Understandably, African Americans are less wealthy than our white counter parts BUT is that excuse? Absolutely not. While some races have inherited millions and even billions from their parents and grandparents allowing them to generate more money, everyone had to start from somewhere. Keeping in mind the history of America, the stealing of wealth from Africa and other nations, etc. Getting past all of that and living today, how can we give our children a head start in life and ourselves.
SAVE! The golden rule of wealth creation is to PAY YOURSELF 1ST. The golden rule for some others is pay God first and then pay yourself. Which ever category you fall in, paying yourself should come before paying any of your creditors. This can be possible by limiting your creditors to begin with.
I remember a family gathering where my uncle spoke about saving, he said he saved pennies until he could save nickels, nickels until dimes, etc. so on and so forth. Saving doesn't have to be an astronomical number that leaves you in a bind however, simply get in the habit of saving. If its a penny a day or a dollar SAVE something.
SPEND LESS THAN YOU MAKE! I get it, many are living pay check to pay check trying to make ends meet, however I can guarantee almost every one spends money they don't have to. Dining out all the time for lunch at work, stopping by Starbucks, Dunkin Donuts, etc. Somewhere, somehow there is something you can cut out or cut back on to ensure that you aren't spending more than you make. How can you spend more than you earn? I have no idea yet, the bottom 5th of earners spent double their incomes, http://www.huffingtonpost.com/2012/09/26/bottom-fifth-of-americans-spent-double-their-incomes-2011_n_1915992.html.
CUT OUT EXPENSES! The Internet, Cable, etc. are luxuries, yes I said it luxuries. There are many things we feel are necessities that are not. While they are highly entertaining, they aren't necessities. A secret that some may not know, while the wealthy have TVs, cable etc. few of them spend a lot of time watching TV if at all. That maybe why they are wealthy....hmmm.....just a thought!!!!!!! Limit dining out to 1 or 2x/month and other things. Create a viable plan that allows you to treat yourself every now and again without going overboard.
INVEST! Not sure about stocks, bonds, mutual funds, annuities etc.? First use the world wide web at your disposal and research. Don't be afraid to invest, risk can be a good thing. You are risking more not taking a risk at all as the interest rates on basic checking, savings, money markets, and CDs is not even worth mentioning. Now, many banks are charging customers that have the least money, the most to use banking services ouch! MANAGE YOUR CHECKBOOK AND ACCOUNT! Keep up with your account and balance it. Paying unncessary overdraft, overdraft protection, and bounce check fees is a waste of your hard earned money.
Back to INVESTING! If you and your children do not have life insurance that increases in cash value, get some now. Life Insurance can be used for much more than simply burying someone. PROTECT YOUR INCOME! INCOME PROTECTION is insurance that helps you just in case something were to happen to you, God forbid, but again insurance is for just in case of emergencies. Take part in your companies 401k AND 403B programs, if your company doen't have one, consider starting an IRA or ROTH IRA on your own and contributing to it regularly.
We can't give you investment advice BUT we can introduce you to an excellent FINANCIAL PLANNER, that can assess your financial situation and help you get on the right track to meeting your FINANCIAL GOALS.
Speaking of FINANCIAL GOALS, do you have FINANCIAL goals for 2013 and beyond? If you answered no, "write the vision and make it plain!!"
The wealth gap between blacks, browns and whites continues to increase http://www.pewsocialtrends.org/2011/07/26/wealth-gaps-rise-to-record-highs-between-whites-blacks-hispanics/, however we can do something about it. Forget the name brand labels, expensive sneakers etc. for your children, think about college funds, down payments for purchasing investment properties, and business start up funds. Plan for the future while living in the present. Teach your children the value of a dollar, what it means to save, invest, and that their worth is not determined outwardly but by what's in the inside. Too many black folks are acting rich but living poor! Something has got to give...
CREDIT! Take credit seriously, credit cards should be used for EMERGENCY purposes ONLY. Paying interest on new clothes etc. is for lack of a better expression, hustling backwards. CASH IS KING! I've heard a saying if you can't afford it you don't need it. I think about myself all the shoes in my closet I haven't worn, dresses etc. Not that I have a lot but I have more than enough. The shopaholic in me is slowly dying down but every now and again something speaks to me and I just can't help myself so this post is for me as well, as I'm not getting any younger and my son is getting older, also I want to be able to continue to be a blessing to others and not think with a survival, me and mine, scarcity mentality.
NEED CREDIT REPAIR, I know someone that can help you with that as well. Your credit score determines interest rates, car insurance rates, job hiring decisions, credit holds a lot of weight, it something that needs to be taught to children at a young age and protefted. If you have CASH you don't need credit but we can talk about that later....
PROPERTY OWNERSHIP! There are some excellent programs in the nation as well as my home town Chicago that are helping 1st time home buyers and low income persons purchase property. Look into www.naca.com (nationwide) and the Neighborhood Stabilization Program (Chicago), for those in other cities I'm sure there are programs in your area as well. If you are paying your rent every month, hopefully, on time, you can purchase property.
PURCHASING A CAR! Start on-line if you can and get price quotes once you've found the care you want from different dealers. Once you go into the dealership you have a leg up on negotiating the best deal for you. Most Internet quotes will tell you they will beat a competivie quote by so much money. If you must finance a car, finance at the lowest possible rate. I was able to finance at 0.9%, need help purchasing a car, email us we will give you all the advice you need. Once your car is paid off, SAVE THE CAR INSURANCE MONEY YOU WERE PAYING UNTIL YOU CAN AFFORD TO PAY CASH FOR ANOTHER ONE!!!!!!!! There is always the option to by used or a certified pre-owned vehicle. I read somewhere th at 80% of wealthy people purchase used/pre-owned vehicles.
As African Americans we have to change our viewpoint on money, credit, saving, and investing and simply make wiser decisions. Time out for keeping up with the Joneses, its time to close this wealth gap, and create a legacy for future generations. Again, if you would like to speak to a financial service provider I can direct you in the right direction.
COLLEGE SAVINGS! For those who love to shop, www.upromise.com has an excellent program that allows you to save by living your everyday life, grocery shopping, dining out, purchasing gas, traeveling, and shopping online at retailers. I've been a member since my son was born. You can link the account to a high-yield Sallie Mae savings account as well. Upromise can be used by anybody for more savings, not just for those with children.
Think about and look into scholarships, grants, etc. when your child enters HIGH SCHOOL, maybe even the 8th grade. Get a feel for what's out there, what's required, deadlines, etc. Also consider the fact that college may not be the best option. $50 to $100K could be better spent starting a business or investing in property....
This is in no way and end all be all BUT it is a good start for things to think about and PREPARE and think about the future.....after all "a wise man leaves an inheritance to his children's children!
Be a blessing and be blessed! Namaste! Peace! Love! Joy! Happiness! Prosperity! Kindness! Self-Control!
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