Kevyn
Nelson has always fostered the entrepreneurial
spirit. From running his own paper route when he
was still in single digits to opening a recording
studio at the age of 16, the Los Angeles native has
dabbled in various business ventures for many
years.
Today, as a
sought after financial consultant, Nelson runs the
two-year-old CVI Wealth and Asset Management Group
(the sister company to his renowned Worldwide Credit
and Financial Solutions). Based in Manhattan Beach,
CA, Denver, CO and Lawrenceville, GA, CVI serves a
broad range of clients from L.A. to Atlanta,
including a rather large contingency of
entertainers.
With
offices opening in New York and Chicago, CVI
specializes in an array of services, among them
wills and estate planning, investment consulting,
credit restoration and enhancements, business plans,
grant proposals, nonprofit formation, corporation
services, business development, and business
funding. “We have an ongoing roster of about 30-35
people,” Nelson said. “I also have a lot of clients
on a rotating basis, so we average between 400 and
500 clients per year.”
Being a
financial consultant during a recession can’t be
easy, but Nelson has been undaunted. He has learned
how to customize his services to suit the unique
needs of a clientele facing tough economic times.
“If it’s a client that I had three or four years
ago, certain things that were timely then are no
longer the case, so I give them updated
information.” Nelson says drastic changes in the
banking industry have caused him to alter his
strategies somewhat and he has been mindful of the
counsel he dispenses regarding real estate
investments. “If a client doesn’t have a lot of
available liquid assets, I don’t advise real estate
investment right now, but those who have cash can
pick up good deals because of all of the
foreclosures.”
One of the
most challenging areas of Nelson’s work -- and
perhaps the one for which he has the most passion --
is providing services to entertainers, many of whom
may be riding high professionally but suffering
financially. With a client roster that has included
the likes of Ralph Tresvant, TLC, Adina Howard,
Brian Austin Green, and “Moesha’s” Lamont Bentley,
Nelson tries to show entertainers how to make their
money outlast their fame. “When it comes to
entertainment, I focus primarily on independent
labels, artists and executives. I like to work with
indie labels to show them how to use their budgets
to access capital that can be used to sustain their
projects. With artists, I try to get them to
understand the value of their intellectual property
and with industry executives, I teach them where to
put their money, especially nowadays with so many
execs losing jobs and going into consulting.”
In addition
to his hands-on, one-on-one counseling, Nelson also
offers financial words of wisdom to those who may
not be able to afford his $5000 consulting fee. In
his book, “Corporate Credit Unleashed,” available at
Amazon.com, Books-A-Million and Barnes & Noble,
Nelson reveals the secret to building business
credit. In the popular book, Nelson teaches readers
about business credit reporting agencies, ratings,
building a business profile, and the process of
building credit.
Nelson said
he chose to focus so heavily on credit building
because most of his clients have the misconception
that “good credit will allow them to live a
lifestyle that they can’t afford.” He explains,
“The purpose of credit should be to allow yourself
to take advantage of investments. If you’re going
to have an 18 percent interest rate on a credit
card, whatever you’re using that card for should be
bringing you back 20-25 percent. Credit is not to
use so you can live a lifestyle that you can’t
afford. Once your debt ratio is over 40 percent, it
doesn’t matter how high your credit score is --
people will still start denying you.”
Educated at
Southern California University of Professional
Studies, where he earned a BA in Corporate Law and
Entrepreneurial Studies, Nelson says he has serviced
a wide range of clients who have acquired money from
an equally wide range of sources. But Nelson says
his job is to serve his clients, not judge them. “I
know for a fact that there is definitely a need in
the entertainment industry for the services that I
provide,” he says. “There is a need for my services
in a lot of markets and I’m happy to provide them as
long as it’s done the right way.”
Dedicated
and committed to always maintaining a high level of
integrity in business, results-oriented financial
consultant Kevyn Nelson consistently delivers.
Billionaires and millionaires aren’t always white
or oil barons. African Americans can also throw
down when it comes to wealth. To prove it, we have
listed ten of the wealthiest black people in the
world below listed by current estimated worth.
Aliko Dangote – Never heard of him?
Most Americans haven’t. He is a businessman
based in Nigeria and head man for The Dangote
Group, which was founded in 1977 as a small
firm. Since then, it has substantially grown
and earned Dangote himself an estimated worth of
$13.8 billion.
Mike Adenuga – He runs Conoil
Producing, the first Nigerian company to strike
oil in significant quantities during the early
1990s. He is also the owner of the second
largest mobile company in the country. A true
success story, he made his first million at age
26 by selling lace and soft drinks and is now
worth $4.3 billion.
Patrice Tlhopane Motsepe – He is
another African and another billionaire. His
company is called African Rainbow Minerals and
deals in gold, platinum, and other precious
metals. From South Africa, he was born royalty
and became the first black partner in a local
law firm in 1994. His estimated worth is $3.28
billion.
Oprah Winfrey – Her own show and now
her own network took this small town reporter’s
dreams to places girls of her generation never
thought they could go. By investing in herself
and her own show, Oprah was able to create a
wealth of $2.7 billion.
Michael Jackson – His estimated worth
is sketchy. Although he made hundreds of
millions of dollars from album sales alone,
Jackson had a notorious spending habit that was
also in the hundreds of millions. However, he
did purchase the rights to many Beatles songs,
which are estimated to be worth between $500
million and one billion. After his death, sales
of his own music also spiked into the hundreds
of millions.
Jim Ovia – His nickname is “the
godfather of Nigerian banking.” He founded the
Zenith Banking Group in 1990, and it became one
of the largest financial services provider on
the continent. He also founded a mobile company
and is estimated to be worth $775 million.
Robert Johnson – If not for the
recession, he would be higher on the list with
over one billion dollars in net worth. However,
the founder of the BET network still enjoys a
net worth of $550 million.
Michael Jordan – The “air man” is most
known for being one of the best players in NBA
history. It also didn’t hurt that his brand of
clothing and especially shoes are still a top
seller. Between the endorsements, investments,
and more, he is worth $525 million.
Tiger Woods – As with Robert Johnson,
if it wasn’t for his divorce and lost proceeds
from a scandal, he would be farther up the
list. However, with an annual salary of $85
million, golfing legend Tiger Woods is still
worth $500 million and is the youngest person on
the list.
Bill Cosby – Proving that you can make
money by telling a simple, family oriented story
is the legendary Bill Cosby. Critics believed
his show wouldn’t make it past year one when the
virtually unknown comedian debuted it in 1984.
Over 25 years later, he is worth $450 million
and rising.
Natalie Dawson owns the site
Masters Degree. She enjoys
writing articles about everything in the education
field.
Author Vernon
Williams Shows Students How to Graduate from College
Debt Free
Columbia, Maryland – August 10,
2011 – Noted personal finance expert and
respected authorVernon Williamshas
published 425 Ways to Stretch your $$$$.
Since the average college graduate has accumulated
more than $27,000 in loans, students will be
particularly interested in Chapter 9 – 33Ways to Get a Degree without Debt.
The chapter is jam-packed with practical strategies
for reducing the cost of tuition and finding and
winning scholarships and grants.
Here’s what one parent had to
say about 425 Ways to Stretch your $$$$: “As
a single mom, one of my biggest concerns was how I
was going to pay for my son's education. Thanks to
425 Ways to Stretchyour $$$$, I was
not only able to lower the cost of college, but I
was able to save money by finding college
scholarships and grants for college. I also got some
ideas on how to save money on everyday household
expenses, as well.” -Sharon Maloney
But that’s not all. Vernon has
broken the book into sections so students save
almost 40 percent by only downloading the chapters
in which they are interested.
Vernon Williams has lived his passion of helping
consumers achieve financial success for over 20
years. He has taught hundreds of workshops on goal
setting, setting up and managing a budget while
eliminating unnecessary expenses. He has discussed
money-saving tips on several media outlets including
National Public Radio Station WEAA and Comcast's
Money Matters Today program.
Being sexy can be summarized in 3 main areas:
attitude, confidence and image. Attitude
relates to your views on life, usually an optimistic
person who can take criticism well and always
remains positive. Confidence is how you feel
about yourself no matter what someone else says
about you or does to you. Image is the
physical appearance of a person, their smile, their
teeth, their hair, their walk, their laugh, their
face, their body, how they dress, how they smell.
According to a study by ING 61% of the men
that participated in the survey feel that
women who are frugal are smart and sexy.
Cash is king and having a savings account makes you
more attractive and appealing. When you are in debt
and have bad credit it is hard to focus on anything
else and if you do, you can’t give it your all
because of your financial problems especially when
it comes to relationships.
When you go on dates or out with your boyfriend or
girlfriend your conversations will somehow always
lead to discussing your financial problems. The lack
of a savings account or retirement account may cause
you to stay in a relationship longer than you have
to or stay at a job longer that you would like
because you are living paycheck to paycheck. If you
are out on a date and have financial problems you
might slip up and make statements like “I wish I
had someone to help me pay my bills” or “I
wish I had a man to take care of me” which may
be a turnoff especially on a first date.
When you start saving you see your money grow which
is a great feeling. When you start paying down your
debt you feel like a burden has been lifted off of
your shoulders and you can begin creating long-term
financial goals such as planning for retirement,
starting a business or planning for your children’s
college education. Saving money also helps to pay
for unexpected expenses and prevents you from going
into debt. Saving money and have good spending
habits is an appealing quality in a mate.
If you don’t feel sexy try to make yourself more
appealing by working hard to save money, fix bad
credit and set financial goals. Saving is smart.
Investing is smarter. Good credit is smart and sexy.
Saving the environment is sexy. Saving is sexy.
About the Author
Harrine Freeman is the CEO
and owner of H.E. Freeman Enterprises which
provides credit repair services to help people
restore their credit rating and develop good money
management skills to pay off debts and plan for
retirement for the past 12 years. She is an
energetic speaker, author, personal finance expert,
and freelance writer. She was once in $19,000 in
debt, only making $21,000 a year and was
successfully able to get herself out of debt without
filing for bankruptcy. Her knowledge and tips have
helped her diverse clientele restore their credit,
learn how to manage their finances and get totally
out of debt.
As a guest speaker at regional and
national churches and schools, national radio shows,
organizations and Fortune 500 companies, Freeman's
simple, yet effective methods positively impact the
bottom lines of her clients. She has provided credit
repair, debt management and business credit seminars
to various audiences. As a panelist she participated
in a number of national and local conferences. She
has appeared in Market Watch, Wall Street
Journal, Black Enterprise, Essence Magazine, Ebony,
Pink Magazine, Heart & Soul, Forbes, Bankrate.com,
Creditcards.com, Yahoo.com, The Michael Baisden
radio show, NPR, and on NBC and ABC. She is
an Advisory Council member of Russell Simmon's
HSAN Get Your House Right Home Ownership
Initiative.
She is a producer for DCTV and will
be producing her own television show in 2011. She is
a member of the American Association of Daily Money
Managers, Credit Professionals International, the
National Association of Women Writers and
Toastmasters.
Her personal experiences with debt and her
business savvy have proven her to be an effective
and competent speaker on personal finance and
business credit issues. She is also the author of "How to Get out of Debt: Get An "A" Credit Rating
for Free", a self help book on credit repair
that provides consumers with a step by step plan on
how to get out of debt, increase their credit rating
and maintain their good credit. Her purpose and
passion in life is to give back to her community and
help others become savvy in personal finance. She
currently lives in Washington DC. For more
information visit Harrine's web site at:
http://www.hefreemanenterprises.com
.
The Business of Culture
Afro-Latino
Caribbean culture insists on tasty flavorful
food. One dish required at any meal is the
beloved plantain. The plantain’s lure is its
ability to be served both as a vegetable and a
fruit which is why it reigns supreme in every
Latino diet. From the savory tostones rellenos
(stuffed plantains) to pastelon (Caribbean
lasagna) or sancocho (stews); the plantain is as
versatile as the potato. The plantain is the
Caribbean potato!
In either of its
forms, the plantain was time consuming and
cumbersome to prepare, until now that is… John
Rivera invented Rivera’s Tostonera to
revolutionize Latin kitchens; giving cooks the
power to make tostones (fried plantains) chips,
cups, and slices, with the added convenience of
making more than one at a time.
Rivera’s
Tostonerais a patented plantain
press, invented by John Rivera. John spent the
summers of his childhood in Piñones Puerto Rico,
where his family owned a food kiosk on the
beach. Growing up he pressed thousand of
plantain chips. They had to make the tostones in
a fairly primitive manner, mashing them with a
can, a brown paper bag or between two pieces of
wood one at a time. Today tostones are still
being pressed the same way.
So John went to
work. “I wanted to create a modern day plantain
press that could do more than one chip or cup at
a time but could also press slices”. It took
John 52 prototypes, a two year apprenticeship
with a Caribbean Executive Chef, and at least
500,000 plantains to get to “Rivera’s
Tostonera.” So now John Rivera proudly
presents Rivera’s Tostonera, (Patent No.
7,442,025 B2) It shapes plantains into Chips,
cups, and slices quickly and efficiently, no
muss no fuss and it makes more than one at a
time.
2010 WORLDOFMONEY.ORG YOUTH FINANCIAL EDUCATION
INSTITUTE
The WorldofMoney.org is a leading
provider of financial education to underserved youth. Since 2005, the
WorldofMoney.org has been dedicated to the financial
education of underserved young people ages 12 - 18,
in the New York Tri-State area. The Money Track
curriculum includes: wealth consciousness, money
creation, disciplined savings, stock market
investing, real estate investing, mutual funds,
credit, mortgages, homeownership, business etiquette
et al. The 2009 WorldofMoney.org Summer Youth
Financial Education Training Institute graduated 85
enthusiastic young people.
Developing financially responsible adults...one
child at a time.
Get Ready for "Son" of Stimulus Plan By John F. Wasik, Author of The Audacity of Help: Obama's
Economic Plan and the Remaking of America
So,
where are the jobs? Even as the fog seems to be
lifting over housing, manufacturing and the
financial sector, the unemployment rate continues to
float ever higher.
Despite
the largest economic bailout in America history, the
jobless rate soared to 9.7 percent in August. All
told, nearly 7 million jobs have been lost since
December 2007. Wasn't that $787 billion stimulus
package supposed to make this awful number go down?
The
stimulus plan is like trying to weld a plate onto
the hull gash in the Titanic after it hit an
iceberg. Once you set aside the money spent on
economic triage -- more than a half a trillion
dollars -- you have a long-term investment in social
and physical capital. As I discovered in researching
my new book The Audacity of Help: Obama's
Economic Plan and the Remaking of the America (www.audacityofhelp.net),
much of the legislation was a combination economic
band-aid and long-term therapy.
While
it may not be reflected in the unemployment numbers,
there is visible progress from the stimulus
spending. About $60 billion of the $288 billion in
promised tax cuts has flowed into the pockets of
most middle- and lower-class Americans. Another $84
billion of a nearly half-trillion dollars in capital
improvements spending has been doled out. Roads are
being repaved, bridges are being rebuilt and
thousands of public works projects are underway,
resulting in about 2 million jobs, reports IHS
Global Insight, a consulting firm.
Where Money Was Spent
Let's
start with the largest chunk of the stimulus
program: Tax relief, which accounted for $288
billion of the spending. Those on fixed-income
received a one-time payment of $250. That's not much
help when Social Security payments, indexed to the
consumer price index (CPI), were expected to remain
flat. It would be ideal if the CPI reflected the
true cost of living that incorporates higher medical
costs, all taxes and transportation, but it doesn't.
Sorry,
you can't turn in your clunker for a bigger check to
cover higher out-of-pocket medical or insurance
bills. Most everyone else saw a slight increase in
their take-home pay as withholding taxes were
dropped a bit, although it only added up to a few
dollars a week. A more salient way of boosting
incomes would be to grant a holiday on payroll taxes
for a few days or weeks, but that's not what
Congress and the Obama Administration decided to do.
The
next-biggest portion of the stimulus spending --
$144 billion -- was for "state and local fiscal
relief." Faced with the loss of state and local tax
revenue, government agencies were facing massive
teacher layoffs and shutting down public services
without this band-aid measure.
This
move saved more jobs than would have otherwise been
lost, although it doesn't address a more pernicious
long-term problem. Property valuations, which are
the basis for local real estate taxes, are
continuing to fall. That means less money for
schools, libraries, fire and police departments. How
can public agencies replace this money? It's an
ongoing crisis that will translate into more
program, service and job cuts (or tax hikes) later
this year and into 2010. Get ready for "Son of
Stimulus" when this reality gobsmacks Congress as it
heads into mid-term elections next year.
Long-Term Investments
The
saving grace of the Obama-designed stimulus is that
it's earnest about investing in infrastructure,
research, energy and education.
·$111 billion will be spent on infrastructure and science. This is
everything from medical research, fixing roads and
high-speed rail planning.
·Some $53 billion will be spent on education and training and is
broadly distributed to everything from Headstart for
poor families to higher education (seewww.ed.gov).
·$43 billion will be spent on energy research for sorely needed
technologies like efficient batteries.
What's
not clear about the stimulus spending is if the
money allocated to specific projects is being spent
efficiently or that it will match the number of jobs
lost during the recession. Early indications are
that it isn't, although it will take time for nearly
a trillion dollars to make it from the Treasury to a
project in your community. The Obama Administration
definitely needs to provide more information on its www.recovery.gov site
to tell taxpayers how that money is being spent.
There are maps that tell you which projects are
funded and where, but more detail is needed. For
now, a much better source is the nonprofit
journalism groupwww.propublica.org.
The
stimulus program will either be a down payment on a
productive new shift in job creation -- what I call
social capitalism -- or a bandage on a hemorrhage.
In any case, such a transformation will take time
and the waiting period will be increasingly painful
for those losing their jobs.
The Audacity
of Help: Obama's Economic Plan and the
Remaking of America.
Click hereto go there now.
About the Author John F.
Wasik, author of The Audacity of Help:
Obama's Economic Plan and the Remaking of America,
is the author of twelve books, including The Cul-de-Sac
Syndrome and The Merchant of Power. He
speaks widely and writes a weekly Bloomberg News
column that reaches readers of five continents and
which earned him the 2009 Peter Lisagor award for
journalism. He lives in Chicago.
I don’t know about you, but
I’ve had enough of the banks and credit card
companies taking advantage of hardworking consumers
and people who consistently pay their bills on
time. Not all of the people struggling to pay their
bills and meet their financial obligations used to
have good credit, but have fallen prey to the
revolving credit card industry and/or hard times.
The current downturn in the
economy has made life “tough” for millions of
Americans. “Tough” is a relative term, in that
“tough” for some people is cutting back on their
Latté’s and the housekeeper. “Tough” for others
means they have no savings and are about to lose
their home.
I own and operate a small
business. I’ve tried to grow my business and like
millions of others businesses, the economic downturn
has negatively impacted my company. In fact, the
terrorist attack on our country that occurred on
September 11, 2001 was the beginning of the loss of
revenue for the company.
As a result of trying to
hold on to the business I used my sterling credit
rating in the form of credit lines to fund and
eventually restructure the business. I’ve had a
30-year relationship with the American Express
company. As a result I was able to secure a
business line of credit via both gold and platinum
corporate cards. I selected American Express
because they offered services that were supportive
of small businesses.
Imagine my surprise when I
received a letter from American Express informing me
"that after a thorough review" of my credit profile
they have placed a spending limit on my account. My
first reaction was OK, times are difficult and many
banks and companies are tightening their credit and
lending practices. As I continued to read the
letter, I was informed that my credit had been
drastically reduced. I went from a six-figure
credit line to a low four-figure limit. In fact,
the limit is so low that I cannot run my business
with the new limit.
Let me put my situation in
perspective. My company has no history of late
payments or outstanding balances. In fact, my
last month’s statement had a surplus balance.
American Express showed their appreciation by
crippling my ability to run my business. Their
actions clearly indicate that they no longer wanted
to be a business partner with my company. Thank
you American Express. When it's all said and done,
I think I will reflect on this situation and realize
that this was a turning point in my company's
financial independence.
I would not dare compare
what’s happening to American consumers to
“mafia-like” tactics. That would be an insult to
the mob. However, I can’t help but wonder if
consumers would be better off if their accounts were
managed by organized crime. Many of these banks,
were forced to take tax pay dollars. Some of the
banks needed the money to survive and others did
not. American consumers were misled. Through a
series of press releases and announcements,
consumers were led to believe that some of the
financial institutions who took the money were going
to help consumers with their debt. Many of these
banks took our tax dollars and wiped the books clean
of their debt and mismanagement and proceeded to
make more money by screwing consumers with tricky
fees and raising interest rates without warning or
on a seemingly ad-hoc basis putting their customers
deeper in debt.
The Obama administration
says they recognize that what’s happening to
consumers is not fair. They tout the Credit Card
Accountability Responsibility and Disclosure Act
that outlaws several of these credit card policies
that have sparked consumer outrage including
retroactive rate increases on existing balances for
cardholders who are in good standing. Other
deceitful tricks, albeit legal, include hiking rates
for new charges without at least 45 days' notice;
"double-cycle billing," which allows fees to be
charged for balances that were already paid off; and
"universal default," which applies rate hikes if a
customer is late with payments on unrelated bills.
Sounds good doesn’t it? I
wouldn’t pop any champagne just yet.
The new law amends the Truth
in Lending Act, which only governs consumer loans.
It does not apply to corporate cards. Say what?
What this means is limited
liability corporations and other companies that use
traditional corporate cards, the same old rules will
continue to apply. Let me translate this in a more
vernacular kind of way: Some of the credit card
companies will continue to have the legal authority
to insert a golf umbrella in your rectum. Other
companies will try and open the umbrella.
It is time to fight back.
I’ve decided to use all of my business adversity to
motivate me to do better. To work harder, be
smarter and do what I can to help others who have it
worse than me.
I can’t quit. I have faith
that I will not be down for long and I will emerge
from this downturn stronger than ever.
American Express’ decision
to reduce my spending limit has crippled by ability
to conduct business. I was upset. I only allowed
myself to stay upset for about 30 minutes. My net
move was to fight back. I decided to fight back
strategically by terminating my relationship with
the company. Consumer advocates tell you NOT to
close your accounts immediately because this action
can impact your credit score in a negative way. I
have enough credit lines and alternatives. I’m
willing to take that risk.
I called American Express
and when the Customer Service Representative (CSR)
came on the line she announced her name and asked
some identifying information to confirm that I was
the cardholder. Her next question was: “How can I
help you today?” Before I could answer, the CSR
replied, “Oh, I think I know why you’re calling.
You received a letter about your spending limit.”
I wanted to make sure that my call was being
recorded for accuracy. Once confirmed I calmly
asked the rep if my account was in good standing.
She acknowledged that it was. I then asked if I had
a history of late payments or outstanding balances.
She she acknowledged that this was not the case. I
asked why my spending limit had been reduced.
She explained that my credit report reflected high
balances on some other accounts. She then suggested
that I get a copy of my credit report and work to
reduce my card balances with the other lending
institutions. The rep also was sure to let me
know that American Express would re-evaluate my
situation at a later date.
I explained to her that I
was aware of the contents of my credit report and
that I have no history of late or delinquent
payments. I am in good standing with all of my
creditors. I advised the representative that
American Express has their method for dealing with
customers and I have mine. My method involved
dealing with companies based on how they dealt with
me. As a result, I don’t like how I’ve been treated
and advised her that I wanted to close my account.
The credit card companies don’t want to lose your
business, but every action has a consequence. I’ve
decided that it was time for me to part ways with
American Express Corporate Gold Business card.
During my company’s heyday, I would generate $5000
to $10,000 dollars a month in charges. The company
would get their money within 30-days. Those days
are over. By their actions American Express has
told me that they no longer want to be a partner as
they have been in past years. I’m sure they want
more of my money, however, when business gets
better, I will give my business to a company that
demonstrates that they want to work with me during
both good and bad times.
I am in the process of
getting a pay off balance, cancelling my account and
moving forward to reduce my debt to credit ratio to
become less dependent upon the banks and credit card
companies.
I really feel good about
this action. This was my way of staying empowered.
If more people took small steps like this, we would
send a message to the predatory bank and lending
institutions.
I am not an economist, but I
believe this country would have been far better off
if every citizen’s debt was reduced by 50%. We
would not need a Stimulus package, recovery money
and all of the other programs, many of which will
result in waste and fraud, again costing the
taxpayer more money.
The president of the American Bankers Association says the
legislation "changes the entire business model of
credit cards. "Edward Yingling says it restricts
the ability to price credit for risk -- in other
words, to charge more for those more likely not to
repay their debts.
Lots of people pay off their
credit cards in full each month to avoid finance
charges. This is not good enough for some credit
card companies. Some industry experts say credit
card providers might start charging new fees for
their cardholders and could raise their interest
rates.
Don’t get mad people, get
strategic. Consumers need to find a way to fight
back against the credit card companies and lending
institutions in a manner that will allow them to
stay empowered and be whole. This philosophy has
worked for me. This is how I maintain my sanity.
Folks, I’m one of the most blessed people on earth.
I have a loving family which serves as my support
structure. How do the folks who don’t have a
support structure surviving?
I would suggest that
everyone in need assess your skills and abilities
and look for opportunities to prosper, even during
these terrible economic times. Times aren’t bad for
everyone. Many people and business have not been
affected by the economy and others are thriving.
Come on people! Let’s get started!
The Isley Brothers
had a song out years ago called “Fight The Power.”
Fight it! Fight the power!
So
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article
click here and sign our
Guestbook
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8 Ways to Save on Auto Insurance
Taken from the popular book,
425 Ways to
Stretch Your $$$$, by Vernon Williams
www.howtocutexpenses.com
1. Raise your deductible.
A Deductible represents
the amount of money you pay before the insurance
company pays a claim. By requesting higher
deductibles on collision and comprehensive (fire
and theft) coverage, you can lower your costs
substantially. For example, increasing your
deductible from $200 to $500 could reduce your
collision cost by as much as 30%. Since the
national average annual premium is $687, this
can save you $206 per year.
2.
Drop collision and/or comprehensive coverage on
older cars.
If your car is totaled in an accident, you
receive the cash value of the car. Although
insurance companies use their own criteria to
make this determination, you can get a ballpark
estimate from www.kellybluebook.com.
If your car is 5 years old or older, it may make
sense to cancel the collision and/or
comprehensive and bank the savings.
3. Avoid duplicate medical coverage.
If you have adequate
health insurance, you may be paying for
duplicate medical coverage in your auto policy.
In some states, eliminating personal injury
protection (PIP) can lower your premium by up to
40%.
4. Drive a "Low-Profile" car.
Before you buy a car,
check into the insurance costs. Cars that are
expensive to repair, or are favorite targets for
thieves have much higher insurance costs. Go to
www.hwysafety.org and click on “Injury,
Collision and Theft Loss” to see how your car is
ranked.
5. Drive less.
Some companies offer
discounts to motorists who drive less than a
predetermined number of miles a year. Consider
using public transportation, a carpool or
vanpool to commute to work.
6. Ask for a multi-policy discount.
Some companies give a discount if you have more
than one policy with them.
7. Ask for a discount based on your credit score.
Some
companies use the credit score to establish
premiums. If you have a high credit score, ask
for a discount.
8. Comparison shop.
Prices for the same
coverage can vary by hundreds of dollars, so it
pays to shop around.
One
of the biggest myths is that if you file for
bankruptcy you will be financially free and no
longer have debt problems. Wrong! Bankruptcy is not
the cure-all for getting out of debt. Over a
million Americans file for bankruptcy every year.
One in every 73 households files for bankruptcy. In
2007, approximately 1 million Americans filed for
personal bankruptcies. Millions of Americans are in
debt and get in debt every year. Many people think
that filing for bankruptcy will solve all of their
debt problems. On the surface it seems that if you
file for bankruptcy all of your debt will be
eliminated and you can start with a clean slate.
Actually it is not that simple.
To
file for personal bankruptcy you must reside in a
state for 90 days prior to filing and have a total
unsecured debt XE "debt" less than $290,525 or
secured debt less than $871,550. The new bankruptcy
law that went into effect in October 2005 states
that debtors (consumers) who earn less than the
median income in their state about 80 percent of
those who file for bankruptcy still would be
entitled to file under Chapter 7 XE "Chapter 7" .
But those who earn more than that and who have the
ability to repay at least $6,000 over five years
would have to file under Chapter 13 XE "Chapter 13"
, which requires a repayment plan XE "plan" .
Although it is true that after you file for
bankruptcy you can purchase a house or a car, what
people don’t realize it that the interest rate that
you will be given will be very high. Also, based on
the new bankruptcy law implemented in October 2005,
it is harder to file for bankruptcy and depending on
the type of bankruptcy granted it will remain on
your credit report for seven to ten years. This
greatly lowers your credit score and it will
probably take about 3 to 5 years before you score
increases due to the bankruptcy filed and provided
that you don’t get into any further debt.
When you have financial problems and can’t see any
way out bankruptcy looks like the best option but
there are many other options available to you. If
you have a house you can take out an equity loan to
pay your debts, you can reduce your expenses and
create a budget for yourself, you can get a
part-time job, go to school and further your
education and get additional training related to
your particular job, setup payment plans with your
creditors or sell some of your assets if you have
any.
The best consumer is an educated consumer. If you
find yourself in financial troubles the first and
best thing to do is do research and find out the
options available to you. Next you want to identify
your assets and liabilities. Your assets are
anything that you do not owe money on such as
stocks, bonds, 401(k), retirement plans, etc. Your
liabilities are anything you owe money on such a
house, investment property, boat, car, etc. This
will help to determine if you have any assets that
can be sold or money borrowed against to pay off
your debts. Next you need to create a budget for
yourself to identify how much money you have coming
in (how much you get paid each week) and how much
money you have going out (how much you pay each
month in bills and expenses).
If you have very little or no assets then you will
need to do some quick fixes such as cutting back on
expenses such as: bringing your lunch to work,
carpooling, catching the subway or bus to work,
riding your bike or motorcycle to work, eating
breakfast at home, renting videos instead of going
to the movies or cutting back on how often you go to
the movies, canceling your pager or cell phone
service or switching to the cheapest plan available.
These things will provide extra money in a short
period of time until you develop a plan for paying
off your bills. If you have researched all options
that are available to you and are unable to use any
of them then bankruptcy should be your last resort,
not your first option.
Getting in debt is the worst place to be but with
time you can overcome this obstacle. Think long and
hard before filing for bankruptcy. It may not be
worth the headache.
Harrine Freeman is the CEO of
H.E.
Freeman Enterprises, a credit repair and
personal finance services company. She is a
member of the American Association of Daily
Money Managers, SPAWN, Toastmasters, NAWW and
the Women Network.
And what is his plan to
make an impact in the world as we know it?
Derek Ward is a mortgage broker with a
far reaching background in the realm of
financial counseling and education. He has been
in the world of finance for more than two
decades and is now dubbed “The Financial
Educator.” A title that he says he “doesn’t
take lightly”. Ward is also a former co-founder
of First Federal Mortgage in Palmdale,
California. He is currently promoting a state
of the art product that will allow many people
to not only stay in the mortgage game without
losing their shirt or home, but actually
get ahead with increased equity and a paid
mortgage much earlier than your loan documents
state.
With the economic “crunch” (don’t call it a
crisis…or even a recession) that America is
facing, many people are trying to find a way out
of debt, mortgages and credit obligations. A
record high in nationwide foreclosures is
putting a damper on the American dream. A
change in the stock market is leaving many
people concerned about the future of retirement
based investments. And, the increase in the
cost of living coupled with the decrease in the
value of the American dollar is leaving many
people in a quandary as to what their next step
should be.
In steps Derek Ward…
“The Financial Educator” has been offering
advice for many years…advice that has been so
succinct and on point that he, jokingly, often
finds that he “talks himself out of business by
telling his clients what all of their options
are and allowing them to make the decision for
themselves”. Despite his strong financial
background, he has found a solid stepping stone
in the mortgage world. In light of the spike in
home foreclosures, he has focused his efforts on
bringing relief to consumers finding pain in the
housing market.
With a system that is fairly new in the United
States but very popular abroad, Ward is vowing
to help clients pay off their mortgage in record
time. “We are in the process of trying to bring
this system to the United States and I am a man
on a mission; my goal is to change the financial
landscape of America one family at a time by
showing people how to own their home free and
clear and eliminate all of their debt and have
financial freedom.”
This is how it works…
“Traditionally homeowners deposit their income
into a checking account and pay their monthly
expenses as they’re due, using that account.
And, any money that’s left over at the end of
the month is either left in their checking
account or transferred into their savings
account.”
“Well with my system, homeowners are actually
able to cancel out interest on their mortgage
with the money that they would normally leave
sitting in their checking account or their
savings account. It consists of three
components:
1.Your mortgage: We can show homeowners how to
take their thirty year mortgage and pay it off
in a fraction of the time…many cutting their
mortgage repayment by 1/3 to 1/2 of the normal
time.
oThey do not have to refinance
oThere’s no increase to the current monthly
payments
oIt’s not a bi-weekly program
oThere’s no lifestyle changes to the consumer
Derek Ward breaks down mortgages and the way
this all works together. “A current mortgage is
a ‘closed-in’ mortgage and what that means is
that the consumer has a monthly scheduled
payment and they [the consumer] send it to the
bank and the bank applies a very small portion
to the principal and the bank then takes the
huge chunk and apply it towards your interest.
By doing that, you’re actually paying almost
double the finance charges in a thirty year
period on a typical mortgage, for example a 200k
mortgage will cost you about 431k total so you
are actually paying about 231k in finance
charges on a 200k mortgage. That is a lot of
interest. In the United States, we are a
payment driven society. In the United States we
normally look at two things; ‘what’s my monthly
payment’ and ‘when is it due’. They never tend
to take a look and see what the finance charges
are that their being charged on that loan. This
goes for credit cards. This goes for car
payments. This goes for any type consumer
debt.”
2.A line of credit: You can use any line of
credit. You can use a personal line of credit.
You can use a business line of credit, or if you
have equity in your home, you can use an equity
line of credit.
oThe line of credit, typically depends on your
mortgage balance. Your line of credit can
usually be anywhere between 8k and 80k.
3.The software: The software works as a financial
dashboard to enable the homeowners to
effectively manage the entire process.
oWe offer lifetime service support to the
homeowners in addition to coaching services that
enable them to benefit from the full potential
of the program.
oThe software instructs homeowners to transfer
specific amounts at specific intervals from
their line of credit to be paid directly to the
principal on their primary mortgage.
After discovering the 3 basic pillars of the
program, Ward continues to explain the full
breakdown of this process and how it works to
save you time and money. “This creates
considerable interest savings over a homeowner’s
primary mortgage. After the homeowners transfer
specific amounts of money, they will then
deposit their income back into the line of
credit instead of depositing it into their
checking account. So what it’s coaching us to
do is change our banking habits and paying the
bills directly out of the line of credit, and
you start depositing your line of income back
into the line of credit.”
“The nice thing about this is that when you go
to pay your bills each month, you don’t have to
wait until you get paid because you are using OPM
which is Other People’s Money. You are
going to advance the amount of your expenses
directly from your line of credit. Now when you
advance that money from your line of credit, the
bank typically calls for a minimum payment
that’s required because you borrowed the money.
By taking your income, paycheck, payroll or
commission or whatever you have and applying it
back to the line of credit, that does two
things. The first thing that it does is cancels
out the interest on that line of credit because
you have applied money back to it. The second
thing that it does is actually satisfies the
banks requirement of the monthly payment.
Homeowners are still able to use their line of
credit services such as checks, debit card, ATM
card…they still have access to their money.”
Through typical banking we deposit our money
into a checking account to make monthly
payments; leaving our money to remain dormant
and stagnant for us. Additionally the bank is
loaning that dormant money out and making money
on it through interest payment from other
consumers and you still make nothing from it.
This type of program cancels that out and allows
your money to work harder for you. Ward
explains the remaining portion of the program
and how it comes into play beyond the standard
three steps.
“Once the software determines that the homeowner
has reached an optimal balance on their line of
credit, the software instructs them to initiate
specific funds transfers towards the primary
mortgage to reduce the balance on the
mortgage.”
In our society, this all seems too good to be
true, yet Ward explains his own personal doubts
he had with the system in the beginning and how
it has proven to be what was promised and more.
“When I first heard about this, someone came to
me and said ‘Derek, I can show you how to pay
your 30 year mortgage off in 8 to 11 years.’ and
I said ‘How is that done?’, and they said ‘Let
me run an analysis on your house.’ Well, it came
back the next day and it showed that I would
actually pay my house off in 11.8 years and I
would save over 700k in finance charges. And I
said ‘this is too good to be true.’ So I
started to do my own research on this company
and found that this company is licensed with the
National Better Business Bureau. They have an
AA rating with the Better Business Bureau and
they’ve also been approached on many occasion to
purchase the rights to the software and the last
offer was over 60 million dollars and they
declined it. IT appears that this will be the
next paradigm shift for homeowners. It is
predicted that anywhere between 40 and 60 % of
homeowners will be on this type of program or
something similar to it in the next five to
seven years. So my mission is to get this out
to the homeowners and let them know that you can
own your house free and clear.”
“One of the additional services that we offer to
the client is that once determine how you can
pay off your home early, then we put together a
financial strategy in terms of your retirement
investments. We all know that social security
is not going to be there. We so many people
going back into the workforce and usually you
see them at the front door of Wal-Mart greeting
you. That’s simply because they didn’t plan for
retirement and they were not given the choices.
It’s not that they planned to fail, they just
failed to plan.”
With a 100% success rate, 97% rate of client
retention rate and a conservative projection
from the software, many people are finding that
the program causes a shift in their spending
habits; a change in habits that actually results
in a major adjustment to initial projections for
the better. Whether you are planning to stay in
your current home or sell it, the program has
proven to be beneficial due to the increase in
equity and earlier pay off date. To learn more
about the program and obtain the software go to
Derek Ward’s personal website:
http://www.TheFinancialEducator.Blogspot.Com.
Then click on “Pay Your mortgage off in 8-10
years.” This will direct you to a website and
you will click on “Free Analysis” to see if the
program is right for you.
Additionally, Derek Ward is looking for more
agents to promote the program and may be
contacted for employment opportunities
through his personal e-mail address at
DWARDENTP@Yahoo.com.
Derek Ward is also a contributing columnist
with Center Stage Magazine and his advice
may be viewed online at
http://www.CenterstageMag.com.
So
what do you think? If you would like to respond to this
article
click here and sign our
Guestbook
to leave a public or private statement, comment or
reaction.
Why You Need to Save
Many Americans today don't have a savings
account or emergency fund. I heard on the news
on recently that the Commerce Department
reported that Americans spend all the money they
have and personal savings rates reached the
lowest level since the Great Depression.
Start you creating an emergency fund. Your
emergency fund is your safety net, in case you
get sick or lose your job you can use your
emergency savings to hold you for a few months
until you can find a new job.
Your emergency account should be separate from
your checking or savings accounts and should
only be used for emergencies such as an
unexpected expense, unemployment, medical bills,
etc.
An emergency fund should be enough savings to
pay your bills for at least 3 to 6 months.
Money for an emergency fund should be readily
accessible and stored in a checking or savings
account, preferably a high interest savings
account such as Emigrant Direct or ING or a
money market account where you can make money
while saving money.
To determine how much money is needed to pay 3
to 6 months worth of your bills do an inventory
and write down all your bills and expenses and
the monthly amount spent for each. Calculate
the total. Use this amount and multiple by 3 or
6 to determine the total amount you need to save
in your emergency fund.
Make sure you do some comparison shopping before
opening an account for your emergency fund to
ensure that they are no minimum or other fees
for accessing your account. A good source to
use is
www.Bankrate.com.
You can start off by contributing small amounts
to your emergency fund until you are able to
contribute more. Start off with a contribution
of at least $20 a month to your emergency fund.
Once you are able to contribute more to the fund
do so. Make several short-term goals for your
emergency fund. Once you have saved enough
money to pay one bill pat yourself on the back.
Then keep saving until you have enough to pay
three bills and so on until you have enough
saved to pay your bills and expenses for 3 to 6
months.
Once you have reached your emergency fund goal
it is time to start developing some long-term
goals such as an additional savings account and
to start planning for retirement. A great site
to learn about retirement planning is
www.Morningstar.com
and look under the Personal Finance section.
Having an emergency fund will ensure that you
are on the road to becoming financially secure
and will prevent you from going into debt when
an unexpected tragedy happens or unexpected
expenses arises. An emergency fund is the first
step to getting out of and staying out of debt.
There are many organizations that provide
emergency services for people such as the
American Red Cross Emergency Assistance,
Salvation Army Emergency Assistance Program and
the United Way. The utility companies provide
funds for people in need. You can use these
funds to pay necessities and use money from your
part-time job to pay other bills.
According to
MSNBC.com, the savings rate
of Americans declined to -5% in 2005, -1% in
2006 but has not risen to .6 in the second
quarter of 2007. Consumers are spending over
half of what they earn. The other 40% is spent
on health insurance.
We no longer live in a
society that promotes longevity and encourages
stability. You must prepare for the future and a
critical component of that is having a savings
account. You may not know what the future holds
but if you prepare your finances now, it will
ease the burden of what tomorrow holds.
Harrine Freeman is the CEO of
H.E.
Freeman Enterprises, a credit repair and
personal finance services company. She is a
member of the American Association of Daily
Money Managers, SPAWN, Toastmasters, NAWW and
the Women Network.
Wealth is
defined as the value of everything you own minus
any debts. A wealthy person is described as
someone who can live comfortably for a least 5
years without working. Not everyone during his
or her lifetime may become wealthy but you can
become financially empowered. Financially
empowered is being in control of your finances,
spending your money responsibly, buy needs more
often than buying wants, and setting goals for
your future.
Here are 5
ways to become financially empowered:
1. Become a
homeowner. Becoming a homeowner increases your
credit score, proves that your are a responsible
spender, provides a tax write-off, increases
your financial worth, provides you with an asset
that will appreciate over time which will
provide you with equity.
2. Buy
insurance. Buy health, life and disability
insurance. Many people get in debt from medical
costs because they do not have life insurance.
Life insurance is critical because medical costs
increase by 10 to 20% each year. Disability
insurance (short-term and long-term) will help
you in the event you become seriously ill and
have to be off work for an extended period of
time. This will help you to recover because you
will not have to worry about how your bills will
be paid during this time.
3. Start a
business. Find out what your passion is, what
you love to do more than anything else. You will
not become financially empowered by working for
someone else unless you were one of the lucky
people who bought tons of stock while working at
Target, Wal-Mart of AOL. Do your research before
starting your business and take baby steps.
Start your business in your home; there are many
tax write-offs for home based businesses. Once
you generate enough income then get a loan to
open your own office. Get the book Rich Dad,
Poor Dad by Robert Kiyosaki.
4. Purchase
investment property. All of the financial
experts, millionaires and billionaires have
talked about it. They all have the same thing in
common. They all own investment property. If you
are not sure how to begin, do your research, buy
two or books on buying investment property, join
a real estate group, listen to financial
investment shows and find out the best way to
get started. Investment property generates cash
flow that can be used to generate wealth and
allows more opportunities to become available to
you.
5. Plan for
your retirement. Many Americans today have to
work past retirement age because they have no
savings or retirement. When a person looks at
their life to see what they have accomplished,
it is sad to say that they have nothing to show
for it. Many still owe money on their homes,
don't have any savings and have little or no
money in a retirement account. You worked all of
your life for what, to pay bills. That is not
how life is supposed to be. You should work
hard, enjoy life, retire, and then really enjoy
life.
She is a
personal finance expert and the author of, "How
to Get Out of Debt: Get an "A" Credit Rating for
Free Using the System I’ve Used Successfully
with Thousands of Clients.
Harrine Freeman is the CEO of
H.E.
Freeman Enterprises, a credit repair and
personal finance services company. She is a
member of the American Association of Daily
Money Managers, SPAWN, Toastmasters, NAWW and
the Women Network.
While many understand what it means to be rich,
few have grasped the concept of true wealth.
Scripture points to several examples of the
difference between being wealthy and being
rich. In all examples, being rich was a
temporal experience while those who experienced
wealth were under a different anointing. Some
may ask the question; can I be wealthy and serve
God? The answer is yes, yes and yes, not only
can you serve God and be wealthy it is expected
that with your wealth your ability to serve is
expected. God wants you to be a blessing, He
enables you daily for that purpose, the more you
endeavor to place yourself in the position of
being a blessing the more the Lord will put you
in the position to be a blessing in a major
way. Through scripture you will see that God
wants us to be wealthy, in contrast the
government needs us to work. The government
needs us to be consumers. Unfortunately, poor
money management and financial illiteracy have
led to the great American nightmare of excessive
debt, no savings, and limited access to
alternative income. It has also led many people
away from God’s promise.
Here is what the Bible has to say about wealth
and financial responsibility.
(Entrepreneur)
2 Kings 4
1. A certain woman of the wives of the sons of
the prophets cried out to Elisha, saying, "Your
servant my husband is dead, and you know that
your servant feared the Lord. And the creditor
is coming to take my two sons to be his
slaves.''
2. So Elisha said to her, "What shall I do for
you? Tell me, what do you have in the house?''
And she said, "Your maidservant has nothing in
the house but a jar of oil.''
3. Then he said, "Go, borrow vessels from
everywhere, from all your neighbors empty
vessels; do not gather just a few.
4. "And when you have come in, you shall shut
the door behind you and your sons; then pour it
into all those vessels, and set aside the full
ones.''
5. So she went from him and shut the door
behind her and her sons, who brought the vessels
to her; and she poured it out.
6. Now it came to pass, when the vessels were
full, that she said to her son, "Bring me
another vessel.'' And he said to her, "There is
not another vessel.'' So the oil ceased.
7. Then she came and told the man of God. And
he said, "Go, sell the oil and pay your debt;
and you and your sons live on the rest.''
(Investor)
Matthew 25:14-29
14. ``Again, the Kingdom of Heaven can be
illustrated by the story of a man going into
another country, who called together his
servants and loaned them money to invest for him
while he was gone.
15. ``He gave $5,000 to one, $2,000 to
another, and $1,000 to the last--dividing it in
proportion to their abilities--and then left on
his trip.
16. The man who received the $5,000 began
immediately to buy and sell with it and soon
earned another $5,000.
17. The man with $2,000 went right to work,
too, and earned another $2,000.
18. ``But the man who received the $1,000 dug
a hole in the ground and hid the money for
safekeeping.
19. ``After a long time their master returned
from his trip and called them to him to account
for his money.
20. The man to whom he had entrusted the
$5,000 brought him $10,000.
21. ``His master praised him for good work.
`You have been faithful in handling this small
amount,' he told him, `so now I will give you
many more responsibilities. Begin the joyous
tasks I have assigned to you.'
22. ``Next came the man who had received the
$2,000, with the report, `Sir, you gave me
$2,000 to use, and I have doubled it.'
23. ```Good work,' his master said. `You are a
good and faithful servant. You have been
faithful over this small amount, so now I will
give you much more.'
24. ``Then the man with the $1,000 came and
said, `Sir, I knew you were a hard man, and I
was afraid you would rob me of what I earned, so
I hid your money in the earth and here it is!'
26. ``But his master replied, `Wicked man!
Lazy slave! Since you knew I would demand your
profit,
27. you should at least have put my money into
the bank so I could have some interest.
28. Take the money from this man and give it
to the man with the $10,000.
29. For the man who uses well what he is given
shall be given more, and he shall have
abundance. But from the man who is unfaithful,
even what little responsibility he has shall be
taken from him.
(Real Estate)
1 Kings 21
1. Naboth, a man from Jezreel, had a vineyard
on the outskirts of the city near King Ahab's
palace.
2. One day the king talked to him about
selling him this land.``I want it for a
garden,'' the king explained, ``because it's so
convenient to the palace.'' He offered cash or,
if Naboth preferred, a piece of better land in
trade.
3. But Naboth replied, ``Not on your life!
That land has been in my family for
generations.''
Here is what the government says. My
illustrations are drawn from information on
federal employees, one because I am one and also
because generally government employees have
certain benefits not offered in the private
sector. It was once thought that if you had a
government job, you were set for life, with a
good retirement to follow.
“….employees may be underestimating how much
income they will need in retirement. More than
a quarter either believe they need less than
what financial planners generally recommend or
could not estimate their retirement needs”
Careful Retirement Investing, Stephen Barr,
Washington Post, 29 January 2007, Page D01
WASHINGTON - People once again spent everything
they made and then some last year, pushing the
personal savings rate to the lowest level since
the Great Depression more than seven decades
ago. The Commerce Department reported Thursday
that the savings rate for all of 2006 was a
negative 1 percent, meaning that not only did
people spend all the money they earned but they
also dipped into savings or increased borrowing
to finance purchases. The 2006 figure was lower
than a negative 0.4 percent in 2005 and was the
poorest showing since a negative 1.5 percent
savings rate in 1933 during the Great
Depression. “2006 Personal Savings Drop to
74-Yr. Low”, By MARTIN CRUTSINGER, AP Economics
Writer
“….Although
the government continues to offer guaranteed
pension benefits, it, like many companies, is
requiring employees to take more responsibility
for their retirement planning. People hired by
the government after 1983 are covered by the
Federal Employees Retirement System, and FERS-covered
employees outnumber those in the older Civil
Service Retirement System 2 to 1. “Employees
must now begin making decisions about their
retirement goals as soon as they start their
federal careers,” the OPM paper said. Under
FERS, retirement income will come from three
primary streams: a modest pension, Social
Security and investments in the Thrift Savings
Plan, a 401(k)-type program. “A
significant and for many employees the
largest—portion of their retirement benefit will
come from the TSP,” OPM to Prod Federal
Employees to Get Cracking on Retirement
Planning, Stephen Barr, Washington Post, 21
November 2005, Page B02
….”
While the TSP is important, financial advisors
stress that it should only be a complimentary
source of income for retirees.
…. employees should still be relying on their
defined annuity, Social Security and other
savings for the basics, and if that’s not
enough, “then we have to wonder if they’re
expecting too high of a standard of living in
retirement.”Life After Government: TSP
Tips, Karen Rutzick, GovExec.com, 22 September
2005.
How can we live a prosperous life according to
God’s word? The Bible gives us some great
examples of the three ways to generate wealth:
Land (Real Estate), Investments (stock market),
Entrepreneur (Business Ownership). This is
where the government can actually help. Our
system of government favors business owners and
investors; the ten percent of the population
that controls ninety percent of the wealth.
There are 137 tax deductions for business
owners.
Financial education is vitally important but
sorely lacking in this country. Everyone should
first understand why they need to be wealthy.
The next step is to accept the responsibility of
wealth. Third, don’t try to do it alone. Build
a financial team. Great wealth awaits those who
grasp opportunity.
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What About Those Subprime Loans?
Or The Subprime Default Crisis
By Solange Toura Gaba
Recent news stories have
declared a “meltdown” of the subprime market.
Subprime loans
are traditionally given to borrowers with
significant credit issues or who are unable to
qualify for conventional loans. Since the
lender providing the loan assumes more risk,
these loans bear higher interest rates, are
often adjustable, and generally carry steep
pre-payment penalties. We seem to be in a
financial crisis.
The recent February housing results released by
the government fell below expectations. For the
second straight month, sales of new U.S. homes
fell below estimates. The 3.9 percent drop in
February brought the sales rate to its lowest in
nearly seven years. The Standard & Poor Housing
Index showed that prices of single-family U.S.
homes, year over year, fell in January -- their
worst showing since January 2004 (REUTERS
3/27/2007).
The reader need not buy in
to the doom-and-gloom forecast. Subprime
lending only represents a very small portion of
home loans overall. Federal Chairman Ben
Bernanke testified before Congress this week
that ‘Turmoil in
the subprime mortgage market, which caters in
large part to borrowers with poor credit
histories, seems unlikely to affect the broader
economic and financial markets.” The Federal
Reserve Board (Fed) monitors inflation and uses
the Personal Consumption Expenditure (PCE) Index
as its key indicator. The Fed prefers the PCE
Index to remain at 2% and the latest Core PCE
was 2.3%. Consequently, the Fed will probably
not cut interest rates anytime soon. Despite
the recent volatility in the Stock and Bond
market, home loan rates have remained steady.
It seems paradoxical, but as
a rule, weaker than expected economic data is
good for rates, while positive data causes rates
to rise.
Lenders are tightening their standards and
requirements so this may have an impact on home
sales.
How Does All this Impact the Borrower?
¨Is This The End of 100% Financing?
oLenders will still provide 100% financing, but
it will likely be available only to those
borrowers with the most pristine credit. This
could reduce the number of borrowers in a given
community and have an impact on affordability.
However, borrowers can use credit remediation to
improve their credit and increase their options.
Most consumers don’t really understand what
impacts their credit scores. A mortgage
professional can provide some straightforward
ways that can help to increase those
all-important credit scores.
¨What Is A Risky Loan by Today’s Lending
Standards?
oBorrowers with a FICO (Fair, Isaac and Company)
credit score below 620 have proven to bring more
risk to the table than those with higher scores.
They can still get financing – but the days of
the easy subprime loan are over. Consumers with
less than perfect credit may want to consider:
-
Expanded approval loans. Backed by
Fannie Mae, these loans reward borrowers by
lowering the interest rate after 24 consecutive
months of timely payments.
-
FHA loans. Borrowers should ask their
mortgage advisor about these tried-and-true
loans, which have been overshadowed in recent
years by more exotic mortgage products on the
market.
- Tougher documentation standards.
Borrowers will be asked to at least state their
income and in many cases they will also be
required to provide the documentation to support
it.
¨Will Rising Defaults or Foreclosures Impact Home
Values?
oDepending on the severity of the rate of loan
defaults; it may have a significant impact on
local housing valuations. Consider this:
Lending institutions do not want to hold on to
properties – they want them off their books.
That means they will sell at a discount. We saw
this in the early 1990s when there was a rise in
foreclosures and a subsequent decline in
property values.
Borrowers should consult a knowledgeable
professional to assist them with their financing
needs. The industry will continually undergo
changes - some positive, some negative.
Borrowers shouldn’t let the current climate
prevent them from realizing the dream of home
ownership.
Solange Toura Gaba
is a licensed, mortgage advisor in the DC
Metropolitan Area. She also provides credit
remediation services. For more information,
please call 240-821-4513 or e-mail her at dreamhome20020@yahoo.com.
She is available for
consultations.
Posted March
29, 2007
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New
Web Site Teaches Kids Money Management and Financial
Literacy Skills Summary: A new web site has been created that teaches money
management, spending, saving, and investing skills to help
kids develop financial literacy.
Hillard, OH -- A new web site is now available to
assist parents and educators as a resource to help teach
financial and money management skills to children of all
ages.
The web site at
www.skillsthatclick.com
is the brain-child of Donald L. Robinson, CEO of eSkills,
LLC.
"eSkills is committed to providing an entertaining and
educational online program which will assist our youth in
understanding the importance of strong credit and money
management skills, and encourage them to view money
management as an important life tool," explained Robinson.
The web site was created as a money management resource for
schools, youth-focused programs and initiatives, and parents
as a tool, primarily for kids aged 12 to 15, to develop
financial literacy. The sire provides a personalized and
interactive financial simulator program to learn proper
money management. The target market is schools,
youth-focused programs and initiatives and independent home
users, according to Robinson.
"I created
www.SkillsThatClick.com to
be an entertaining and educational program for learning the
importance of money management and credit, because so many
kids today have a very limited exposure to strong models for
financial management skills," explained Robinson.
The site offers a financial situation simulator to enable
young people to practice their financial skills. Educational
information and guidance is provided on many topics,
including checking and savings accounts, ATM cards, credit
cards, investments, and even 401k plans. Students learn to
shop, save, and invest wisely.
"Kids go to school to learn the skills they need to one day
have a profession and earn a living to support themselves
and their family. Unfortunately they do not get much
training to develop financial literacy through money
management training. Parents and teachers now have a
resource to turn to that will fill that need," said
Robinson.
About eSkills LLC: Donald L. Robinson is the founder and CEO of eSkills
LLC. The company offers a financial management skills
training web site as a tool for parents and schools to
enable young people to develop financial literacy. Robinson
has an MBA from Franklin University, and has years of
experience in financial and business management.
Headline: Encouraging Youth To View Money Management as
Important Life Tool
SkillsThatClick.com
is a new
financial situation simulator website aimed at helping teens
makes smarter decisions with their money. Research shows
that teens spend their money as fast – and sometimes faster
– than they earn it, without ever learning simple financial
management skills, such as how to open a checking account,
the differences between debit and credit cards, and the
benefits of investment vehicles ranging from simple savings
accounts to 401K plans.
All of these resources are provided at
SkillsThatClick.com,
which will
serve as valuable one-stop shopping for teens looking to
make more informed decisions with their money.
SkillsThatClick.com
has the potential to become the
leading financial resource site for teens on the Internet,
but first we need your help.
SkillsThatClick.com is actively
soliciting corporate partners who will help us further
develop SkillsThatClick.com
in exchange
for sponsorship recognition to
SkillsThatClick.com’s
valuable and
highly targeted visitor base.
Who We
Are
SkillsThatClick.com
was formed in
2006 and is a division is eSkills, LLC, a service-disabled
veteran-owned business operated by CEO and founder Donald L.
Robinson. Donald Robinson is a U.S. Navy veteran who served
his country as a counter-narcotics officer and as a
counselor who helped families a just to Navy life while
better managing their finances and tax liabilities.
After
leaving the Navy, Robinson earned an MBA and is currently
pursuing a PhD in business administration. He has spent his
civilian career helping people with at-risk credit profiles.
He has worked for the Credit Bureau in Columbus, OH and as a
manager for H&R Block, and he now serves as branch manager
for Heartwell Mortgage, one of the Midwest’s leading
mortgage lenders. Throughout his career, Robinson has
watched people lose assets, have liens placed on their
homes, and denied mortgage assistance because of poor credit
decisions that often began in the teenage years.
Robinson believes that
SkillsThatClick.com
can provide a
useful tool to help teens avoid poor financial decisions
that will haunt them for years and deny them their piece of
the American dream.
The
Problem We Hope To Address
Research by the federal government has found that teenagers
are heavily engaged in the American workforce, but do not
always make the smartest choices with the money they earn.
The Bureau of Labor Statistics estimates that approximately
3 million teenagers between the ages of 15 and 17 are
employed during the school year, and 4 million are employed
during the summer.
Teens
account for billions of dollar in wages, but they often
manage their money irresponsibly. Research shows that teens
rarely use their money to contribute toward family expenses
and instead spend heavily on consumer items such as take-out
food and fad clothing. The desire to purchase consumer
goods is so strong among teens that they often are preyed
upon by credit card companies charging high interest rates.
The
debt that many teens develop during their younger years
often accumulates into adulthood, resulting in poor credit
scores and even bankruptcies. Nearly 2.1 million bankruptcy
cases were commenced in U.S. courts in 2005, a staggering 30
percent increase over 2004 figures.
Therefore, while teens may contribute positively to the
economy during their teenage years, through their voracious
purchase of consumer goods, the poor financial decisions
they make often prevent them from making larger purchases
later in life, such as cars and homes.
SkillsThatClick.com
aims to teach
teens valuable financial skills during their early years so
that they can make informed decisions and develop good money
habits that will serve them well in adulthood.
eSkills, LLC
Donald, Robinson, CEO
E:
donaldr@skillsthatclick.com
4696 Cemetary Road
Suite 332
Hilliard, Ohio 43026
(614) 777-1507
Available for interviews upon request.
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How to
Build Wealth When You're in Massive Debt
By Vicky
Therese Davis, William R. Patterson, and D. Marques Patton
Whenever
the topic of finance is discussed, it is important to note
that everyone's situation is different and that financial
advice should be tailored to an individual's particular
circumstances with the help of a professional advisor.
Everyday
our mailboxes are flooded with advertisements, catalogues,
and "pre-approved" credit card offers hoping to deplete our
savings and draw us deeper into debt. In the latest Survey
of Consumer Finances conducted by the Federal Reserve,
concern has been expressed that the rising level of debt may
become "excessively burdensome to families." Similarly, the
American Bankruptcy Institute reports personal bankruptcies
are at an all-time high and in 2005, more than 2 million
were declared.
Debt is a
scary place to be; it is emotionally and financially
threatening. It limits our ability to meet daily expenses,
invest for the future, and creates a long chain of financial
difficulties. The strains put on our relationships due to
these financial pressures make it imperative that we find
ways to effectively deal with debt. Like all problems, it
will dangerously compound if we ignore it, so we must
confront it head on to positively change the condition of
our lives.
Permanently resolving our debt situation involves three
things: gaining an awareness of the different types of debt,
understanding the psychology and circumstances that led to
the current situation, and devising an effective debt
reduction, savings, and wealth acquisition plan.
Put
simply, debt falls into two categories: investment debt and
consumer debt.
Investment debt is an obligation that one takes on in order
to free up funds, generate cash flow, and build wealth. It
is the leverage of other people's money (OPM) to purchase
assets that substantially increase in value or produce
income. A few examples of investment debt include mortgages
for rental properties, business loans, and stock margin
loans. The best forms of investment debt produce positive
cash flow. When debt produces positive cash flow, it
generates more money to invest and does not reduce your
existing income.
Consumer
debt is a financial commitment used to purchase items that
have no substantial resale value or depreciate after they
are bought. Examples of consumer debt include: automobile
loans, personal loans, personal lines of credit, credit card
debt, and more. It can be wise to buy an item using consumer
credit, if the after-tax return on your investments is
greater than the interest rate on your debt. With this
approach, you have more money available to invest at a
higher rate of return. This is a riskier strategy and should
only be employed by sophisticated investors. It is also
important to note that one person's consumer debt is
another's investment debt. The money one expends servicing
debt goes to help another build their wealth. Over time,
your goal should be to turn the tables.
The
Psychology of Debt
To change
your financial condition, you must understand the factors
that have led you into debt and position yourself so that
you will never return to similar circumstances. Common
expenditures leading to excessive debt include automobile
purchases, education expenses, vacations, gambling, medical
expenses, unsuccessful business ventures, and the frequent
purchases of consumer goods and services.
In
general, we must become better planners and begin to stop
thinking of debt as the first solution to our problems. If
our debt situation stems from overspending, we must address
the emotional state that drives us to live beyond our means.
If it is due to unsuccessful business ventures, we must
learn to move our enterprise forward through stock
offerings, or creative means like partnerships and the
bartering of services. If it is from necessary expenditures
or emergencies then we must develop the discipline to create
special savings accounts and cash reserves. Once we change
the way we think about debt, we are prepared to implement
life-changing solutions.
The most
expedient way to deal with debt is through a two-tier
approach of budgeting and investing.
Begin
your financial turnaround by writing down the monthly
payment, interest rate, and total amount owed for each of
your debts. Once you know where you stand with each of your
creditors, attempt to lower your interest rates. This
involves calling your creditors and asking for lower rates,
transferring balances to lower interest rate credit cards,
or more aggressive tactics such as home refinancing, to turn
liabilities into lower interest-bearing, tax-deductible
debt.
Next,
create a realistic budget and eliminate unnecessary
expenses. Take any free cash flow and use it to pay more
toward your highest interest, non-tax deductible debt. On
all other debt, pay only the minimum. Do this every month
until that particular high-rate debt is paid off. Once that
account has a zero balance, use the money you normally would
have expended on your monthly debt payment, plus any free
cash flow, to pay toward your next highest interest rate
debt. Continue this process until all your debt is paid off.
It is
important to note that if you have savings, you should use
it to pay down your highest interest rate non-tax deductible
debt. It makes more sense to pay off debt at interest rates
of 12-30%, than earn less than 2% interest in a money market
or savings account. Also, remember the interest rate on your
debt is equivalent to the after-tax return on an investment.
So, if you are not outperforming on an after-tax basis the
interest rate being charged on your debt, it is more
advantageous to pay off your debt.
The
second aspect of your debt transformation involves
investing. In order to effectively manage and overcome your
debt, make investments that have a return that outweighs the
interest rate on your obligation or that generates cash flow
in excess of your monthly debt payment. Because investing
can be rather complicated and volatile, it is important that
you have as much education as possible in this area. Your
first thought may be, "I don't know much about investing,
and I don't have the time to learn." Well, you must decide
if you are willing to make the time, or choose to work the
rest of your life to pay off your financial commitments.
Budgeting alone is a much slower solution, so you would be
wise to develop a mastery of investing or partner with
people who possess such knowledge in order to expedite the
process. Seeking the advice of competent professionals is a
sound way to shorten your learning curve and prevent costly
mistakes. If you encounter an emergency during this period,
you may use your credit accounts as your cash reserve.
There are
many strategies for investing your way out of debt. Some
include starting or investing in businesses and buying
assets that appreciate in value or generate cash flow. The
issue becomes, how do you take advantage of opportunities
with little cash and poor credit? The answer to most
questions of lack is through partnerships. Though we may not
view ourselves as entrepreneurs, we all have viable business
ideas inside us. It is up to us to develop those ideas and
approach enough people until we find partners who believe in
us and are willing to finance or actively participate in our
venture. For those who like the idea of owning their own
business, but not the hard work it takes to develop one from
scratch, there are a number of direct sales organizations
that will provide you with business opportunities for low
startup up costs and lots of guidance. All of these add up
to ways of generating excess cash flow to help pay off your
debts and build wealth.
The
mentality that created your current financial situation will
not suffice to solve your debt issues. For most, the
financial difficulties we face have taken years to develop,
so they will not be solved overnight. As much as we would
like to believe, there are no incantations or magical
formulas for ridding ourselves of financial obligations,
only the disciplined strategies of sound money management
and investing. We must remember to deal with the issues that
drove us into debt before attempting to implement any
strategy. If we do not start with our own thought process,
any plan of action will not be effective in the long run and
may put us in a worse financial position. To transform our
lives, we must change the way we think about finance and
obligations. On the occasions that we do use debt, it should
be for the purpose of buying assets, not consumer goods that
depreciate or have no value.
Vicky
Therese Davis,
William R. Patterson, and D. Marques Patton
are award-winning lecturers and National Best-selling
co-authors of the business and personal finance book, The Baron Son: Vade Mecum 7. Their ethical guidebook
to wealth, power, and success, The Baron Son,
has been translated around the world and featured in the Forbes Book Club and
Black Enterprise
magazine. For over $3,600 in FREE Bonus Gifts and more
information on THE BARON SOLUTION™Strategies for
Wealth & Business Success, visit:
http://www.baronseries.com.
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HERE IS YOUR FIRST MONEY MAKING
TIP
Some of the smallest idea's can turn into a very profitable
experience. How many of you own a home base business? There
was a time in my life when I had no money, no job and was going
to school full time to become a Chiropractor. I decided that I
was tired of being broke. I didn’t have a car and I was renting
a room from a wonderful lady who rented out her basement.
Each semester would pass and classes became harder and my
student loan balances continued to grow. I saw no employment
opportunities in my near future and began to search for a small
home based business that did not require a lot of money.
It’s very hard to get a loan without a job or good credit. I
needed a way to create residual income with little or no money.
Like most people I asked my friends and family for their
opinion. For many people, this potentially is your first
mistake. Allowing other people to dictate your
path towards financial independence and prosperity is a
mistake. You have to decide what’s right for you. After weeks
of research I found the Pay Phone business. This seemed to be a
good investment that would not require a lot of time or other
daily management tasks. There was one problem; the pay phone
business was too expensive for my budget.
The price range
to start a pay phone business was $7,000 - $15,000 for a turnkey
operation. (A turnkey operation is a business that is up and
running with a customer base and reported income). Of course
all the companies would finance you, but I was tired of being in
debt and wanted to own them free and clear. The venture
appeared to be a good return on my investment. I asked people
to invest with me but no one was willing to invest. I had no
choice but to look elsewhere.
With frustration settling in, school not going so well and a
stressful relationship, I came across another turnkey business.
Many of you may wonder where to look for these types of
opportunities. They’re in your local newspaper’s business and
classified sections. You can also search the Internet.
I recently came
across a small but lucrative business opportunity for anyone—the
vending machine (candy, soda, etc.) business. Vending is a cash
business. It’s not real estate, but it’s another form of
income.
I found a
company that was willing to sell me a candy machine route, with
machines in stores. I needed to establish a wholesale business
account with a distributor. Sam’s Club and BJ’s are the most
popular distributors of wholesale candy supplies.
One of the
benefits of establishing this type of home-based business is the
tax advantage. All of my business related supplies, gasoline;
bank fees would be eligible for a business tax deduction on my
annual income tax return. In addition, a $2,500.00 home
business credit, which the IRS allows to everyone who lists a
home business, would be eligible for a tax deduction.
Now let me show
you how the money worked out for me. I purchased 10 new vending
machines for $3,500.00. The machines arrived the next day and
were easy to assemble. The beauty of this business is the ease
in which people use the products. How many of you stopped to
buy a gumball, peanuts, Skittles or a pack of M&M’s from a small
candy machine at your local restaurant or store? Most of us
have done it and don’t think twice about spending the money.
When you think about the foot traffic at a good location, the
quarters add up.
My 10 locations
were averaging between $100.00 -$150.00 a month. That’s an
extra $1000.00 - $1500.00 per month (mostly in change). My only
responsibility was to keep the machines supplied with candy.
For some people, the extra money can be the difference in paying
your rent and buying groceries.
My business was
growing. I started to save my money and in 3 months I purchased
20 machines for $2000.00, bringing my total number of machines
to 30. My machines were earning $2000.00 to $3000.00 per
month. Think about it, that’s an extra $24,000 to $36,000 per
year—part time. Sure I had to roll quarters and take them to
the bank and keep the machines stocked, but this was nothing
compared to the return on my investment. I still had time for
other interests such as home and school activities.
If anyone from Atlanta is reading this if you've eaten at
Spondivits in East Point or Ryan’s or Apple Bees' and Wal-Mart
you've put money in my machines. My best locations are
restaurants.
Thank you for reading this information. Please forward this
information to your friends and ask them to sign up for
future money making tips.
Cedrick Goodman is a professional speaker, trainer, entrepreneur
consultant and soon to be author. He is available for speaking
engagements, seminars, and consulting services. Visit his web
site at
www.cedrickgoodman.com or
e-mail him at
cedrickspeaks@aol.com. Dial
1-800-509-8312 or 1-866-460-1521. Please don't forget to sign
up for our Monthly News Letter.
You can read
other articles by Cedrick Goodman on our Talk Back page.
Click here to go there now.
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You
can learn a lot from a 13 year old. In a recent
conversation with some eighth grade students from
Washington, D.C., they told me their future plans included
strategies to save money in order to attend college,
purchase a home and prepare to raise their children. Some
of them come from financially balanced homes where parents
model responsible saving and spending habits. The vast
majority, however, learned these valuable lessons from their
math teacher, Ms. Kelley Lockard. Her “Family Life” project
forced them to enter the world of adulthood.
All students, regardless of
marital status, were financially responsible for a car note,
mortgage, credit cards, and children. “A lesson on compound
interest allowed the students to buy cars and select
economical repayment terms of three, four or five years,”
Lockard stated. She beamed as she described their financial
worksheets of budgets, charitable donations and spending
money. At the end of the four-week project, they learned
the value of buying versus renting, establishing savings,
using cash for purchases, and making profitable
investments. One of her students summed it up best; “It
doesn’t matter how much you make, it’s how you budget and
spend your money!”
It was
refreshing to speak with young adults who have been exposed
to the concept of financial empowerment. However, the
number of individuals who lack basic information about how
to build wealth, and stay out of long-term debt, is
staggering. A few years ago, the Consumer Federation of
America noted that “the typical black household had less
than one-quarter the net wealth of the typical American
household -- $15,500 vs. $71,700.” Their research indicated
a clear distinction between Blacks and other American groups
in terms of long-term planning, wealth building, saving, and
spending. Some of the negative behaviors noted were;
spending beyond income, irregular or no savings, low
tolerance for investment risk, and shortsighted financial
plans.
The
idea of building wealth is not a difficult concept to
grasp. Owning a home is one of the best ways to
increase your net worth. Beyond that, tackling your current
debt and reformatting how you view money is the next big
step. This requires a commitment to honestly assess your
current liabilities and assets, note all sources of income
and devise a financial plan that you follow. If you are not
a long-term planner, then you may wish to consider your
goals in five to ten year increments. What big purchases
will you make within the next five years? What should you
consider in the next five to ten years? When will you have
to replace your furnace, car, or pay college tuition? The
idea is to plan for big expenditures, and then save money
for each one. You will eventually use cash, not credit, to
make all of your purchases, thus eliminating unhealthy debt.
Do you
have a vision of your future? How about a plan to get
there? People who write down their plans and outline steps
to achieve a goal are more likely to accomplish them.
Regardless of your lifestyle, income or current financial
situation, you may find value in writing out some of these basic steps to help you make your vision plain
enough to see, and simple enough to follow:
·Monitor your spending by noting every purchase made for one
month. Evaluate your spending to see where you can cut
back.
·Establish a written budget that includes personal spending
money and savings.
·List
your assets and all liabilities.
·Create
a debt elimination plan; target smaller items first, or
those with the highest interest rate.
·Obtain
adequate protection of your assets. For instance, a single
homeowner may want to consider life insurance to protect his
home in the event of his demise, or inability to continue
working.
·Establish an employer-based savings, IRA, SEP, or Keogh, or
other long-term savings plan.
·Aim to
save six to eight months' worth of your living expenses in
order to create a cushion, in the case of an emergency.
·Earn
higher wages or additional income.
·Accumulate no new debt! Separate your needs from wants.
·Make
radical changes in your life. You'd be surprised how much
money you could save (and use to pay off that credit card
you racked up) by giving up certain things.
·Make a
commitment to live a debt-free life!
One of
my personal goals is to educate others on simple steps that
may enable them to make financially sound decisions. My
deepest desire is to see generations of families leaving
financially healthy legacies behind. What do you want your
legacy to be?
Lizette Llanos is a Mortgage Professional with AVision
Residential Solutions LLC, in Maryland. 100% of her time is
dedicated to providing her clients with various mortgage and
home equity/lines of credit options, as well as strategies
to meet their financial goals. She currently conducts
educational seminars on protecting your credit,
homeownership, budget planning, and the home-buying process
in the D.C. Metro area. She can be reached via email at
lizllanos@avresidential.com, or by calling (202)
270-3966.
So
what do you think? If you would like to respond to this
article
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Guestbook
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reaction.
10
Spiritual Principles for Unlimited Wealth & Abundance:
Breaking the Cycle of Lack in Any and Every Area of Your
Life
By
Valerie L. Taylor
Principle
#7: Practice Giving Away 10% of Your Income
The
concept of tithing is usually associated with religion;
however, in this context, I refer to tithing as a spiritual
principle rather than a religious obligation.
If
you’re associated with a religious institution of any kind,
you’ve probably been beat over the head about tithing—and
for good reason. Churches, temples, mosques and other
non-profit institutions rely on the generosity of their
members for their survival.
If
you’re not associated with a religious institution—and you
certainly don’t have to be to practice tithing—then you may
want to pay special attention to this article, as you may
not have been constantly reminded of the importance of
giving away 10% of all you earn like the regular
church-going folks have been.
Either
way, being a generous giver is as integral to becoming
wealthy as everything we’ve discussed so far in this series,
maybe even more so. But why does generosity have to be done
at the 10% level? Can’t I just give whatever I want to give
whenever I feel like it? These are excellent questions, and
not only will I provide the answers herein, but I will also
provide you with 3 compelling reasons to give away 10% of
all you earn.
First
off, let’s answer your first question: Why do I have to give
away 10%? Wouldn’t any amount do just as well? There is a
special significance to 10%; and if you are a Bible reader,
it comes from the passage of scripture found at Malachi
3:10. To briefly paraphrase, God’s promise is that if we
bring a full tenth of all our income to him, then He will
pour out a blessing on us so bountiful and plentiful that
there will not be room to receive it. Then He promises
protection of crops, peace, happiness and blessings—all as a
result of giving back 10%. A small price to pay for such
great returns!
Herein lies
the 3 most compelling reasons to give away 10% of your
income, regardless of your religious affiliation, or lack
thereof:
1.
Tithing reminds us that there are always others who need
money more than we do. For those of us reading this who live
in the United States of America, we inhabit the richest
country in the world. We may feel that all of our wants and
needs are not met at all times, but, in general, we lack for
very little. If we are sitting at home, and if we’ve had at
least two meals today, and are now sitting back with our
family enjoying a little TV, we’ve used more resources and
eaten more food in one day than 80% of the world’s
population. Most of the world’s population goes to bed
hungry, homeless or living life below the poverty line,
including millions of children.
If we
each gave 10% of our income just to feed hungry children, we
could probably wipe out starvation in one day.
Tithing forces us to look outside ourselves to see folks who
are much worse off than we are. Then it gives us an
opportunity to be deeply thankful for all we do have, which,
in turn, causes us to receive even more abundance and
wealth. A gratitude attitude brings lasting riches.
2.
Tithing makes you feel good. Giving is always better than
receiving. We feel bigger than ourselves when we give, and
we feel that we’ve made a difference. As the saying goes,
‘You can’t take it with you’, so why not cheer yourself up
while you do good for others?
3.
Tithing increases the flow of wealth into your life. One
reason why Oprah and Bill Gates (two of my favorite rich
people) are so rich is because they give away so much. They
actively seek ways to give away massive amounts of wealth.
And if you’ll notice, all the money they give away keeps
beating a path right back to their doorsteps! This is the
true paradox of giving: whatever you give away is multiplied
and returned to you. You truly do not lose when you give,
you only stand to gain.
Some
ancient philosophies, such as Kabala, teach that giving away
10% of your income actually protects the other 90% and
prevents you from losing everything you have. Food for
thought.
Tithing is not limited to income, we can tithe our time as
well. The best gift we can give to another human being is
some of our precious time. It is even more valuable than
money in some respects: unlike money, if time is lost, it
cannot be replaced.
Remember that money is energy and moves from place to place.
To have more of it circulating in your existence, you’ve got
to give away more of it. It sounds backwards to actually
give away the thing you most need, but it works! It cannot
fully be explained with words, but it is an absolute
spiritual truth.
There
is one more supreme reason for giving away 10%: it exercises
our faith muscle. Faith is no good if we just talk about
having it. Tithing allows us to ‘put our money where our
mouth is’ and ante up. When we do, though it may be a huge
leap of faith, we are expressing to the Universe that we
have full confidence that all our needs are met, no matter
what.
Make
someone’s day today, give something of value away.
Principle
#8: Put Together A Solid Estate Plan
Whether we like to think about it or not, one day, each of
us will leave the planet. We don’t live here forever. That
being the case, it’s prudent and loving to take care of your
financial matters in advance of your demise. Taking the time
to put in writing a solid estate plan shows you care about
whomever you leave behind.
How
does one go about putting together an estate plan?
First
of all, a little knowledge and research can go a long way in
this area of financial planning. Before proceeding, think
about your current financial situation and what you want to
happen when you’re gone. Consider the following factors:
Are you married or single?
If you’re married, would your spouse be at all dependent
upon you during retirement?
If so, what would be your contribution to your mate’s
retirement and how would you replace that amount if you
weren’t around during retirement?
Do you have any children or other dependents?
If so, what are your children’s college education needs?
What do your entire current debts amount to? What about debt
that is jointly held with a spouse? (The surviving spouse
would still be responsible for this debt.)
What are the total assets you would leave behind? And do the
assets exceed the liabilities?
How would taxes impact your estate?
Do you have a blended family? (Children from a previous
marriage, or currently married to a person who has children
from a previous marriage).
If so, have you discussed with your mate how they will be
impacted in your estate plan? (This can get very sticky if
there are children from a previous marriage who will inherit
everything to the exclusion of the current mate).
Do you have any charitable organizations that you’d like to
leave money to? What about schools or other educational
institutions?
Do you currently have life insurance? If so, is it enough?
These
are loaded questions, but they are best planned for IN
ADVANCE of any unexpected, undesirable events.
Let’s
first address the life insurance issue. The question most
asked about life insurance is: How much do I need? From my
experience as a financial advisor for many years, I can’t
tell you how often I heard this question. The clients almost
never liked my answer, as it was always a higher amount than
they had been anticipating. Here’s why.
Life
insurance should cover the following:
Any
joint debts that a surviving spouse would still be
responsible for, including mortgages, credit cards, car
loans, etc. The reason is because it now takes two paychecks
to carry these debts, and if one spouse were gone, one
paycheck would have to cover everything. I don’t know too
many families who could instantly go from living on two
paychecks to living on one and still be comfortable.
The
surviving spouse’s needs for retirement that would have been
covered by the spouse who is no longer there. Most couples
rely on each other for retirement, especially if both are
working. Just as they rely on two paychecks during their
working years, most couples plan to have two or more
retirement incomes that they can rely on during retirement.
This means that if one spouse leaves prematurely, the other
spouse is left to cover his or her own retirement in full.
Obviously, if the surviving spouse wants to maintain the
same standard of living, they will need some help. This
issue often impacts widows more than widowers because men
tend to have higher earnings throughout their working
careers as compared to women. Also, men tend to live shorter
lives than women, so there are usually more widows than
widowers, thus narrowing the pool of available older men
that widows could marry, if they chose to do so. Which
brings me to the next point: it seems that more men get
remarried after losing a mate than women. Go figure.
Any
living expenses associated with raising any minor children,
including tuition and college expenses.
Considering all of the above, let’s look at an example. If a
husband earns $50,000 per year, and his wife earns the same
amount, their total gross annual income is $100,000. If one
of the mates were to pass on prematurely, the surviving
spouse would be left in the position of trying to keep up a
$100,000 lifestyle on $50,000. That’s a stretch.
However, if this same couple each had life insurance
policies of $1,000,000 each, and one of them passed away
prematurely, the $1,000,000 (insurance proceeds are
tax-free) could be put into an account that could earn at
least 6% per year. At this rate of return, the account would
yield an average of $60,000 of income each year. Assuming
that the surviving spouse would not need the entire $60,000
to live on, but only $50,000 (maybe less since there is only
one person spending the money where there used to be two)
then $10,000 could actually be reinvested back into the
portfolio each year, thus enabling the $1,000,000 to grow
each year. As the pot continues to grow, it produces higher
and higher income.
This
is a favorable scenario to create for the surviving spouse
and any children the couple may have.
Single
folks usually want to know if they need life insurance. The
answer to that is: it depends. If the single person is a
parent, they most definitely need life insurance. It would
be a good thing to define clearly in the estate plan who
would get custody of the children, and it would also be kind
to leave enough money behind for the children to be well
taken care of.
A good
guideline for life insurance is: always get more than you
think you need. Of course, speaking to a licensed
experienced life insurance agent whom you trust is the best
course of action before committing yourself to a policy. I
would warn against getting life insurance over the Internet
if you were not savvy about insurance. It pays to have a
knowledgeable professional with whom you can discuss your
desires and know that things will be done exactly as you
wish. A good life insurance agent is invaluable.
In
addition to life insurance, a good estate plan includes a
living will, durable power of attorney, healthcare directive
and a will or trust.
It is
critical to have a healthcare directive, because it can make
your wishes clear if you’re not able to speak for yourself.
There is much confusion, sadness and grief if a family
member winds up on a feeding tube and/or a breathing
apparatus and no one knows what to do.
A
durable power of attorney lets you appoint someone who will
carry out your wishes for you and speak for you if you are
not able to speak for yourself. It gives them the power to
make medical decisions for you, in accordance with what
you’ve already stated in your healthcare directive.
There
is a booklet entitled “5 Wishes” that is available in over
40 states from the Department of Aging and from most Hospice
providers. It steps a person through 5 issues that anyone
could be facing in a life-threatening situation. It
addresses most of the medical issues that could arise in
such cases. It is wise to complete it, even if you’re young
and healthy.
If you
decided to have a will, remember that a simple will is made
public because it is held on record at probate court, and
therefore anyone has access to it. For more privacy, many
have opted for a trust, which is completely private.
However, a trust is more expensive to set up and requires
more work. A simple will may cost only a few hundred
dollars, while a trust (depending upon how complex it is)
could cost thousands to set up. In addition, after the trust
is set up, assets must be renamed in the ownership of the
trust, which is time consuming and labor intensive. But it
is certainly worth it for the tax benefits that trusts
provide. Wills provide no tax advantages, but are just a way
for you to state who gets what.
Your
best bet is to speak with an experienced estate planning
attorney who can provide guidance and advice on how to
establish the best estate plan for your family’s needs and
your desires.
Another important issue to consider is who your
beneficiaries are on all of your financial accounts. Wills
go through probate court and can take months to settle. If a
person has a beneficiary designated on their financial
accounts, the money can be transferred directly to the
beneficiary immediately. The beneficiary needs only to show
a death certificate and complete minimal paperwork. Check
your beneficiary designations on the following accounts:
Investment accounts (such as stocks, bonds, mutual funds)
Dividend reinvestment plans and shares in an investment club
Any other financial account
Be
sure to establish an estate plan, BEFORE YOU NEED IT. After
setting up the estate plan, and designating beneficiaries on
ALL your financial accounts, re-visit your plans once per
year to see if your desires and thoughts have changed, or to
determine if changes in your circumstances warrant changes
in your estate plan.
Getting your financial house in order, before you leave this
planet, is the loving thing to do. Rather than leaving your
family worried about and stressed over money, you can allow
them to reflect on happy memories they had with you.
Your
family can then get on with the business of healing, since
the business of money will already be taken care of.
So
what do you think? If you would like to respond to this
article
click here and sign our
Guestbook
to leave a public or private statement, comment or
reaction.
10 Spiritual Principles for Unlimited Wealth & Abundance
Breaking the Cycle of Lack in Any and Every Area of Your
Life
Principles #5 and #6
By Valerie L. Taylor
In our previous articles, we covered the first four
principles of 10 Spiritual Principles for Unlimited Wealth &
Abundance. As a review, here’s what we’ve covered so far:
Principle #1: The Source of Wealth
– there is an infinite supply of abundance and wealth all
around you. The key is to learn how to attract wealth to you
rather than chasing a dollar.
Principle #2: Your Power to Create
– look at your paycheck, your house, your car, your bank
account, your investment accounts and your retirement
accounts. They are all your creations and mirror to you what
you think you should have. If you’re not happy with what
you’ve created thus far, the choice and power belong to you
to create something different.
Principle #3: Do What You Love & You'll Attract All the
Money You Want
– We’ve all heard “do what you love and the money will come.”
It’s true. When we’re engaged in our passions as a money
making pursuit, it‘s more likely that we will do what it
takes to become a success, which leads to larger profits.
Principle #4: Get Your Financial House in Order
– There are two critical documents you need to prepare: a
Net Worth Statement, and an Income & Expense Summary.
Without these documents, it will impossible to monitor your
financial health and become wealthy. These are the first two
documents I would prepare for my clients when I was a
financial advisor. These documents are like taking a
patient’s temperature and looking into their eyes. They are
critical diagnostics that determine where you are weak and
where you are strong in your overall financial picture. Then
you’ll know exactly how to proceed.
Now let’s move on to:
Principle #5: Creating More Monthly Cash Flow
After creating your Income & Expense Summary, you know
exactly how much cash flow or “discretionary income” you
have. As we’ve discussed, discretionary income is the amount
of funds that are left over on a monthly basis after you’ve
paid all living expenses, including savings,
gifting/tithes, taxes, bills and fun money.
The problem most families run into is that their
discretionary income is low, non-existent, or negative.
Below I will list several strategies to increase your cash
flow by over $1,000 per month within the next 90-120 days.
If your cash flow is low, or if you are just breaking even,
or even if your cash flow is negative, listen up!
Pay
off debts with savings.
I routinely had clients come into my office who had
$10,000 or more in savings in the bank, and credit cards
with balances of $3,000 to $5,000. I would add up the
interest for the year and show clients how much it was
costing them to carry each credit card balance they had.
The reaction was usually shock at how much their debt
was costing them. For example, if you have a credit card
with a $5,000 balance, and a 9.9% interest rate, that
credit card costs you almost $500 per year in interest.
If you have a credit account with a balance of $10,000,
and an interest rate of 19%, it costs you $1,900 per
year to carry that debt. (These are simple figures, not
compound, so you may actually be paying more, but we use
these figures to keep it simple.) Taking some cash out
of the bank and paying off debt is a wise move if you’ll
still have cash reserves left over after you’ve paid off
your debt. Cash Flow Increase: $200-$400+/mo.
Refinance your home, or get a HELOC (home equity line of
credit) or a home equity loan.
A home refinance could lower payments and you may be
able to take cash out of your home to pay off other
debts. Most people have done multiple refinance loans on
their current residence, considering the real estate
markets. But much of this money is used to pay off debts
and buy more stuff rather than being put to use in
investment vehicles that could create positive cash flow
every month. Taking a HELOC and using the funds to buy a
rental property that pays $200 or $300 per month in
positive cash flow may be a better move than paying off
a bill that only has a $50 monthly payment. In one
scenario you create $200 to $300 cash flow, in the
second scenario; you only create an additional $50 in
cash flow. Or you could invest the funds from a
refinance in a stock account that pays excellent
interest and use the profits as cash flow. For example,
there is a stock account that targets making a profit of
5-10% per month on investments. Not 10% per year, 5-10%
per month. In that case, if you invested $5,000 in such
an account, and it earned 5% per month, your cash flow
would be $250 per month. Of course, there are no
guarantees of these returns, nor does past performance
indicate or ensure future gains. As always, you should
carefully investigate and conduct your own due diligence
before investing any money. To get more information, see
the website at the end of this article. Cash Flow
Increase: $200-$300+/mo.
Examine your homeowner’s insurance policy.
Most homeowner’s insurance policies include both the
value of the house and the land under the house. If
there were a fire, the insurance proceeds would rebuild
the house; but since land doesn’t burn or go away, you
can subtract the cost of the lot your house is on out of
the homeowner’s policy. Speak with your insurance agent
about how much of the policy is for the lot your house
sits on as the land is usually included in the value of
the
home.
Cash Flow Increase: $10+/mo.
Examine your auto insurance policy. Many of my clients
would have several items on their auto insurance that
were redundant or just unnecessary. The first item to
look at is your deductible. Many people are afraid of a
high deductible, because it represents the amount of
money they would have to pay out of pocket if there were
an accident. The cure to this ailment is having cash
reserves. Insurance premiums drop the higher the
deductible climbs. You may want to consider a $1,000
deductible rather than $250 or $500. It could
substantially reduce your premiums, and your cash
reserves would take care of the $1,000 if you got into
an accident. If you don’t have current cash reserves,
but you have a credit card with at least $1,000
available on it, try this strategy: reduce your car
insurance premiums by picking the highest deductible
you’re comfortable with. Then put the difference between
the payments in an account to start saving for cash
reserves. For instance, if you pay $175/mo. for car
insurance with a $250 deductible, and your premium
dropped to $125/mo. with a $1,000 deductible, put the
extra $50 per month into your cash reserves. Also look
out for other charges on your car insurance such as
roadside assistance. If you have a new vehicle that
comes with roadside assistance or if you’re a member of
Triple A, you may not need to pay for roadside
assistance again. Also, if you have a rider for medical
expenses on your car insurance, but you have excellent
health insurance and you find that the coverage is
redundant, remove that rider from your car
insurance.
Cash Flow Increase: $100+/mo.
Use
your imagination.
There are so many ways to make money that a mentor of
mine says “Money is nothing but an idea and people who
lack money simply lack ideas.” I’ve put this principle
to the test and it is true. For example, if you are
short on cash each month, are there any businesses that
you know and like that you wouldn’t mind promoting? You
can visit the mortgage brokers and real estate brokers
in your area and ask them what kind of referral fees
they pay for new qualified clients. They may say $100 or
more per person you refer who buys from them. Then you
fully understand that business, and get busy promoting
it to your friends, family, business associates, or
whomever you might meet. You are recommending
restaurants and other businesses right now, why not get
paid for it? In one instance, a beginning real estate
investor came up with an idea to help find tenants for
landlords and to help tenants find good landlords. He
keeps a list of people who are looking for a home to
rent and he keeps a list of landlords who always have
properties to rent out. He’s made a deal with the
landlords that they will pay him a finder’s fee of a few
hundred dollars every time he sends them a tenant that
rents from them. In the meantime, he’s negotiated with
the tenants to also pay him a finder’s fee for
connecting them with a place to live that meets their
specifications. This fee is also a few hundred dollars.
So this idea is paying the person who thought of it
almost $1,000 every time he matches up a tenant with a
landlord. Not only is he making money, he’s learning
about being a real estate investor!
Cash Flow
Increase: $1,000+/mo.
There are so many ways to increase your cash flow, but by
now you get the idea. It takes work on your part. You will
have to examine everything you’re spending now to see where
you can trim the fat. A word of caution here, don’t get
carried away! If you make a budget that is too tight, you
will feel as if you’re being denied the pleasures of life
and you will soon rebel against your budget. You just want
to trim enough so that you can create an extra $1,000 per
month that you can save and invest for your wealth creation.
Happy hunting!
Principle #6: Get Wise Counselors
Oprah and Bill Gates have the best of the best advisors in
every imaginable facet of their financial lives:
accountants, lawyers, tax attorneys, real estate advisors,
financial advisors, the list goes on. The average person who
wants to build wealth will also need a team of trusted
advisors or counselors. Your next door neighbor or your
workmate don’t qualify as wise counselors if they’re in the
same boat as you are.
The downfall of many is that they try to do everything
themselves. Trying to be a tax person and doing your own
taxes (even with the help of tax software) could potentially
cost you thousands of dollars in missed tax deductions.
There are 138 legal tax deductions for a home based
business. Do you know all of them? How about half? You get
my point, if you’re not a tax professional, you would do
well to have a tax professional do the work for you.
Likewise, trying to manage your own stock and investment
accounts without the help of a qualified advisor could
potentially lose you thousands or hundreds of thousands of
dollars as well.
Not hiring a competent, trusted and skilled lawyer could
also cost you a bundle.
The point is clear, having wise counselors in your hip
pocket is critical to your financial success. You don’t know
everything, and you don’t know what you don’t know! Most
people don’t even know what a Roth IRA is; let alone how it
could turn them into a tax-free millionaire! It pays to
secure wise advisors. In our wealth building organization,
we have access to several financial professionals: CPA’s who
manage all areas of our tax lives for little out of pocket
expense, a network of attorneys at a reduced price (for
members only), stock professionals who give us daily updates
on the markets and brokers who trade our accounts profitably
for us, credit professionals who help us acquire perfect
credit and who then become watchdogs over our credit reports
to prevent identity theft, millionaire mentors who coach and
assist us with real estate investing and wealth building.
It is impossible to build substantial wealth without a team
of trusted, competent, experienced advisors and counselors
who have proven track records.
Next up, we’ll talk about principles 7 & 8, which will
highlight the power of gifting and how to pass on your
wealth to your heirs.
Check out the following website for the financial
information Valerie mentions above:
www.fdirep.com/106466.
Are Social Security Private Accounts a Good Deal or Raw Deal for
African Americans?
By Bret Searles
How many
legs does a dog have if you call the tail a leg? Calling the
tail a leg doesn't make it a leg.
Abraham
Lincoln
Whew! I
almost wrote a really long article about the Social Security
System and what it means to Black folks.
Fortunately, I fell asleep while writing it just like you would
have reading it. I can't think of anything more boring then an
in depth analysis of what is wrong with Social Security.
I think
that one thing the under 40, Black American, internet savvy
crowd already knows is that the Social Security system is in
trouble and that it won't be there for us when we retire the
same way it is for our parents and grandparents. Something has
to give.
One thing
is definitely true, the Social Security system won't exist in
the same form and with the same level of promise that it has
now.
So, with
all the boring stuff out of the way, I want to say a few things
about private accounts and what I think they mean for African
Americans. I'll start with the bottom line up front. I think
that Social Security private accounts are a good deal for
African Americans but with some very serious reservations.
First of
all, a private account is the government's attempt to add an
ownership component to the system. However, in this case, your
ownership rights will be severely restricted. I can invest MY
money in stocks, bonds, cash, real estate, businesses, mutual
funds and any other investment vehicles I so choose. The private
accounts system will likely offer a limited range of choices in
nothing but paper assets like stocks, bonds and money market
accounts that are managed by large Wall Street brokerages and
mutual funds - the so-called experts. Ownership with
restrictions is merely the illusion of ownership. Very few
things you own will have as many complex rules, restrictions and
legal entanglements as private account will have attached to it.
Second,
the government is forcing every American to become an investor
without committing the resources to raise the level of basic
financial literacy in this country. Alan Greenspan has said that
basic financial literacy should be taught in our public schools.
The
government did this very thing before when they created the 401K
retirement system. That system has been a boon to Wall Street,
Corporate America and many fellow Americans. However, the pain
felt when the 401K gets hurt is not shared as freely as the
benefits. Ask employees at Sun Microsystems, Enron, Martha
Stewart Omni Media and other companies that have gone belly up
or otherwise taken a brutal pounding in the stock market because
of mismanagement and corruption.
Who will
get hurt when Social Security private accounts take a beating?
Will the average citizen be the last to know, as is already the
case, when their private accounts hit rock bottom? Without a
major, national effort to boost the financial literacy in this
country, how will people react to negative news about private
accounts? Will the government restrict our ability to react to
negative news?
Third,
what will the government do should you out-live your private
account? Because the account only offers limited ownership not
real ownership, I expect that we won't be able to bet their
private account at the casino on the day they retire. I do
expect the withdrawals from our private accounts to be amortized
over a period of time based on something like the average life
expectancy. What happens if you are the lucky somebody that
lives a long, healthy life to 120 years old? If your account
goes broke, what will the government do for you? If you enroll
in private accounts, you agree to a cut in your benefits. Will
you suffer if you private account suffers?
Fourth,
the new promises are just as shady as the old ones. Private
accounts will salvage the system for some time but ultimately
will become plagued by their own, new and different challenges
that will need to be fixed by a future generation.
No one in
either political party wants the truth to get out about Social
Security. Socialism is a miserable failure. Taxes will
ultimately have to be increased on us no what fix we decide
today for the system. When and by how much are the only
questions that need to be answered. Cuts and elimination of some
benefits are inevitable. Retirement will become anathema in the
future.
In the
past 10,000 or so years of human history, retirement didn't
exist in any way, shape or form as it does today. People either
got too sick to work or died. We've tried to change history with
our current system but we can't change humans.
If you
send someone a check and tell them they don't have to work
anymore, they won't work. There are able-bodied and able-minded
senior citizens that are not working because the governments
sends them a check every month regardless. The truth is, a
system set up like this will collapse one day on its own because
its not the way of humanity.
I think
its good that my generation believes more in UFOs then in Social
Security being there for us when we retire. Maybe that belief
will be the motivation we need to save outside of Social
Security to secure our own retirement.
So, with
all of these reservations, you may wonder why I think that
Social Security private accounts are a good for Black Americans.
The answer to that is simple math.
Simple Math Reason Number One: Black males live to an average
age of 66 years old. The average Black male now collects one
year of full Social Security retirement benefits. The age of
full retirement for the under 40 crowd is now set at 67. Watch
for proposals to raise that age even more. The average Black
female has a live span of 72 years meaning that she collects 5
years of benefits. The average White male and White female have
life spans of 76 and 78 years, respectively.
Personally, I would rather pass my life time of Social Security
tax dollars on to my children and grandchildren then to a
little, old white lady I've never known in my life like we do
now under the current system. You may not like this truth but
that is who is getting your benefits now.
Simple Math Reason Number Two: It is not hard at all for the to
earn more then the 2% return on investment that Social Security
provides now. A money market mutual fund is paying anywhere from
3% - 5% interest at this time. You could easily and safely earn
double what Social Security offers.
Simple Math Reason Number Three: The average Black American has
a net worth less then $5,000 and that is only one-tenth of the
average White American. Social Security private accounts,
because they are form of forced savings, will add to the net
worth of Black Americans. All other Americans will see their
personal wealth build also so I don't expect that private
accounts will close the racial wealth gap. I do believe that
private accounts will inject much needed wealth into the
accounts of African Americans and we need the boost most of all.
Also, because
we don't live as long beyond the retirement age (which I hope will
one day change), more of the wealth in our private accounts will get
passed to our children, helping them to build wealth. So, a legacy
of wealth will begin to grow from the seeds of investment into
private accounts.
Simple Math Reason Number Four: This relates to what I said
about bucking human history by creating this artificially
constructed, man-made system of retirement and actually
believing that it will sustain us unchanged in perpetuity. The
system is breaking down. We need to start taking complete
ownership - and control - for our retirement security.
Partial
privatization is a step in the right direction. Even if the step
is one small incremental one, we must begin somewhere. I don't
think the destitute and disabled should be left out in the cold
without our help and support. I do believe that the truth needs
to be told and that no one is telling it today.
So, here is what I
have to say: make a plan to provide for your own financial
independence, invest heavily into your own financial education
(Including my site, www.blackwealthnow.com), invest your money wisely, prepare
for the absolute worst and hope for the absolute best.
God bless.
About the
Author:
Bret
Searles
is a freelance writer on Black personal finance and business
issues, author of ebook "The 7 Simple Secrets to Building
Wealth: An African American Guide" and publisher of the e-Zine
Black Wealth Now at
www.blackwealthnow.com.
So what do you think?
If you would like to respond to this
articleclick hereand sign ourGuestbookto leave a public or private
statement, comment or reaction.
10 Spiritual Principles for
Unlimited Wealth & Abundance
Breaking the Cycle of Lack in Any
and Every Area of Your Life
Principles #3 and #4
By Valerie L. Taylor
Principle
#3:
Do What You Love & You'll Attract All The Money You Want
This is a foreign concept to
most of us. From childhood, we're taught to go to school,
graduate with a degree, and get a good job. Never mind if we
like the job or not; if it pays the bills, it's good
enough.
I recently read a book by a
successful author who offered a radically different
perspective on this issue. He stated that as his children
were growing up, he told them that his only expectation for
them was to do what they loved. He told them he didn't care
about them getting good grades, or graduating from the 'best
schools', or finding the 'right' job. He only wanted them to
pursue whatever they had a passion for. He even went so far
as to say that if they didn't earn enough money to live on
while pursuing their passions, he would take care of them.
The rest of my book club had
little tolerance for this viewpoint. I, however, found it
intriguing. What if children were free to do exactly what
they loved, and to pursue it passionately, without regard
for money?
Well, in the case of this
author, his children turned out exceptionally well. They
didn't receive pressure from him about getting good grades,
but they always performed well above average in school. He
didn't care if they were at the head of their class or not,
but they all graduated with honors. And he didn't care if
they got 'good' jobs or not, but they all ended up with
excellent paying work--doing exactly what they love doing.
Which brings me to my point:
do what you love, and the money will beat a path to your
door.
Why? Because enthusiasm is
contagious. The more enthusiastic and passionate you are
about your product or service, the more customers you'll
draw, and the more money you'll attract.
Ironically, the people who
love what they do so much that they would do it for free are
usually the ones who get paid the most.
What are you are great at?
What do you have a passion for? If you can answer those
questions and find a way to package it into a viable
business, you'll have the starting point of an exceptional
income stream!
Remember, Donald Trump loves
the art of the deal, and has become a master at it. In the
process, he's attracted more money to himself than he could
ever spend in one lifetime.
Principle
#4:
Get Your Financial House In Order
There are two financial
statements that are critical for gauging your financial
health. The first is an Income & Expense Summary (or Cash
Flow Statement) and the second is a Net Worth Statement.
Why do you need these
documents?
As a financial planner, the
first thing I would do to determine the financial health of
a client is to ask them how much money comes in every month
and how much goes out. I was looking for a vital figure: the
amount of 'discretionary income' or 'disposable income' of a
given client. Discretionary income is simply the amount of
money that is left over each month after all bills and
expenses. Here's an example:
Net
Income: $4,000
Bills: -
$2,500
Subtotal: $1,500
Expenses:* -
$1,000
Discretionary
Income: $500
*Expenses include gas, dining
out, entertainment, grooming and personal care, etc.
Now that we've determined
discretionary income, we have a dollar amount that can be
used each month to build wealth. The discretionary income
amount of $500 per month in the above example can be
invested in real estate, stocks, mutual funds, variable
universal life insurance, annuities or countless other
wealth building vehicles.
The biggest challenge that
exists when calculating your cash flow and discretionary
income is figuring out how much money you're really
spending. So much money can slip through our fingers if
we're not paying attention. I've had clients who could not
account for $1,000 or more per month: they would tell me
that the money just slipped away.
The next trap when
calculating your discretionary income is spending more money
than you're bringing in, causing you to have negative
discretionary income. There are only two solutions to this
issue, both of which are obvious: spend less, make more, or
do a combination of both.
What is your discretionary
income? If you don't know, chances are you won't be able to
build substantial wealth.
Today, take time to calculate
your discretionary income. If you're not sure of how much
money you're really spending (like most people), then do
what I did for years: carry a financial diary. Every time
you spend any money, even if it's only one dollar, write it
down. After keeping a financial diary for 30 days, you'll
have a very good idea of how much money you're actually
spending. It may be a lot more than you realize.
Creating an Income & Expense
Summary is one of the most important documents you could
prepare for your financial health. It is the starting point
from which you will build your fortune!
Next, you must create a Net
Worth Statement by adding up the value of everything you own
and subtracting from that figure the value of all you owe.
The result is your net worth. For example:
Home Value:
$400,000
Stocks/401(k): $100,000
IRA:
$75,000
Valuables: $50,000
Savings/Checking:
$10,000
Total
Assets: $635,000
Mortgage
Loan: $250,000
Car
Loan: $12,000
Student
Loan: $33,000
Credit Cards:
$10,000
Total
Liabilities: $305,000
Assets:
$635,000
Liabilities:
$305,000
Net Worth:
$330,000
Why is it so important to
calculate your net worth?
If you're like most people,
you want to stop working one day. When you do, you'll want
to be able to maintain your standard of living. Your net
worth is the best gauge of whether you're on track to retire
or not. In order to be financially independent, you must
have enough income-producing assets that provide you with
enough income for you to be able to leave your job and
maintain your lifestyle. Your net worth statement shows you
how well or poorly you're doing in that endeavor.
If your net worth is negative
because you have more debts than assets, there's good news:
you can reverse that negative situation by using your
discretionary income to build wealth.
If you have negative
discretionary income and a negative net worth, you must
adjust your lifestyle to spend less and/or make more money
to create positive monthly discretionary income. Or, you may
consider purchasing real estate that provides monthly cash
flow to increase your discretionary income, enabling you to
build your net worth.
Remember another important
factor: whatever you focus on expands. Most people focus on
their bills, and thus receive more of them. Focusing on your
net worth will cause it to expand.
If you don't know your net
worth, take time today to prepare a simple Net Worth
Statement for yourself. Update it each month. By paying
careful attention to your net worth, you'll become more
financially aware and open to opportunities to increase your
wealth.
I'm sure if you asked Oprah
or Michael Jordan about their cash flow and net worth,
they'd know. Take a hint from financially successful
people.
Valerie Taylor is the founder of
Elephant Financial Group, a company that conducts workshops
and retreats on financial topics. She was formerly a
financial planner with American Express, and has spent 10
years in the financial services industry. If you'd like to
learn more about how you can earn more and build wealth,
visit
www.FDIRep.com/ElephantFinancialGroup.
So what do you think?
If you would like to respond to this
articleclick hereand sign ourGuestbookto leave a public or private
statement, comment or reaction.
10 Spiritual Principles for
Unlimited Wealth & Abundance
Breaking the Cycle of Lack in Any
and Every Area of Your Life
By Valerie L. Taylor
Not everyone wants to be rich.
Most people I talk to just want to be comfortable, with no money
worries. What about you?
5% of Americans control 95% of the wealth of this country while
the other 95% of
Americans control only 5% of the country's wealth.
Apparently there's a great divide
between what we say we want and what most of us actually have.
Where's the disconnect?
I spent 7 years as a Financial
Advisor, which allowed me to peer into the financial lives of
hundreds of clients. The experience was eye opening. I saw
firsthand that even the most successful people struggle with
money, live in debt, and scrape by from paycheck to paycheck.
Few are ever really as "comfortable" as they would like.
Over the past 20 years, I've
learned more about money than I care to remember. But it wasn't
until I experienced a dramatic reversal in my own financial
situation that I came to fully understand the principles you are
about to read.
If you're like me, you don't want
Experience for a teacher -- the exams are hard, the lessons
painful. Take it from me and hundreds of others, the following
principles will make you wealthy, if you...
WORK THE PLAN
Remember, nothing changes until
you decide that it's time to do something different. Until then,
your financial life will remain exactly as it is now. If that's
fine with you, and you are financially comfortable, you don't
need this article. For the rest of you, read on.
Principle #1: The Source of
Infinite Wealth
You may not subscribe to belief
in God or Allah or the Buddha or Jah. But there is a Universal
Force that is the Source of infinite wealth. The Universe
doesn't know lack. Lack is a state of mind based on a lie. If we
look at the entire cosmos, there is only bounty. Just think: how
many creatures, microscopic or otherwise, are inhabiting the
patch of earth underneath your feet right now? Thousands?
Millions?
The same is true with money. It
is in unlimited supply.
I'll say it again. MONEY IS IN
UNLIMITED SUPPLY.
Your personal economy may cause
you to doubt this statement, but it's true. There's no limit to
the amount of money you can attract to yourself -- just ask Bill
Gates or Oprah. Granted, Bill and Oprah are exceptionally
wealthy, but they're still human, as are you and I. They and
other billionaires and countless millionaires believe in an
unlimited supply of resources.
If you'd like to test this
theory, go to the most highly successful people you know, those
who are very financially well off, or find a successful real
estate investor. Ask this person if they believe that they can
make an infinite amount of money or if they think the money
supply is finite. Listen closely to the answer.
What about you? What do you
believe?
You have a choice. You can choose
to believe that your resources, income and assets have
limitations. And you would be right.
Or, you could choose to believe
that the resources of the universe are in infinite supply and
ready to become yours. And you would be right.
Remember,
"A friendly universe always wants
you to have something
better than the best you are now
experiencing."
Catherine Ponder
Which brings me to the second
principle...
Principle #2: Your Power to
Create--Breaking Out of Limiting Thought Patterns & Beliefs
You are a powerful creative
being. Whether you realize it or not, you are always creating.
We create our world with our thoughts, beliefs and attitudes. If
you want to know what you believe, look at your life. The kind
of car you drive, the amount of money you have in the bank right
now, the kind of house you live in are all creations of your
design. They are each reflecting back to you exactly what you
believe.
To deny your creative power is to
take the stance of a victim. Victims are powerless. Victims are
not responsible. Someone else is. There's always someone else we
can find to pin blame on for our financial woes. I did. I blamed
by ex-husband for my financial woes, because I had perfect
credit before I married him. After we got married, my credit
began to deteriorate. At first, I reasoned like a victim because
he was always asking and pressuring me to buy on credit.
Although it would artificially
soothe me to play the victim, the reality is: I created bad
credit for myself by acquiescing to his desires. I could have
just as easily said, "No, we're not buying that car on my
credit." But I didn't. I agreed. Hence, I used my creative
powers to create more debt.
Until I used my creative powers
for my own good, my finances faltered. When I became completely
and fully aware of my power to create any reality for myself
that I desired, I began to think more productively and
profitably. And it showed in my world.
Right now, at this very moment,
you are creating.
You either have a dominant
thought and belief pattern of lack, or a dominant belief pattern
of wealth and abundance. Either way, your dominant thoughts
create your reality.
Lack thoughts are based in fear,
and fear is a lie. Thoughts of prosperity are rooted in love for
yourself and your family. Fear and love are polar opposites. I
have found that people who fear not being able to make ends
meet, or who fear running out of money, or who fear not having
enough income to live on in retirement actually create and
magnetize those fears to themselves. They begin to manifest.
Such is the creative power of your mind.
Conversely, people who live
fearlessly, who strive forward with full confidence and faith
that the universe always supports them, and who expect their
financial experiences to work out superbly, actually magnetize
that reality to themselves.
It's your choice.
Today, look in the mirror and ask
yourself honestly:
WHAT AM I CREATING?
Look for Principles #3 and #4 in
the next edition of the newsletter where you'll learn how to
create two critical documents that are key to your financial
success. See you next month!
_____________________________________________
Valerie Taylor is an author and
speaker who presents financial success and personal development
workshops, classes and seminars in the Washington, D.C. area and
nationwide. She is the host of the television show "Dollars &
Sense." Valerie served as a financial advisor for 7 years with
American Express Financial Advisors, where she taught hundreds
of clients how to reach their financial goals and dreams.
Valerie may be contacted by
e-mail at angelnoir10@aol.com (please be patient with e-mail
replies).
So what do you think?
If you would like to respond to this
articleclick hereand sign ourGuestbookto leave a public or private
statement, comment or reaction.
An Interview with
Author Bill Boudreaux
BMIA.com:
When did you first know that you wanted to be an entrepreneur
and that economic empowerment would be your calling?
Bill
Boudreaux:
During the early eighties while working as a fresh-out-of
college CPA for an oilfield transportation company, I watched
the bottom fall out of the oil industry. I saw many businesses
go “belly up” while others not only survived, but also thrived.
It was then I realized that there is a big difference between
“being a person in business” and “being a business person”.
During times of great prosperity, being “a person in business”
might be good enough to bring some measure of success. But
during challenging times, one must be a “business person” to
succeed. That is, one must operate by principles and implement
strategies to maximize the chances for success. That’s what I
bring to the table. I teach entrepreneurs how to succeed
despite the obstacles. And after years of working with
minority businesses, I can say with fear of contradiction, that
the obstacles for minority businesses are many…and growing in
number! I simply want to do my part to reverse that trend.
BMIA.com:
What is your educational background?
Bill
Boudreaux:
First, let me say that I am a professional student. I have made
a commitment to lifelong learning. Of course the pace of formal
education has abated somewhat, but the learning continues. In
addition to being a Certified Public Accountant in the State of
Louisiana, I have a BS in accounting and a MBA with emphasis in
economics. I earned both degrees at Nicholls State University
in Thibodaux, Louisiana. I have also completed about half the
course work toward a Ph.D. in city planning at the University of
New Orleans.
BMIA.com:
Why are you committed to small and minority owned businesses?
Bill
Boudreaux:
Invariably, I get this question, and I’m always delighted to
answer it. I’m committed to minority-owned businesses because I
have a ton of experience in this area and I understand the
unique issues that minority businesses must contend with. I
want to help MBEs save time and effort as they go through the
process of organizing their businesses. For example, one of my
goals is to de-mystify the Small Business Administration (SBA).
I can’t begin to tell you how many times I’ve counseled minority
entrepreneurs who spent countless hours going after “SBA grants”
or “minority firm set-aside opportunities” that lead to
nowhere. So many paths, so many promises, so few real
opportunities. So I’m determined to counsel my clients on how
to make the best use of their time and resources by pursuing
real opportunity and not empty promises, unfunded initiatives
and “pie in the sky.”
BMIA.com:
Who influenced you the most?
Bill
Boudreaux:
My father was an entrepreneur, so in addition to all the other
ways he influenced me; he also nurtured my entrepreneurial
spirit. Even so, the greatest influences in my life are my
mother and grandmother. Both of them are tremendously positive
and optimistic people. During my youth, they simply refused to
allow me to say, “it can’t be done”. Even now I can hear their
admonitions and sage advice. They would tell me, “say you won’t
do it; but don’t say it can’t be done…because you know what, if
you don’t do it, eventually someone else will”. That mantra has
become the basis of my work ethic and dogged tenacity. That
said, I would be remiss not to mention the fact that, as a
Christian, the workings of the Lord Jesus Christ and Holy Spirit
also are an ever-present source of guidance.
BMIA.com:
What do you want people to get out of your books?
Bill
Boudreaux:
I wrote the book in the most concise manner possible. I did not
want to write a rambling 600-page encyclopedia…something that is
burdensome and is eventually tossed aside. It was my intent to
be as expedient as possible and still convey the essential
issues regarding organizing and managing a black-owned
business. On top of that, I definitely want the readers to
benefit from the information regarding all the Small Business
Administration (“SBA”) loans and programs that are available to
minority business enterprises, as well as the “ins and outs” of
the SBA’s 8(a) program, which is a program designed to help
minority firms win government contracts.
BMIA.com: There are a lot of books on the market about
entrepreneurship and money. Why should people buy your book?
What makes it different?
Bill
Boudreaux:
Well, as you know, time is money…I kept that in mind when
writing my book. It was written for the busy entrepreneur…a
person who has a thousand other things to do in addition to
getting the necessary information to organize his or her
business. It is a tightly written book that not only deals
with essential entrepreneurial issues, but also maintains as the
center of its focus the unique perspective of the black
entrepreneur. Since I am a minority entrepreneur, obviously I
know my intended market very, very well. Plus, I have worked
for other small minority businesses for 20 years. I respect
their time, appreciate their talents, and share in their unique
challenges as we all compete in this very tough US economy.
BMIA.com:
Do minority businesses face any special challenges?
Bill
Boudreaux:
Oh, yes indeed! To adequately answer this question would take a
book in and of itself! For the sake of brevity however, please
allow me to focus on black business only…rather than all
minority business. That being said, the current state of black
business in the US is woefully below average. In fact, if I had
to assign it a grade, it would be a “D”. And there are many
statistics to support that low grade, but I want to avoid
venturing into the boggy swamp of statistics. However, there
are a couple statistics that are too important not to mention.
For
example, there is a survey conducted by the U.S. Department of
Commerce. It is called the “Survey of Minority Owned Business
Enterprises.” In this report, it suggests that even though
minority businesses have increased, there remains a significant
gap between minority and non-minority firms. And that’s a gap
we need to bridge.
When we
walk about making a better grade, we need to talk about parity.
Of course, the obvious question is: what is parity? Let me try
to explain it this way: Since we know that Blacks make up
approximately 12% of the population, then it stands to reason
that black businesses should receive approximately 12% of the
gross business revenues. Sounds reasonable, right? Well, in
this country within a recent reporting year, to bring about such
parity, black business would have to receive 8 times more
revenue than they did! If we were running a race, non-minority
businesses would have “lapped” us 8 times! We’re that far
behind.
How about
this statistic: Among the four major minority groups
(African-American, American Indian, Asian, and Hispanic),
African-American firms have the lowest average gross receipts
with a low of $86,000 per year as compared to Asian firms at
$335,200 and non-minority firms at approximately $1 million. In
fact, 40% of African-American firms had receipts under $10,000!
Now I know sometimes statistics can be hard to follow, so the
point is this: Black business is lagging far, far behind and
catching up in going to be a very, very, very difficult
process.
BMIA.com:
What has been your biggest failure?
Bill
Boudreaux:
Mmmm - interesting question—not one that I get very often. I
suppose my biggest failure comes from my tendency to be overly
optimistic. I’m thinking back a few years ago when I began
working on a book that I intended to sell to a publisher. I
spent the better part of a year writing it. About half way
through the project, even though I started getting feedback that
it would be hard to sell, I kept writing. Well, I did indeed
finish, but it did not turn out as intended and I was unable get
a publisher to pick it up. It cost me a lot of time and effort,
but on a positive note, I learned a great deal in the process.
BMIA.com:
How do you define success?
Bill
Boudreaux:
On the surface that appears to be a very hard question, but
actually it’s probably the easiest one I’ll answer today.
Obviously, success is subjective, which means my idea of success
is not necessarily your idea of success. Success is different
to each of us. Even so, there are a couple of principles that
should be followed as goals are set to achieve success. First,
we must maximize the talents given to us by God; secondly, we
must maintain proper priority, which places God first and family
second…everything else follows. And finally, one is never truly
successful until he or she learns to give back from the rewards
of success. Giving back is vital and is probably the most
tangible evidence of success.
BMIA.com:
What has been your biggest success to date? Personal and
business?
Bill
Boudreaux:
My greatest personal success is my long and happy marriage, one
that has blessed me with two wonderful children. I am married
to a true Proverbs 31 woman. I am, indeed, a very blessed
man. In business, my greatest success is on going and
wonderful. It makes everything I do worthwhile. It happens
ever time I get an email or letter from readers who let me know
how much they are being helped by the work I do or the book I’ve
written.
BMIA.com:
What’s your most popular workshop or seminar? Why?
Bill
Boudreaux:
Hands down, workshops on creating business plans are the most
popular. It seems that creating and writing business plans
remain a significant challenge to most people, so they are
constantly seeking help as they prepare to undertake the
process. I think writing, for many people, is just this
enigmatic endeavor. Once I quell that fear by helping them see
that writing doesn’t have to be some overwhelming undertaking,
they are able to tackle the process with a whole lot less
reservation.
BMIA.com:
What is your philosophy about life?
Bill
Boudreaux:
Oh, I get a chance to philosophize—I like that! I have a
“tropical island” philosophy, which means…even in the midst of
frantic activity, I live at an easy pace, enjoying the fullness
of each day. I take nothing for granted, and I never lay my
head on my pillow with anger or animosity in my heart. I
forgive instantly and I don’t sweat the small stuff. As I’ve
mentioned before, that frame of mind is made possible by my
adoration of the Lord Jesus Christ and what He has done for me.
BMIA.com:
What motivates you to get up every day?
Bill
Boudreaux:
The fact that I live an incredibly full life—filled with
personal and business activity. I can’t imagine—literally can’t
imagine not hopping out of bed and anticipating everything from
a cup of coffee, to a morning jog, the first business meeting,
the commute back home, then spending quality time with my wife
and family. I am not motivated by any one thing. I find every
opportunity and challenge of life sufficient motivation to make
me spring out of bed each morning. For me, sleep is a
necessity…I seldom indulge in it.
BMIA.com:
What’s your secret to wealth building?
Bill
Boudreaux:
Ah…great question. My secret to wealth building rests on three
pillars: To saving a percentage of my income, to surround
myself with people smarter than me, and to give cheerfully.
Planting seeds of philanthropy and charity returns amazing
dividends—at least that’s been my experience. Of course, those
strategies and choices are fairly simplistic. The challenge
most times is maintaining the commitment and discipline to do
it.
BMIA.com:
In your opinion, what’s the biggest obstacle facing black people
in America?
Bill
Boudreaux:
I am so glad your question was framed in such a way as to elicit
one obstacle. After all you did say the biggest obstacle facing
black people in America. Otherwise, this answer could go on
for a while. In my opinion, I think the biggest obstacle
facing black people is their lack of an economic base,
especially at the retail level. Black people represent a
powerful consumer base. Our buying power is essential to
prosperity here in the United States. Yet, in spite of this
dizzying level of economic contribution to our society, not only
does black business lag behind non-minority firms in almost
every category, but it also lags behind every other minority
group, including Asian, Hispanic, and Native Americans. Black
entrepreneurs have a rarely seen face at the retail level, and
what is rarely seen is rarely emulated. That is a very
unfortunate situation for all the young, would-be entrepreneurs
who just don’t have many role models. I think, as a people,
blacks will continue to lag behind every other ethnic group
until we begin to gain business ground and grow an economic
base.
Bill
Boudreaux has worked
with small minority businesses for more than 20 years. At
25, he became the treasurer of an international marine
transportation firm. He has an ongoing relationship with
an information technology firm that develops software solutions
to track marine vessels in the inland waterway system.
So what do
you think? If you would
like to respond to this article
click here and sign our
Guestbook to
leave a public or private statement, comment or reaction.
Tommy Baskerville
The Importance
Of Acquiring Net Financial Assets
Theories of wealth accumulation and inequality specify
earning power as the best predictor of wealth. An
examination of wealth holdings by income class provides a
clear picture of the strong relationship between income
inequality and wealth inequality. Wealth accrues with
increasing income because higher earning groups accumulate
wealth-producing assets at a faster pace. Therefore those
below the poverty line control virtually no financial
reserves to ease them through a financial crisis or
difficult periods of unexpected income curtailment.
(Reference from Black Wealth White Wealth by Melvin L.
Oliver & Thomas M. Shapiro).
The
perception that net worth is the only barometer that we
measure our financial success by is based on net worth
(total assets minus total liabilities) does not tell the
whole financial story. The missing part of this equation is
net financial assets; liquid assets-stocks, bonds, cash,
cash equivalents, CDs cash value insurance, annuities etc.
The value of your house, car and other hard assets are not
included in the calculus of net financial assets. So one
could say that net financial assets are assets that you
readily have access to that can be easily converted into
cash and also has the potential to increase in value over
time.
Yes, I
know some of you out there are probably thinking my house
has the potential to increase in value. It has proven to be
a great asset that has appreciated over time by supply and
demand forces, inflation and real estate speculation.
However that appreciation is not readily accessible. You
will have to (1) sell your house, (2) apply for a equity
loan or equity line of credit or (3) apply for a cash out
refinance. The first option well, you have to live
somewhere. Option (2) and (3) will create a secured debt,
not a great way of creating net financial assets.
I am
strongly suggesting that you place an emphasis on
accumulating net financial assets because once you begin to
acquire these assets you have effectively become pro-active
in controlling your financial future. You are beginning to
structure a financial buffer from the vagaries of this new
economy.
The
trend today in this ownership society is that more of the
financial risk is being passed on to you. Retirement
pension plans (defined benefit plans) are being phased out
and defined contribution plans (401k 403b,and 457) are being
implemented. Medical health care benefits are being reduced
or the higher cost of providing benefits are being passed on
to the employee. Pending legislation is being drafted to
privatize a portion of social security. I think that you
are getting the picture, cost and risk are being passed on
to you!
I am
suggesting that you start today to take control of your
financial future and begin structuring a financial buffer
from the uncertainty of this new economy and all that it
portends for the future in regard to your finances. Once
you start the process of building net financial assets you
are in essence becoming pro-active instead of re-active.
You are now creating financial reserves.
The
components that are required to ensure that this net
financial engine performs at it’s optimal capacity are:
Cash
Management:
More than just keeping a balanced check book, cash
management includes preparing (and following) a budget,
using credit wisely and keeping the income tax burden to the
lowest level possible: (cash flow, cash reserves, checking
account, money market account) for immediate expenses,
intermediate expenses and contingency fund for unexpected
exigencies).
Risk
Management:
There is risk of loss of both life and property. Life
insurance can be used to protect a family against the risk
of premature death.
Disability insurance can protect against the loss of a
person’s ability to earn a living. Property and casualty
insurance can protect our worldly goods against accident and
such perils as fire, flood, earthquake and theft.
(Insurance to cover your risk exposures, health, home, auto,
life, disability and long term care).
Accumulation:
We all need to save money for some reason. Educating our
children is one very common goal. Buying a home and
building an investment portfolio are two other typical
accumulation goals (investing in stocks, mutual funds
annuities, IRA accounts, children’s 529 plans Coverdell plan
and state sponsored plans etc).
Financial Independence:
It is important to take steps now to insure that the golden
years are, indeed golden. (Saving for retirement (401k,
403b, 457 mutual funds, annuities etc).
Estate
Planning:
This means recognizing that death is inevitable and planning
for the ultimate transfer of our assets to our heirs. Now
that you have accumulated assets the most efficient way to
convey those assets to your heirs. Will or Trust, medical
directives, durable power of attorney etc.
Don’t
get overwhelmed with all of this. Remember this is a
process, however a very critical process in creating and
preserving wealth and the transference of wealth.
Let it be noted that we are
living in a period of the greatest generational wealth
transfer of financial assets in the history of this
country. Unfortunately African Americans participation in
this great wealth transfer has been small. This has been
partly due to slavery, discrimination, lack of financial
knowledge and lack of access to acquiring that knowledge.
This
is a new day! You will have to empower yourself, invest in
yourself, trust in yourself and others, financially educate
yourself and your children, and seek professional financial
advice to help you achieve your financial goals, needs, and
priorities.
So what do
you think? If you would
like to respond to this articleclick hereand sign ourGuestbookto
leave a public or private statement, comment or reaction.
The
views and opinions expressed in "$$Money Talk$$" do not
necessarily reflect the opinions of the Black Men In America.com. The information provided in this section of the web
site is not a substitute for seeking professional advice or counsel. We
strongly recommend that competent professional advice be sought before acting
upon the information contained herein.
