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Financial Empowerment for AANHPI Communities: Breaking Down the Model Minority Myth

By Staff
  | May 16, 2024

Pacific Islander Family showing a phone to a baby while smiling

This May, Self-Help is honoring Asian American, Native Hawaiian, and Pacific Islander (AANHPI) Heritage Month!

To achieve our mission of economic opportunity for all, we are actively working to close the racial wealth gap. But too often, AANHPI communities are left out of conversations about economic inequality and financial empowerment.

In this post, we explore some of the dynamics that affect the financial well-being of AANHPI people and share some financial tips for people in the AANHPI community.


What is the model minority myth?

The model minority myth is the (incorrect) belief that all Asian Americans are educated, wealthy, and successful and that they serve as an ideal example of what a marginalized person can accomplish in our society with hard work.

This belief is often based in stereotypes that may seem complimentary toward Asian Americans at first, but actually work to erase a broad range of AANHPI experiences and pit people of color against each other by minimizing the role that racism plays in the struggles of marginalized groups.



The truth about AANHPI financial wellbeing

a woman comforting another woman

The model minority myth has created a perception that Asian Americans are financially well-off, which is reinforced by statistics from the U.S. Census. While these statistics can be great for understanding general trends, they often lack context. They also don’t account for the extraordinary diversity within the AANHPI community, which encompasses up to 53 different countries of origin and includes a vast range of cultures and experiences.

Let’s consider a few facts:

  • Asian Americans experience the greatest income inequality of any racial group in the U.S. By 2017, Asian Americans in the top 10% of the income distribution earned 10.7 times more than Asian Americans in the bottom 10%,1 most likely due to variations in immigrant status and education.
  • Asian Americans have the highest proportion of immigrants of any ethnic group in the U.S.2 Immigrants are more likely to earn less, more likely to live in overcrowded households, and less likely to respond to surveys (like the U.S. Census). They also have no credit upon arrival, which makes ownership significantly more challenging.
  • Asian Americans are the least likely to be promoted into management. This is true across industries - even in the tech industry, where Asian Americans are most likely to be hired (30%), they are the least likely to be promoted into senior leadership (15%).3 This barrier to advancement in the workplace is referred to as the “bamboo ceiling,” which is believed to exist due to harmful biases that Asian Americans don’t make good leaders.
  • If we appropriately define wealth, Asian American communities are at a disadvantage. According to a recent study from the Federal Reserve Bank of St. Louis, when class is evaluated in terms of wealth—savings and assets minus debts—rather than just income, Asian families hold only 70 cents to every White dollar of wealth.4

The prevalence of the model minority myth erases these realities that many AANHPI communities face and has resulted in a huge lack of research, support, and resources. On top of that, some Asian Americans have reported that biases around financial wellness have prevented them from getting access to the resources that are available.5



Tips to financially empower AANHPI communities

two asian people smiling at each other in a park

If you’re a part of the AANNHPI community, it can feel daunting to be faced with these dynamics. But there are things you can do to take control of your finances and achieve your goals. We’ve put together a list of tips:

  1. Work with a credit union (CU) and/or community development financial institution (CDFI) – Many AANHPI communities have a very understandable distrust of banks. CUs are a great alternative to traditional banks, since they are member-owned, so you have a say in how they operate. They also offer a more personalized experience, and CDFIs like Self-Help are dedicated to supporting low-wealth communities and advancing racial equity by providing more accessible financial opportunities.
  2. Take advantage of financial coaches. Many AANHPI communities are raised with a do-it-yourself mentality when it comes to managing their finances. While educating ourselves is important, there are many CUs that provide financial coaching services to members without an additional cost. At Self-Help, we have a growing number of financial coaches who are ready to guide members in a wide variety of financial circumstances to help you build credit scores, manage student loan debt, understand the homebuying process, and more.
  3. Make use of free financial capability resources. If you're not comfortable with the idea of meeting with a financial coach, consider taking advantage of the various courses and other resources that many CUs provide to members, which allow you to explore on your own and feel more confident in your financial decisions.
  4. Consider a credit-building or immigration loan. A credit-builder loan is a specific type of loan meant to help borrowers build credit. The money is held in a secure account, where it accumulates savings interest, so not only are you building credit, but you are also earning dividends in the process. For immigrants looking to cover application fees or get a loved one out of immigration detention, there are options that can support you financially through these processes while also helping you build credit.
  5. Look into investing. In many AANHPI cultures, there is a tendency to be risk-averse when it comes to investing. Many of us may feel like investing in a “sure thing” is the best way to go, but it’s important to diversify your investments to allow your money to grow. Often, the best investments take a little risk and a lot of time - patience is key! Remember, there are resources that can help you make informed decisions.

While the model minority myth has masked the very real financial challenges faced by AANHPI communities, we can work to understand the nuances around income inequality, immigrant status, and workplace discrimination to create better support for AANHPI communities. Utilizing resources like credit unions, financial coaching & resources, loans, and responsible investing strategies can help AANHPI communities build wealth and achieve financial security.

This Asian American, Native Hawaiian, and Pacific Islander Heritage Month, let's commit to breaking down the model minority myth and creating more inclusive financial systems that celebrate the diversity of AANHPI experiences to provide equitable opportunities for all.







1 Pew Research Center, "Income Inequality in the U.S. Is Rising Most Rapidly Among Asians," July 12, 2018. 
2 Jingnan Huo, "6 Charts That Dismantle The Trope Of Asian Americans As A Model Minority," NPR, May 25, 2021. 
3 Jackson Lu, "Lessons from the Bamboo Ceiling," Observer, June 28, 2021. 
4 Ray Boshara et al., "What Wealth Gap? An Introduction," Federal Reserve Bank of St. Louis, February 2015. 
5 Pew Research Center, "The Hardships and Dreams of Asian Americans Living in Poverty," March 27, 2024. 


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