financial literacy – Black Is

April 18, 2012April 18, 2012

Recommended Reading For African American Financial Starters

The way to wealth is as plain as the way to market. It depends chiefly on two words, industry and frugality; that is, waste neither time nor money, but make the best use of both. Without industry and frugality nothing will do; with them, everything. – Benjamin Franklin

The HISTORY

Capitalism & Slavery by Eric Williams

Comments – This book is tied for one of the most important books I have ever read period with Miseducation of the Negro. It is by far the most important financial book I have ever read. To understand the history of system you are engaging is vital. One of the most important lessons I came away with in this book is that capital within the capitalist system will always seek to find the cheapest labor.

Black Titan: A.G. Gaston and the making of a Black American millionaire by Carol Jenkins & Elizabeth Hines

Comments – The biography of arguably one of the greatest business men to ever grace America’s soil. His story of entrepreneurship and building of an empire is worth the read. He owned a bank, insurance company, along with many other businesses, and before his death was proposing an African American owned stock exchange. His rise from humble beginnings that would make many of us blush today gives one a role model of perseverance.

The 3 TYPES OF INCOME

Comments – Robert Kiyosaki explains the three types of income. He is also the author of Rich Dad Poor Dad. A book that is worth reading but there is much of it that must be taken with a grain of salt.

Robert Kiyosaki: Three Types of Income

Mr. Kiyosaki, while I respect his opinion in a lot of areas of his book, primarily that your house is not an investment, some of his book is a sales job to get you to buy more of his products so reader beware.

The REALITY

The median net worth for African Americans is $2,170.

The median net worth for European Americans is $97,860

And more can be found here:

Men Lie, Women Lie – Numbers Don’t: The Financial State of African America

STOP: African Americans should NOT be maxing out their 401(k)

The TECHNICAL

Security Analysis by Benjamin Graham & David Dodd

Comments – This one will put your mettle to the test. Its long. Its boring. Its fundamental. Its imperative. Benjamin Graham was Warren Buffett’s teacher and that alone makes it a must read. Beyond that this book will provide the discipline needed to make you understand the need for long-term value investing and not subject to the whims of the ups and downs of the daily market.

Common Stocks & Uncommon Profits by Philip A. Fisher

Comments – If Warren Buffett is known as the greatest value investor of all-time then Philip Fisher is arguably the greatest growth investor of all-time. Again, focused on long-term investing but this time in growth companies. Mr. Fisher did not believe in diversification investing but finding a few (7 to 10) really good stocks and being dedicated to them over the long-term.

The WEBSITES

These are websites that I check with some frequency on a weekly if not daily basis. Now while I wouldn’t expect anyone to check them at the rate I do these are websites that should at least find your eyeballs at least once a month. Also check newspapers from around the world. This is important because you want to start to see trends. The reality is that geopolitical and geoeconomical events can echo strongly into financial markets at times. No, reading CNN is not enough. You want to read events from others point of view about the world. CNN gives you the world view from European America’s perch. Understanding the difference can and will give you an edge when examining your company if it has a multinational operation.

www.foreignpolicy.com

www.world-newspapers.com

www.tiger21.com

This is just the start of a long road of wealth building but a foundation to begin you on your way. All of these avenues will potentially lead you to other avenues of information. Don’t invest in isolation either. Conversations about companies and their long-term potential with other investors can help you see things you might miss.

MOST importantly – SHARE this information with your family, friends, and community.

Make more money than you spend and don’t spend that much.

Mr. Foster is the Interim Executive Director of HBCU Endowment Foundation, sits on the board of directors at the Center for HBCU Media Advocacy, & President of AK, Inc. A former banker & financial analyst who earned his bachelor’s degree in Economics & Finance from Virginia State University as well his master’s degree in Community Development & Urban Planning from Prairie View A&M University. Publishing research on the agriculture economics of food waste, full-time contributor at HBCU Money, and guest contributor for a number of African American media outlets.

March 14, 2012May 6, 2018

PODCAST – Jordans: The Impact of a Sneaker on a Generation

Listen in as KC and the family discuss the Air Jordans and the impact of consumerism on the Black community. Podcast guests include Mr. CEO, Toria Williams, John Wood, and Porsche Taylor. This episode also includes a special guest segment with Mr. Moody of the My Next Door Neighbor social network. Enjoy!

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May 23, 2011May 22, 2011

Good Credit

I can’t count the times I’ve had the conversation about opening credit cards in college with friends and the trouble it got us all in before we were 21. For many of us our parents forewarned us of the drama credit card debt would cause us, but our non-existent college budgets made applying for credit a temptation we couldn’t resist. Credit card companies know this, and make it their business to camp out college campuses across the nation to prey on poor college students.

However, not every young person is fortunate enough to be forewarned about the dangers of opening a credit account without the proper knowledge of how it works. Financial illiteracy is typically passed down from one generation to the next, leaving a long trail of bad correct in need of repair.

What I didn’t know then that I understand now it what a process it would be for me to develop good credit after damaging it so badly, and how important good credit is in relation to buying power. Nothing beats cash and a good savings account, but good credit is next to gold when it comes to making certain purchases. Take the following steps with your own credit to master management of it:

Read your credit report. It’s a bad habit to avoid your credit report, especially when you know you’ve ran up credit or have paid bills late. Read your credit report thoroughly especially when you have established bad credit so you can determine how to repair it. Look for misreported account activity, negative information and account alerts to see where you stand. Everyone is given three free reports a year through annualcreditreport.com. a website sponsored by the three credit reporting agencies (Experian, Equifax, and Transunion). You may also purchase your credit score for a mere $8.

Understand your FICO (credit) score. FICO (which stands for Fair Isaac Corporation) and is the number used by lenders to determine your credit worthiness (or the likelihood of you paying your debts). FICO scores range from 300-850 and the lower your score, the greater a risk lenders will consider you. Factors that affect your credit score are: payment history, credit utilization, length of credit history, types of credit used, and recent searches for credit.

Understand the difference between the types of account listed on your credit report. The types of credit accounts that are listed on your credit report are:

Mortgage: A loan given for the purchase of property.

Installment: The type of credit that has a fixed number of payments. Student loans and car payments are examples of installment accounts.

Revolving: The type of credit that does not have a fixed number of payments, as the amount of credit can increase or decrease as funds are borrowed and repaid. Credit cards are an example of revolving credit.

Consumer Finance: Consumer finance refers to alternative financial services that consumers depend on. Payday loans and rent-to-own agreements are examples of consumer finance.

The best debt-to-credit ratio to manage is around 30%. For example, if you are given an $1000 credit limit, and you keep your limit to $300 or less, you will maintain a good credit score. Once you cross the 40% limit, your credit score will start going down. It’s can be tempting to spend more than half of the credit extended to you, but keep in mind that the more you spend, the more challenging it will become to get credit extended to you elsewhere.

Pay more than the minimum required amount towards your debts. Even if you can only afford $5 over the minimum, do it. Paying just the minimum amount on account will have you paying the maximum in interest! Save yourself some time and money and pay as much as you can afford.

Avoid credit consolidation companies. There are many companies that offer to help you bundle your debt into once nice monthly payment. As attractive as it sounds, utilizing one of these companies will leave a negative mark on your credit report. It says to lenders that you aren’t responsible to pay your bills on your own.

Don’t close any accounts. Even after you’ve paid off an account, don’t close it. If possible, use it sparingly when needed. Closed accounts also negatively affect your FICO score.

Pay your bills on time. Your credit report tracks how many days late your payments are from the due date and keeps record of how often this happens. Paying your bills on time will help you raise your FICO score by showcasing a history of you paying your debts as agreed.