Money – Page 14 – The Big Words Blog Site

How To Beat The High Co$t of Living

Two major focuses of my blog are Financial Literacy/Money, and Wealth Building. A key part of both of these areas is budgeting, planning and controlling costs. The following contributed post is thus entitled; How To Beat The High Co$t of Living.

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Another day, another bill. Another day, another dip in the bank balance. Another day, another moment when you wonder how you are going to cope with the rise in energy prices, bank charges, insurance costs, and more.

Rather than confront another day like yesterday, we wouldn’t be surprised if you huddled under your duvet in the morning, fearful of losing yet more money simply by going about your daily life.

Don’t despair! It is possible to beat the high cost of living, but you are going to have to work at it. You can put the ideas we give you in this article into your five-year plan, or better yet, your yearly planner. You see, you don’t have to let the financial aspects of your life get on top of you.

For starters, quit those bad habits that are eating away at your monthly income. Not only will you have more money in your pocket, but you will feel better as well. We are thinking of smoking and drinking alcohol, two expensive habits that are harmful to your health. We are thinking about watching too much tv; despite the many wonderful things to watch (and the utter drivel), you will save on your electricity bill if you spend time doing other things, such as (dare we say it), exercise! And quit your spending addiction. If you’re forever buying things you don’t need, then it’s little wonder you have no money for the essentials in your life. Put that credit card away!

Don’t let your utility companies take more money than they should. They are forever putting their prices up, but you are in your right to ditch them. You can get the same gas and electricity from another supplier, so use a price comparison service to find a cheaper deal. After switching, instill good habits around the home to make further energy savings. We have already told you to stop watching so much tv, but there are further ways to save money. Ensure your family are up to speed with your energy-saving habits as well, because as you know, they can often be responsible for draining your bank account!

Cut down the cost of driving too. For starters, don’t use your car if you are only travelling short distances. Why waste money on fuel when you can save money (and feel healthier) by using your two legs. As with your utility companies, use a price comparison site to save on your insurance. We use this site, https://cheapautoinsurance.co, but there are there are plenty of others available. Then practice safe driving. You see, the less reckless you are on the road, the less likely you are to do damage to your vehicle, and the less likely you are to pay out on huge maintenance bills. Driving safely saves money on fuel too!

Don’t let your bank take you for a ride. If they are charging you monthly fees just for having an account with them, it’s hardly fair! As with some of the other things on this list, you can do yourself a favour by ditching those banks who are inflicting damage on your account and transferring to another. You should be able to find lower rates and fees, and may even get rewarded for making the switch too. Check out this banking guide as a way to make the most of your money.

You can beat the high cost of living by making changes in your life, and by doing your homework into finding cheaper alternatives to the people who take your money away from you. So, don’t delay, start to make savings today, and continue to practice good habits and price comparisons in the months and years to come. It does make perfect financial sense, after all!

Know When To Call Upon The Power Of A Loan

Two of the focuses of my blog are Financial Literacy and Money. In some instances, it’s important to know when to take out a loan if there is a financial crisis and there are no other options left. The following contributed post is thus entitled; Know When To Call Upon The Power Of A Loan.

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The rut of financial baggage is relentless and tiring. It happens to us all at least once through our lives, but because it can go on and on, we feel like it’s normal. Well, newsflash, it isn’t and no one should ever think that it is something we should be okay with either. Firstly you need to pinpoint the reasons as to why you are in this mess whereby you can’t seem to pay your bills on time, you’re cutting back on the things you need for your family such as groceries and clothes, and yet still here you are sat up late at night with a calculator in your hand. Life shouldn’t be a game of catch up but it ends up being that way when we are irresponsible with our finances, going in over our head and getting into debt. Slowly but surely, if you cannot seem to stop the ball of debt and financial burden from rolling, eventually it will roll over you. But when is it really the best timing to go for a loan to help alleviate the pressure?

Living lavishly

Human beings are just strange creatures at the end of the day, we mostly cause our own problems. It’s hard to admit but you need to seriously question if you’re living a life that you honestly should not be. Have you bought a car that looks and feels good to drive but the gas mileage is pathetic? Do you buy too many clothes just to look good at events that don’t really matter? Could you possibly be a little too passionate and keep buying tickets to your favorite sporting team’s matches? We need to stop living lavishly when we know we don’t have the money. Many people will try to make excuses such as needing to feel good about yourself when you’re sad and depressed, or trying to live a normal life for the family etc. well, tough luck, it’s time to seriously question whether you should be buying some things when you know you are in a pinch.

Do you have a plan

What if you had a bag full of money thrown at you, what would you do? Just for the sake of argument, it’s only enough to pay off your debts and start to control your finances. Do you know what you would do first? What bills, debts, credit cards and such would you pay off immediately? If you haven’t even thought about the long-term solution to your financial burdens, your short-term plans are almost nonsensical. Paying off this week’s debt is a single drop in the ocean, what about the tens of thousands of dollars you owe for your mortgage, car payments, phone contracts and more? Create a plan that deals with a point by point analysis of what is most important financially, and then come up with monetary rules for paying off those problems first and foremost.

Measure the deepness

Loans are a great financial tool to use when you need to just throw money at the problem to make it go away. They do provide you with a lot of power to end some financial crisis situations, that much cannot be denied. But, they come with their own set of rules as they are a solution but also a new addition to your financial responsibilities. Use this information that compares direct lenders only and see what kind of APR rate and interest is best suited to you. Some lenders charge high rates as they want to aggressively control how and when you start repaying them. Others are more open to allowing you to figure out what the best plan would be. You can get a small loan of around three to four figures or you can get into the five-figure sums if you need a large quantity of cash.

Take the hit

No one wants to dip into their savings account to get from under a financial jam, but you have to be willing to do so. If the worse comes to worse, then you need to set a limit on how much you will be eating into the money you have been saving all your life. Take the hit and stop yourself from going under. Filing for bankruptcy is going to be much worse than halving or completely devouring all your savings. As much as it hurts, set a plan in place for how much money you will take out of your savings account to help pay for your debts. Setting a threshold for how much money you have left in your main bank account is a common way of doing this.

Loans have the ability to put a large chunk of money right in your hand, in a very short amount of time. Therefore they have a lot of power to aid you in your financial troubles. However, know when you need to call upon a loan and devise structures so you make good use of the money.

The Three Biggest Sources of Money Stress

Two of the main focuses of my blog are Financial Literacy and Money. The following contributed post was written by Faye McDonald. It discusses The Three Biggest Sources of Money Stress.

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Most of us have felt it at some point or another. When you’re facing money trouble, stress becomes a real factor in your life. It can affect your sleep, your work, your relationships, and even your health. Here, we’re going to look at some of the biggest sources of money stress and what you can do about them. After all, the impact of money troubles goes a lot further than your bank account.

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Income
A lot of importance is put on getting a job with a good income. It’s true that if your paycheque is big, you’ll have an easier time managing all your costs and putting together savings for your future. However, while working on your career should be a focus, it shouldn’t be the only one. There are other paths to take to financial security and prosperity. It’s all about planning better with what you have. By creating a budget, it’s easy to find the little extra savings that you can contribute to long-term goals. These investments from Profitable Venture show that you can even start contributing them to strategies that can see them playing a part in growing your wealth outside of your job. Investments allow you to diversify not only your income but also your reserves for retirement and bigger investments in the future.

Debt
The fear of debt is often a lot worse than debt, itself. There are a lot of different strategies to try and handle it. None of them involve ignoring the problem and hoping you don’t get noticed, which is unfortunately what most people in a panic tend to do. There are options to help control it like debt consolidation loans from Buddy Loans, but you should always try talking to your creditors first and foremost. If you begin to suspect you will have trouble repaying your debts to the letter of the agreement, you may be able to negotiate it with them. You might not always have your debt reduced, but you can get your repayments restructured. Most creditors don’t want to have to turn to collectors just as much as you want to avoid them.

Insecurity
If you’re living on a low income, one of the biggest fears might be the risk that an unexpected cost could bring with it. If you suddenly have to pay for major car repairs, would it put you in debt? Besides insurance, building an emergency fund is one of the best ways to ensure that you at least have some safety nets to stop you from going into freefall. Contribute a little bit of your income every month towards a fund that can cover all of your expenses lasting three-to-five months. That way it can cover not only unexpected costs but some of the danger of being put out of employment, too.

Don’t forget that there are resources like the Money Advice Service that you can turn to when you can’t see any options that can help your financial situation. It’s easy to feel like you’re stuck in a downward spiral, but if you’re not a financial expert, there may be solutions and plans that you haven’t considered.

The Best Influence: Saving Money As A Father

Two of the focuses of my blog are Financial Literacy and Money. The following contributed post was written by Emma Morgan. It discusses The Best Influence: Saving Money As A Father.

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When you’re trying to be a great dad, having little to no spare cash during the year makes it a challenge to stay positive, and money worries are often a cause of family quarrels and arguments. Therefore, it’s worth looking into ways you can be thrifty, and save money each day in your home and lifestyle. It’s never too late to begin making wiser, considered choices regarding your finances, so make plans as soon as possible to start making positive change.

You can put your excess cash into savings for next year and the future, or your money can go towards covering the cost of family life, and ensure that you and your kids want for nothing. Being smart with money is also a great thing to instill in your children; they’ll be influenced by your good habits. The following are some ideas, tips, and advice for fathers looking to cut back their spending, and ensure their outgoings aren’t too much, by making little lifestyle changes that will add up to making a big difference.

Image source: https://www.pexels.com/photo/man-rich-travel-shopping-33250/

Family Transport

Vehicles can cost a lot to maintain, so it’s worthwhile reducing the family’s car to just one, and figuring out how you can reduce using them regularly. It’s also worth checking out a car payment calculator so that you can get a better idea of your monthly outgoings regarding your car, for more successful budgeting.

Your daily commute might be costing you heavily in fuel, especially when you’re stuck in traffic. Therefore, many are choosing to cycle to work, and bikes are a common sight on the roads during rush hour. Public transport passes work out cheaper if you buy them in bulk, and many services will get you to work far quicker than if you were in a car on the roads, so this could be another option for you if you’re not confident when cycling.

Family Food

Often, it’s easy to get home and realize there’s nothing in the fridge to eat, and end up ordering an expensive takeaway. The same goes for when you’re out in the day; you can end up spending a lot of cash on food from shops and cafes. Therefore, when you write your weekly grocery list; make sure you meal plan each day for the family. If you have the ingredients ready to use when you get in or can create a tasty lunch to take to work; you’ll reap the savings every day.

Family Budget

Sadly, it can sometimes be easy to find yourself in debt, especially when you’ve had unexpected costs to fork out for, or you’ve got behind with payments on something. Therefore, it’s crucial that you create a detailed account of what you’re bringing each month and compare it to your outgoings. This is the best place to start regarding how you can make changes to improve things long-term, so make sure you include everything, right down to the last cent. You can begin to change your monthly budget and improve family life in the meantime, for a bright future as a father ahead.

Should HBCUs Teach Their Students Financial Literacy And About The Business Of Higher Education?

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“A graduate is someone who gets a degree from an institution and never looks back. An alumnus is someone who gives their time and money back to their alma mater!”

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A Visit From Our School President

This piece was originally published on Dr. Matthew Lynch’s online publication The Edvocate back in May of 2015. It was entitled, Thoughts on Why HBCUs could use more Alumni than Graduates, and Financial Literacy. I decided to republish this story after the new President of my alma mater, Johnson C. Smith University (JCSU), recently visited our Washington DC alumni chapter to discuss his vision for the university which is currently on probation due to financial distress.

Paltry Alumni Giving And Its Effect On Corporate Giving

A lack of alumni giving has long been a major issue for Historically Black Colleges and Universities (HBCUs). Something our new President Clarence Armbrister shared with us that I didn’t know, was that securing funding from Corporate America is difficult if alumni aren’t already giving significantly. Donors in fact inquire about alumni giving when deciding to give money themselves confounding the problem.

What’s at the heart of this conundrum? I think a major piece is that the concepts of wealth-building aren’t passed on in the ecosystems many HBCU students come from. When I say ‘ecosystems’ in this context, I’m referring to the environment the students have come from prior to matriculating into their particular schools – their home, their social circles, their church and the school systems they’ve come from – in some instances where the goal is simply survival.

The Importance Of Alumni Giving

Coincidentally when you start studying money, a common theme you see is the importance of giving. Since many of these students are not receiving this information from wherever they come from, perhaps our HBCUs should consider planting these seeds in their student’s minds before they graduate – weaving it into their curricula somehow. After all, higher education is actually a business, and it isn’t free as someone somewhere has to pay for it.

In a previous post regarding the Tax Reform and Jobs Act, I discussed my alma mater being on probation, and challenged other HBCU alums to take some of the money they’ve received from their tax break and pass it on to their alma maters – something which may have upset some readers. In this piece, I suggest that the HBCUs themselves should proactively arm their students with information which will not only empower them during their working lives, but also compel them to give support back to the places which gave them their start, allowing other kids to have similar opportunities.

A Lack Of Alumni Giving

Being highly involved in the Washington DC Alumni Chapter for Johnson C. Smith University (JCSU), I’ve become keenly aware of the issues facing HBCUs. As an education advocate and writer, I’ve helped promote the “Quotes for Education” collaboration between Allstate and the Tom Joyner Foundation the last two years. In numerous interviews with Allstate’s Senior Vice-President and Florida A&M University alumnus Cheryl Harris, the importance of HBCU alumni giving back to their alma maters was stressed. In addition to the other pressures these institutions are facing, one of the more significant problems is the lack of alumni giving.

At a recent Executive Board meeting, our Chapter President Robert Ridley shared with us an idea he read stating that, “A graduate is someone who gets a degree from an institution and never looks back. An alumnus is someone who gives their time and money back to their alma mater!” This was an important distinction that I’d never heard before, not even when I was a student at JCSU. It’s an important concept that arguably should be introduced from day one at our HBCUs.

Giving Future Generations A Fighting Chance

Why is it important for graduates to give back to their alma maters? The main reason is to give future generations a fighting chance to succeed. This is particularly important for Black America. Secondly, institutions of higher learning rely on state, federal and extramural funding from private donors. Many HBCU’s are “Land Grant” institutions and their funding has been decreased ironically under the Obama Administration, in addition to the tightening of the borrowing criteria for the “Parent Plus Loans” which many HBCU students and families heavily relied upon. Thus donations from alumni have become more important.

As unofficially told by an insider, for the 2014 fiscal year, less than 14% of my class of 1999 gave anything back to JCSU, a staggeringly low number. When our school President Dr. Ronald Carter gave an overview of the current health of the University here in Washington, DC, he cited low alumni giving as one potential threat to the University’s future. A key piece of that evening was encouraging alumni to consider cutting back on certain luxuries to free up money to give back.

Why Don’t HBCU Alumni Give Back In Greater Numbers?

Why don’t HBCU Alums give more to their alma maters? Why would only 14% of my class give back to the University? One reason is that many students who’ve attended HBCUs feel as though they’ve given enough of their money to their alma mater when pursuing their educations, and don’t feel inclined to give anything else after graduating. Another reason is hard feelings towards one’s alma mater. Many graduates feel bitter about their experience for one reason or the other as well. I’ve heard this personally and read about it in other articles.

Another piece to this puzzle though is socioeconomic. Of the many curses to being born black in the United States, a key one is starting from lower rungs on the economic ladder than our counterparts of other ethnicities. If for example, your parents planned ahead and saved a college fund for you, your economic burden will likely be lessened or non-existent upon graduation as discussed by Georgette Miller, Esq. in Living Debt Free. You’ll have less debt and more disposable income (some to donate) once starting your career.

“They just weren’t thinking that way,” my father said in a discussion about my grandparents in a discussion about mortgages. I stumbled upon the basics of financial literacy by accident (from books like Rich Dad Poor Dad and The Millionaire Next Door), and wondered why my parents didn’t teach me more about the vital knowledge shared in these books. They didn’t know themselves and I think this is true for a lot of African American families in the United States.

Low Levels Of Financial Literacy

Likewise, I hypothesize that many other college graduates from my community have a low level of financial literacy and that in part drives this lack of giving that we see from alumni towards their HBCUs. In other words, they know how to lavishly spend it, but not how to gradually save and grow it. If my hypothesis is true and many students are matriculating into our HBCUs with low levels of financial literacy, HBCU’s may do good to start educating their students on these topics from day one and also stressing that higher education is in fact a business. A good place to start would be Dave Ramsey’s Financial Peace University (FPU), or something similar.

I honestly didn’t seriously start giving to either of my alma maters until going through the FPU class taught at my church. In FPU, I learned that the greatest misunderstanding about money is that one of major keys to building and maintaining wealth is blessing others. Put another way, sustained financial health and giving are a function of one another, and in order for one to be able to give, one’s own financial house must first be in order.

Student loan debt can also help explain the lack of giving, but my suspicion is that there’s a percentage of graduates that once they get established, their finances aren’t situated so that they’re able to give back, or giving back just isn’t a priority. Coming from the African American community, there is truth to the myth that we as a community often collectively make poor financial decisions, particularly when ‘keeping up with the Joneses’, ‘signaling’, and trying to portray a certain image. For this reason, and because so many of us don’t get it at home, HBCUs once again may do good to expose their students to a financial literacy curricula such as FPU which ultimately stresses sound financial decision making and ultimately charitable giving.

Why Give Back?

So why give back? Giving back to our alma maters, especially HBCUs is important if we want to see future generations grow and thrive. One of the keys to advancement of the African American community in the United States is financial stability as a group. Likewise the community itself has a responsibility to give its younger generations a fighting chance to participate in our new global economy. In the United States, economic power influences everything else. Regarding my own graduating class of 1999, we can do better than a 14% rate of participation in terms of giving back to our alma mater, as can graduates from other institutions.

Thank you for taking the time to read this blog post. In you enjoyed this post you might also enjoy:

• What are your plans for your tax cut? Thought on what can be done with heavier paychecks and paying tax
• Who will have the skills to benefit from Apple’s $350 investment?
• Challenging stereotypes and misconceptions on household income and wealth building
• We should’ve bought Facebook and Bitcoin stock: An investing story
• Your net worth, your gross salary and what they mean
• The difference between being cheap and frugal

If you’ve found value here and think it would benefit others, please share it and or leave a comment. To receive all of the most up to date content from the Big Words Blog Site, subscribe using the subscription box in the right-hand column in this post and throughout the site. Please visit my YouTube channel entitled, Big Discussions76. Lastly follow me on the Big Words Blog Site Facebook page, Twitter at @BWArePowerful, and on Instagram at @anwaryusef76. While my main areas of focus are Education, STEM and Financial Literacy, there are other blogs/sites I endorse which can be found on that particular page of my site.

Father’s Day 2018: Dad’s Doctor and his Lawyer, and a Discussion on Careers

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“Your brother is going to be my Doctor, and you’re going to be my Lawyer!”

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A Quick Plug

Hello. Thank you for clicking on this link and I hope you enjoy this essay. Writing a book was the genesis of me blogging and becoming a video content creator. I am close to publishing part one of my book project entitled, The Engineers: A Western New York Basketball Story. Please consider visiting the page to learn more about the project and see promotional content I’ve created surrounding the project. And now on to our feature presentation.

Father’s Day 2018

Happy Father’s Day. My 2017 Father’s Day blog post talked about some of my father’s life and money lessons, and there were many. I wrote some more about us in my second essay submitted to A Voice For Men entitled: Two very well-behaved boys left to figure things out on their own: Reflections on growing up ‘Blue Pill’, which discussed how my brother and I had to figure out several aspects of manhood on our own. There weren’t a lot of men around growing up, and there were limitations in what we were taught by the men we did know.

For this 2018 post, I’m going to go in a different direction and will discuss what Dad wanted both me and my brother to be career-wise, versus what we actually became. This piece isn’t an “ode to fathers” per se, but instead a set of thoughts and ideas based upon something my father said to us as children, which will serve as a jumping off point for things me and those in my circle regularly discuss today as adults – things that have impacted our family dynamics as the years have gone by. As described in my piece Challenging stereotypes and misconceptions in academic achievement, Dad’s fatherly guidance helped me reach my academic potential. He also stimulated me to start thinking about potential careers at an early age.

Envisioned Careers

“Your brother is going to be my Doctor, and you’re going to be my Lawyer!” Dad said on one of our summer visits in the mid-1980s. The three of us were crossing a street in downtown Schenectady, NY and he turned and gave his proclamation to the both of us – communicating with one of his hands – his signature style. Like many parents, Dad had his own plans for what we should be. Somewhere along the line, he determined that it should be a medical doctor and a lawyer, and as with everything Dad said, he said it with lots of authority, pretty much commanding us.

Not having either in my immediate family circle on either my mother’s or father’s side, I didn’t know much about what lawyers did. I had some idea of what medical doctors did because I had gone to see them on numerous occasions as a child. One of Dad’s first cousins was in fact a medical doctor, but we didn’t see him enough to be able to ask him about his career. In elementary school it hadn’t occurred to me what I wanted to be career-wise, though I got the inkling that it would be something scientific after really enjoying “Life Science” in the seventh grade – essentially beginner’s Biology. My brother had begun showing signs of being both artistic and creative.

But what made my father so enamored with medical doctors and lawyers in terms of careers for his sons? Dad was always one for stability which is why he became a junior high science teacher. Neither of his parents had gone to college, so he was a first-generation college graduate. From what I can see, some parents naturally want their children to do better than them. In the mid-1980s, the conventional wisdom was that medicine and law were two very high-profile professions which would lead to affluent and comfortable careers/lifestyles.

“I know that your grandfather would be very proud of you being a doctor and all,” Dad said on several occasions regarding my Ph.D. years later. He didn’t necessarily understand what my doctorate stood for, or the skills it represented, but the title of ‘doctor’ meant a lot to him – something I witnessed in the coming years both positively and negatively. Coincidentally, I think he initially discouraged me from pursuing a doctorate – potentially because he only knew Ph.D.s in the context of the school system, and not the ‘research’ and ‘regulatory’ worlds.

White Collar Careers

With one of the principles of my blog being “Critical Thought”, I believe it’s important to look at things in their entirety. So, while Dad wanted these two prestigious careers for us, what would it have taken for us to get into these two professions? The answer is it would’ve taken lots and lots of school for the both us and then, most likely, considerable debt to pay back. This is something very important to consider for parents and students looking to attend college to pursue ‘White-Collar’ careers.

In terms of higher education, thinking out the entire plan long-term is critical – considering the cost of the degree, how to get a quality degree for the least amount of money possible, what the expected salary will be on back end, and finally how much debt will need to be paid back. According to a 2014 article in Forbes, the average amount of debt for Law School graduates ranged from $84,000 to $122,158. Also, according to a recent 2018 article by Credit Donkey, the average medical school graduate finishes with $192,000 of debt.

Keep in mind that these are on top of however much debt was accrued during one’s undergraduate studies. The numbers probably weren’t as high thirty years ago, but it’s important to be mindful of blindly chasing certain careers based upon titles and prestige. If it’s something a student really wants to do, that’s different, but the costs still ought to be considered.

If you run the numbers and your prospects aren’t good, I would recommend not going into debt for that particular degree. A mentor recently taught me that the economy actually dictates the need for specific careers at a given time. I don’t know what the prospects were like for lawyers in the mid-1980s when Dad announced his wish for me, but as I progressed in my education, I heard more and more stories about the market being ‘saturated’ with them. I likewise heard that the landscape for medicine had changed, and in some ways, it wasn’t as lucrative a career as it once was.

In terms of my career, I figured it out as I went along. I had an interest in the biological sciences and thus followed that path. I pondered going to medical school at one point, but decided against it after a professor at Johnson C. Smith University encouraged me and some of my classmates to study up on what it entailed – the demands, the lifestyle, and the backend costs.

Blue Collar Careers and Skill Trades

It’s also important for students and parents to keep in mind what the student is good at, and where their gift/passion lies. While I turned out to be the son that was interested in the Biology, my brother’s gifts were completely different. He turned out to be a ‘design and build’ –type of guy. He had the gift for designing things, constructing things, taking them apart, and he was quite formidable with tools and devices. He started studying Architecture in college but didn’t finish, but in hindsight, he may have also been well suited for one of the ‘skill trades’ – something that didn’t come up as a child as college and ‘White-Collar’ careers were emphasized as opposed to ‘Blue-Collar’ careers.

Speaking of the trades, since finishing my own education, I’ve realized that there is power in learning one or more of the skill trades. There will always be the need to build and fix things. That includes: the electricity and plumbing in your home, airplanes we travel on, the public transportation vehicles we ride to work on every day, and so much more. If your refrigerator breaks down as mine did recently, for example, you either have to buy a new one or hire someone to come and fix it – unless you can do it yourself.

Unfortunately, our society looks down on the Blue-Collar careers in some ways, though they pay very, very well and don’t require the years of schooling doctors and lawyers need – the same is true for the debt required to train for the latter two careers. In my opinion, individuals who are proficient in the trades people are willing to pay for; and those who also have some business training, stand to make lots of money as they can do things like start their own companies and hire other people.

My brother never finished college and has become a bit of an inventor/entrepreneur which actually is the route that our technology giants like: Bill Gates, Steve Jobs, and Mark Zuckerberg took. There may have been some luck involved for each of them, but these men are reminders that in some instances, ideas and skills are more powerful than the degrees themselves. Today for example, there are quite a few individuals making significant incomes without being ‘degreed’ – those who can write code for Blockchain Technology applications for example. Also, while my brother isn’t degreed, he’s also not saddled with a significant debt payment of any kind – a tremendous advantage.

Financial Literacy Regardless of Field

As for me, depending on your belief system, I got lucky. I pursued a Ph.D. in a Science, Technology, Engineering and Mathematics (STEM) field at a time when the economy rewarded individuals with such degrees. What’s even more significant is that I finished only with a little bit of debt from my undergraduate studies. Because I pursued a STEM degree, I didn’t pay for any of my graduate studies so I didn’t have a hefty loan to pay back for those five to six years of graduate school. This brings me to my closing point. It wasn’t until I finished that phase of my science training that I realized that I was missing something very, very important – something some kids are given early, and something others stumble upon later in life if at all.

Regardless of whether or not you get a college degree, a trade or some sort of entrepreneurship, the critical piece is understanding money. Something not discussed much in our younger years was wealth-building – something that is possible for everyone, and independent of one’s career choice as it involves a specific set of behaviors that I’ve written about in my Net Worth and Debt Snowball pieces. Understanding the concepts of wealth-building: budgeting, living within one’s means, delaying gratification, investments, and ‘Compound Interest‘ – these are the keys to a great and bountiful life, not necessarily the careers and titles themselves, contrary to what many people think.

Prestige and titles are nice, but if you read Dr. Thomas Stanley’s The Millionaire Next Door, you’ll see that there are many high-income professionals who look the part, but who are actually struggling. In my blog post about the Tax Reform and Jobst Act, I referenced a 2016 article in the Washington Post entitled: The shocking number of Americans who can’t cover a $400 expense which showed that even some individuals making over six figures, surprisingly couldn’t cover such an emergency.

I never wanted to be one of those people. I may be different from most, but I’d rather secretly live nice and comfortable with a simple outward appearance, as opposed to looking wealthy and struggling behind closed doors. That’s a personal choice however – one which everyone must make for themselves.

Closing Thoughts

In closing, our parents sometimes have dreams of what they want us to be. Some kids actually go ahead and fulfill their parents’ dreams while others go their own way. In some instances, our parents can discourage us from what we really want to do based upon what they know and feel from their lives.

There is thus a complex set of decisions to be made based upon: what one really wants to do, their unique gifts, what they’re passionate about, and how they’ll be able to earn a living on the back end. In the end, the economy dictates what’s needed at that particular time – it will determine who gets hired and how much they will be paid. Lastly, no matter what path is chosen, the critical piece is understanding money. Once again, Happy Father’s Day.

Thank you for taking the time out to read this blog post. If you enjoyed this post, you might also enjoy:

• Two very well-behaved boys left to figure things out on their own: reflections on growing up ‘Blue Pill’
• Father’s Day 2017: reflections on some of Dad’s money and life lessons
• Mother’s Day 2018: Memories of my grandmothers
• Mother’s Day 2017: one of my mother’s greatest gifts, getting engaged, and avoiding my own personal fiscal cliff
• Challenging stereotypes and misconceptions in academic achievement
• The benefits and challenges of using articulate speech

The Big Words LLC Newsletter

For the next phase of my writing journey, I’m starting a monthly newsletter for my writing and video content creation company, the Big Words LLC. In it, I plan to share inspirational words, pieces from this blog and my first blog, and select videos from my four YouTube channels. Finally, I will share updates for my book project The Engineers: A Western New York Basketball Story. Your personal information and privacy will be protected. Click this link and register using the sign-up button at the bottom of the announcement. If there is some issue signing up using the link provided, you can also email me at [email protected] . Best Regards.

My personal experience With Dave Ramsey’s Debt Snowball Revisited

Buffer

“The rich rule over the poor, and the borrower is slave to the lender.” – Proverbs 22:7

Buffer

One of the principles of my blog is the “Teaching of Wealth Building and Financial Literacy”. A key component of Financial Literacy is understanding debt – specifically what happens when you carry too much of it. I painfully learned what it’s like to carry exorbitant amounts of debt – a place I hope never to return to. The featured image of this post is the exact same American Express Gold Charge Card which was a critical piece in my debt journey. The image of it will always hold a special significance for me – a reminder of what not to do.

My Inspiration For Writing This Piece

I got out of debt because some friends graciously shared Dave Ramsey’s “Financial Peace University” with me. While there are supporters of Financial Peace University and Dave’s “Debt Snowball”, I found that there are also detractors and critics. I wrote the following piece on the Examiner in early 2016 after someone else wrote an article about why she quit her Debt Snowball. I didn’t write this to rebut the author in a confrontational way or to discard her experience altogether, but instead to share an alternative perspective. By the way, to read about how to prolong your Debt Snowball, see my Mother’s Day 2017 blog post.

Giving Up On Dave Ramsey’s Debt Snowball

Over the holiday season, an article appeared on my Twitter feed from another passionate Financial Literacy writer (there are many) entitled, “Why I Gave Up on Dave Ramsey’s Debt Snowball”. Being a coordinator within the Financial Peace University ministry at the Alfred Street Baptist Church, and also in the final stages of my own Debt snowball, the article resonated with me and prompted the crafting of this piece. This piece won’t refute Jennifer Calonia’s experience, but will actually agree with some of her points and discuss my own experiences.

Starting To Accumulate Debt

No one plans to go into crippling financial debt which usually occurs because of a lack of Financial Literacy; living above one’s means, or something else such as today’s soaring costs of higher education. Many people don’t understand what they’re doing and the long-term ramifications as was in my case. Roughly nine years were spent completing my Ph.D. and then the two and a half years of subsequent training – all on a taxable graduate stipend which ranged from $17,000-$22,000, and then a postdoctoral salary of $37,000. During that time, my expenses often exceeded my income for a number reasons. My old Saturn SL2 was bought with my father’s credit card. It was maintained using another credit card whose balance eventually ballooned to $8,500 (just paid off this month). An unhealthy relationship or two also contributed to the bonanza.

Going Deeper Into Debt

After starting my first real job in the federal government, my debt swelled at least two to three times due to wanting to learn to invest in real estate, and wanting to do too much too soon money-wise. It was a good idea but the trainings came at a steep price which in hindsight could’ve been obtained for less money. Those who gave those particular trainings dangerously encouraged us as students who didn’t have tens of thousands of dollars saved up, to use our credit cards, under the assumption that the costs of the classes would get paid off relatively easily once we got some real estate deals done (to be covered in depth in a later piece).

Finding A Way Out

After accumulating my mound of debt, my life was blessed when two friends (from the same real estate trainings) discovered and shared Dave Ramsey’s Financial Peace University (FPU). Just briefly, four of the key components of FPU – the cornerstones of Dave’s “Baby Steps” include:

• Saving an Emergency Fund – one month and then four to six months
• Learning how to budget
• Using cash instead of credit cards and debit cards
• The Debt Snowball

The Debt Snowball is a strategy for eliminating debt. The individual lines up all of their debts smallest to largest, steadily paying them off one by one using the money from each paid off debt on the next one, steadily increasing the size of the payments on the larger ones until everything is paid off using “Gazelle Intensity” as Dave Ramsey calls it. Dave Ramsey uses the parable of the Gazelle who represents consumers who are preyed upon by the Cheetahs who represent credit card companies, banks and marketers.

The Debt Snowball Takes Determination And Work

Jennifer Calonia’s points are honestly all valid. My own Debt Snowball has taken two to three difficult years (and that’s without children), and it is easy to feel like quitting. Life continues to happen not just to you, but those around you – some of whom aren’t making good financial decisions and ultimately need your help – often unexpectedly. There is also the pull to do what others are doing – taking lavish vacations and acquiring luxury items for example. Finally, because you’re living on a fixed income when doing the debt snowball, some people may conclude that you’re “strapped” for cash which can be hurtful if you’re sensitive to the words of others.

These are all reasons why Ramsey discusses prayer when pursuing this effort (if that’s in your value system of course). From experience, when doing the Debt Snowball, one has to know that there are times when this financial plan can and must be altered temporarily – the holiday season for example. Furthermore, periodic rewards are realistically a good idea too (within reason). In other words, if you’re doing the Debt Snowball, you have to allow yourself some fun, or else you’ll stop it and never go back.

Other Ways To Pay Down Debt

Much to my surprise, Dave Ramsey does have his detractors and critics as does every author/speaker/guru. There is for example a second method to paying down debts which involves paying down the highest interest rate obligations first. Some consider this more financially intelligent than the debt snowball which is powerful because of the ‘emotional’ effect of seeing the debts go away.

Closing Thoughts

“We’re going to live like no one else, so later we can live like no one else,” Ramsey says frequently during frequently during Financial Peace University meaning that some sacrifices are initially involved, for greater gains and a comfortable life later on. Money is an emotional topic and as with most things, everyone has to make the best decisions for their own lives. Being on the cusp of completing my own debt snowball, it admittedly wasn’t easy, but if one can find a way to stick to it, it does work.

Thank you for taking the time to read this post. If you enjoyed this one, you might also enjoy:

• Chris Brown discusses true stewardship and financial peace
• Your gross net worth, your gross salary and what they mean
• The difference between being cheap and frugal
• Mother’s Day 2017: One of my mother’s greatest gifts, getting engaged, and avoiding my own personal fiscal cliff
• Father’s Day 2017: Reflections on some of Dad’s money and life lessons
• We should’ve bought Facebook and Bitcoin stock: An investing and technology story
• Challenging misconceptions and stereotypes in class, household income, wealth and privilege

If you’ve found value here and think it would benefit others, please share it and/or leave a comment. To receive all of the most up to date content from the Big Words Blog Site, subscribe using the subscription box in the right-hand column in this post and throughout the site, or add the link to my RSS feed to your feedreader. Please visit me on one or all of my channels on YouTube. You can follow me on the Big Words Blog Site Facebook page, and Twitter at @BWArePowerful. Lastly, you can follow me on Instagram at @anwaryusef76. While my main areas of focus are Education, STEM and Financial Literacy, there are other blogs/sites I endorse which can be found on that particular page of my site.

What are Your Plans for Your Tax Cut? Thoughts on what can be done with Heavier Paychecks and paying less Tax

Tax Season

Depending on your world view, this blog post may upset you, but it contains some ideas worth pondering. As they once told us at the Writer’s Center, if you’re not making someone uncomfortable, you’re not doing a good job of writing. This may also be my first blog post to incorporate all of the principles of my blog.

Our calendar year is marked by different seasons. Each year builds up to the excitement of the traditional ‘Holiday Season’ – Thanksgiving and Christmas. When the ball finally drops in Times Square, all of the excitement stops with the birth of new year. The holiday decorations and advertising goes away and ‘Tax’ season starts. It wasn’t until I became a working adult myself that I realized that Tax season was its own season, spanning through the Super Bowl, Black History Month, Valentine’s Day, March Madness; right up until Easter Sunday.

You start seeing advertisements on TV for franchises like ‘H&R Block’, and software like ‘Turbotax’. If you have one your tax preparer starts calling you for your annual appointment. You see people dressed up like the Statue of Liberty on street corners encouraging you to have your taxes done at franchises like Liberty Tax. If you’ve paid taxes, you start gathering your materials together to have your taxes done – your W-2 and other associated forms, your gift receipts, your mortgage interest deduction statement, etc.

Depending on your diligence, you either get them done early, or you procrastinate right up to the middle of April. It’s an exciting time, or a desperate one. Depending on how you’re living your life, the refund (if you get one) will propel you further ahead, or it will be gone as soon as you receive it.

The 2018 Tax Reform and Jobs Act

The 2018 tax season will be different than most in recent times in that many Americans will receive a tax cut, thanks to the recently passed ‘Tax Reform and Jobs Act’. Tremendous controversy surrounded the bill – specifically its beneficiaries. If you were 100% against the bill and are still convinced that it was written solely to help the wealthy, no discussion of the increased standard deductions or the adjusted tax brackets will sway how you feel. This is particularly true if you live in one of the high tax states like my native New York State, whose residents are losing the ability to write off some of their state taxes – taxes which are much higher than the other states.

I would highly encourage everyone to do their own research and not take what you hear on the major cable news networks as the gospel. For this post, I’ve done my own research and am citing projections from the Tax Policy Center of the Urban Institute and Brookings Institution which was last updated on December 22, 2017. The majority of the rancor and debate in the Main Stream Media (MSM) has centered around the wealthiest Americans being the biggest beneficiaries of the law. That discussion leads us down the road of ‘Identity Politics’, ‘Fairness’, and varying perceptions of what’s right and wrong. It brings up President Barrack Obama’s position that, “Some Americans can afford to pay more taxes,” versus the other point of view which is that it’s wrong to excessively take money from those who have created it, or inherited it for unsustainable government spending.

My focus is on the potential benefits for individuals living on ‘Main Street’ and what they can do with a little more money in their pockets. I would encourage everyone else to do the same – ask yourselves what you can do to make your life and the lives around you better, as opposed to focusing on what others are getting. It’s tricky because its gets us into discussions about doing for self, and personal responsibility – difficult discussions, but important ones nonetheless.

The new law seems to have already encouraged companies like Apple to reinvest in the United States, but what are the effects of the Tax Reform and Jobs Act personally for people living on Main Street? First, how it affects your life will in large part depend on how you’re living your life in the here and now. Are you living ‘paycheck to paycheck’ or ‘hand to mouth’ as some would say? Are you living outside of your means? Are you riding a high level of debt? Do you have any emergency money? These questions will determine if you’re able to take any extra money you get back and build with it, or if it will get gobbled up right away.

A Decreased Standard Deduction

According the Tax Policy Center’s report, one of the major changes in the bill is the increased Standard Deduction for single people and married couples – $6,500 to $13,000 for single people and $9,550 to $18,000 for married couples. For us on Main Street, this one change is going to either increase your refund, or decrease the amount of tax you owe – a win for most people. The tax brackets and associated percentages have also been adjusted. I was originally going to discuss the host of other changes and provisions, but I’ll just simply say that many of the other changes were made based upon the generous expansion of the Standard Deduction.

In addition to the changes in taxes at filing time which will be seen when filing in 2019 for the 2018 tax year, it appears there are going to be changes to Main Street’s paychecks in the near future. Kelly Phillips Erb of Forbes published an article on January 11, 2018 titled IRS Releases New 2018 Withholding Tables to Reflect Tax Law Changes. Based upon these changes which are to take effect in February, many Americans are going to get ‘raises’ due to changes in the amounts withheld. Many people are going to have extra money to spend.

This brings me back to the title of this blog post. What are your plans for your tax cut? As in my ‘Net Worth’ piece, this is a rhetorical question – one whose answers I wouldn’t recommend broadcasting. There are reasons for my asking this question. Do citizens on Main Street need some extra money at tax time and in their paychecks? The data in the next section suggest that they do.

Can You Afford a $400 Expense?

About a month or so ago when the tax cut debate reached its crescendo, someone on Twitter shared an article entitled The shocking number of Americans who can’t cover a $400 expense, written by Ylan Q. Mui of the Washington Post. The article was published on May 25, 2016, and was based on a 2015 Report by the Federal Reserve which I’ve linked to this piece.

The article cited Figure 12 from the Federal Reserve’s report. Of the three groups surveyed, the group making less than $40,000 said they’d have the hardest time covering a $400 expense – overall less than 50%. The group making $40,000 to $100,000 had the second hardest time covering a $400 expense – overall 62%. As expected, the group making greater than $100,000 fared the best – overall 81% could cover a $400 emergency expense. That said it surprised me that someone making above $100,000 would have a hard time covering a $400 expense. By the way, the groups were broken down by race. Interestingly, black/non-Hispanics were the least likely of this $100,000 or greater group to be able to cover a $400 expense – 63% and Hispanics were close by at 67%.

The argument could be made that individuals making less than $40,000 just don’t make enough money to live off of, but what about those making above $40,000? The same is true for individuals making $100,000 or greater. This data suggests that either the United States has become too expensive a place in which to live, or that some people are mismanaging their finances. In both cases, it seems quite a few people could use the extra money. One could suggest that it’s unwise to not carry enough for a $400 emergency, but that’s dangerous because it gets us into discussions about personal accountability/responsibility, and self-reliance.

Low Retirement Savings

Rodney Brooks also of the Washington Post wrote an article entitled 71 percent of Americans aren’t saving enough for retirement. In the article he cited data from a national survey by Experion in collaboration with Get Rich Slowly stating that 71% of people surveyed said they didn’t have enough money to retire. Why would Americans not have enough retirement money? Mr. Brooks further cited data from the Consumer Financial Protection Bureau stating that among other things, the percentage of homeowners 65 and older with mortgage debt increased from 22% in 2001 to 30% in 2011. Among homeowners 75 and older, the rate more than doubled to 21.2% from 8.4%.

Furthermore, 49% of the people polled had credit card debt, and 46% had less savings than they expected to have five years earlier. Katie Ryan O’Connor, an editor from Get Rich Slowly, was cited in Mr. Brooks’ article stating that 71% of the people in the survey said they were not invested in the stock market, and 41% said that they had no plans to invest due to lack of funds. The data cited in these two articles suggest that some Americans could benefit from having some more money in their pockets. If you’re wary of investing money, a wise alternative may be to simply shove it under your mattress for an unforeseen emergency. Over the holiday season, a relative shared that simply getting, “rear-ended on the expressway,” causing a $500-dollar emergency would put many Americans in financial distress, so this seems to be real. By the way, a really good course for learning about the importance of emergency funds and the dangers of debt is Dave Ramsey’s Financial Peace University.

HBCUs and Donations

I’ve discussed a lack of money for $400 emergencies and retirement savings, but what else can one do with an increased standard deduction and a heavier paycheck? One alternative is to put something into the collection plate of charities, causes and institutions of your own personal interest that also need money. That can be anything, but I’m going someplace in particular with this.

Early on in President Trump’s first year, some Historically Black College and University (HBCU) Presidents bravely visited the White House, upsetting many alumni, students, and African Americans in general. Why did they go? The answer is simple. Their institutions, many of which are close to folding, needed money. Higher Education is a business – one which relies on funding from the Federal Government via grants and loan programs, in addition to gifts from private industry, and donations from generous and loyal alumni.

Three out of the four years I wrote for the Examiner, I interviewed Allstate’s Cheryl Harris about her company’s ‘Quotes for Education’ program in collaboration with Tom Joyner. What consistently came out of those interviews were discussions about anemic rates of giving by HBCU alumni – something that continues today. For my alma mater, Johnson C. Smith University (JCSU), we’ve experienced the same thing. In 2014, as the treasurer for our DC Alumni Chapter, I unofficially got wind that my class of 1999 had an 11% alumni giving rate. That is only 11% of the alumni from my class gave anything to the university that calendar year. It’s a strange phenomenon in that in 2018, HBCUs – those still open, are still very necessary in terms offering higher educations for students who can’t get them anywhere else.

My HBCU on Academic Probation

Recently on December 6, 2017, Reginald Stuart of the online publication, Diverse Education, published an article entitled SACSCOC Places Johnson C. Smith University on Probation. The article discussed how the Southern Association of Colleges and Schools Commissions on Colleges (SACSCOC) placed my alma mater on a 12-month probation due to concerns about the long-term financial viability of the institution. The article stated that SACSCOC’s actions do not immediately impact the school’s accreditation, though a failure to correct the standards cited could lead to the university losing its accreditation and subsequently permanently shutting its doors. The article further stated that JCSU, in addition to Bennett College and St. Augustine’s University, are ‘tuition-dependent’, meaning that they enroll a high percentage of students who need federal financial aid to attend college.

Why would my alma mater and others like it have such low alumni giving rates? It’s a difficult discussion to have once again because it gets us back into personal responsibility. One explanation for the anemic HBCU alumni giving is indifference about the future crops of students. An alternative explanation is that perhaps many HBCU alumni simply don’t have enough money to give back to their alma maters. It thus again suggests that perhaps they could benefit from a tax cut like the one just passed. If you’re an HBCU alumni who will benefit from the Tax Reform and Jobs Act, regardless of how you feel about President Trump and the Republicans, a potential use for your new extra money in your paychecks could be a donation to your alma mater or an organization like the United Negro College Fund, which gives money to black students at both HBCUs and ‘Predominantly White Institutions’. But that’s up to you.

Closing Thoughts

Clearly, there are a lot of people who can use extra money. How it’s used will depend on the individual. Will it be spent frivolously on a new pair of shoes and other depreciating items? Or will it be used for something long lasting like a down payment towards a house, retirement savings or donation to a charity? If you want a great charity to donate to then the Dwoskin Family Foundation are a great option.

Consider the best way to use your gift from the Grand Old Party. Whose lives and community will it stabilize and enrich? Will it be your own? Or will it be someone else’s? Whose job is it to take care of you and your people? Is it yours or someone else’s? I touched upon this briefly towards the end of my blog post titled Challenging misconceptions and stereotypes in household income, wealth building, and privilege. And in closing, what are your plans for your tax cut? Again it’s a rhetorical question – one I wouldn’t necessarily broadcast. Instead, it’s something to think about.

Thank you for taking the time to read this blog post. In you enjoyed this post you might also enjoy:

• Who will benefit from Apple’s $350 investment?
• Challenging stereotypes and misconceptions in class, household income, wealth, and privilege
• We should’ve bought Facebook and Bitcoin stock: An investing story
• Mother’s Day 2017: one of my mother’s greatest gifts, getting engaged, and avoiding my own personal fiscal cliff
• Your gross salary, your net worth and what they mean
• The difference between being cheap and frugal

The Big Words LLC Newsletter

We should’ve bought Facebook and Bitcoin stock: An investing and technology story

“Over your lifetime, you’ll actually miss more deals than you’ll catch onto.”

Two of the principles of my blog are “Long-Term Thinking/Delayed Gratification”, and the teaching of “Financial Literacy” as money and investing are topics that I ponder and study quite a bit these days. I wasn’t taught a lot about them as a youth and strive regularly to fill that space in my personal toolbox. Learning about investing money is actually critical for all employees who are responsible for saving into their own “Defined Contribution” plans. A third principle of my blog is “Creating Ecosystems of Success” – helping others to be successful. This particular story involves all three principles and focuses on two investing opportunities from years past – both of which could have drastically changed my life today if I had been in position to take advantage of them.

This post was inspired by two people. One is a mentor who has literally adopted me and whom I regularly meet with to talk about the content of my blog, economics, current events and everything else under the sun. Everyone should have a mentor like this. The second individual is a long-time friend from our hometown of Buffalo, NY. He worked in the banking industry, and has always had a bit of an entrepreneurial mind.

Instead of diving right into the story, for context I’ll go back to my brief high school basketball career – one of the best times of my life. One of the things our coaches tried to stress to us was “boxing out” on defense. That is putting a body on your man once a shot went up from the opposing team. By committing to boxing out as a team, any team almost certainly could position itself to get the rebound and limit shot opportunities for the opponent no matter their height or leaping ability. It was a simple and effective technique if used consistently and for our young minds, that was the hard part – doing it consistently. All it took was being mentally alert, and positioning oneself at the right time.

Okay, let’s talk about Facebook and Bitcoin. I’ll start with a reading assignment my mentor gave me about three months ago. One of the topics we discuss regularly is investing money – something he is very experienced at and has taught his kids to do – something I’m playing catch up on.

At the conclusion of one of our mentoring sessions, he gave me a book to read titled “How To Turn $100 Into $1,000,000: Earn, Save and Invest” by James McKenna and Jeanine Glista with Matt Fontaine, the creators of Biz Kid$. When he first handed me the book, I made a comment about it being a, “Children’s book,” to which he quickly snapped back at me, “Do you know everything thing in this children’s book?” Eager to know more of what he knew, I didn’t take offense, but instead appreciated his coaching. He tasked me with reading the book prior to our next mentoring session.

As I read through the book, the initial chapters started with basic money lessons youngsters should have – ways to legally earn money such as through doing chores or eventually getting a job, and also planning and goal setting – some lessons many children aren’t taught at an early age. Later the book delved into investments in a very simple and digestible way – charts, diagrams, pictures and all. One caption that stood out for me was something on page 106, which told the story of Facebook’s Initial Public Offering (IPO) back in 2012.

“We should all pool our money together and buy Facebook stock,” my friend described earlier said enthusiastically. It was the holiday season up in our hometown of Buffalo, NY. He had worked in the banking industry for a while and had knowledge of investment vehicles that myself and my brother, and probably most of his family didn’t have.

We were all at his grandmother’s house where his relatives gathered to fellowship as they did most years. I watched as he floated around his grandmother’s upper unit telling everyone, “We should pool our money and buy some Facebook stock. They’re about to have an IPO.”

At that point, Facebook had completely eclipsed Myspace as the number one social media site and most everyone was on it. While most everyone was using it to reconnect, share the most intimate details of their lives, and other unscrupulous things, its creator Mark Zuckerberg, was cleverly devising ways to monetize his creation through selling advertising space. It never occurred me, and I would guess the majority of the users, to invest in it.

A mischievous guy at times, I thought this was just another one of my friend’s bright ideas that he was trying to suck us all into. But was it? As described in How To Turn $100 Into $1,000,000, Facebook’s initial stock price in 2012 opened at $38 per share. Shortly thereafter the stock price decreased to $17.55. When I heard that the stock price went down, I laughed internally at the prospect of all of us “pooling” our money to buy this Facebook stock, and the fact that my friend was lobbying so hard for us to do it. But that was just the beginning.

Facebook’s stock rebounded over the next five years from that $17.55 per share drop and eventually appreciated to around $100 per share in 2015 when How To Turn $100 Into $1,000,000 was published. Just before crafting this piece, I checked the business section of the Washington Post for stock prices and to gauge the health of our economy – a regular exercise now. There I saw that Facebook’s stock is now trading around $170 per share, that’s right $170. It’s also now considered one of the “Four Horseman” of technology stocks – the other three being Amazon, Apple, and Google.

So let’s put this all in perspective. What occurred to me when I read that passage in the book was that if I simply had $2,000 lying around and ready to invest in 2012, I could’ve purchased just 100 shares of the Facebook stock for a total value of $1,755 (plus the cost per trade). Holding onto that stock for another five years, those 100 shares would have appreciated to a total value of $17,550 which could either be cashed out for another purpose, or held for more appreciation. There would of course be the potential of loss too as with all investments, but Facebook has become a very strong company. But if you were positioned to get into the game at that point, you would’ve been rewarded later on.

I’ve come to realize that life is all about positioning similar to the way smart basketball players position themselves to get rebounds when a shot goes up, as opposed to simply leaving things to chance. When I look back to where I was in 2012, I honestly wasn’t in position to safely buy stock of any kind. I was still lugging around a considerable amount of debt from school, and from mistakes made shortly after starting my federal career – paying too much money for some real estate investing trainings (discussed in another post). I was recently out of a tumultuous relationship where money was an issue – my not spending enough.

I further had no Emergency Fund (see Dave Ramsey), and I hadn’t started funding my government retirement plan at least up to the point where I would get my 5% matching contribution – something all employees should position themselves to do if employers offer it. What’s more is that I didn’t understand much about the stock investing game other than you want to “buy low” and “sell high” whether or not you get into an opportunity when it’s first offered, or if you find something of value at a discounted price and chances are it will appreciate – stocks, real estate, whatever. By the way, to see why it’s critical to have an Emergency Fund and to be prepared for disasters, I recommend reading An In-Depth Guide to Financial Emergency Preparedness by Brian Robson.

But there is so much more to it than buying low and selling high. There are lessons which take time and commitment to learn – this is part of positioning one’s self. Furthermore, there are often sacrifices to be made to have money to invest – sacrifices such as not buying a car if public transportation and Uber can be used, taking one’s lunch to work more often times than not, and not “Turning Up” at the club on a regular basis. As a man, another position might be not having a girlfriend for a while, or at least finding one who isn’t high maintenance. These are examples of the positioning one must do to be ready to take advantage of the next Facebook if and when it ever comes around.

My friend was right in that it would have been good for us to take advantage of the Facebook IPO. Coincidentally a couple of years later, he came back to us and told us that we should take advantage of something called “Bitcoin”, a new cyber-currency which I thought was another one of his silly ideas. Years later I would learn that it ran off of something called “Blockchain” technology. He was very enthused about it, but one of the issues was he couldn’t clearly explain to us what Bitcoin was and why it was important going forward. This brings up another very key point. A very important investing rule of thumb is that one should never invest in something they don’t understand. It turned out though that he was right again. Two to three years later, Bitcoin seems to be paying off for those who positioned themselves and invested in it when it was dirt cheap. See the recurring theme here?

This post is not about buying Facebook or Bitcoin today in 2017 per se. Those ships have arguably sailed, and you’d have to have enough money readily available even just to buy 10 shares of Facebook stock today. In terms of getting into these opportunities early when they’re affordable, you have to position yourself, and that’s the central point. Either you’re in a position to take advantage of an opportunity when it’s presented to you, or you’re not. You must be prepared.

This involves knowledge and resources. Study your investment of choice, minimize your debt, save for emergencies, and then allocate your money to invest – money you won’t be adversely affected by the if the investment doesn’t work.

If you’re not in a position to take advantage of a particular opportunity, you can always position yourself for the next one, and the one after that, and then the one after that. It’s all about foresight and positioning. Before starting discretionary/speculative investments, it might also be worthwhile to see a trustworthy financial planner (or someone knowledgeable whom you really trust) who can make sure you’re on sure footing. They may be able to give insight into what type of investments are best for your particular financial goals. Click here if you want to know more about your options.

For the people who were in position to get into Facebook and Bitcoin, it wasn’t magic. They had the resources and they were probably spending time studying those opportunities so that they were able to strike at the right time. It all takes some time and effort, and how you spend your time will determine if you’re in position to take advantage of the next Facebook. In closing, I highly recommend How To Turn $100 Into $1,000,000 to youngsters who have the aptitude for money and finance, and for adults like myself who’ve needed to play catch up. I’ve personally started sharing copies with those in my inner-circle.

Thank you for taking the time to read this post. If you enjoyed this one, you might also enjoy:

• Your net worth, your gross salary, and what they mean
• The difference between being cheap and frugal
• A look at STEM: Blockchain technology, a new way of conducting business and record keeping
• A Cryptocurrency App Case Study
• Why SEO really is the key to a successful online business
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Father’s Day 2017: Reflections on some of Dad’s money and life lessons

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“You just did something I don’t like. You didn’t count your change. How do you know that the cashier gave you the correct change?”

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A Quick Plug

Father’s Day 2017

Last month I wrote a piece in celebration of Mother’s Day, so it’s only fitting that I write something in celebration of Father’s Day as well. The Mother’s Day post was about a specific piece of advice my mother gave me about my engagement and looming marriage a couple of years ago. As jokingly stated in that post, Dad didn’t give me much advice in that particular instance. He did give me lots of guidance throughout my life though. Over on my “Heroes and Quotes” page, his is the first quote which was some advice he gave me at a young age about how to succeed academically.

There was much more though, particularly in way of advice about money, women and other things – lots about money and women. He sometimes consciously taught me things, and some things I learned simply from observation. With two of the key principles of my blog being “Creating Ecosystems of Success”, and “Empowering Others”, I’m going to reflect on some of his money lessons and some of their deeper and associated life meanings/significances – some of which I had to question. As in most cases, I didn’t understand everything that was being said then as I do now.

Being Present and Visible

As I go through some of this stuff, keep in mind that fathers are important – biological, step-, or mentors of all sorts. According to data from Kid’s Count in 2015, 66% of African American kids were raised by a single-parent while the national average was 35%. My parents divorced when I was three-years old and I thus grew up in a single-parent household for the majority of my childhood. While I’ve sometimes looked back and wondered what it would’ve been like to have my father in the house, the blessing was that while he wasn’t physically there, it was important for him to be as visible and accessible as possible.

“Always make sure your children know who you are.” He tried hard to keep up with the words of his own father who died during his teens. It sounds like a simple thing, but as I grew into adulthood myself, went through college and even started dating, I realized that not every father did this, especially in the black community. The results often times were catastrophic with long lasting ramifications, especially in dating or ‘pair-bonding’ – a separate topic all in itself.

Counting Your Change

“You just did something I don’t like. You didn’t count your change. How do you know that the cashier gave you the correct change?” I was an early teen when this discussion took place. I had just paid for something, took the change the cashier gave me and immediately stuffed it into my pocket. A stern man, his words, “You just did something I don’t like,” stopped me dead in my tracks. I didn’t think he was paying attention, but sure enough he was – in general Dad was always paying attention to the most minute details even when you thought he wasn’t. He also remembered things long after you forgot them and would bring them back up when you least expected it.

When I discovered what he was unhappy about, it made sense to me and I started counting my change. I even started calculating in my mind the change I was supposed to get back from cashiers before they gave it to me. The lesson here was to be careful with my money, and to trust no one. Years later he observed that I was in fact careful with my money. I told him that I had gotten the behavior from him. He replied saying something very profound, “Well son, when you have to make child support payments, you have to be very careful with your money.”

Keeping Your Receipts

“You always keep your receipt because you never know when you’re going to have to return something.” I don’t know which came first, this lesson or the change counting lesson, but they weren’t far apart. His father had gotten on him about this when he was younger. He had allegedly gone into lower Manhattan to buy some underwear and returned home without the receipt resulting in his getting scolded.

“When you get paid, you want to account for all of your expenses.” This was an early lesson about budgeting. We didn’t sit down and do one right then and there, and I wouldn’t master it until at least ten years later, but I always remembered the discussion.

Paying Yourself First and Keeping Jobs

“You always pay yourself first.” This lesson came shortly after I started working, though again as a teen, I didn’t grasp the power of this advice until later. It had tremendous implications in one’s prime earning years where diligent individuals save for both emergencies and investments and build wealth while others spend all of their income.

“You don’t quit your job unless you have another one to go to.” Dad gave me this sage wisdom between my junior and senior years of high school after quitting my very first job at the Denny’s Restaurant, near the Buffalo airport. I lasted three months at that job which consisted of washing dishes, cleaning up the restaurant, and taking out the garbage. I didn’t last long enough to have to shovel snow in the winter. The place where I really wanted to work for my first job was McDonald’s. At the time it looked fun to me.

I was happy to have an income, but after a while I grew tired of working at Denny’s – coming home sweaty, greasy, and exhausted. Without talking to anyone, I quit that job right there on the spot with no other job to go to. It was then that I came to the understanding that I had no more cash flow – a sign of immaturity. The only positive thing about that situation was that I was still in high school and wasn’t required to contribute to any of my mother’s household bills. Some adults quit their job without having a replacement and put themselves in a pickle; often burdening those around them.

Saving Money

“You always keep money in the bank because you never know when an emergency is going to arise.” There’s a very funny story behind this lesson and it involves a woman – something very dramatic and stressful according to Dad. For my own safety, I’ll just stick to the lesson. At an early age, Dad stressed the importance of having money in the bank due to unforeseen emergencies which inevitably happen to you, or to someone around you. In this particular quagmire he had gotten into, having some money in the bank helped him get out of it. He also regretted once not having $5,000 available for a mortgage down payment on a house he was renting.

Harsh Lessons on Affording Things

“You can keep dating her if you want to. You might have to miss your electric bill.” This sobering advice came during my first year in graduate school in my mid-twenties. It was one of my first experiences learning something that Dad had talked about for most of my childhood – women and money. At least most of the ones we knew came with a price tag, and wanted to be wined and dined.

I had, unfortunately, taken a liking to someone whom I dated for one to two months who openly admitted she was needy, which I didn’t understand at the time as she had already started her own career. Inexperienced at dating, she grew frustrated with my meager finances and my lack of understanding of what was expected of me. Dad’s advice here, which came in a hurtful and mocking tone, was simply communicating that I needed to determine whether or not I could afford this particular female. I decided that I couldn’t.

It’s an important set of questions for all men to ask themselves when meeting a potential partner. Can I afford her? Does she line up with my priorities? Will she tank my finances? This was also one of the first times I could personally feel the pain, the scars, and the poor fortune my father experienced in the dating jungle after he and my mother split – as there was lots of despair, and little hope or encouragement in his words.

Child Support Payments

“When you have to make child support payments, it forces you to be very careful with your money.” I have to be very careful here as this is a sensitive topic, and my mother generally proof-reads my articles. Throughout my childhood, Dad sometimes lamented about making child support payments – not because he didn’t want to support his children, but because I think he had a hard time making ends meet on his own end. During my childhood, he eventually took a second job in the military to pay the bills. It’s a sensitive topic because while he felt maxed out, my mother felt as though he wasn’t doing enough. And I’ll stop there, but suffice it to say that in many instances men and women see money (and life) differently. In some instances, as the ones being asked to provide, it can seem like your best is never enough – a hard pill to swallow. He and I talked about this a lot as I got older and I started experiencing my own scrapes and bruises with the opposite sex.

What is Real Money?

“The bank is going to want to look at all of your bank statements when you apply for a mortgage, and $2,000 isn’t any money,” Dad scoffed at me, making me feel five feet tall. I was still living with the big guy during my Postdoctoral fellowship. I had started reading Robert Kiyosaki’s Rich Dad Poor Dad series and had joined my local Real Estate Investment Club. I wanted to make an ambitious move and get my first investment property – a duplex which I would live in and eventually rent out for “Passive” income. I needed some help with the closing costs and associated expenses, so I asked him for a loan. It was one of the worst experiences of my life.

Instead of a nice teachable discussion about the ups, the downs, and the ins, and outs of trying such a thing – it turned into him putting me in a proverbial headlock. It dragged on for days and days as he mulled over it, and asked me random pointed questions about it – his analysis and communication styles. After a while I just wanted to drop the whole thing, and I concluded that I never wanted to be in a position to ask his help for anything money-related, though I did once more, and returned to the same conclusion.

In hindsight while it was smart to want to create a passive income stream, it wasn’t a good idea in that particular instance. I wasn’t going to stay in that area long-term, and I wasn’t experienced enough, and didn’t have enough money to manage a property from a long-distance. What was funny was that many people don’t even have $2,000 in the bank they can access quickly. That said, he was right in that it wasn’t a substantial amount of money. He was also right in that prior to qualifying you for a mortgage, the banks do want to know everything about your financial history.

Dad was also jaded in terms of being a landlord from a prior experience, as he once had a tenant in his lower unit – an older woman. According to him, he went downstairs to collect the rent one day, and the woman transformed into a malevolent, ominous, and demon-possessed state. It scared him at the time and forever soured him on being a landlord.

Dad’s Risk Averseness

“I wouldn’t invest in the Stock Market if I were you.” This bit of advice was given to me in my 30s when I expressed that I wanted to buy some stock by the end of that particular year. Because of his own life experiences, Dad was averse to losing money. Coincidentally, one of our closest cousins recommended I get in the game and buy stock, and even today experts like Dr. Boyce Watkins, strongly advocate blacks getting into the Stock Market. So who was right in this case? Who was to be believed and trusted?

This gets back to one of the points I made in my 2017 Mother’s Day post. As we grow into adulthood, I think we all get to a point where everything our parents tell us can’t be taken as the gospel and in some instances must be questioned and or pondered critically. In this particular instance, yes investing in stocks does involve potential loss. An important consideration going in though is whether or not you understand that there is a potential for the loss, and whether or not you can absorb the loss. In other words, do you have emergency money in the bank, and is the amount to be invested allocated for that reason? Can it be easily replaced for another round? This is a much different thought process than simply stating, “You’re going to lose your money if you do that.”

Closing Thoughts

If the tone of this blog post was in part melancholy and mixed, then it reflects our father-son relationship which has been full of contradictions and mystery. When I look back at my youth many of my childhood experiences were marked by concerns over money. I’m not saying that I grew up in poverty because I didn’t by any means. I don’t really remember my mother, whom I spent the majority of my childhood with, talking about money a lot, but I think she shielded my brother and me from some things – sheltering us, as one of my aunts often said. I did look around at peers, such as my best friend and realized that I didn’t have Air Jordans, Starter Jackets, Karl Kani, or any of the trendiest apparel of our cohort.

Most of the money-related talks as I grew up actually came from my father and as you might have gathered from this post, many of them had some sort of pain associated with them. As I’ve gotten older, I understand things much better now. As we get older we start to see that our parents are people who make mistakes themselves, and are not perfect though at one point we may have thought they were. In some instances we start to understand their pains and struggles.

Over the years our father-son relationship has gone through a lot of changes – some good and some bad with multiple ups and downs. Overall I’m grateful for everything my father has done for me, and I tell him that every time I see him now (my mother too). That said, as I think President Obama said years ago, for children whose biological fathers are missing, there can be other fathers too. And even if a child’s father isn’t a good one, or can’t supply everything needed, there can again be other fathers to fill in those gaps. I certainly have many.

There are a lot of podcasts and men’s stations on places like YouTube these days – many talking about the importance of fathers. My favorite in this current station of my life is Paul Elam’s A Voice for Men – content I would recommend for any man still figuring things out in our society – personal values, dating and marriage, and finally gender/societal roles. Fathers are very important if for no other reason than to lend a balanced perspective on the world. This is true for both boys and girls who themselves will eventually both grow into men and women.

Thank you for taking the time out to read this blog post. If you enjoyed this post, you might also enjoy:

• Two well-behaved boys left to figure things out on their own: Reflections on growing up ‘Blue Pill’
• Mother’s Day 2018: Memories of my grandmothers
• Mother’s Day 2017: One of my mother’s greatest gifts, getting engaged, and avoiding my own personal fiscal cliff
• Challenging stereotypes and misconceptions in academic achievement
• The benefits and challenges of using articulate speech