10 Things Blacks Need to Know About Money – Part II

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5. Personal Investments – paying down debt is the number one priority according to most African Americans. Credit card, student loans, and personal debt are significantly higher in the African American community compared to the general population (according to Prudential Financial). That creates a serious damper on savings, investing, and business ownership opportunities. One way to combat this scenario and have money available to purchase stocks, bonds, and other investment options is that people need to stop living beyond their means. It is extremely difficult for anyone to build personal investments if they spend more money than what’s coming in each and every month. Remember, it is not how much you make but how much you keep!

4. Life Insurance – is your home insured? I sure hope so! How about your car? Hopefully! But, are your assets insured? In most cases, the answer is “probably” no. Life insurance are great solutions to unexpected financial catastrophic disasters. The strategy is that you pay low premiums NOW to insure against potential high-cost future events that most people would not be able to afford. Therefore, we all should have enough life insurance to cover remaining  debt on: mortgage(s), student loans, credit cards, car note, and other consumer debt. Your goal should be to never leave your financial burden to someone else. Talk to your insurance agent. Please, do not wait!

3. Spending – consumer spending in the U.S. of African Americans is over $1 trillion. Let me put that another way, the extra money that we have left after paying our bills (called disposable income) in Black America is over $1 trillion. Unbelievable! That is comparable to the 16th largest country in the world. So, where is the money? Why are we so broke? If we can spend $1 trillion then how can we explain: 1) the highest unemployment rate, 2) lowest paying jobs, 3) more people live in poverty, 4) highest high school drop-out rate, and 5) we are the highest educated African Americans this country has ever seen. The answer is simple, no matter what you do for a living and how much money you make, since this money is not saved, not invested, and does not circulate and stay in the Black community, we will continue to see similar results. Unfortunately, most of the monies are spent outside of the African American communities enriching others but our own.

2. Entrepreneurship – starting a small business is one of the most effective ways to become rich (of course, if that’s your goal). If you can find a need and provide strategies to enhance, improve, and/or add value to that need, there’s a good chance that you’ll be successful. It takes a good dose of desire, faith, and determination to make it. If you can pull it off, the potential rewards can be huge. This is how Oprah, Bob Johnson, Reginald Lewis, Damon John, Russell Simmons, Bill Gates, Warren Buffet, and Jay Z did it.

1. Wealth Creation – focus on prosperity – not debt. Many people get stuck focusing on paying off their bills and debt. All of their attention with regards to money and accumulation center around paying bills and reducing debt. While it is great to pay your bills on time and reduce debt, you can’t let it distract you from creating wealth. That is why it’s a good idea to set up an automatic payment plan and start focusing on savings, prosperity, and growth. Whatever you think about, you will attract. It’s the “Law of Attraction”. It takes your focus away from the problem and on the solutions. As your bills get paid and you reduce debt, your mind is now free to focus on strategies to create and build wealth.