A Financial Plan for MJ’s Kids

by Dr Boyce Watkins

"Stuntin like my daddy" was the first song on the album, "Like Father, Like Son," issued by Lil Wayne and Birdman in 2006. "Stuntin" is a hip hop term synonymous with "flossing," blinging," and "balling." It means that you've engaged in excessive spending to ensure that you have the finest of everything and are even willing to live at the edge of your means in order to present appropriate status symbols to the world. Anyone who follows hip hop knows that you should never take financial advice from a rapper. In light of the recent passing of their father, I sincerely hope that the children of Michael Jackson didn't hear the Lil Wayne song, since their daddy's financial "stuntin" before his death has left the children with a conflicted economic legacy.

On one hand, we shouldn't feel sorry for Michael Jackson's kids, at least not financially. Their father's amazing talent gives them a brand that is literally worth well over a billion dollars in future royalties and licensing fees. Michael Jackson may have died physically. But financially, he is still a viable and overwhelmingly powerful corporate entity.

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Is FreeCreditReport.com Actually Free?

5 months ago I signed up for the "free" credit report. Little did I know that I would be charged 1.00 per month on aservicecalled "Your Savings Club" which they automatically sign you up. Also they charge you another 1.00 per month as well as 30.00 for "CREDITDIAGNOS". In addition it is your regular charge of 11.95 for "CIC*Credit Monitor". So because I didn't cancel in time, my "FREE" credit report cost me 214.75.

Justin of Lawndale, CA June 10, 2009

Freecreditreport.com requires you to enter yourinformationin BEFORE it discloses its terms and conditions. Upon reading all the terms and conditions I simply closed my web browser. I did not click on "agree" to terms and conditions and I did not click on either "no, just give me my free credit report" or "yes, I would like my 27 three credit reports" I simply closed the window.

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Lessons to be Learned from Michael Jackson’s Debt

by Dr. Boyce Watkins

• Janet Jackson honors Michael at BET Awards

Doctor talks to police about Jackson's final moments

Let's remember what Michael did for us

Michael Jackson is not dead. No, he's not on a deserted island chilling with Tupac and Elvis (who some believe faked their deaths), but he is certainly alive in corporate and social spirit, impacting millions of people.

Michael will make 1000 times more money in death than most people make when they are alive. But similar to when he was alive, massive amounts of cash will have to be generated in order to counter the enormous debt that Michael created while he was doing his thing.

Reports have stated Michael Jackson's debt to be as high as half a billion dollars, enough to make some major corporations blush. What's worse is that this debt was not created via a series of sound financial investments: it was conceived by building personal amusement parks, buying rare monkey statues, and rocking his way from one expensive store to the other.

Michael's spending became his addiction. Financial needs could have been what led to him agreeing to do 50 concerts in London this year (a tour he was preparing for just before his death), when he may have not been able to handle one. It was starting to get sad watching Michael perform, similar to watching Muhammad Ali after he'd spent 10 years dealing with Don King. While the 50-year old Michael Jackson may have given a great performance, it would probably be something less than what we've come to expect.

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Dr. Boyce Watkins: Why I support Obama’s Financial Overhaul

by Dr. Boyce Watkins, Finance Professor Syracuse University

I have a friend who broke both of his legs climbing a dangerous mountain in Southeast Asia. This friend has nearly died 8 times, been chased by bears, and has had food poisoning too many times to count. After his latest injury, we presumed that he would understand that taking such risk simply doesn't pay. But he rebuffed our intervention, stating that the risk is what makes his life worth living. My friend seems to believe that pursuing and living the dream might be worth enduring the occasional nightmare.

The current financial crisis is certainly the worst of economic nightmares. Job losses have been enormous and the stock market has shrunk faster than Lindsay Lohan's dress size. A report released by the Bureau of Labor Statistics last week reported that in May jobless rates were higher in all 50 states and in the District of Columbiathan they were a year ago.

The Black community has had a double dose of economic drama, as our unemployment rate is nearly double that of White Americans, standing at 14.9% according to the latest figures from the Bureau of Labor Statistics. Black urban centers such as Detroit have been hit especially hard.

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Retirement is Changing for Baby Boomers

From our Black Money Blog.  For more black wealth advice, please click here.

They grew up during a time of cultural change, and now are being forced to redefine retirement at midlife.

The 77 million Americans in the Baby Boom generation face an economic storm: The Wall Street meltdown trampled their retirement nest eggs more than any other group. After losing jobs during what they thought would be some of their peak earning years, many are struggling to get back into the workforce. Health care costs are rising, and declining home values mean they might not be able to count on home equity to guarantee an easier retirement.

SAVE EARLY: Tips for building a solid retirement plan

"This generation will be sobered by their experience," says John Coyne, president of Brinker Capital, an investment management firm. "They may not have as extravagant a vision of retirement as they did last July."

The confluence of events has an even bigger impact on a subset of the Baby Boomers known to analysts as the Sandwich Generation. Those Boomers are putting money toward their children's college education and their aging parents' long-term care, as well as their own retirement savings.

 

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Dr Boyce: How Kobe Bryant Came Back

by Dr. Boyce Watkins

Syracuse University

Kobe Bryant started his career with the LA Lakers as a tremendous athlete with a valuable brand. His stock rose like an elevator, as Madison Avenue loved him as much as Laker fans. Then life took a strange twist. First, there was the nasty departure of Shaquille O'neal, which instantly reduced Kobe and the Lakers to "also-rans" in the NBA playoffs. A man who was used to winning championships was reduced to simply playing for pay.

Off the court, things got even worse. In 2003, Kobe was accused of a horrifically embarrassing sexual assault, a case that was later dropped. But even though the charges were dropped, the case still had a lasting impact on Bryant's reputation: Sponsors ran the other way and everyone wondered if Kobe might turn into another "coulda, woulda, shoulda" black athlete.

But he persisted. The Lakers got a little bit better every year, with that improvement culminating in what some believe to be Kobe's first "real championship" this year; a title without the boost of a dominant big man. For the first time, the Lakers are champions under Kobe's watch. He has proven that he is more than a replica of Anfernee Hardaway.

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Preparing for the Retirement Crisis: America’s Perfect Storm

by Dr. Boyce Watkins, Finance Professor at Syracuse University

www.TheGrio.com

I hate to be the bearer of bad news. But then again, it must not bother me very much, since I am going to give you a big pile of bad news right now. Given that I earned a Masters Degree in the "morbid science" of statistics, I figured I would start the day by fulfilling my occupational expectation.

The first piece of bad news is that you are going to die. One day, your heart will stop beating and the 2.5 billion breaths you'll take during your lifetime will come to an end. Hopefully, it won't be painful, but I can't guarantee that. The truth is, however, that death might not be the worst part of it all.

The toughest news is that before you die, you are likely going to experience a long, slow period of physical and psychological decline called "old age". In conjunction with this decline, you are going to see your financial resources dwindle as quickly as the muscles in your body. Not only will the scale of your resources decline, but your expenses will likely mount as you go to one doctor's visit after another, all with the hope of delaying the inevitable. That period of life is called "retirement", and most Americans are not financially prepared for it.

Now that you are sufficiently depressed (there's no point in lying to you, I'm not very good at that), I will give you some facts to chew on. I also hope that in light of these realities, you will engage in something that the rest of America is not doing: preparing for retirement. While retirement planning has always been important in the past, it has never been more important than it is for you right now. The Perfect Economic Storm is coming, one in which all the scary clouds merge together into one big ball of fiscal devastation that can only be created by God himself. When your financial meteorologist (me) gives you that information, it's your decision to get your family prepared. Let's break down the components of the storm, shall we?

 

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Tavis Smiley and Wells Fargo: Partners in Deception?

by Genma Holmes

This is the third in a series of posts about Tavis Smiley and Wells Fargo, sponsor of the State of the Black Union (SOTBU). Everyone is in uproar about Wells Fargo employees calling loans to black mortgage holders “ghetto loans” and the disdain they showed for the customers they made the most profit from. But the media, especially black media, has been very silent about the role Tavis Smiley played in helping stack this ill fated deck of cards that has plagued the black community in several major cities.

When Mr. Smiley first partnered with Wells Fargo in 2005, he was a TEACHER of economic empowerment and assembled seminars around the country as the keynote speaker for wealth building. Press releases filled every major news outlet inbox and black newspapers were infected with faxes stating Mr. Smiley’s desire to teach the principles of home ownership as the key for breaking the cycle of poverty in the African American community. All this knowledge was given at no charge to trusting black folks. This was the golden ticket to obtaining the elusive piece of the pie via Mr. Smiley’s recommendations. Surely the intentions of all involved were pure and Mr. Smiley had vetted Wells Fargo thoroughly. Or so we thought. My granddaddy would say often, “Be wise when someone wants to give you something for free, there will be a price to pay later.”

Here’s what Mr. Smiley and Wells Fargo said in 2005 according to a widely circulated press release:

Wells Fargo Home Mortgage Joins With Tavis Smiley to Offer Free Wealth Building Strategies Seminar in Washington, DC Tavis Smiley and a Host of Financial Experts Share Information About Building Generational Wealth and Family Financial Security

WASHINGTON, Aug. 25 /PRNewswire/ -- Wells Fargo Home Mortgage, the nation's leading originator of home loans to ethnic minority customers, has joined forces with talk show host and author, Tavis Smiley; and several financial affairs experts to provide free Wealth Building Strategies Seminars in eight cities across the country, including Washington, D.C. Additional seminars featuring other popular panelists also will be offered in 12 more cities, nationwide.

Click to read more on the African American Money Blog

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Black America: Do Not Let Capitalism Enslave You

Dr Boyce Watkins – Syracuse University: Black Scholars Coalition

I recall giving a speech at a university in Upstate New York. We were talking about wealth building for the Black community and how Black folks can remove themselves from the underbelly of American capitalism. I'd heard this school had a reputation for strong liberalism and I was looking forward to addressing the audience. A young white female in the back of the room raised her hand to ask me a question. She said "How can you support a system that enslaves people?"

The woman was clearly offended by my mere presence as a financial expert and apparent supporter of capitalism. I could immediately tell, that no matter what my answer was, she was going to hate me and wish death upon my children. She didn't realize that I am not just a Finance Professor, but also a closet socialist in many contexts. While I am not one who wants to live in a socialist society, I do understand that capitalism and socialism must balance one another in any society that alleges to embrace human compassion. 

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Black Money Expert Explains How to Not Lose your home

Black finance expert Ryan Mack brings us advice from a place of real heart to help hard-working Americans deal with the mortgage mess. With his warm brand of personal finance advice, Mack's strongest words to the community are: "If you are having problems paying your mortgage DO NOT WALK AWAY FROM YOUR HOME!" In part one of our two-part interview, learn more about how we got into this housing crisis, how it has affected the general economy and what you should do now to protect your home.
How did you become a finance expert? What inspired you to pursue this goal?
When I was on Wall Street making great money I felt empty, because I was not an effective contributor to my community. I knew that finance was my passion, but I also knew that sitting in a cubicle making money only for the sake of self-empowerment was not my purpose.
Like too many families in America, many people in my family were not financially literate. My passion was to change that. In addition, I was always getting asked personal finance questions from peers who knew I was a stock trader. But trading is different from personal finance. To address these questions, I began to study personal finance and started a Yahoo group called MakingMoneyWork, which provided tips and strategies to over 200 members through weekly newsletters.

Click to read more on the African American Money blog.

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Your Black News: Detroit Becoming a Hot Bed for Real Estate Purchases

NEW YORK (CNNMoney.com) -- As Detroit home prices in Detroit crash, sales are heating up. But with all of the plant closings and layoffs, who's buying? Investors -- some of whom are snapping up five and 10 houses at a time.

"I have investors from all over the country and the world," said Jeremy Burgess, co-founder of Urban Detroit Wholesalers, which buys undervalued homes to rehab and rent or to sell to other investors. "One Lithuanian woman just bought a second house."

"Most of the local investors are out of money," added Mike Shannon, who specializes in Detroit foreclosures and has clients from New Zealand, Australia, England and other places.

Recently a Californian purchased 178 properties, mostly one at a time, and most for under $10,000. Another has purchased six Detroit properties since September and hopes to begin buying five a month.

Click to read more on the African American Money Blog.

 

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Dr Boyce Watkins: What the Wells Fargo Predatory Lending Suit Means to the Black Community

by Dr. Boyce Watkins

www.BoyceWatkins.com

Tavis Smiley needs to have a conversation with one of his primary sponsors, Wells Fargo. This week, it was announced that Wells Fargo is being sued by the city of Baltimore for egregiously racist predatory lending practices in the black community. The company has been accused by some former loan officers of targeting subprime, low quality loans to black neighborhoods, leading to a dramatic economic collapse for the black community of Baltimore.

The statistical evidence is daunting. Half of all the properties foreclosed by Wells Fargo are vacant and 71% of those properties are in black neighborhoods. Wells Fargo's African American borrowers with incomes greater than $68,000 per year were 8 times more likely to hold subprime loans than white borrowers with the same income.

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Black Men Can be More than Athletes: NY Yankee Transitions Successfully to Business

Jason Robertson is a man of many gifts. As an young man, he was an All-American baseball player, drafted by the New York Yankees straight out of high school. He was also listed by Essence Magazine as one of the most eligible bachelors in America for his good looks and success. If that were not enough, Jason retired from baseball and re-invented himself as a leading, award-winning entrepeneur.

Besides being a model of success for his 3 sons and celebrating his engagement to fiance Marshawn Evans, Jason is on a mission to teach other young men how to make the transition from successful athlete to outstanding businessman. Black Voices got a chance to catch up with Jason.

1) What do you do for a living?

I own an industrial packaging company. We sell corrugated boxes, bags, films, pallets, and we also provide warehousing and storage.

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Credit Card Addiction

by Dr Boyce Watkins

In an interview with NPR's Michel Martin, I explained how credit card companies are really financial drug dealers. While this comparison might initially seem out of the park, it is actually quite appropriate: Credit is like a drug: it makes you feel good, and it is difficult for most Americans to feel secure or comfortable without it. Also like a drug, credit can be abused. Americans are hooked on consumption and credit card companies are willing to serve us our drug to the point of financial ruin.

The difference between financial drugs and medical drugs is that most financial drugs are legal, no matter how harmful they might be. In 1979, Congress got rid of usury laws, allowing credit card companies to charge darn near any interest rate they wanted, any fee they felt applicable and any penalty they felt you deserved. In other words, the legalized financial drug dealers were allowed to run rampant and sell as much of their product as the addicts could consume.

 

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How Does Your Financial Situation Compare with Most Americans?

Polonius wouldnt have gotten very far in America today. He's the Shakespeare character in Hamlet who warned, neither a borrower, nor a lender be.

Modern society, as we know all too well, is overrun with both borrowers and lenders. But just how big is the typical family's debt? How fast is it growing? How does your mortgage compare to the Joneses next door? And how might consumer debt -- your debt -- affect the U.S. economy?

We decided to look at the most recent numbers and take a snapshot of household debt in the United States, circa 2004. What emerges is a picture that's both familiar and unsettling. Yes, consumer debt -- encompassing credit cards, mortgages, student loans and more -- is growing like a well-fed St. Bernard puppy. No, there's no sign that the growth will slow. Yes, some economists worry about the ill effects, but no, not many of them are sounding urgent alarms.

 

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