I was born in a refugee camp and immigrated to the US in the 1980s.
While being raised by Vietnamese parents in the US, sometimes I felt split having one foot in Vietnam, one foot in the US. It wasn’t always easy to reconcile both worlds.
One of the ways my husband and I bond is that we’re Vietnamese-Americans and both of our parents were also refugees.
- Related: How I met my husband
Being able to communicate money values together is important as a couple. It’s even more important when you are an immigrant or from a blended culture. Every culture deals with money differently.
Some of you have messaged me that you are curious about the cultural insights I have about finances coming from our immigrant background.
I deliver three important money lessons from across the ocean that I learned as a Vietnamese-American.
In some parts of Vietnam, you can see people living off of $1 a day. They cook using open fire, have dirt floors, and roofs made of corrugated metal.
Some of my relatives still live this way. During Lunar New Year — a holiday that’s so major it’s like Easter, 4th of July, and Christmas all-in-one — I send some money to help improve their living. After all, the only difference between me and my cousins is that their parents stayed in Vietnam, while my parents escaped Vietnam on a tiny wooden fishing boat. My fortune living in the US was not my own, but due to my parents’ hope and bravery.
One year, they used my New Year gift to buy a really nice laptop.
I didn’t think that was how that money was going to be spent. To me, I saw replacing their rugged pots and pilled clothes as a need, and a laptop as a luxury. I am using an old laptop myself, and theirs was even faster than mine!
I understood them better with time.
To them, a laptop meant to them a window to the outside world, something that I take for granted living in the US. Living without an internet is a state of absolute destitute, far more serious than having really old, used things.
After the end of the Vietnam War, the entire country became communist where free speech and communication is limited by the government. However, with access to the internet, the world is at their fingertips. With enough curiosity, hard work, and discipline, they could learn anything. If there is one thing I am very proud of, it’s that Vietnamese people are very resourceful. That’s why even if they are riding water buffalos with no formal education beyond high school, they know how to write to optimize SEO better than I do.
The lesson I learned is to buy what brings you the most happiness. In the US, you may be expected to have nice appliances, a nice car, a nice home. You may want to drive a beater and spend elsewhere and that may be counter-cultural. But don’t look to fulfill others’ expectations, look to your own heart.
One thing that Vietnamese people do really well is cook. My female cousins live together and revolve their lives around meal prep. Food shopping happens daily. They get to the open markets early as most foods are sold out for the day at noon. Then they will spend the rest of the day contributing one dish each to the family dinner.
Eating fresh food from scratch is a way of life in Vietnam because dried or canned foods aren’t as readily marketed and freezers aren’t common in the tropics.
If you are eating delicious pho — no matter where you live — you know that there was no shortcut in making it other than collecting oxtails and other bones to make homemade stock.
In the US, cooking from scratch is a healthy lifestyle choice. You can f you want to, but you don’t have to.
Options like frozen, canned, and pre-packaged foods are available at every grocery store, which make meal planning so much easier. I love using frozen corn instead of shucking husks, for example.
Some of these convenient foods can be healthy, some not so much. The ones that are not good for you are processed ones, although great in a pinch. It becomes a problem is when a “sometimes” food becomes a “daily” food. When you eat processed foods too often, it doesn’t lead to long-term health.
While there are many reasons why all four of my grandparents lived fully into their 90s, it wasn’t because they ate processed foods every day.
The lesson I learned is that money does not buy health. While I live in the US, I have better access to healthcare but I still have to mind what I use to fuel my body.
Intergenerational wealth building is a common strategy in Vietnam. A typical three-generation home setup is parents take care of the grandparents, and grandparents take care of the grandchildren.
In the US, no longer is living all under one roof the only option for a family of three generations to build wealth. We have retirement accounts like 401k, which adds creative options for families of multiple generations to work together. Nobody builds wealth overnight in the stock market, it is done over several generations. Families with three generations who understand compounding and long-term perspective can build some serious, unimaginable wealth together.
And if it’s one thing Vietnamese people do well, it’s getting everyone involved and working together as a unit.
Here is what some Vietnamese-American families do to work together for a Stretch IRA: Parents gift their kids money to fund their retirement accounts while they are in their 20s and 30s. It’s in these early years when their kids need money the most, as they are paying off student loan debt, buying a home, getting married, and starting a family.
When the parents stop working at age 65 1/2, they can no longer contribute to an IRA. Here’s where the magic happens: instead of parents tapping into their IRAs at the age of 65 1/2 to pay for living expenses, the kids gift back the money their parents gave them in their 20s and 30s. They’re essentially paying back a “loan.” Because the IRA is left alone to compound, it will continue to grow exponentially. When the parents die, the money can be passed to the kids through a Stretch IRA.
Let’s say the parents retire at 65 and die at 85. If the IRA has $1 Mil in it at age 65, then if untapped and left to compound for another twenty years, that IRA will have $4 Mil, which can then be passed to the kids. I don’t know about you, but if I can afford to support my parents between age 65 until they die, I rather do that and get $4 Mil (minus taxes), than not do that and get nothing.
Now, let’s forget about supporting the parents until they die. Let’s say the kids only support their parents from the age of 65 to 70. I can model the same situation as before, that the IRA has $1 Mil in it at age 65. Left untapped and to compound for another five years, that IRA will have $1.5 Mil. That’s an extra $500,000 for the parents to live off of just for leaving the IRA alone for five years.
Of course, this collaboration only works if parents teach their kids the power of compounding and to have a long-term mindset, and if everybody has a solid relationship.
The lesson I learned is to bequeath education to the younger generation about saving money, investing, compounding, and working towards long-term goals. Education truly enables them to continue to build wealth for several generations. If family dynamics is right, and the ability to form a symbiotic relationship is possible, the family can be a mean money-making machine.