Tuesday, May 27, 2008

Getting ahead by cutting back

By John Eidson

The 1970s runaway best-seller The Millionaire Next Door laid out the results of an extensive study of how the rich in America become wealthy, and stay that way.

Contrary to popular misconception, most millionaires are not athletes, entertainers or corporate CEOs, nor did they inherit their fortunes. Most of the well-do-do don't live in mansions and don't drive luxury cars. More carry the credit cards of places like Sears and Target than those of exclusive upscale stores.

In short, most millionaires have used an incredibly simple strategy in amassing wealth: they spend less than they earn. Having learned how to get ahead by cutting back, they are living the ultimate American dream.

The good news is virtually anyone can join them, and it isn't necessary to be a doctor or other high income earner. According to no less an authority than Forbes magazine, the inescapable implication of The Millionaire Next Door is that ordinary people with nothing more than ordinary jobs can accumulate impressive nest eggs simply by learning to live beneath their means.

John Eidson is a white conservative who takes great pleasure in black success. In addition to postings on YourBlackMoney, he also occasionally posts on YourBlackPolitics.

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Friday, May 23, 2008

Black Love, Black Money, Black Relationships: When It's "Cheaper to Keep Her" in Your Black Marriage

Black love can be a wonderful thing, except for when it goes wrong. I am sure some of you have seen the typical “unhappy couple”. You know who they are: they may pretend that their marriage is wonderful on the outside, but there are a pile of scandalous secrets behind closed doors. The secrets may involve hidden bank accounts, secret gay lovers, or perhaps even some nasty abuse. Some even think they represent the best that black love has to offer, but every now and then, you get to witness tiny hints of an unfulfilled existence. You then realize that if there ever was a couple that needed to be divorced, it’s this one. So, you continue to witness their agony, wondering deep down why they don’t just call Dr. Kervorkian and have him put their marriage out of its misery. Actually, ending their marriage might end your own misery as well.

When you finally muster up the courage to ask your buddy why he doesn’t go ahead and pull out the marital machete, he gives you the words you’ve heard in so many bar room jokes, “it’s cheaper to keep her”. While these statements are stereotypically from men, you hear more and more women saying the same thing these days. You may also hear your friend tell you that he/she can’t afford to lose the financial support provided by their spouse. Either way, you feel sorry for the couple, because they’ve made one clear admission: “Whatever I have in my bank account is worth far more than my personal happiness.” That is what I would call bad Financial Lovemaking.

If our emotional fulfillment was suddenly converted into money, many of us would be bankrupt. However, there are many people in third world countries who are filthy rich with life satisfaction. This doesn’t understate the significance of their financial hurdles, but it does remind us that money, if not used as a tool to pursue happiness, can ultimately become a barrier to personal joy.

One of the trappings of a capitalist society is that we are taught that money is the ends, rather than the means. Money is a tool to enhance your life and your relationships, it should not be the reason you are in the relationship in the first place. That’s like buying a new car just so you can get the radio.

If I were given a choice between being dirt poor and happy vs. filthy rich and miserable, I would surely choose the dirt. You see, a person who endures unhappiness in order to protect his wealth is missing the point. The goal of money is to make you happy. So, using money as an excuse to not pursue happiness in your life is like saying “I am going to starve to death because I really want to stay in this restaurant.” If the restaurant isn’t feeding you, you might want to consider eating someplace else. That might be an example of good Financial Lovemaking, since part of the Financial Lovemaking process is getting comfortable with your own relationship with money.

I am not an advocate of divorce in black marriage, nor do I judge those who’ve made the decision to split. But I can say that if you have no ideological problems with divorce, and money is your only reason for not going through with it, it might make sense to reconsider your priorities. If happiness and money were put on a scale next to one another, love would be the 3,000 pound elephant and money would be the 2 ounce cricket. All choices in the black love and money balance should lead to short or long-term satisfaction, there really is no other way to say it.

Dr. Boyce Watkins is a Finance Professor at Syracuse University and author of “Financial Lovemaking 101: Merging assets with Your Partner in Ways that Feel Good.” For more information, please visit www.financiallovemaking.net.

Wednesday, May 21, 2008

Save 20%-30% on gasoline costs

When my wife and I bought our Honda Accord two years ago, we did a miles-per-gallon test on our first tank of gas. We got right at 21 mpg for city driving, exactly as advertised on the window sticker.

A few months back, we heard a tip on the radio about saving gasoline. According to the report, the typical driver can save 20%-30% on gasoline simply by changing the rate at which they accelerate and brake.

Old habits are hard to change, but change them we did. We are now getting nearly 25 mpg, almost 4 miles per gallon more than our car’s rating. That translates to roughly an extra 50 miles out of each tank of gas. At today’s gasoline prices, we’re saving nearly $500 a year.

A good way to drive more efficiently is to accelerate and brake as if there is a raw egg between your foot and the pedal, pretending that the egg will break if you press the pedal too aggressively.

John Eidson is a 64 year old white conservative who takes great pleasure in black success. In addition to postings on YourBlackMoney, he also posts occasionally on YourBlackPolitics.

Friday, May 16, 2008

What I learned from Bill O'Reilly about Money

by Dr. Boyce Watkins

I learned something about the power of money last night. I received an email from one of our readers on Your Black World, who simply said, “Bill O’Reilly is coming after you again.” I took it in and got back to what I was doing. I expected O’Reilly to make another smear attack this week, since a good terrorist always hits the target multiple times.

O’Reilly Bin Laden’s latest target was my poor chancellor, Nancy Cantor. Sending one of his goons (some call them correspondents) to the campus, Dr. Cantor was asked why she is allowing “the good name of Syracuse University to be ruined by a ‘racist’ like Boyce Watkins.” Translation: to some, a “racist” is any black person who speaks up for black people. I accept that.

O’Reilly never really came at me directly, as I and some other black scholars have refused to appear on his show. I don’t fault the ones who choose to appear, but I don’t consider a platform legitimate just because it has a few viewers. Instead, he felt that going after my chancellor and the alumni of Syracuse University would be a more reliable tactic.

I couldn’t agree with O’Reilly more, perhaps the chimp is smarter than I thought.

Our campus is in the middle of a billion dollar fund raising campaign, and I am sure there are those who are sickened by the fact that one of the most visible faculty members on campus is the subject of racial controversy. Financial theory teaches us that risk management and minimization are critical to maximizing popularity and profitability. Controversy is risk, and too much risk hurts your ability to raise money. Oprah knows this all too well, as her political moves have diminished her show’s brand and base during the past year.

As Barack Obama’s experience reminds us, race is not a comfortable conversation, even when presented in the most diplomatic fashion possible. The backlash is far greater when you are direct and honest. What’s interesting is that O’Reilly couldn’t exactly cite why he was so obsessed with me, nor could he point to any strong evidence to support his “race baiter” assertions. The mere fact that he labeled me a “race monger” was enough to get his disciples up in arms. Bill O’Reilly should change his name to Bill Oprah-Reilly, as he has an amazing ability to manipulate his minions and their small, impressionable minds.

According to Bill O’Reilly, I am using the Presidential campaign to engage in “villainous pursuits” to promote a radical agenda. Being the good and noble American that he is, his goal is to ensure that “race hustlers” like myself don’t use their “hate-filled speech” to manipulate the results of the 2008 Presidential Election. Bill O’Reilly has become Martin Luther King Jr in his fight for truth, justice and political purity. God bless him.

My finance lesson this week came from watching Bill O’Reilly squirm. He was boiling mad at me, and even his fellow conservatives couldn’t quite figure out why (note the confusion on the face of the silly conservative radio show host, Laura Ingraham). The reason O’Reilly had become obsessed with me and my words is because of the dirty secret exposed by MSNBC host Keith Olbermann: A group with which I am affiliated, The Your Black World Coalition, has mobilized an intense email, phone and letter writing campaign to O’Reilly’s corporate sponsors, the FCC and the producers of the show. The ultimate objective is to hold O’Reilly’s corporate sponsors accountable for supporting a man who has consistently engaged in dirty tactics to defame Jeremiah Wright, Barack Obama and other respected individuals in the black community. While O’Reilly is certainly entitled to Freedom of Speech, I won’t have him unfairly assaulting and defaming my respected colleagues, and using my money to do it. While I give O’Reilly credit for being a good financial student, he must remember that I am ultimately the professor.

In reference to my many “lies” to smear O’Reilly, Keith Olbermann asked Bill one simple question: “If that’s what Watkins said, where are the lies?” In naming Bill O’Reilly “The Worst Person in the World” for his attacks on me and the chancellor, Olbermann quoted my reference to O’Reilly’s statement about wanting to have a “lynching party” on Michelle Obama. O’Reilly speaks of lynching the potential First Lady of the United States, and then has the nerve to call others racist and unpatriotic.

Given my training in finance, I learned one thing about living in a capitalist democracy: money makes people move. O’Reilly also understands this. Money makes good people do bad things and gives bad people an excuse to do good things. Money is the reason Fox News exists, and why this form of “capitalism gone wild” has destroyed the integrity of American journalism. Money is the reason that Barack Obama went from being a non-factor to becoming a target of The O’Reilly Factor and the reason that President Bush is sweating over the price of gas.

It is the ability to acquire resources, mobilize resources and take away resources that will change this election. This election will, in turn, change the world. Race matters, there’s no question about that. But money matters much more.

Dr. Boyce Watkins is a Finance Professor at Syracuse University and author of “Financial Lovemaking 101: Merging Assets with Your Partner in Ways that Feel Good.” This book is one of the definitive guides to Love, Money and Relationships, cited in Essence Magazine, Black Enterprise and other outlets. For more information, please visit www.BoyceWatkins.com.

Monday, May 5, 2008

Black Money, Black Wealth, Black Liberation: What black people should do right now

I spoke this weekend at an Entrepreneurship boot camp for The Urban Philly Professional Network. The head of the organization created something I consider to be profound and promising. He regularly gathers the black entrepreneurs of Philadelphia for networking events, training and motivation for their endeavors. I am proud of him because he has shown a consistent commitment to two issues of critical importance in the black community: black people working together and black people engaging in the ownership of capital.

Black entrepreneurship is not just about money. It’s about LIBERATION. The easiest way for me to control another man is for him to know that I am the reason his kids get to eat every day. That man will do exactly what I tell him to do, when I tell him to do it, and how I tell him to do it. Historically, African-Americans have been consumers of products and sources of labor. We have rarely been in a position to own or control capital. This country’s empire of wealth was built without black participation, as our ancestors were unable to transfer assets to their children. We all know that. Slaves were a form of human capital from which our country’s foundation was created. Theft from the black community is in the trillions.

As a result of this legacy, nearly every inch of the financial capital base of American institutions is controlled by someone else: The media, corporate America, academic institutions, you name it. Fox News freely spouts racism because Rupert Murdock and others like him control media infrastructure. Universities earn over 1 billion dollars per year from the families of black athletes because HBCUs don’t have the capital base to compete for these players. Jeremiah Wright and Barack Obama end up with distorted images because they’ve attempted to repair their reputations by appealing to the same institutions that destroyed their images in the first place. There are few black alternatives to media and corporate America, so our messages, leadership, outcomes and incentives are typically beyond our control. The controller of capital is the controller of destiny, so the social implications of capital ownership are vast.

The legacy of disproportionate capital acquisition also breeds a mentality in those who are controlled by capital. Some might call it the slave mentality. It affects all of us, from truck drivers to college professors. The slave mentality says your sole objective for obtaining education or skill is to work for someone else. We seek to find a job, rather than create one. Even most black doctors, lawyers and college professors fall victim to this mentality, as this is the tradition for many people of color. Risk aversion in the black community is strong enough to choke a horse, and any dreams of “going at it on your own” are squashed by relatives who encourage you to take the high paying, “prestigious” position at IBM or Stanford University.

The problem with the slave/laborer mentality is that there is a huge social price being paid when one spends his/her entire life drinking from someone else’s fountain: You are not free to pursue social justice and the platform on which you stand can be taken out from under you at a second’s notice. When injustice occurs around you, you are trained to sit silently and hope for the best. You don’t dare rely on ideas like “academic freedom”, because capitalism usually trumps idealistic concepts like democracy and freedom of speech. You can speak freely as long as it is financially convenient for the organization that controls you.

When I met with the black entrepreneurs and business owners of Philadelphia, I reminded them of the significance of their contribution to Black America. Owning a business is not about making a dollar, it’s about providing a critical supplement to the work of Dr. Martin Luther King, Jr. Black Entrepreneurs aren’t just finding a source of income, they are building black institutions. I reminded them that General Motors wasn’t built in a year, and that they should be proud of the trees they’ve planted, even if they are smaller than the strong, sturdy oaks around them.
There was a time when a high ranking position in the British Empire paid a lot better than joining the American Revolution. Black Entrepreneurs are the financial Harriet Tubmans of the black community: liberating people in mind, spirit and resources.

Many of us are so “blinded by the bling” that we take our eyes off the prize. Even those with high incomes remain as vulnerable as Katrina victims, as one unfortunate event can lead you to financial ruin. High income without an understanding of wealth building, diversity of resources and long-term financial stability is a recipe for financial disaster.

An understanding of the strengths and weaknesses of capitalism is critical to any social movement in America. Socially responsible financial machinery can serve to empower and sustain movements toward justice and equality. Models of entrepreneurship should be taught to every black child in America. Children should understand the nature of revenue generation, cost minimization and how business models work. The path to liberation in a capitalist democracy goes straight through Financialville. Controlling capital means controlling lives, and it’s tough to be free without it.

Dr. Boyce Watkins is a Finance Professor at Syracuse University and founder of YourBlackWorld.com. He is also the author of Financial Lovemaking 101, the definitive guide on black love, black money and black relationships. For more information, please visit www.BoyceWatkins.com.