The New Rules for Wealth Building

Our economists offer strategies on building your enterprise, increasing your earning power, and protecting your portfolio in a volatile market

jobs.

According to analysis provided by Brimmer, while the recession turned out to be less severe than anticipated, the recovery process will still be slow. African Americans should continue to see increases in their proportion of the nation’s total money income — a key measure of spending power — for 2002. “My own view is that the black share of money income will continue to improve but at a much slower rate,” says Brimmer.

A major key to survival is using consistent savings to establish an emergency fund equal to six to 12 months of living expenses. “You do need to be looking ahead and thinking about contingency funds,” Simms says, “[money] you can tap into…if you either lose your job or need some additional funds.” As the economy moves slowly into a recovery, the Board says you should already be planning ahead for the next recession in order to be financially secure should the layoff hatchet come your way.

Conclusion
African Americans are more susceptible to economic fluctuations than Caucasians, but careful planning, sound investing, and the realization that downturns happen can help minimize the chances of financial catastrophe. Following the first principle of the BE Declaration of Financial Empowerment — to save and invest 10% to 15% of your after-tax income — is key to establishing a safety net for you and your family.

“What factors will turn this economy around and restore confidence in employment, and when do you think this will take place?” — C. Lewis, Washington, D.C.

There are indications of a turnaround right now, says BE economist Williams, pointing out that the downturn started before Sept. 11. One of the factors that would affect the turnaround include companies starting to reinvest again but it’s not limited to that. “There are multiple factors that caused [the recession],” Williams observes, “there are going to be multiple factors that correct it.” He points out that interest rates are still relatively low. As companies start to reinvest again, that will increase employment.

Gail Armorer is among those waiting for the turnaround. The 45-year-old resident of Philadelphia commuted over two hours each way to her office in Long Island City, New York, where she was employed as an IS project manager for Citibank — until she lost her job in November 2001. As an IS Project Manager, her responsibilities included coordinating all the project teams in order to ensure that all software and applications under development were done properly.

Although having been out of work for several months, Armorer remains optimistic and expects improvement on the employment front by September. “I don’t see things really improving until we go into the next stage of the economy,” she says. “Overall it’s going to take a little while but it seems to be starting to open up now.” The rules of job hunting have also changed, according to Armorer. “It used to be you call a headhunter, they say they’ve got this list of jobs, you get dressed up, and you go out on the interviews,” she says. “Headhunters now are either out of

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