Here at Black Enterprise, we believe that doesn’t have to be true. Being savvy about your finances allows you to create an exciting life for yourself and your family. We know the subject can sometimes be complex, intimidating, and—honestly—yawn-inducing, so every month we put our heads together to find fresh, dynamic ways to help you better understand your finances. Our Wealth for Life mission is to ensure that you become an active participant in wealth creation—and not a victim of economic conditions.

This month even we were surprised by how engagingly interesting and informative a discussion of personal finance principles could be. Check out the third installment of our Women & Money series, “Everything You Wanted to Know About Your Finances,” a roundtable featuring estate planning expert Lori Anne Douglass, partner in the Trusts and Estates Group of law firm Moses & Singer L.L.P.; CNBC’s Sharon Epperson, senior commodities and personal finance correspondent; money manager Dail St. Claire, president of Williams Capital Management (No. 13 on the BE asset managers list with $2.4 billion under management); and financial adviser Robin A. Young, president of Women Behaving Wealthy. It was like a gathering with your best girlfriends, who just happen to be super savvy about money, don’t mind sharing all their good tips, and care about you enough to tell it like it is. They answered your burning questions, through Facebook and Twitter. And no subject was off limits during the discussion, which was led by Senior Multimedia Content Producer Carolyn M. Brown and live tweeted by Multimedia Editorial Director Sonia Alleyne. It was better than any chat, chew, or view available on daytime TV.

But that’s just one element of our annual investment guide. We’ve got you covered no matter what stage (or gender) you are. Many of our BE Nexters should relate to this month’s Financial Fitness Contest winner, cover subject Jhanay Harris, who is just starting out on her goals to achieve wealth. For those of you already active in the stock market, “Investment Planning by the Decades” gives you customized advice whether you’re in your 20s, 30s, 40s, 50s, or 60s. Defining your financial objectives is the first step to advancing your position in life. So stop putting off financial planning as that tedious task you must do; get engaged in the process, and start reaping the benefits of a more exciting lifestyle.

I am carrying things for both of us.” A vice president with the Corcoran Group in Brooklyn, New York, she keeps her wallet or clutch organized. “It doesn’t have sections, but my money is grouped together in one area, my credit and debit cards are in another, and my receipts are all in another.”

Why should it matter what’s in McField-Asamoah’s handbag? Robin A. Young, a certified financial planner, says a “purse check” is one way women can do a quick financial assessment. Financial behavior often reflects how you feel about yourself, says Young, president of Women Behaving Wealthy in New York. Money is personal and emotional—and what you carry around every day says a lot about your relationship with it.

For example, the credit cards McField-Asamoah carries in her purse are indicative of her challenges with debt. She admits that she was a frivolous spender before her son was born. “I tightened the purse strings because a lot of money now goes toward his needs.” McField-Asamoah is expecting another baby this summer. She avoids department store charge cards and currently has a MasterCard and American Express card. She pays with cash whenever possible, often using her debit cards, as she pays down her debt, including a $10,000 MasterCard balance.

An independent contractor, McField-Asamoah has a SEP-IRA account through Merrill Lynch to which she contributes on average $20,000 annually when feasible. She also contributes 10% of her paycheck to savings, mostly joint accounts with her husband, Kobla. The couple lacks structure. “We have goals in place but not a step-by-step plan for achieving them,” she says.

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Like McField-Asamoah, many women want to pay off their credit cards and reduce spending while increasing savings. But the one area where most women still lack is retirement assets. The average woman near retirement has $34,000 in a 401(k) plan or IRA, whereas her male counterpart has $70,000. Roughly four out of 10 women rely on Social Security as their only source of retirement income. For many, a 401(k) plan serves as their emergency fund.

Part of the challenge is that the male-dominated financial services industry is oriented toward the male mindset, says Young. “The industry doesn’t meet the unique needs of women, who have more questions and approach money more holistically.” Young has worked in financial services for 12 years, most recently at Fidelity Investments, where she advised 500 millionaires how to invest their money.

“A woman behaving wealthy spends on the basis of what is important to her on her current income,” Young says. “You never want to operate out of a place of fear. The goal is to become more confident and comfortable about making wealth decisions.”
So, grab your bag and answer these seven questions to see if you’re a woman behaving wealthy.

What’s in your wallet?
Count the number of credit cards (not debit cards) that you carry. If you have more than one, you’re likely overspending and incurring debt. You should have one credit card that you use to, say, rent a car or pay for a trip, with the goal
of paying off that card in 30 days.

“You really should be using cash or a debit card, which would indicate that you’re living within your means,” says Young. “If you’re using credit then you’re probably spending beyond your income. Besides, managing multiple credit cards complicates life instead of simplifying it.”

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What’s the average balance on those cards? For example, if you have five cards with a credit limit of $2,000 and each has a balance of $1,000, your total debt is $5,000. You have used 50% of your available credit, which affects your FICO score. You need to put away those cards, stop using them, and pay them off.

“Don’t close the account after paying off the balance, because that will increase your debt-to-available-credit ratio, which will lower your credit score,” cautions Young. Once you pay off all your cards, consider using one account. “Keep the credit card that offers the most benefits like cash-back rewards, merchant discounts, and airline mileage points,” suggests Young. Nix department store cards since they charge the highest interest rates, canceling out any 15% to 20% discount you get for using them, she points out.
To help you manage your debt, check your credit score, view alerts, and handle other tasks, use tools such as Equifax’s mobile app for the iPhone, iPad, or Android phone. For other management tools, see “4 Apps to Boost Your Score” in Money, this issue.

Is your cash organized by denomination?
Open your wallet and look at how your cash is organized. Is it ordered by denomination with bills facing the same way? Cash that’s arranged and in order is characteristic of a person whose financial life is organized, Young says. Not to mention that it’s easier to get hold of and to add when making purchases.

“Cash in disarray reflects a disorganized financial life. Focusing through clutter and chaos is difficult.” Organize your cash, financial files, documents, and accounts. “It is hard to have abundance when your money isn’t in order and financial papers are all over the place,” says Young. Disorder increases the odds that you’ll get overcharged or miss payment due dates. Some women are even afraid to look at their statements, allowing them to sit around unopened for months, notes Young. You’re not making the right financial decisions if you don’t review your financial statements each month.

Young explains that organizing—your cash and your financial papers—has to do with money awareness. “When I was at Fidelity, I managed nearly $1 billion in assets for clients who averaged $2 million each. The one thing my millionaires had in common is they were very money aware. If they got charged $10, right or wrong, they would question it. They were very focused—though not obsessive—on how much money they had at all times.” Every day, the woman behaving wealthy is aware of how much money she has in her purse, checking account, and savings.

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In addition to tools such as Mint, Intuit’s Quicken personal finance software gives you the ability to track and maintain records of bank accounts, credit cards, loans, brokerage accounts, IRA accounts, insurance policy status, and various other transactions.
Do you have an up-to-date to-do list?

Whether you maintain a to-do list in a traditional day planner or on an electronic device, it’s essential that you have a written plan for what you would like to achieve, says Young. It can be daily, weekly, or monthly. “Having a current to-do list reflects that you have identified, quantified, and prioritized your goals. Research has proven that goals that are written down are more likely to be achieved.”

Let’s say one of your goals is to pay off your debts. When you go to the mall and see a dress you like, you need to know that spending that $200 means you’ll have $200 less to pay toward your debts. You’re even more aware when you have a specific dollar amount, adds Young. For instance, if your goal is to retire early and you need to save $600 a month to do it, it becomes easier to make daily buying decisions.

“Having a better sense of your day translates into having a better sense of your money,” Young says. “When you become more strategic about managing your daily life, you become more strategic about managing your finances.”

LifeWellth.com, a personal finance resource, now provides an iPad app that helps you set and formulate custom long-term plans to reach financial goals such as retirement, purchasing a home, and saving for college.

Do you have protection plans on your electronic devices?
Protection plans protect you from the loss or malfunction of your gadgets. Let’s say you lost your $300 smartphone. With a protection plan, you have the option of receiving a free replacement or paying a small fee. Ask yourself if you can manage the risk, says Young. If your $500 tablet is lost, stolen, or destroyed, can you afford a new one without financial difficulty?

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Protecting your gadgets is analogous to protecting your assets. Essentially, you need five forms of protection or insurance coverage: disability, life, health, homeowners’ liability, and long-term care—especially given that women live longer, but often in worse health. “Every day, you face innumerable risks. A woman behaving wealthy protects her assets: loved ones, income, health, and property,” adds Young.

Retailers such as Best Buy and manufacturers such as Apple offer their own protection plans or warranties. Also, visit SquareTrade.com, an independent warranty provider that says it offers prices that are on average 40% less than most retailers’ prices. For more information on insurance products, visit A.M. Best’s Consumer Insurance Center at www3.ambest.com/consumers/.

Do you have an emergency card?
An emergency card lists your healthcare emergency names and numbers (e.g., hospital, doctor, dentist, pharmacy, health plan, and insurance policy). It includes your family’s contact information (e.g., spouse’s, parents’, and children’s contact numbers) in case of an accident. The best time to prepare for an emergency is before it happens. One quick way to create an emergency card is to go to RedCross.org/contactcard. Young says that if you have an emergency card, you have probably taken steps to create an emergency kit, which RedCross.org also explains how to prepare.

This mindset of preparedness ties into estate planning, she adds, because women behaving wealthy prepare for other unfortunate possibilities such as disabling illness or death. You should have a financial directive or power of attorney (someone to handle all your financial matters) and medical directive or power of attorney (someone to make decisions about your medical treatment) in the event that you’re unable to.

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Have you selected a custodial and financial guardian to care for your minor children, bearing in mind that minors cannot inherit assets, including life insurance benefits? Have you updated the beneficiary designations of your 401(k), IRA, bank account, and life insurance policy? At BlackEnterprise.com, watch the video, “How Estate Planning Protects Your Family.”

Are receipts and important papers organized?
Receipts and important documents in your purse can represent additional income and savings if you use them to lower your tax liability. “By consistently categorizing expenditures that are potential deductions and credits, you are employing tax-reduction strategies to increase your wealth,” Young explains. “Taxes are a detour on the wealth-building journey, as they erode your investing power. A woman behaving wealthy has the objective of retaining as much income as possible, which can then be redirected to savings.”

ProOnGo.com is a personal finance tool that allows you to track things like automotive mileage and business-related expenses, and to generate expense reports for tax purposes. Another is Expensify.com, which creates automatic expense reports from photo scans of receipts.

If you passed the litmus test for six or all of the above questions, congratulations are in order—it appears that you are a woman behaving wealthy. If your purse audit suggests that you aren’t quite on the right path, it’s still not too late, Young says. “Take action today and transform your financial life.”BE

Arthur Wylie, a self-made millionaire, shares his 'crazy and fearless' secrets to success in his latest book. (Photo: Arthur Wylie Enterprises)

Arthur Wylie made his first million by the age of 26—not by playing it safe and following all rules, but by using a “crazy and fearless” plan of attack.

As a college student, he started his own wealth management company, taking on clients from his dorm room.  “At the time, the job market was shrinking, and I knew the best way to get a job was to create one,” Wylie says. “I wanted to look at a way to earn money, be good by myself and contribute to my family.”

With a father in the financial services industry and several mentors, Wylie was able to expand his brand into film and real estate.

Today, the founder and CEO of Arthur Wylie Enterprises shares his secrets to success in his latest book, Only the Crazy and Fearless Win BIG! The Surprising Secrets to Success in Business and in Life (BenBella Books; $24.95), exploring the inspiring stories and enterprising success models of innovators and entrepreneurs who took risks and reaped the benefits of thinking beyond limits.

BlackEnterprise.com caught up with Wylie to find out how being crazy and fearless can lead to career fulfillment and lucrative prosperity.

BlackEnterprise.com: What are some of the skills that “crazy and fearless” leaders use every day?

Arthur Wylie: In the book, I looked at common traits of successful businesspeople — Steve Jobs, Henry Ford, Mark Zuckerberg, Sean “Diddy” Combs, Sara Blakely. They all had a crazy vision and created things even when they did not already exist. For whatever they wanted to do, they thought big. It wasn’t just about that, they put together a fearless plan of attack. They had a vision and a power plan, knew how to execute, how to market themselves and how to deal with the unknown. They were comfy with understanding that if they continued on their path, they wouldn’t have to worry about what would happen next because they did the right thing to prepare. They knew how to network with the right people and they were okay with dealing with that fear factor.

Speaking of the fear factor, many young people are taught to play it safe when it comes to life and their careers. How can young people tap into being crazy and fearless to achieve success?

Sometimes it’s a bigger risk not doing anything that goes above and beyond the norm. To say, ‘One day I’m just going to walk off my job’ is not what I’m talking about. You have to have a plan of attack—that crazy and fearless plan. You have to think beyond boundaries and execute.

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You’ve had mentors to help guide you in your path. How do mentors play into the “crazy and fearless” pursuit of success?

From Ray Kennedy [founder, president and CEO at American Product Distributors] to [businessman] Richard Griffin, who gave me the first office I could work out of for my business, to my father, who was in the insurance and investment game for over 30 years—their efforts were very instrumental. With mentors, you must look at what they do, understand how they do it, and move forward. It’s  essential to have them. Some you may know personally and some you may model after by example. You have to have these mentors to look at the steps they took toward their success and also learning from their failures.

When does crazy and fearless go too far in business?

When you go after a crazy idea with no plan of attack. It’s no good when you’re not looking at your vision and fleshing it out or you neglect to make sure you understand the process and create a business or life plan accordingly. You need to analyze and look at things, from short-term to mid-term to long-term goals. If you’re not doing those things, I think it’s stupid. It doesn’t make any sense. It’s okay to say, “Hey I want to get to the moon.” Many people would say that’s ‘crazy,’ but if you have a game plan for getting there, that’s success.

How does one go about thinking outside of the box to achieve the “crazy and fearless” success?

First understand, I didn’t even know there WAS a box. There is no box, and you can’t think out of something that is not there. Don’t limit yourself. You must create and innovate, as many of the successful people mentioned in my book have done.

Check us out tomorrow Wylie’s six “crazy and fearless” steps to career success, and a chance to win Arthur Wylie’s book Only the Crazy and Fearless Win BIG! The Surprising Secrets to Success in Business and in Life.

She was not referring to your social, romantic, or family life. Instead, she was talking about your individual financial well-being. In general, I have found there are way too many African American women who focus on everyone else—except themselves. As a result, they are placing their own future in jeopardy.

I was shocked to read recent statistics on the wealth status of women of color. According to a 2010 study on women and money, single black and Latino women retain only a penny of every dollar of wealth held by men of their own race. And such comparisons to their white counterparts are just as startling: Single white women have a median wealth of $41,500 versus a mere $100 for single black women. Moreover, 57% of single white women are homeowners compared to only 33% of single African American women.

As the father of twin daughters who will be graduating from college this spring, I’m extremely concerned about this crisis. It is imperative for young black women to take control of their financial destiny now, and be as vigilant about money matters as they are in updating their social media pages.

I am alarmed by the number of my personal friends and colleagues—many of whom have graduated from the nation’s leading colleges and who work for some of the world’s largest corporations—that have opted not to save or invest but would rather wear their assets or carry them in a designer purse.

My message is simple: It’s no longer acceptable to claim that you lack resources to save and invest. Instead of making an investment in a new pair of Christian Louboutins, set financial priorities by paying yourself first and then sticking to a comprehensive, consistent plan of saving and investing. In fact, once my daughters leave college and become full-time workforce participants, I will give them no choice but to save a percentage of their income toward the purchase of their own homes within a five-year period. They will also seed their respective retirement funds by investing through a company-sponsored 401(k) plan or an IRA—an activity that a disturbing percentage of black professionals, including women, have decided to forgo.

It is imperative that you establish your own credit rating even if you are married. There are certainly no guarantees you’ll remain hitched for a lifetime. Having your credit status tied to an ex-husband or deceased mate could prove disastrous, especially if you’re unaware of exorbitant bills, missed or delinquent payments, liens, or other irresponsible acts.

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In order to fully strengthen your financial position, you must also learn to become a savvy, relentless negotiator. In salary negotiations, demand what you’re worth. When you make consumer purchases, never settle. For the African American women who represent the fastest-growing segment of entrepreneurs, ask for the big contract. Mothers: Manage your personal financial life with the same ferocity as you would fight for opportunities for your children. Never be complicit in giving anyone the upper hand by caving in to intimidation due to lack of confidence or information.

You simply can’t afford to be a passive observer when it comes to maximizing your dollars. In dealing with financial professionals, don’t let them use their knowledge and credentials to bully you into making decisions. Remember they work on your behalf and that you have the final word. It’s up to them to explain and justify their approach to managing your money. In the same manner that you keep up with your loved ones, take the same painstaking approach to detail in reviewing financial statements.

Every woman must take nothing for granted and map out a long-term plan. By applying sound financial principles, and understanding the great value in short-term sacrifice, you will be well on your way to achieving your ultimate life goals.

DeSean Jackson of the Philadelphia Eagles in his handout picture (Image: Getty)

With a month of the 2011-2012 NBA season already in the wind and the rest of it in doubt, it’s become painfully clear to many athletes that even their paydays are not guaranteed and that broke can be right around the corner from rich. Unfortunately, lockouts and how to keep your money during lean times were not at the top of most athlete’s list of priorities before they signed that professional contract. With that in mind, BE Next lists a number of prerequisite moves and options any future franchise player, or even bench warmer, should consider before putting pen to paper on that pro deal.

You Are Still Getting a Pay Check

Just because you’re worth millions, doesn’t mean you aren’t going to be getting a paycheck. Malik Shareef, attorney and sports agent who represents Ryan Williams of the Arizona Cardinals and Isaac Redmond of the Pittsburgh Steelers, amongst others, breaks it down. “A football player gets 17 game checks and then that’s it. Those 17 game checks have to last for 52 weeks. A minimum deal in the NFL is $375,000, they’re getting 22 grand a week.”

Click here to read more at BlackEnterprise.com/BENext

Inspired as a student by an article she’d read in BE, she wanted to learn about finance so she could better understand how to manage money and eventually pursue a career in finance. But knowing better and doing better are two different things. When the loan went into default, Harris faced a dilemma: either pay the nearly $5,000 bill or tarnish her credit report. For roughly two years she paid nearly $200 a month to fulfill her relative’s obligation. “When you’re just getting out of college, that’s a lot of money,” she says.

For Harris, the costly lesson proved invaluable. She says it taught her how to decline constant requests for money. “I share my personal story with my clients,” says the now 40-year-old financial adviser and owner of Harris and Harris Wealth Management Group L.L.C. in Upper Marlboro, Maryland.

Countless Americans compromise their financial future because of money mistakes they could have avoided. Some emerge more astute after averting a path to financial disaster, while others find themselves in seemingly bottomless money pits. In today’s unpredictable environment, you can’t afford to sleepwalk while managing your money. For example, in response to financial reform, a number of banks have increased their out-of-network ATM fees, started charging monthly fees for debit card purchases and paper statements, and eliminated free checking. Those costs add up, leaving you with less money for saving and investing. So that you can stay on course, here are five common money mistakes and ways you can steer clear of them or rebound from financial blunders.

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Mistake 1: Not creating an emergency fund
I know you’ve read in the pages of this magazine about the importance of an emergency fund to handle unexpected expenses such as car repairs or a furnace breakdown. But this is one smart move that can’t be overemphasized. Without this safety net, you’ll likely wind up paying for emergencies with a high-interest credit card. In fact, 66% of those with credit card debt report having difficulty saving, according to a survey by credit rating agency Experian and America Saves, a national campaign managed by the nonprofit Consumer Federation of America. Setting clear financial goals is the first step toward saving for a rainy day, says Ken McDonnell, the director of the American Savings Education Council, which works to make saving a priority for Americans. Here’s how to increase your odds of success:

Strive to save an amount equal to six or more months’ of expenses. While it may take you a couple of years to get there, six months’ worth of living expenses can provide a cushion for unplanned events such as major home repairs or short-term unemployment, McDonnell says. Have a portion of your paycheck—10% or more—automatically transferred to your rainy day fund.

Have a specific amount in mind. Calculate to the penny six months’ of living expenses. “If you don’t know how much you need to save, how are you saving?” says McDonnell. Once you’ve achieved that goal, focus on a different financial priority, such as investing.

Put convenience over return. If you don’t have an emergency fund, you shouldn’t spend too much time seeking high returns. Even though the average money market account yielded only 0.55% in October, according to Bankrate.com, “the purpose of emergency savings is to get cash now if an emergency arises,” says McDonnell. “It’s not to get an investment return.”

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Mistake 2: Becoming a human ATM for family and friends
According to a survey conducted by The Washington Post, the Kaiser Family Foundation, and Harvard University, 60% of African Americans—more than whites or Hispanics—said they or a family member had loaned money to family or friends. There’s nothing wrong with helping others. But if you lend money that should go toward your bills, emergency fund, and retirement accounts, you’re jeopardizing your financial well-being. If you find yourself putting the needs of others before your own:

Give, don’t lend. A litmus test to help you decide if you can afford to lend is to ask yourself if you need the money back. If the answer is yes, then you don’t have the dollars to lend. Although loved ones may have every intention of paying you back, “Think of the loan as a gift, because it’s unlikely that you’ll ever see that money again,” says Alexandria M. Cummings, a financial adviser with Polaris Wealth Management in Chicago. Also, learn to say “no.”

Lend from discretionary income. You should use only those dollars left over after you’ve made your regular contributions to your savings, emergency fund, and retirement plans, as well as paid all bills and expenses, Cummings says. Savings accounts and money from lines of credit should be off-limits. “What if you have an emergency the following week and you’ve already given the money out of your nest egg?” Cummings asks.

Offer a lesson, not a handout. There’s wisdom in the proverb, “Give a man a fish and you feed him for a day; teach a man to fish and you feed him for a lifetime.” There are better alternatives to becoming a human ATM. If a friend is regularly having trouble managing finances, buy him or her a personal finance book, suggest a free financial course or seminar, or provide information about a qualified financial professional. By doing so, you will help your friend develop money management skills and break the cycle of dependency.

Mistake 3: Mindless spending
Most cases of random spending result from being unaware of your daily spending habits, says Jesse Abercrombie, a Dallas-based financial adviser with Edward Jones Investments. To get your spending under control:

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Take the 14-day challenge. Track all expenditures in a notebook for at least two weeks. This will help you gauge the amount and type of purchases you make. Once you identify waste, “Don’t go cold turkey,” warns Abercrombie, citing the tendency to splurge later. Instead, cut purchases gradually until you adjust to reduced spending in specific areas.

Create SMART goals. Make sure every financial goal is Specific, Measurable, Attainable, Relevant, and Time-bound, Abercrombie says. In other words, you want to know the exact amount and length of time you need to save and that your goals are realistic.

Mistake 4: Failing to manage credit
As the economy recovers, credit card issuers are offering sweeter deals, says Gerri Detweiler, personal finance expert with Credit.com. A recent First Data Corp. survey revealed that consumers are using charge cards for more purchases and that credit surpassed all payment types in June. The fact is using credit without a plan to pay it off is a recipe for disaster. “A lot of times minimum payments are so low they lull you into a false sense that you can handle it,” says Detweiler. If you find yourself in over your head:

Create an accelerated payment plan. Credit card statements now let you know how much you have to pay to retire a bill in three years. “If you can afford that amount, make it a do-it-yourself project,” says Detweiler.

Use technology to help you. Smartphone apps such as Matthew King Software’s Debt Snowball Pro ($2.99) and Parallel Focus’ Pay Off Debt ($2.99) can help you track your spending and consistently pay down your debts.

Consider credit counseling. The magic number for debt reduction is three years, says Detweiler. “After that it becomes difficult—either motivation dies or life intervenes.” If you’re in too deep to climb out on your own within that time frame, find a credit counselor through the National Foundation for Credit Counseling (www.nfcc.org).

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Mistake 5: Not taking advantage of company benefits
Benefits make up about 30% of employee compensation, according to the Bureau of Labor Statistics. So a failure to use them leaves a lot of money on the table, says Michael Erwin, a spokesman for CareerBuilder. Open enrollment typically takes place in October. To make sure you get the most from your benefits:

Light the 401(k) match. Make sure you save enough through your employer-sponsored plan to take advantage of any company match, says ASEC’s McDonnell. Not only is the match free money, but “401(k) contributions offer tax advantages and are one of the best ways to build retirement savings.”

Consider lesser-known benefits. Employees frequently overlook flexible healthcare spending accounts, wellness benefits, tuition reimbursement, and banking programs. Some employers offer employees discounts on items such as personal entertainment, technology, and travel, Erwin says.

Don’t be afraid to ask. When you’re negotiating your salary for a new job, ask for benefits such as telecommuting and tuition reimbursement, suggests Dawn Fay, district president of Robert Half International, a staffing services firm. Telecommuting can save you commuting costs, and coursework may later “translate into more dollars and opportunities.”

“Participating in black expos was a great way to introduce our company and sell our products to our target demographic of African American women,” says Meagan, 27, who teamed up with her husband, Darrius, 32, to produce the Magic City Black Expo in 2009. Although other cities in Alabama have sponsored black expos in recent years, Birmingham’s last one was in 1996.

Adds Darrius: “We also realized that there were other black-owned businesses just like ours that needed the same outlet and platform to gain exposure and sell their products and services.”

Since last year, the daylong event has taken place during Black History Month. It showcases the products and services of black-owned and -operated businesses and offers education, empowerment, and entertainment activities.

During its first year the expo had more than 60 exhibitors, mostly local, along with more than 2,000 attendees. In 2010, they added about 30 exhibitors and the 2011 event had more than 150 vendors. This year, TheCASHFLOW and 100 Urban Entrepreneurs  sponsored a business pitch competition and awarded three $10,000 business grants to winners. The 2012 expo is expected to pull in 10,000 visitors.

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Tickets for the expo cost $6 for adults, and children under 12 are free. The Peaces charged exhibitors $400 for a 10-by-10 booth and $300 if they bought space early. Any money they make from the expo goes toward paying for the next year’s event. This year, they made $23,500.

Between 2002 and 2007, Birmingham’s black-owned businesses increased 113.3%, from 6,964 to 14,855. One of those business owners, Cedric Threatt, a Birmingham-based children’s book author and owner of Ahava Publishing L.L.C., has had a booth at every Magic City Black Expo and says his annual book sales have increased steadily with each event.

“I would say anywhere between 15% to 20%. It was just good to have another avenue because I got to meet people who otherwise would have never heard of me,” says Threatt, adding that he met educators who invited him to schools to do presentations for students.
Participating in the expo also proved fruitful for Birmingham spa owner Tiaesha Chestang, who was able to track the 15% sales increase she had in 2010 from a discount flier she handed out at her exhibit booth.

“I even get people who come up to me in the grocery store who say, ‘I remember you from the black expo.’ [The expo] was really a truly amazing experience,” says Chestang, owner of Purify Wellness & Spa.  “The outpour from the black community was amazing. I had no clue that this could happen.”

HOW THEY DID IT
•  Do your research. Darrius says they Googled “How do you present an expo” and downloaded e-books that outlined tips such as securing a venue, gaining support from local government, and attracting exhibitors and sponsors. Next, they attended several black expos around the country, taking copious notes, connecting with people behind the scenes, and asking event organizers for advice on how to get started.

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•  Hit the pavement. Organizing the first Magic City Black Expo was truly a grassroots effort. They had no idea where the black-owned and black-operated businesses were located in Birmingham, so they drove around and asked. Many small businesses were home-based and therefore not visible, Meagan noted. They also received referrals from other black businesses, friends, and family members. The Peaces passed out fliers, purchased radio and TV advertisements, and used e-mail and Facebook to promote the event. They also cold-called, e-mailed, and visited local black-owned businesses to get them to sign on as exhibitors.

To help ensure diversity among exhibitors, they permitted only two of the same types of businesses within a given category to participate, allowing a wider array of businesses. Darrius explains. “The only criteria we had was that they be licensed, legitimate businesses,” he says.

• Barter. Meagan and Darrius relied on their own resources and family and friends to make the initial investment of $3,000 for the first expo, which had operating costs totaling $10,000. The couple and volunteer organizers also relied on their negotiating skills, bartering for things such as media airtime. 

In addition to her job as an office manager at a tax consulting firm, where she now earns an annual salary of $53,000, White makes almost $5,000 bartending part time. She used to run a check-cashing business in Jersey City, New Jersey, for five years. But her entrepreneurial aspirations came to an end in 2009 when she was forced to file for bankruptcy to pay off $90,000 in business loans and personal and business credit card debt after being robbed. “One weekend I pulled out $50,000 on three different cards to remain in business,” says White, recounting her efforts to keep the business afloat.

White, who at one time had a credit score of 710 before filing for Chapter 7 in December 2009, quickly rebuilt her credit from the 500-range after the bankruptcy was finalized in April 2010 to 680 today. Since then, she has focused on rebuilding her credit by taking out and repaying two small $500 loans from the Intersect Fund in New Brunswick, a nonprofit that lends to small businesses that have experienced financial hardship to help them rebuild their credit. She also has a secured Visa card with a $300 limit, which she makes sure is paid in full each month, and she pays her $330 car note on time.

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White still hasn’t built any solid wealth, though, and she has a savings goal of $20,000, which she hopes to reach by next summer to eventually purchase a condo and reopen her business. She maintains a budget at Mint.com and, based on her monthly living expenses, she should have a surplus of $400 each month. However, the figures don’t add up. “My savings account has been at about $7,000 for the last five or six months, White says. “I’m 41, I have no kids. I should have money in an account even if I never spend it.”

In addition to her savings, White has started investing for retirement after a seven-year hiatus. She now puts 5% of her income into the employer-sponsored 401(k), bringing her total retirement savings to approximately $44,000 spread out through five different mutual fund retirement vehicles. Three are other 401(k) accounts not rolled over from previous employers, totaling nearly $30,000; one’s an IRA worth more than $10,000 that she converted from a traditional to a Roth, which caused her extra taxation; and there’s a CD valued at $3,700.

White also indulges in a $189-a -month gym membership. Her company pays $50 of it and also pays for her public transportation costs. She also enjoys hanging out after work at meet-ups and admits to going out as many as four times in one week.

White realizes she could make some cuts and says she plans to replace hanging out after work with reading in the park because she really wants to meet her goals. “At this age, I’m seriously looking to get a home and I should have something in the bank,” says White. “I want my business again. I was proud of myself. I want to try to give it another shot,” she says.

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The Advice
Black Enterprise and Wells Fargo financial adviser John Nelson in Cliffside Park,
New Jersey, offer this advice to help White meet her wealth-building goals.

• Get help to change financial behavior. White needs to change her behavior and focus on maximizing her income potential instead of relying on her business venture to fund her retirement. be recommends that she continue working with a financial planner and enroll in financial empowerment courses.

• Delay home buying and business goals. White should not even consider homeownership or restarting her business until she gets her financial house in order. She needs to get back to the basics, building an emergency fund equal to six to nine months of expenses as well as secure the 20% down payment needed to purchase her home. “While I understand that reopening her business is a priority for her, I urge her to consider delaying the start date until the necessary startup capital is fully funded,” says Nelson. “For the house, she should delay that for two years to accumulate $30,000 to $40,000 to cover the down payment and closing costs.”

• Curb spending. Nelson estimates that White can cut about $200 per month in dining out and health and fitness. Since every bit counts, she can design her own exercise program and save the money on a gym membership and allocate those funds to her savings. She should also stop eating out and other such indulgences.

• Sell her second car. In addition to the 2010 Camaro, White owns a 2002 Nissan Maxima, which is paid off. Nelson says she should sell her second car. “That would be $4,000 she can put aside for her home purchase or business. There is no sense in retaining it; it will continue to depreciate,” says Nelson.

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• Accumulate retirement wealth. Nelson advises White to “increase systematic savings toward her 401(k) plan from 5% to at least 10% of her income. Her current employer is matching 25% of her income up to $5,000 per year,” explains Nelson, who estimates that if White increases to 10% of her income, or $5,000, immediately and maintains this contribution for the next 19 years, she will have an additional $132,200 in her 401(k) account when she turns 60. He adds that if White doesn’t do this and just puts this investment toward her business, she will put herself at greater risk. “With a business, you are at 100% risk. With a retirement account, you have an average return of 7% to 10% with certainty that you will accumulate,” estimates Nelson. For her age, length of time working, salary history, and assuming an 8% average return, she should have more than $187,000 in retirement funds versus the almost $44,000 she has now.

Nelson says the second part of White’s retirement financing strategy is to consolidate. He recommends she roll her former employer-sponsored plans into an IRA and collapse her multiple checking accounts into one retirement vehicle.

• Don’t commingle assets. When—or if—White is ready to reopen her business, she needs to keep her business finances separate from her personal accounts. “She must set aside money for retirement as a personal asset and not borrow from it for other purposes,” emphasizes Nelson. Additionally, he says, “You have to protect yourself. If you put all of your assets in your business, what’s the backup?”     

1. I Don’t Make Enough Money.

“This is certainly true for some people—probably anyone earning less than $20,000 per year. Otherwise it is a matter of priorities. Tracking discretionary spending for only one week will show that substantial amounts are being spent on unnecessary items,” says Benna. “Someone who does this should be able to identify items to eliminate that will enable at least 1% of pay to be saved.” Of course, that is far from the amount that you need to save, but it beats not saving anything. The goal should be to move up from there in workable increments.

2. My Employer Doesn’t Match.

“The greatest benefit for most workers of a 401(k) plan isn’t the tax break or the employer match. It is the fact that savings takes place automatically each pay period,” Benna says. “Very few workers have the discipline to save outside the plan what they would be able to save through the plan.” Whether it’s a 401(k), Roth, or traditional IRA, retirement savings offer immediate tax deductions, tax-deferred growth on your savings, and usually a matching contribution from your employer.

3. I Have Too Much Debt.

“Set up a budget and stick to it if you don’t have one. Do not continue adding to your debt; get your debt load down to a level where you can contribute at least the amount that is matched by your employer ASAP,” says Benna. “If you have a match provision it’s a no-brainer; it’s 100% return,” says Harris. If you do not have a match it may behoove you to focus on the high-interest nondeductible debt first, but it’s imperative that you speak with a professional who can help you create a strategy to pay off your debt and secure enough funds for your golden years.

4. My Job Doesn’t Have a 401(k)

If you have your own business and are self-employed with no employees, Harris recommends an SEP IRA, which allows you to make contributions based upon the earnings from the business. If you have employees, Harris recommends a Simple IRA account. If you’re not self-employed, Harris suggests a Roth account first because contributions can  be withdrawn tax free at age 59¹/₂. If you can’t do a Roth, go with a traditional, says Harris, but go with some type of vehicle that allows the growth to be tax deferred. If you choose to invest in an IRA, Benna suggests considering automatic monthly withdrawals from your checking account into your IRA if you have a tough time coming up with lump sum contributions.

NOTE FROM THE EDITORS: Some retirement plans have fees that can impact your performance over time. Review your plan with a professional.

Continue reading more excuses on the next page (and learn how to get over them)

Ted Benna, Wiley Press

5. The Economy Is Bad.

“Saving for retirement is for the long term, and a down economy is just a part of the business cycle,” says Benna. Even during market fluctuations it is important not to suspend your contributions; instead make sure your assets are diversified to protect you against market fluctuations. “The fact that the economy is bad now should not prevent you from contributing to your retirement, provided you have at least a seven-year period before you need the money,” says Harris. “The goal is to buy low and sell high.”

6. Retirement Is Decades Away, I Can Wait.

“Time is the most critical element,” says Harris. “Regardless of how much money you have, it is so important to start as soon as possible with any amount you can. Time is more important than how much you put away, because time has much more of an impact.” Benna agrees. “The sooner you start the greater the amount that will come from investment income. The longer you wait, the more you will have to contribute from your pay later to reach your goal.”

7. Social Security Will Provide.

Social Security was never designed to be the sole source of retirement funds. It was designed to supplement. Right now the average benefit is $1,153 a month, which is less than $14,000 a year, explains Harris. “That’s right above the poverty line. Is that enough to maintain your lifestyle?”

For more, read “Too Young to Think About Retirement? Think Again!” in the October 2011 issue of BLACK ENTERPRISE.