African American Money: CEO Lawrence Watkins with George Kilpatrick

Lawrence Watkins and George Kilpatrick Break down the secrets to success.  Click the image to listen!

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President Barack Obama Seeks to Stop Foreclosures for All Americans

His massive stimulus plan now signed into law, President Barack Obama is turning to attack the home foreclosure crisis at the heart of the nation's deepening economic woes.

His goal is to prevent millions of American families from losing their houses because they can't make mortgage payments.

"We must stem the spread of foreclosures and falling home values for all Americans, and do everything we can to help responsible homeowners stay in their homes," Obama said Tuesday as he signed his tax cut and spending package into law.

The ambitious plan he was announcing at a Phoenix high school Wednesday was expected to offer government cash to mortgage companies that reduce interest rates — and therefore monthly payments — for homeowners in danger of default, according to several people briefed on the plan. What remained unclear was how the government will decide who qualifies for relief.

One Democratic official familiar with the plan said it also would allow homeowners to refinance their mortgages if they owed more than their homes were valued. Still another section would give bankruptcy judges more authority to change mortgages. That last provision has been opposed by lenders, who said it would add risk and lead to higher interest rates.

 

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Credit Card Companies are Changing the Game On You

By Dr. Boyce Watkins

www.DrBoyceMoney.com

In case you weren’t sure, credit card companies are not out to help you. If you are financially illiterate and uninformed, they are going to exploit you. If you are worried about the financial crisis, they are going to prey on your fear to get money out of you. They are also doing exactly what the rest of us are doing: trying to remain protected in a fragile economy.

The stimulus is stymied. The bailout is a failout. The stock market has consistently given a “thumbs down” to every piece of legislation passed in response to this crisis. Our economy is like the sick man who won’t respond to antibiotics. While the results of the latest package are yet to be seen, the truth is that no one is sure what will work. Every company is out to protect their assets and hold on to their cash, which means they no longer have much interest in loaning money to you.

Yes, this is true even if you have a good credit score, which is the ironic part.

Customers are opening their monthly statements to find that credit card companies have started to either ration credit (give less of it) or raise the interest rate being paid on outstanding debt. This doesn’t even count all the dirty tactics used, like using your payments to pay off low interest debt first, quietly getting rid of the grace period or charging interest on your balance from the prior two months vs. the current one. Even when you’ve been making payments on time for years, banks keep raising the bar to maximize shareholder wealth. When liquidity is scarce, those giving out water demand a higher cost per bottle. Additionally, higher default rates have justified the increase in interest rates, but higher interest rates increase the likelihood of default. It’s a nasty cycle, really.

Lawmakers are trying to intervene. Congressional hearings have taken place. Banks are being scolded by senators who keep telling them that this form of business practice is unethical and that they are gouging the American consumer. All this might be true, but what is also true is that you can’t force banks to loan you money. Also, it is very difficult, if not impossible, to legislate a strong economy.

If you have a less than stellar financial history, there is an even greater opportunity for your credit card company to raise your interest rates. If you have defaulted on other loans or are a slow payer in other areas, then they have no problem telling you to pay up or ship out. The days of easy money are long behind us, and companies are dramatically shifting their business practices.

The bottom line is that THEY’VE GOT YOU. They know that you’ve become addicted to the debt they so readily offered in the past, and this debt has become the lifeblood for the lifestyle to which you’ve chosen to become accustomed. They know that they can charge you a higher interest rate because you can’t do anything about it. Like a drug addict who is angry about paying more for his product, you really don’t have any other choice.

Well, maybe you do.

Here is one solution: tighten your economic belt. That means putting together a financial fitness plan today that consists of getting rid of as much debt as possible. I’ve mentioned in prior articles and on our website that paying off debt can be one of the best investments you make with your money. This is especially true if you have a stable job and are paying a high rate of interest to your credit card company.

So, the Dr. Boyce Challenge for this month is simple: Create a budget which includes the steady elimination of credit card debt. That means you should list every single expense you have for the entire month on one piece of paper or a spreadsheet. Don’t leave anything out. Count the money you want to use for getting your hair done, your nails, paying your mortgage, car note, whatever. Count everything. That will be your first step toward obtaining financial fitness.

As you create the budget, allocate at least 10% of your monthly after tax income toward reducing credit card debt. So, if you earn $3,000 per month after taxes,$300 per month should be allocated toward removing credit card debt, not including interest. So, if you owe $5,000 in credit card debt, you can remove this debt in roughly a year and a half. While $300 may seem like a lot of money to find in your budget, it’s there if you look hard enough. In fact, if you spend $10 per day on lunch and/or coffee, you can find the bulk of the money by taking your lunch to work. Make this one of the first bills you pay, not the last. The last bill is the one that only gets paid half the time. It’s easier to negotiate with creditors if you don’t need them so much. Take small steps toward finding your financial freedom.

Next month, we will move to step 2 of the Dr. Boyce Financial Challenge. While I confess that this change won’t be easy, I can promise that it will be worth it in the end. Be strong and remain focused, this is your opportunity to shine.

Dr Boyce Watkins is a Finance Professor at Syracuse University and author of “Financial Lipo 101: From financial fat to fitness”, to be released in April, 2009. For more information, please visit www.DrBoyceMoney.com.

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Should We Really Trust The Government? Thoughts of A Black Finance Professor

Keeping Your Cool During A Financial Meltdown

by Dr. Boyce Watkins
http://www.boycewatkins.com/

If you listen carefully to the words of Treasury Secretary Henry “Hank” Paulson and Ben “Big Ben” Bernanke (chairman of the Federal Reserve) you might notice a trend in their language. The word “confidence” is used a lot when they speak. Many of their monetary proposals are not necessarily valuable for their financial power, but also for their psychological power.

Some of you may wonder what confidence has to do with anything. After all, if you’re broke, confidence doesn’t exactly put money in your pocket. If you’re 100 pounds overweight, confidence won’t help you win the Olympic 100 meter dash. When you are flying on a crashing plane, confidence doesn’t keep the plane from slamming into the ground. But confidence is important to an economy, and one of the most significant drivers of economic growth. In fact, over confidence has driven US economic growth for the past 10 years. Here are some reasons that confidence matters in the minds of Hank and Big Ben:

1) Confident consumers spend money
If you think you might lose your job next year, are you going to max out your credit cards? I certainly hope not. If you are worried about being able to make ends meet, are you going to buy that big screen TV? Not unless you want your wife to leave you. So, even if it doesn’t hold any truth, the mere forecast of a weak economy is enough to make many Americans hold off on consumer spending, one of the great driving forces of the American financial system.

2) Confident companies invest money and hire workers
Investments involve risk. Your hunch may work out, and it may not. If you don’t believe the economy is getting better, you are not going to consider taking that risk. No one plans to go to the beach if the weather man says that it’s going to rain. When economic rain is in the forecast, companies pull out their umbrellas and hold off on new projects. This reduces the number of jobs in the economy, because nearly every job created in America is the result of someone making an investment.

3) Confident Americans do not take their money out of banks
In case you didn’t know, your bank does not have your money. Your money is part of a large base of financial capital that is loaned out to individuals and consumers seeking to get a good return on their investment. So, without investing, your bank would have no interest in paying you any interest at all. So if, say, 30% of all customers of the same bank decide to get their money out at the same time, the bank would have serious financial problems. It is a lack of confidence that could cause customers to “run” on their bank and take out their money.

4) Confident investors keep their money in the stock market
The stock market is a place where fortunes are made and lost. Some part of that fortune is psychological, given that no asset can have a value which exceeds that which someone is willing to pay for it. When investors lose confidence, they take their money out of the stock market, and reductions in demand for stocks lead to massive paper losses in the market. Additionally, most Americans are “momentum traders”, meaning that when the market goes up, they tend to buy more, and when it goes down, they tend to sell. History shows that it is actually the opposite approach that tends to work best.

5) Confident banks make loans
Banks have to keep a certain portion of their funds on hand at all times to meet federal requirements. If they are fearful that their customers might come and demand their cash, they hold onto their capital to ensure that it is available. If they are afraid that their borrowing customers will not be able to repay loans due to a weak economy, they also hold back on issuing new loans. The truth is that when economic forecasts are grim, conservative bankers become even more fearful than the rest of us.

The bottom line of this article is that confidence matters. So, the next time you hear Ben Bernanke give a speech, you can be confident that he is going to use language that makes you feel more secure. Whether you choose to believe those words is up to you.

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 http://boycewatikns.com/

Black Money Tip: It is not Always Best to Buy a Home

 

This is an article explaining some reasons why you might not feel it necessary to purchase a home.  I agree.  What is also true is that there are convenience reasons that an individual may not want to buy: if you are only living in a city for a short period of time, don't want the hastle and expense (not to mention taxes) of home ownership, you have a business that is already giving you a good return or you have a great tax write-off elsewhere.  Owning a home is great, but it is more important to remember the importance of eventually owning SOMETHING.  It doesn't have to be a house. 

Real-estate agents have been pushing the virtues of homeownership since homes were invented. Or since real-estate agents were invented, anyway. Paying a mortgage, they insist, is a can't-miss investment (the tax breaks, the appreciation, the thrill of fixing your own roof!). Renting is for simpletons who don't like keeping their own money.

But does owning a home really trump renting? With the economy stumbling, house prices falling, and credit tightening, many housing experts are questioning the conventional wisdom. "Over the last decade, it may have been true," says W. Van Harlow, an economist at the Fidelity Research Institute. "Clearly, there are periods where [the housing market] will dominate. But give this market correction another 18 months, and it may not be true anymore."

Not so hot. The housing boom produced endless stories of homeowners getting twice what they paid for their homes. But "prices don't always go up," says Jay Butler, director of realty studies at Arizona State University. Even a boomtown like Phoenix has seen median rates of appreciation climb only 4.6 percent a year since 1981. According to a Fidelity study published this year, the return on a dollar invested in real estate in 1963 barely beat that of a low-risk treasury bill.

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Long Term Financial Consequences of Divorce

s you may already know, June is the most popular month in this country for weddings. So now that the marrying month is almost over, I thought it might be a good idea to turn the focus to - what else? - divorce!

I don't mean to be a downer about it, but the reality is, the divorce rate in America has hovered pretty close to the 50% mark for years now. And while there are lots of financial (not to mention emotional) complexities related to divorce, financial planners say one of the most common mistakes people make after getting un-hitched is simply failing to update the beneficiary forms on their retirement accounts.

And that can lead to all kinds of unintended financial consequences years, or even decades, down the road.

Here's why: if you get divorced, you'll probably make a point of updating your will to exclude your ex-spouse. But what you may not realize is that your will has no bearing whatsoever on who inherits any money sitting in your qualified retirement accounts - including an IRA, 401(k), 403(b) or traditional company pension plan - at the time of your death.

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Finding Ways to Save Money

15 Quick Tips on How to Save Money

Author: Mitz

By Mitz





Using these tips on how to save money can literally save you thousands of dollars a year You may think that these tips sound like prison camp rules, however there are a lot of ways to have fun without spending money. I guarantee you will be stress free if you follow these money saving tips.





Don't buy your lunch, pack it yourself. It won't kill you. Stop going out to dinner. Going out to dinner used to be a planned and special outing but now people eat out because they do not feel like cooking.





Cut down on certain luxuries like cigarettes and alcohol. I bought a packet of cigarettes for a friend the other day and I nearly died when I heard the price. Stop buying coffees at the cafe when you can make it yourself. Do not buy bottles of water.





Save money on your gas or petrol bills by not driving to the shop for one item. Be prepared and have what you need, and if you run out, bad luck!


If you have a garden, grow something. Lettuce is easy and is good for salads, sandwiches, hamburgers, and tacos. You could even grow herbs in pots on a window ledge with sun. Swap your surplus produce with others. My neighbours give me eggs in exchange for vegies from my garden.





Reduce the monthly bills you have to pay. Do you really need the premium internet account or the pay TV. What else are you paying for that you really don't need. Turn your electrical items off at the wall. Simply turning the on off switch will not stop the device from using power.





Go shopping once a fortnight. Stick to a shopping list. Buy items in bulk and when on special. If chicken fillet is on special, have that for dinner. Don't buy Premium Lamb cutlets at $25 a kilo just because you want them.





Buy second-hand items. I bought a used play station 2 console. The kids were very happy and I saved around $200. Well looked after, used cars can save you thousands of dollars.





Don't buy anything unless you have the cash in your pocket. Credit cards and interest free loans are a trap!! The interest rates make your repayments a lot larger than what you actually spent.





Cut down on waste. Use food in your fridge before it turns bad. Freeze what you can. Eat leftovers.





Buy your clothes when they are out of season. You can get them for half price or less. School uniforms are great to buy second hand as your child grows so quick.


Look after what you already have. A little bit of maintenance goes a long way.





Develop a budget and try to stick to it. Its not easy but once you master it, you will never look back.





Get rid of that extra car. Some families have more cars than they need. They cost registration, insurance and petrol. Maybe you could do with one family car and one motorbike. You can also get a smaller car that does not chew the petrol or gas like a big one.





Use your computer to communicate with family and friends around the world. If you have a web cam Windows Live messenger lets you chat to people and they can see you at the same time.





Play music from the internet. My children play video clips on youtube. You can also do internet banking. Read newspapers online.


Don't carry cash in your pocket because you will spend it.





This article is free to re-print as long as the authors bio is intact and the links clickable.

Article Source: http://www.articlesbase.com/personal-finance-articles/15-quick-tips-on-how-to-save-money-297208.html

About the Author:

Mitz Pantic wrote this article for Fill Your Money Box.

Getting screwed for the holidays - why my mother and I hate gift certificates

My mother, who is one of the wisest people I know, was talking to me the other day about gift certificates. We were having this discussion while debating what to get our needy-ass, yet loveable relatives for Christmas (only a couple of them are needy, most of them are loveable). Christmas is that overly commercialized holiday that seems to come every single year. I don't mind Christmas, but it seems that the word "Christ" has been removed in exchange for the last part "must". "I MUST have this", "we MUST do that", it's crazy!

At any rate, we were wondering if gift certificates were the best gift to give, since it avoids the awkward, yet inevitable reality that you are going to always end up giving something to someone that they just bought, don't want or don't need as much as something else. So, you have then graced your loved one with the burden of yet another trip to the pawn shop or the 50 mile long Walmart return line right after the holidays are over. They are also burdened with the guilt of having to pretend that they like your gift, even though they really don't. You know, those fake, awkward smiles that make your face hurt and stomach turn.

We both concluded in our scientific analysis (My Mama and Me Labs, Inc.) that gift certificates were better than regular gifts, since you can get what you want.

But I had to put the brakes on our ground breaking analysis....I then said, "Well, based on that logic, it would seem that money is the best gift certificate, since you can not only get whatever you want, but you can use it at any store."

That led us to wonder: "What exactly do companies give us in return for exchanging a hard earned $50 dollars that can be used ANYWHERE for their pathetic, multicolored little piece of paper that can is also worth $50, but can only be used in ONE PLACE?"

Nothing.

The companies typically give us nothing in exchange for the purchase of a gift certificate. It would be one thing if they allowed us to purchase a $30 gift certificate for $25. That would make our decision to limit the stretch of our money at least partially worth while. But when you give them $30 dollars that can be spent anywhere, they give you back the same $30 dollars that can only be spent at one place.

That's not all they do to screw us for the holidays.

Companies also get over on the fact that many of us never use the gift certicates anyway! According to Needham, Mass.-based consulting-firm TowerGroup, over $5 billion dollars in unused gift certificates allow corporations to fill the stockings of their stock holders. And believe me, they aren't giving that money to charity.

So, my mother and I both came to the grim conclusion that gift certificates, from a financial standpoint, are not very good gifts. Cash is the best gift certificate there is. It's the thought that counts, and my mother and I put quite a bit of thought into our decision. We hope our relatives appreciate it.

So this year, everyone we love is going to get a card with cash in it. That's the same gift that makes every third grader smile (Remember when that old relative you never talked to sent you that ugly card every year that always had cash in it? Don't pretend like that WAS NOT the first card you opened!). Perhaps the third graders are onto something, since this gift can make adults smile even more.

Study: The wealth gap widens between black and white families

According to the Associated Press, the income gap between black and white families has grown. A new study that tracked the incomes of 2300 families over the past 30 years has made the conclusion.

Some attribute the growth in the income gap to be due to the increase in the numbers of women in the workforce. This trend has increased family incomes for both blacks and whites, but it has had a greater impact on whites for two reasons: white women earn more and black families are not married as regularly.

"Overall, incomes are going up. But not all children are benefiting equally from the American dream," said Julia Isaacs, a fellow at the Brookings Institution, a Washington think tank.

Isaacs wrote a report that looked at incomes of parents in the last 1960s and 1970s, and then followed their grown children 30 years later. The reports found that about two-thirds of the children surveyed grew up to have higher family incomes than their parents had 30 years earlier.

The reports found that 2/3 of their children had higher incomes than their black parents. While both white and black children had higher incomes than their parents, white children benefited more than black ones.

"Too many Americans, whites and even some blacks, think that the playing field has indeed leveled," said Marc Morial, president and CEO of the National Urban League.

It has not, he added.

"We are like fingers on the hand," Morial said of black and white Americans. "We are on the same hand, but we are separate fingers."

Most interestingly, middle class black children were not as likely to have received wealth from their parents as middle class white children.

My interpretation: middle class is an income measure, not a wealth measure. Black families, even when the income is just as high as whites, tend to have lower wealth. That is due to the fact that most black families had no wealth to pass to their children. So, even a relatively well-to-do middle class black family is more likely to be saddled with debt.

Keeping Debt in Perspective

I thought this story was a reminder of the psychological toll of debt. A man who was over $200,000 in debt killed his ex-wife and their two children. Friends of the man claim that he was not capable of such violence, or didn't appear to be. The event ended with the man killing himself.

He was a school teacher and PhD candidate. On his Myspace page, he described his children as "two amazing little human beings".

Obviously, the man had some mental problems to work through. Additionally, I am sure that the stress of debt is part of what pulled those mental problems to the surface.

But my advice to you is to keep your debt and financial challenges in perspective. Not that anyone would do something as terrible as what this man did, but the stress of debt can be very real for all of us. I recommend that you understand one important principle of money management: Your most valuable assets are not financial. Your love, life, health and family mean a great deal more. So, it was this man's focus on his financial assets that led him to destroy his most precious assets. That's very sad to me.

Click Here to read the story.

Financial Tip of the Week - Wisdom from a EuroHater

When I did a summer research visit with the Center for European Economic Research, one of my German colleagues came to me and asked: "What's wrong with Americans?" Taken aback by his statement, I said "Everything and nothing.....but you sound like a Euro-hater." Of course he didn't know what a "hater" was, but I do believe that some people around the world are jealous of American prosperity. At the same time, there is something to be said about the fact that we learn our financial habits by watching episodes of Vh-1 and "Lifestyles of the Blingingly Geto-fab" (Ok, that's not a real show, but you get the point). In other words, we stink when it comes to managing money, like a whole country full of MC Hammers.

The reason for my colleague's question came a peculiar fact that we unearthed during our research: Americans earn far more than Germans do, we pay far less in taxes than Germans do, but Germans SAVE FIVE TIMES MORE MONEY than Americans do. That led me to a moment of intense pause and reflection - like when Florida Evans suddenly realized that James was dead. I could no longer refer to my friend as a Eurohater....for his comments were right on point.

When I came back to the US, I listened with a more sensitive ear to my friends who swore that it was IMPOSSIBLE for them to save....they don't earn enough, their bills were too high, they will start saving when they get older, blah blah blah. All of these explanations are the reason for the pending retirement crisis in America (baby boomers are relatively broke, so get the spare bedroom ready), and the mortgage crisis (people defaulting on loans after buying a home big enough for King Tut and P Diddy).

Let's start with the basics for our financial tip of the week....ANYONE CAN SAVE. It's all about your personality and preferences. Essence Magazine, Black Enterprise and some other outlets reached out to me for financial secrets. I think they wanted some magical formula that only finance professors know about how to accumulate wealth. The first thing I told them was this: Saving and managing money is 95% psychological - make your mind right to get your money tight. The second thing I did was quote my grandmother, a woman who never went to college and never earned more than $20,000 a year, yet always remained financially independent, and has perfect credit to this day. She told me that "If you have the mind of a spender, you will always be broke. If you have the mind of a saver, you will always have money. When spenders get more income, they spend more. When savers get more income, they save more. A higher income only makes you a bigger version of what you already are inside." After sending thousands of students to Wall Street, learning tons of ridiculous theories and having far more education than any human being would ever want, I ended up going full circle and realizing that my grandmother's wisdom is one of my most cherished commodities.

So, here are my quick tips for those who want to start saving. Like Pookie in New Jack City - it's never too late to turn over a new leaf:

1) The actor Will Smith told me that when he gave his family his spare time, after spending all his time building his career, he always found that there was no time left. That was why he was divorced. He then realized that his family was a priority and that he should structure family time as a key part of his schedule. He is now happily married. Lesson: to be happily married to your finances, don't just save money that is leftover....there won't be any. Make savings the first bill you pay.

2) Find a way, today, to have 10% of your income automatically deducted from your paycheck and put into a special account. If your boss were to give you a 10% paycut, you would find a way to survive, so you can find a way to survive with 10% of your cash going into savings. Your financial security is the most important expense you have.

3) Try to put the money someplace where it is not convenient to get it. These are what they call "illiquid assets", or things that are tough to convert to cash. It's sort of like wanting to save a glass of water and freezing it into a block of ice. You can still get to the water if you're really thirsty, but it will be a pain in the butt to do so (why do you think they call money "liquidity"?). So, the water is there when you need it, but you can't just open the fridge and take a swig. Convenience and easy access are key enablers of compulsive activity (translation: if the temptation is right there in front of you, then you're really gonna wanna do it......That's how babies are born out of wedlock).

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In Search of the Perfect Computer

This holiday season I've been in search for the perfect computer. While my full-time job provides me with a laptop, I also have a side hustle that is blossoming and needs a computer of its own. I know the cheapest and best prices are at this time of the year. If you can't find a computer during the holidays, you just aren't looking!

My search started on Thanksgiving morning and I anxiously flipped through the pages of all of the advertisements. Because my computer will travel with me daily, I really wanted to find a smaller screen that was less than 15 inches. The majority of the computers on sale were 15.4 inches. So this was my first dilemma. Do I go with the larger screen in order to save money or be patient and hope the smaller screens will also go on sale? I didn't have much time to think about it because Black Friday was right around the corner. I found a computer on sale Thanksgiving evening at CompUSA. It was a quality computer at a price I couldn't beat. So I got my game plan together and was ready to purchase it. As I drove up to the store, I saw a very lengthy line wrapping around the building. Although all of those people were probably not in line to get a laptop, there was a very good chance that by the time I made it all the way through, there wouldn't be any left.

At this point I had not only to think about the price of the computer, but also the value of my time. Was the money I would be saving equivalent to the hours upon hours I would be standing in the cold? Time is money and money is time. When I weighed my options, I came to the conclusion that although it was a good deal, it really wasn't worth my time. So I left.

Friday morning I'm up at the crack of dawn waiting for Apple's website to post their Black Friday prices. Apple computers rarely go on sale. I really wanted a MacBook, but struggled with whether I was willing to pay the extreme price. Apple said the sale would be posted at midnight Pacific Standard Time (PST). I assumed that's two hours behind Eastern Standard Time so I click on at 2:00am. Oops, I was wrong, PST is three hours behind so I have to wait another hour. Once I get through, I am highly disappointed to see the sale prices are same ones I receive as an educator. Just more wasted effort. By now I realize folks are starting to line up at the Best Buy and Circuit City stores. I flip through their advertisements one last time. I remind myself that I want a quality computer and not just a mediocre one that will only last a short time. I decide to sleep in.

It is now December 10 and I still have not purchased a laptop. Although I continue to look online at various prices and flip through newspaper advertisements, I haven't found a deal that's a steal. So, I've come to the conclusion that I'm not going to be a scrooge any longer and I'm going to purchase the Apple computer. It honestly is the one I want. Although I may not be saving the $100-400 off a random laptop, I know I'll be getting a quality product that has all of the features I desire. This holiday season, I learned that although a bargain is great, sometimes you have to spend a little more for peace of mind and quality that will last!

Avoiding Paris-Hiltonitis When Managing Your Money

There’s nothing wrong with a little shine in your life, especially since you have worked hard to get that degree. But shining too hard can have you rolling on 24s to bankruptcy court. Whether you earn 10 dollars per year or 10 Million, you are a financial slave if you are not saving, investing and letting your money grow. As I like to say, “To ‘floss’ at 23 is human, but to floss till you’re 90 is divine”.

As a Finance Professor and your personal Financial Physician, let me give you a list of rules to live by, so that your grandkids will be riding high on the hog after you have cooked up the pork chops. A mind is a terrible thing to waste, and you are wasting your mind if you have not used it to build, invest and teach in your community:

Rule #1: The easiest way to stay poor is to never own anything. Renting an apartment will help your landlord get a house, not you. Buying cars helps the auto dealer get a new limo, not you. The candy apple paint on their new Mercedes is being peeled right off your black butt. Get on the other side of that deal! Buy a house as quick as you can, buy stocks, buy bonds, own ASSETS. Don’t believe the hype about having a high paycheck; It means nothing if you don’t own anything.

Rule #2: The quickest path to getting pimped is to always work for someone else. Don’t just try to find a job, put yourself in position to CREATE a job. Start your own business as soon as you can. Remember: when you are working for someone else, they are usually earning 10 dollars for every dollar they pay you. Now THAT’S pimpin. Get with the GRAND hustle, not the BLAND hustle by using the PLANNED hustle to start your own business.

Rule #3: Save at least 10% of your money every time you get paid, NO EXCUSES. You should pay yourself first by having the money come right out of your check. A person who saves $200 per week starting at the age of 22 and invests that money in the stock market for a 10% return every year will have roughly $43,000 by the time they are 32, $434,000 by the time they are 52, and $1.6 million when they are 65. That’s enough money to help Flava Flav get a new girlfriend.

Rule #4: Create multiple streams of income. Your salary should only be one. I don’t care if you sell comic books, Avon or rotten fish. Remember the words of the rapper TI: “If the grapes don’t sell, I dry em up and sell raisins.” Side hustles provide job security, in case your boss hands you the pink slip. If you are smart, you can hand the pink slip to your boss.

Rule #5: Love is creepy sometimes, so watch who you hook up with. Merging your money with someone is like having sex with them: it can be an amazing experience, or it can leave you burned and bitter. Whether it is marriage or starting a business together, only merge your money with someone who cares about your best interest. In other words, don’t waste your life with losers.

Read my lips and follow these tips, and your future will have so much shine that Stevie Wonder will need to put on his sunglasses. Now that’s pimpin.

Black Enterprise Report - How to start an investment club

Three Very Bad Reasons for Not Saving Money

I was talking to my uncle, who is not exactly Donald Trump. He earns a pay rate that is not indistinguishable from minimum wage, lives in an apartment that requires rent by the week, and spends a little too much time in the bottle. I love him anyway, even if I can only take so much of him. But during those moments when we do have a chance to talk about his future, we sometimes discuss his financial planning, or lack thereof.

My uncle tends to give really good excuses for not saving money, and sometimes even a lie or two. They are loveable lies, not the kind that would make you stop talking to him. What is most interesting, however, is that my uncle sounds a lot like many other Americans I’ve spoken with when it comes to finding creative reasons for not saving money. “Broke-as-a-joke-itis” is a disease that is plaguing America (the richest country in the world) and causing nearly all of us to think that we are too broke to save. Most of us aren’t saving anything, for we are learning our investment philosophies from Paris Hilton and Vh-1.

I will only break it down for you with one quick fact: During my Research Scholar Visit with The Center for European Economic Research, I found that Germans pay more in taxes than Americans, earn far less than Americans, but save five times more than Americans. So, when it comes to saving, we really suck. Here are some of my uncle’s excuses for not saving. They might not be much different from your own:

“I don’t make enough money to save”

This is probably the silliest excuse for not saving, but one of the most popular. What if your income suddenly dropped 20%? You would find a way to survive, or you’d find a way to make more money. Either way, you would not die. So, all of us have enough money to save if that is what we really want to do. I recommend an immediate financial amputation: cutting your disposable income right now and putting the residual in your savings account. I promise you won’t die, starve, or go insane. What is also funny is that for most of us, if we were earning 20% more than we earn right now, we would still say that we don’t have enough money to save. That’s like increasing the level of the water in a pool every time you grow a couple of inches. You will always be struggling to swim.

“I save whatever’s leftover”

Some of us pay all of our bills, spend like we want to, and then save almost by accident. I have 3 words for those who try to save whatever is leftover after all their spending is done: wrong, wrong, wrong. The fact is that if you wait until you are done paying for everything else before you start saving, you will always run out of money right before the saving begins. Saving should not be something you do with your extra money, it should be something you do with your priority funds. The extra money is what you use for spending on items that are not necessary for your survival. Going through life without savings is like having no health or auto insurance, so saving is one of the most essential tasks in your life.

“I save through my home ownership or retirement plan”

Home ownership and retirement plans are important, but they are not what we call “liquid assets”. Think of it like this: if you are on the street dying of thirst, would you rather have a glass of cold water or a big block of ice? What if it’s cold outside and you can’t melt the ice to drink from it? You might die of thirst right in front of a big block of frozen liquid. That’s what its like to have a highly illiquid asset as your primary source of saving: you can’t get it on short notice when you need it.

If you were to take a drink from the block of ice in the middle of winter, you might have to pay someone with a blow torch to unfreeze it for you. That’s no different from someone paying interest on a home equity loan in order to get cash for emergencies. Whenever you translate wealth from one form into another, you are always going to pay.


When it comes to saving, Nike said it best: Just do it damnit. Ok, they didn’t say the last part, but you get the point. The fact is that if you are always looking for excuses not to save, they will always be available to you. But when you are truly committed, your whole life will change. Take that step today.

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”. He is a regular guest in national media, including CNN, FOX, BET and USA Today. For more information, please visit www.boycewatkins.com.

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