parents decided to move from Italy to the U.S., so my mother, my sister and I moved to New York in December 2009. Due to visa regulations, my dad remained behind, to support us financially. Thankfully, after 2 years he was able to open a business in the U.S. and he moved here with us.
Seeing my parents take this gigantic leap across continents was striking: they risked it all to give my sister and I a better future. It was really scary and we definitely were afraid we'd run out of money, but we ended up never getting close to it. How much planning did that take? What kind of safety nets did my parents build to make sure we would be safe from financial dismay?
Looking for answers, I chatted with my dad about finance and banking.
I first got the basics down:
He told me that everything he knew about banks and financial services he had learned through hiring a financial advisor for his business. That's why he's with Bank of America in the first place, it makes it easy to log into his business and personal accounts quickly. When I asked him why he chose Bank of America he could not answer. He just said: "My advisor told me it's good" and I asked: "What about it was good?" and all he said, again: "He just told me it's good." Noted.
He does think that Bank of America could do better: understanding whether automatic payments for his credit cards are set up is confusing and he thinks TD Bank has a clearer, simpler and cleaner UX interface for their website. He's also unsatisfied with BoA's merchant account – it's too expensive.
Overall though, he only cares about very simple transactions: withdrawing, sending money, depositing money, paying bills. Everything else gets handled by his business' financial advisor. Or by his partner, who works in finance. He doesn't use any mobile banking apps, because his phone is set up with an Italian Apple Store account, so he cannot download most American apps.
The more I talked to my dad, who as usual sounded really in a rush, the more I realized anything he did related to finance was the bare minimum. He is obviously very careful at saving, every month, but he just uses a checkings account and a shared savings account with his partner. He told me she handles everything about savings right now. He hasn't even had the time to set up a retirement plan, which makes him really anxious.
So I asked him, "What do you know about financial services and the finance world in the U.S.?" he said "Nothing almost. It's too confusing and different from Italy. Everything is handled by my advisor or my partner. I'm too old, too busy to even go to a workshop about this stuff if they offered it."
I asked my dad one last question about the 2008 crisis and whether it affected him. He told me he wasn't really affected, because we were still in Italy and we did not have any investments. But then I remembered that moments earlier he told me that having another financial crisis was one of his biggest fears, perhaps it's because he is now a business owner.
All in all, my dad's goals are simple: being careful at saving, planning for retirement and live a decent remainder of his life. Sounds fair.
After talking to him about finance for the first time, I realized my dad doesn't actually know much about the American finance world. Not to put him down in any way, I actually think it's really impressive that he's been able to get to where he is today after starting from scratch 4 years ago. But how could he now know a lot about finance after working for so many years, after having paid off a mortgage, after moving countries, after owning multiple businesses?
People who are in the second half of their lives don't have time for any crap. They have very few simple goals: they want to make sure they don't run out of money. At least for people who are in the middle-class, they don't care about sugar coating, or garnish, or perfect services. They just need something that works for the very simple goals they have. That's why often they rely on financial advisors: it lets them delegate tasks that would take them a long time to understand and perhaps not do as well. It's too time-consuming, too confusing. It's easier to let someone else do it so they have time to worry about the things that matter most to them: family.
I also realized that for someone like my dad, someone who does not speak English too well, there are not many resources in place to learn about finance. Everything he knows about it today, he learned from the advisors his company had, or from his partner who works in finance. It seems to be a recurring pattern: older generations in the U.S. don't know much about finance, and they do not know where to look for resources, or they can't bother because of time and brain energy required. That leads to most people who are retired or in the process of retirement to leave their money rotting in savings accounts, because they simply do not know their options. Or they rely as much as they can on bank personnel and, if they can afford it, on financial advisors.