When I discuss what it means to be rich at seminars, I explain that the vision is different for everyone. But the one constant is that you will need to have wealth to achieve that rich vision. There is a simple formula for net worth; it’s assets minus liabilities. Please note, INCOME is nowhere in this equation.

I commend the Insight Center for Community Economic Development for conducting a study of the wealth gap between women of color and white women. Perhaps, now more women will get a wake up call and start to do the following to change the picture and focus on building wealth:

A) Find Out Where You Stand

Knowing and accepting your situation is the first step to overcoming any situation.

Add up all your assets, i.e. everything you own or are borrowing-to-own (like a house, car, jewelry that’s paid for on a Zales credit card, etc.)

Subtract everything you owe, i.e. credit card balances, car loans, mortgages, student loans, etc. Do not include utilities because that is not a debt, you can turn that off and the bill goes away. Unless of course, you have to still pay for months that have already passed (as in overdue bills).

Get your outcome number from applying steps 1 and 2. This number is your net worth. Don’t panic or be alarmed if your number is in the negative. This is very common for the first time you apply this exercise.  My  number was like minus-$30,000 or something the first time I calculated my net worth.

I once interviewed a woman for a magazine story who said she actually got diarrhea after she realized her financial situation was so bleak. But imagine what she would have gotten if she didn’t correct the situation. She was about $20,000 short every year for her basic living expenses, which was making her credit card debt mount and continue to ruin her net worth. But after she realized it, she got a job making more money and she is now living quite pretty. She actually lives close by me and she is doing quite well for herself with her million dollar home.

B) Do Something About It

Apply these 5 Keys to Keeping It Rich:

Define. You must define your rich life for yourself. If you are shopping all the time and the bills are running up, its because you have not defined a better life for yourself. Decide where you really want to live, vacation, eat out, etc. then…

Invest in your newly defined lifestyle. Figure out how much that house or vacation costs and then start to save your money accordingly. Once you get 3 months worth of living expenses in the bank, then ask your bank advisor or a friend’s financial advisor about CDs or mutual funds. The options for growth will continue to grow as you grow.

Build your credit. In America, you can’t do much without credit until you truly fall into the upper echelon classes of Carlos Slim Helu or Oprah Winfrey. Get your credit report from www.annualcreditreport.com and call your debtors and work out a plan.  See “A Perfect Score” I wrote a bit ago for Black Enterprise to learn more about building credit.

Own a home or a business. This is where the true net worth building will come into play. The value of a home (although some can’t tell today, but it will change) or a small business adds true worth to a net worth statement. Trust me. I’ll tell you my story at another time to convince you.

Hire professional advisors for insurance, financial advice, taxes, etc. Also, you will need to hire staff for your businesses. You will never become as large at Carlos Slim Helu or Oprah (they are my picks for today apparently) by doing all the work yourself.

Ok, I gotta run. I hope this helps you deal better with the news of black women and their net worth. Tweet me your questions at www.twitter.com/keepingitrich.

Sakina Spruell is host and creator of “Keeping It Rich with Sakina,” and a business journalist, specializing in personal finance and entrepreneurship; she contributes to the personal finance sections of Black Enterprise, Money, and Essence. You can follow Spruell on Twitter and Facebook, as well as view her Keeping It Rich video series and free newsletter.

It’s difficult to find anyone who doesn’t have some feelings of anxiety due to the uncertain economy. Whether it’s small business owners slicing their own paychecks to keep their companies afloat or employees adjusting to salary cuts as they worry about losing their jobs, many Americans are struggling to stay positive amid a pending sense of doom. And the current recession may seem worse than other times because “ its impact has been felt by people all over the world from every walk of life,” says Dr. Gloria Morrow, a licensed clinical psychologist in Upland, California. “In the past, if you were forced to deal with a shortage of income or were having a little trouble paying your bills, there was the hope that things would get better quickly. Now that the media is constantly reminding us about a continually down-spiraling economy, I think some people are panicking.”

With it being anyone’s guess how long it will take the economy to recover, the uncertainty that has been building since the downturn started cannot be eliminated with a quick fix. Experts predict the overall feeling of doubtfulness will remain long after the recession reverses. So the best thing for people to do is learn to function in this new reality and channel their anxiety into actions that will minimize the effects of the downturn on their personal lives.

Here are some ways to take charge in the midst of uncertainty:

Look for new income streams. Rather than worrying about whether you’ll get laid off, look for ways to turn a hobby into income or make some extra money on the side. That way you’ll cushion the blow if the worst case scenario does happen and you lose your job. “You want to have something that you can do right now as a second source of income or something you can create for yourself to help sustain your family in the case of that pink slip,” says Kimberly Seals-Allers, author of The Mocha Manual to Turning Your Passion into Profit: How to Find Your Side Hustle in ANY Economy (Amistad; $14.99).

Make the downturn work for you. If you’re an entrepreneur, take advantage of the fact that there is a lot of great talent that is currently unemployed and may be willing to work for you at a discounted price, suggests Seals-Allers. Also, cut down on professional and personal costs by negotiating your services, product, or expertise as payment. “People are open to other forms of currency so try bartering for services,” Seals-Allers says.

Consider new career options. If you’re in an industry that has little hope of rebounding soon, rather than lamenting the fact that you’re in a dead-end job, start exploring new professions that you’re interested in and have the skills to transition into. Maybe you’ll need to take a class or attend networking functions, but the key is to take steps toward something of interest. Seals-Allers says if you’ve been laid off, “it can be a great time to push that reset button.” And that’s exactly what Jackson did.

Jackson responded to the recession by removing her focus from real estate and buying a Kilwin’s Chocolate and Ice Cream franchise. “No matter how bad the economy is, people still indulge in chocolate and ice cream because they’re comfort foods,” says the 44-year-old. After qualifying for a business loan and spending about $125,000 of her own money to cover the approximately $300,000 investment, Jackson opened her franchise in June 2008 and made a little more than $100,000 in the first three months.

“There have been a few times when I had a pity party, when I didn’t have any customers,” she says. “But one day I woke up and said, ‘I’m not buying into this. I’ve got to fight because I have so much invested and I’m not going to let a recession beat me.’”

This story originally appeared in the July 2009 issue of Black Enterprise magazine.

Many Americans are asking themselves the same question: Why is it fiscally irresponsible for me to borrow more money to spend, but okay for our government to do so? Let me begin my response by saying that we must all be careful not to demonize debt. It’s not all bad. That may sound strange, seeing as we’re in the midst of a financial meltdown caused by a lot of risky spending, borrowing and lending.

 

Home mortgage: Good debt

Think of debt in two simple categories: “good” and “bad”. Good debt is something like a college loan, used to further your education, and therefore your earning potential. An affordable home mortgage is good debt, especially in cases where it’s cheaper than paying a monthly rent. An auto loan can be beneficial as well, if the car allows you to commute to a more lucrative job, assuming you don’t buy a more expensive car than you truly need and can afford.

Another example: A business loan to expand your chain of coffee shops into an up-and-coming neighborhood. These are all examples of debts that broaden your overall financial prospects. Some of these investments, like education or real estate, even increase in value over time. The key is keeping these debts manageable. It’s good to maintain a debt service ratio of less than 35% to 40%. In other words, the amount you pay each month to cover debts shouldn’t exceed 40% of your income.

 

Credit card vacation splurge: Not so much

As for “bad” debt, here’s an extreme example from personal experience: I got my first credit card as a sophomore in college. My first purchase? I financed a Spring Break trip to Florida for myself and a girlfriend—complete with plane tickets, rental car, and hotel. Not only was this an instance of frivolous consumption, my income at the time was a whopping zero. Very bad move.

As for the national debt: at least according to White House economists, this represents “good” debt, an investment in the nation’s future growth and prosperity. Of course, a good number of economists disagree with the administration’s deep-debt spending strategy, and many citizens are nervous about how the debt will effect future generations. Time will tell whether it was all worth it.

John Simons is the senior personal finance editor of Black Enterprise.