Money

Supremes, Mary Wilson Talks Diana Ross, Flo Ballard, and Money

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(Image: Randee St. Nicholas) (Image: Randee St. Nicholas)

Mary Wilson, a member of legendary singing group The Supremes, opens up about Diana Ross, Florence Ballard, and money.

[Read Part 1 here]

In the first part of our interview with legendary singer and original member of the great  Supremes, Mary Wilson shared that she deeply wants to restore her relationship with the group’s lead singer Diana Ross and that she wished that she could have helped original member Florence Ballard with her problems with alcohol and depression.

Through her childhood experiences and the financial success that came with the Supremes, Wilson says she has learned a lot about her relationship with money. She continues to share her insights with BE.com.

Tisdale: Going from difficult financial circumstances to great wealth proves challenging for a lot of people. What was your experience?

Wilson:  I have learned that having money can make life easier, but if you don’t invest or save for that rainy day, it can be devastating. I’ve also learned the dangers of believing that that rainy day will never come.

After graduating high school, my thinking was that if I got a hit record it would secure my future. At the age of 20, we got our first million-selling record. My future was secured, and after five consecutive No. 1 records, I was convinced.

I was making so much money, and thought I was doing the right thing by hiring accountants, managers, PR firms, etc. The spending, however, was too much. I always thought, however, that I would catch up but I was never ahead.

Tisdale:  How has that played out?

Wilson: After many years of this cycle, the Depression hit. Work in the corporate shows I had been doing dried up. Also, fighting some bad lawsuits, where people were chasing the name of the Supremes, and fake groups took the savings I had. I also loaned money to others that I never got back. I realized that this was the rainy day people talked about.  Now, after 60 years, I find myself having to work, and think about all the money I threw away. All I can say for myself is that I should have listened to them and they said save for that rainy day. However, thank God I love what I do and still have a voice. Mom was right; a better education would have certainly helped.

So yes, money can make life easier, as I have had a great life, had I saved, however, it would be even better now.

Money

How to Keep Your Debt From Spiraling

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iStock_000065139017_MediumDebt. It’s not pretty, but lots of people have to deal with it and, while it’s easy to accumulate, it’s very hard to pay off.  You may not like to talk about your debt, but ignoring it just allows it to spiral out of control.

[Related: Should You Ever Borrow From Your 401(k)?]

The average American household has $15,672 worth of credit card debt, $27,141 in auto loans and $48,172 in student loans, according to NerdWallet, and those balances cost a lot more when interest charges start adding up over time. Want to keep your debt from reaching those numbers? Use these tips to help keep your debt from spiraling out of control:

Stop Charging

The simplest way to stop a debt spiral is to stop using credit. Put the credit cards down and go to a total cash system. This will keep you from adding additional debt to your financial picture, and once the cash is gone you won’t be able to spend anymore.

Cut Expenses or Increase Income…like now

If you want to become debt-free you need to start making larger payments; making only the minimum monthly payment isn’t going to cut your debt, in fact the finance charges will continue to slightly increase your balance month after month.

If you want to make larger payments you will need to find the money somewhere to make them. Cutting expenses or increasing income are your two options. Try getting a second job, taking on a roommate, or selling your car to access additional cash.

Don’t Wait Until the Due Date

Waiting until the payment due date is a big mistake if your debt is spiraling. There’s always a chance you’ll forget and make a late payment, which isn’t good for your debt or for your credit score.

Avoid the possibility by setting up automatic payments so you’ll never risk a late payment. Then commit to making additional payments above and beyond the minimum payment to reduce the balance and save on interest charges.

Skip the Bad Habits

The cost of dinners out at restaurants, alcoholic drinks with friends, and cigarettes can all quickly add up. Whatever your vice is, whether it’s binge shopping online, eating out daily or taking luxury vacations, ignite your willpower to make paying off your debt a priority.

Small additional payments will snowball over time and your balances will start to go down. Making extra payments may also encourage you to cut even more spending to pay off your debt faster.

Be Realistic

There’s no point in paying down your debt if you’re just going to run that debt back up.  Figure out how you ended up in debt. Is it because you were living beyond your means? While it’s important to not totally deprive your lifestyle, it’s also important to be aware of your spending triggers and avoid them.

Start with small lifestyle changes to keep your debt balances under control. Is your debt currently spiraling? Which of these tips can you use to stop it?

 

Money

The Supremes’ Mary Wilson Talks Diana Ross, Flo Ballard, and Money

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(Image: Mary Wilson Collections) (Image: Randee St. Nicholas)

When I begin my interview with legendary singer and original member of The Supremes, Mary Wilson, I began by asking her a question that the great financial advisor George Kinder asks his clients before he helps them create a financial plan: If you found out you were going to leave the planet tomorrow, what would be your biggest regret?

[Related: NFL’s Dre Kirkpatrick Shares His Most Important Money Lessons]

Kinder asks his clients this in order to help them identify their most important values, so that they can lay the foundation for a financial blueprint that is in-line with their values.

Wilson’s answer made it clear that relationships, particularly hers with her former band mates, were front and center. “If I was leaving tomorrow, I would make things right with Diana,” referring to Supremes lead singer Diana Ross.

Wilson and Ross had a falling out after the release of Wilson’s book Dreamgirl: My Life As a Supreme, in 1986.

In addition, Wilson says she deeply regrets that she didn’t have the knowledge to help the other member of the original Supremes, Florence Ballard, who lost her battle with alcohol and depression in 1976.

Wilson’s experiences of wealth and loss have also changed her perspective on what it means to have a healthy relationship with money, as she shared with me in our discussion.

BlackEnterprise: What has all that you’ve been through, with the Supremes and before, taught you about money?

Wilson: Money does not define who you are, but often one finds that out too late. I was always happy until I found out that my mom, IV Pippins, and my dad, John L. Pippins, were not my mom and dad. I never asked why my name was Mary Wilson and not Pippins. I was a very happy child who always had lots of pretty little cute dresses, and bows in my hair, and I wore white patent leather shoes…. Because I always had everything I could possibly want, even my own bedroom, it never occurred to me that we were possibly poor, or that we were even black.

Money was never an issue, that is until I turn 10, and had to be moved to the Brewster projects to live with my biological mother, Johnnie Mae, and siblings, Catherine and Roosevelt.

Johnnie Mae was a domestic worker who gave up her first child, me, until she could get back on her feet. Now with 3 children, she had to seek help from the government, welfare. Despite it all, I learned to love my new family, and love my new home in the Detroit projects. Money to this day has never defined who I am inside.

Be sure to check back for Part 2.

Money

Are You Tired of Undersaving?

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iStock_000082694597_MediumWe can always save more money, right? It’s nice to think so, but it’s often easier said than done. In reality, saving money takes planning, budgeting, and discipline. If the balance of your savings account isn’t exactly where you want it to be don’t worry, it can just be a temporary situation.

[Related: 4 Ways to Protect Your Nest Egg in Retirement]

If you’re tired of undersaving and want to boost your savings account, you can do so very easily. The hardest part is getting started; here are four ways you can do it.

Skip the coffee break

This is a simple way of saying if you want to save more you need to spend less; there’s no plainer way to put it. Skip the coffee breaks with colleagues, which can save up to $10 a day. Just say no to dinner with friends and save up to $50 each time. If you do that twice a week, you’ll have saved an extra $100. Wasn’t that easy?

Set a lunch budget

Eating out is tempting because it’s easy, convenient, and there’s no clean up; but eating out several times a week can take a serious toll on your budget. If you aren’t crafty in the kitchen, then go simple with sandwiches, soups, salads, and fruits.

Understand Needs vs Wants

Do you spend because you want to or need to? It’s probably because you want something new, but don’t necessarily need it to live. Eliminate spending urges and impulse purchases by taking out $20 cash at the beginning of the week to use for personal spending. When the cash is done, so are your wants. Leaving your debit and credit cards at home will also help you commit to save because they’re not in your wallet.

Set it and forget it

You can’t miss what’s not there. If you want to force yourself to save then set up automatic transfers from your checking account to your savings account. It’s that simple. Then all you do is sit back and watch your savings grow. Once you start to see your savings add up you’ll want to save even more.

Money

‘Blood, Sweat, and Heels’ Reality TV Star, Chantelle Fraser, Talks Money

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(Image: Aly El) (Image: Aly El)

Chantelle Fraser is not only the star of Bravo TV’s hit reality show Blood, Sweat and Heels, but the British-born Jamaican actress is also a successful entrepreneur and founder of Flawless NYC, a promotional company that books entertainment and talent for high-end events and brands.

[Related: Whoopi Goldberg Opens Up About Her Most Important Money Lessons]

Fraser, an avid supporter of pet adoption and the anti-fur movement, also prides herself on being ‘self-sufficient.’

BlackEnterprise.com, spoke to Fraser about the financial lessons that have helped her lay the foundation to pursue her dreams.

BlackEnterprise.com: It’s difficult to maintain financial stability while pursuing entrepreneurial goals and creating a career in the entertainment industry. How have you done this?

Fraser: You can’t fear the lack of money. This will be the biggest saboteur of your success in business. I started Flawless NYC when I was 27 years old from my bedroom. I didn’t have any money, nor did I know where my next rent check was coming from, but I did have a plan of how to get me to entrepreneurial success. Many people don’t know this, but I actually started Flawless NYC with a partner. After a month or two he quit; he let his fear of not having and going broke get the better of him. He got incredibly stressed out about a future that had not even happened yet. I chose to stay in the present, which significantly reduced my feelings of stress and anxiety about money.

We talk a lot with our audience about navigating the pressure to lend money to family and friends when you find success—even if you don’t find financial success. How do you balance that?

I am sure we have all been in the position where we have given someone a loan and have not been repaid or have to ask the other person for it back, leaving feelings of violated trust, and lack of respect, sometimes causing irreparable damage to a relationship. My integrity means everything to me; all you have is your word, if you can’t keep that, then you have nothing. I have found that keeping my commitments with friends and family keeps our “emotional bank account” healthy. Having a high emotional bank balance comes in handy when you are in times of need. The more friends and family trust you, the more likely they are to help you out financially when you are in need. I learned this during my hardest financial year, 2008, during the recession.

What else have you learned that you would say is key to a healthy relationship with money?

What good is money when you don’t know how to treat others, or lack compassion? Being the best version of yourself doesn’t mean having the biggest house and nicest car on the block. Some people tend to focus on the material aspects of wealth and forget to focus on their personal and spiritual growth.

Money

‘Unretirement’ Becomes New Buzz Word for Post-career Baby Boomers

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iStock_000021246021_MediumYou’ve retired. But you’re restless. You realize your finances can’t support your sunset years. You need to add to your nest egg.

[Related: Should You Ever Borrow From Your 401(k)?]

Or maybe you’re just bored with life’s leisurely pace after 40 years on the 9-to-5 speedway.

But you have no desire to resume the daily grind. You want no part of traffic gridlock, long commutes, or crowded subways.

You decide to “unretire.” There are millions of 60- and 70-year-olds like you.

Each day, 10,000 baby boomers retire, according to the Social Security Administration. Over 365 days, that’s almost 4 million people. After a few years on the shelf, many are rejoining the workforce.

Today, as many as 60% of older workers who leave a full-time career move into part-time work, do freelance tasks, or take a temporary job, says Chris Farrell, an economics reporter and author of Unretirement: How Baby Boomers are Changing the Way We Think About Work, Community and the Good Life.

You won’t match your former pay, but that’s not your aim. Where can you find the job you’re looking for? Financial writers Allyn I. Freeman and Robert E. Gorman recommend:

Trade associations. These can be great sources for specific job openings and can provide you with contact information about member companies.

University alumni associations. Many colleges offer online bulletin boards with job openings and networking opportunities for alumni.

Temporary agencies. These are reliable sources for an overview of flex-time jobs and likely wages in your area of expertise.

Websites. AARP.org offers a portal for employment websites. Some others: SeniorJobBank.org, RetirementJobs.com, 2Young2Retire.com, Seniors4Hire.org and ExperienceWorks.org.

You can expect obstacles to landing a job. Age discrimination may be illegal but is still practiced. You may find a new job unsettling. Ask yourself, can you take instruction from a boss 30 years younger than you?

You want to be certain the job is satisfying. If it is, treat it as an experiment. If it doesn’t work out, accept it in stride and move on.

If you find full-time work and can match your pre-retirement income, consider asking Social Security to suspend your retirement benefits. You can boost your post-career income by delaying when you file for benefits.

If you’ve reached full retirement age of 66, but are not yet 70, benefits increase by a certain percentage each year you delay. “You should know, you can withdraw your application to begin receiving benefits just once. … You can’t withdraw your application after a full year of having received retirement benefits,” says Dwight A. Clark, senior retirement financial planner at TIAA.

If you’re under 66, “you will also be required to pay back to Social Security all the benefits you received,” Clark says.

Until now, retirement planning meant building your portfolio, making the right investments.

“The new thinking is to delay filing for Social Security benefits and find meaningful work,” says Chris Farrell. That means putting your savings on “autopilot.”

Money

Don’t Be Taken In By Marketers’ Retirement Pitches

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iStock_000037288208_MediumYou’re almost retired. You want to fortify your nest egg. You’ve been reading up about how financial hucksters and con artists prey on baby boomers.

[Related: Confidence in Retirement Hangs On, But Preparations Still Lag]

As a soon-to-be retiree, you represent an enticing target for companies in the so-called retirement industry, which encompasses investment, insurance, real estate, travel, retail and anti-aging.

They want to sell you products and services that may help their bottom line more than your financial security. They will employ sophisticated marketing and licensing strategies to pry cash from your nest egg. You must keep your guard up.

Some of the companies are providing a valuable service. Some are not.

According to John E. Nelson, co-author of the popular What Color is Your Parachute? for Retirement: Planning Now for the Life You Want, it is essential that baby boomers learn the difference between the products and services they really need and the ones that companies want them to buy.

Nelson, a retirement planning consultant, says some of these products and services are worthwhile. You will need some goods and services the industry markets at some point in your retirement.

But many of the things companies advertise are simply unnecessary for a successful retirement. These companies are involved in “lifestyle marketing.”

He calls their marketing approach “retirement hogwash”—that is, “emotion-laden advertising messages.”

“The retirement industry wants to define your retirement for you,” says Nelson, whose newsletter offers life-stage planning advice. “Instead of choosing a way to live, they want you to buy a lifestyle.

“Instead of reflecting on your values, they want you to value consuming the right investments, the right insurance, the right real estate, the right travel, the right retail goods, and the right anti-aging products.”

The retirement industry will try to persuade you that buying their various products will open the door to a wonderful retirement.

Before you say yes, use Nelson’s “hogwash detector” to evaluate the product or service. Ask questions about:

Pitch. What are the facts and actual features?
Underwriter. Who’s behind the pitch? What’s the marketer’s motive?

Assumptions. What are the underlying messages about you?

Ideal outcome. What’s the most you can realistically expect?

Needs: Why might you really need it? Why might you not need it? What are the alternatives?

Retirement hogwash is not about lying to retirees, Nelson says. It’s really about companies trying to sell you something that’s not a good fit for your values.

“Hogwash is not so much a universal untruth as it is a misalignment with your personal values.”

Money

Why Michael Jordan is the Highest Paid Retired Athlete

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Highest Paid Athlete Michael Jordan

According to Forbes, basketball legend Michael Jordan is the highest paid retired athlete in the world, bucking the trend in a world where, according to Sports Illustrated, 60% of NBA players are broke 5 years into retirement. Forbes says Jordan earned $110 million in 2015, due in part to relationships with Nike, Hanes, Gatorade, and his investment in the basketball team, the Charlotte Hornets.

In addition to being the highest paid retired athlete, Jordan is a member of the billionaires club, with an estimated net worth of $1.14 billion.

BlackEnterprise.com spoke with MM Leverage founder, and leading brand and financial consultant for athletes, Martin Morse about the secrets to Jordan’s success.

BlackEnterprise.com: What is the secret to Michael Jordan’s financial success in retirement? We’ve seen so many star athletes struggle with money after their professional careers are over.

Morse: Michael, in my eyes really benefited from the perfect storm of growing urban pop culture and the global expansion of the NBA to become the billionaire he is today. Back when his agent, David Falk, helped shape the first ‘head to toe’ basketball deal between Jordan and Nike, Nike was second fiddle to the Converse stronghold. Converse dominated the basketball landscape with their shoe on the league’s biggest stars at the time, Magic Johnson and Larry Bird. Falk brought his ‘head to toe’ tennis sponsorship blueprint to the Nike folks and it changed the game for what has now become a multi-billion dollar sports apparel business and the standard in which all sports apparel companies operate when it comes to brand ambassadors. Of course none of this would be the case without the meteoric rise of Michael Jordan and the intangibles he brought to the game of basketball, and also the retail market. Indeed everyone wanted to be like Mike and it reflected in the sales of the Jordan brand.

In addition to name recognition, why do you think the Jordan brand is so successful and Highest Paid Athlete?

In my opinion, the brand has become successful because of several very genesis ingredients: design and amazing marketing campaigns surrounding the greatest player to play the game. Those campaigns were a first and have become legendary. It set the bar for an entire retail industry.

The other business dealings for Jordan are of course great ventures (Hornets, racing teams, movie franchises, etc.), but none come close to the amount of success[ful] brands Jordan has given the icon. I believe the takeaway for us in this business, and one we operate under at The MM Group, is one of always putting our clients in a position to carve equity baskets and always install tail clauses and claw backs. Why shouldn’t a corporation reward and be obligated to reward the personality which enabled market expansion? Jordan not only influenced pop culture, but Falk and he influenced the way we all do business as athlete and corporate advisors.

Money

4 Ways to Protect Your Nest Egg in Retirement

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iStock_000090468297_MediumYou’ve worked for 40 years, socking away money diligently to build up your retirement nest egg. You’re confident that your pension, tax-deferred accounts and personal savings are enough to support a stress-free lifestyle in retirement.

When your peak earning years are history, you want to make sure your sources of income are leak-proof. Here are four ways to plug holes in your nest egg and keep it protected:

1) Evaluate Spending: Record daily spending so you’ll know how much spending is too much for you to handle. Take the advice of Alice Wood, author of Wealth Watchers: A Simple Program to Help You Spend Less and Save More.

After joining Weight Watchers, she realized that the plan’s day-to-day calorie-counting approach was an excellent model for managing personal finances. Wood developed Wealth Watchers, a system to determine the amount that can be spent after fixed costs have been addressed.

2) Evaluate Insurance: Take a look at coverage amounts. “Insurance needs often drop as we age,” says Kerry Hannon, a nationally recognized expert on retirement. “A lot of retirees who carry term life insurance because of kids don’t really need it anymore.” More tips: scale down to one car; increase the deductible.

3) Get Out of Debt: “Debts are a real dream killer,” says Hannon, a member of TIAA’s expert panel on Woman2Woman. “I’m a real fan of financial fitness. When you’re debt-free you have so much more opportunity to be nimble.”

Pay off credit cards and destroy credit cards checks, which can have interest rates annualized at more than 200%, says consumer advocate Curtis Arnold, author of How You Can Profit from Credit Cards.

4) Reconsider Housing Needs: “If you’re not bringing in significant income you’d be wise to free yourself of a mortgage,” says Hannon. Advice: Downsize your living situation as quickly as you can.

Selling frees you from other house-related expenses: property taxes, utility bills, homeowner association fees, and other costs of home ownership.

Deciding to get rid of a home can be tough. “Two factors are involved in selling: One is financial; the other is emotional,” says John Waggoner, an investment news columnist. “Some people would rather die than sell the house they’ve been in for 30 years.

“But if you feel like you can make a lot of money now, one of the joys of real estate is the capital gains home-sale tax break,” Waggoner says.

When you sell your primary residence, he explains, you can make up to $250,000 in profit if you’re a single owner—twice that if you’re married—and not owe any capital gains taxes.

While shoring up your retirement nest egg is important, it’s also critical to manage what you’ve got.

That means proactively managing your investment portfolio, understanding how it produces income, and the risks that are involved.

Major mistakes can quickly deplete money meant to cover the golden years.

Money

Lifestyle Trade-offs That Will Boost Your Savings

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iStock_000071026955_MediumThere are surefire ways to save more if you are willing to make small adjustments to your lifestyle—these trade-offs can and will boost your savings over time—but they require an acknowledgement of your power to choose and a commitment to your life over your lifestyle.

Your interests, opinions, and behaviors are the basis of what makes up your lifestyle. You display your lifestyle through tangible and intangible factors, including what you value, choices you make, your personal preferences, and your outlook toward the future. Your lifestyle is articulated and can affect where you live, what career you choose, and how much money you make. There is also a direct correlation between your lifestyle choices and your spending habits.

The Journal of Artificial Societies and Social Simulation published an article stating that we as individuals often overvalue the impact things we spend on will have on our lives. Our overall happiness doesn’t increase as we purchase more, in fact, it decreases, because our lifestyle expectations continue to rise with our income.

Consider the trade-offs associated with reducing the cost of your current lifestyle. In economics, we call trade-offs opportunity costs. Simply described, an opportunity cost is the unpursued choice between two options. It’s the option you lose out on when you can only make one choice.

The power of choice is not always explicitly acknowledged. Remember you created your current lifestyle so you have the power to mitigate, control, or reduce the cost associated with it. You don’t have to continue supporting a lifestyle that hurts you financially over the long term.

Daily Coffee Fix:  $15 in savings per week

If you must have luxury coffee at $5 per cup, commit to reducing the frequency from five days a week to a max of two times per week. You’ll still have the occasional pleasure of a latte, and the savings of $780 over the course of a year.

Buying Breakfast & Lunch: $50+ in savings per week

The average meal prepared at home has a cost per serving of $.50–$2. Compare that to the cost of purchasing breakfast $5.08, lunch $10, and dinner $12.75 outside and you are easily paying markups of 1,000% or more. Reducing this expense to twice a week will still cost you more than $2,000 annually, so consider going further, only eating out twice a month to increase your savings by more than $1,000 per year.

What are some other small trade-offs you are willing to make to boost your savings? Is it your weekly mani? Your monthly shoe treat? Tell us more in the comments below.  

Money

4 Savings Accounts You Should Definitely Have

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iStock_000005219324_MediumOver the years, the term emergency fund has become a catchall for all things savings-related, but according to Bankrate, you shouldn’t have just one savings account. Having multiple accounts allows you to target your savings for your financial goals and when accounts are earmarked for specific goals, you are far less likely to raid them for miscellaneous reasons. Here are four types of savings accounts you should definitely have in your banking arsenal.

Emergency Fund – 3 months’ worth of expenses or $5,000

The word emergency is such a misnomer. I like to call this the unexpected expense fund. It’s the dental bill you get hit with after your insurance swore they would pay, it’s not necessarily an emergency, but it isn’t a bill you should ignore either. This account should have three months of living expenses in it or $5,000 whichever is greater. Anything greater than that isn’t an emergency or unexpected expense, it’s an event that requires a lifestyle adjustment.

Job Loss Fund – 6 months’ worth of expenses or $20,000

This is the do not touch under any circumstance fund! It’s liquid cash that you hold on to in case you are laid off, fired, or decide you need to quit. You can always increase it to nine or 12 months worth of expenses, but it should never be less than six months’ worth or $20,000 whichever is greater.

Short-Term Goals Fund

Annual vacations, holiday spending, new televisions, refrigerators or home down payments should be allotted for in this account. It’s money that you save for a specific purpose, empty when it’s time to purchase, and then build up again for the next short-term goal. It will see fluctuation and that’s OK; it’s typically money you plan to spend in one month to five years. The amount you save here is set by the costs of things you want to buy. You may even want to have multiple short-term goal accounts so that down payment money isn’t comingled with your annual vacation fund.

Long-Term Goals Fund

This is where you would include your 401(k), IRA, and any other long-term investment accounts. Typically, you don’t need this money for a minimum of 10 years. It’s best to have these accounts set up on automatic contributions so that they continue to grow year after year after year and you should assess their performance and growth annually.

How many savings accounts do you have? Do you think targeting your savings and separating the purpose of each account would help you better commit to your goals?

Money

Don’t Let Inflation “Deflate” Your Retirement Dreams

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iStock_000038137664_MediumSince the Great Recession ended, the country’s annual rate of inflation has held well below its historic average.

Rates of inflation are calculated using the Consumer Price Index, published monthly by the Bureau of Labor Statistics.

[Related: Should You Ever Borrow From Your 401(k)?]

Last year, the CPI ticked up just 0.12%. The average CPI over the 100 years since 1916 is 3.2%.

A rate around 3% seems benign—unless you’re a retiree with a portfolio that leans heavily toward cash and fixed-income investments.

A portfolio of staid bonds, cautious stocks, and safe mutual funds will insulate you from market gyrations. But, it will not protect you from the erosive effects of inflation.

You can’t ignore what inflation will do to a portfolio made up overwhelmingly of conservative investments. You can expect steady income, but you can also expect that the purchasing power of that income will be reduced.

Think of it this way: If you need $40,000 a year today to keep the wolves from the door, you’ll need $60,000, maybe $70,000, in 10 years.

Don’t underestimate the amount you need due to inflation. You can calculate how much inflation will impact your retirement needs using a retirement calculator. There are many.

If you Google the phrase “retirement calculator,” you’ll be deluged.

Most financial services companies have an online calculator to estimate how much to save for retirement.

They will ask you to input: current age; life expectancy; desired retirement age; income to replace at retirement; current gross annual income; expected rate of inflation.

Take “the estimate” to your financial adviser. You need eyes more expert and critical than your own to look at the number.

“You always have to worry about inflation,” says John Waggoner, an investment news columnist. “Even at the historical average of 3% since 1926, you’re going to lose one-third of buying power over 20 years.

“And there’s always the threat that inflation can spiral up as it did in the early ’80s, when it hit 13%.”

You can’t grow your portfolio on conservative investments. It’s that simple. Although money market funds and certificates of deposit are ironclad safe, they are not impervious to the ravages of inflation.

Spice up your portfolio with a few growth stocks. You don’t want to outlive your money.

Mark Bass, a Lubbock, Texas, financial planner, protects his clients from inflation. “I don’t want their bank account to go to zero before their blood pressure.”

Inflation is your constant enemy. Always keep its effect in sight.

BE Money

Whoopi Goldberg Opens Up About Her Most Important Money Lessons

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iStock_000039057016_MediumActress, comedian, and television host Whoopi Goldberg understands that there is a lot more to money than dollars and cents.

Goldberg, who is one of only a handful of entertainers to win an Emmy Award, a Grammy Award, an Oscar, and a Tony Award, as well as being the second black woman in the history of the Academy Awards to win an acting Oscar, for her role in the film Ghost, also understands the power of her brand, and the resources she can generate by putting her brand behind something she believes in.

She is currently channeling her efforts into a new company in the cannabis space, joining forces with award-winning edibles maker Maya Elisabeth to launch Whoopi & Maya, a medical marijuana company that will focus on producing cannabis-infused salves, balms, and edibles designed to relieve menstrual pain and discomfort.

“This is my way of saying, hey, I’m going to stand behind what I’ve created because what I’ve created was good,” Goldberg tells BE. “We made a really good product for a really good cause,” she adds.

In addition to knowing what she can do to generate financial resources, Goldberg shared with BE.com, some of the ‘life lessons’ her experiences with money have taught her about building and preserving wealth.

BE.com: What are some of the most important lessons you’ve learned about money?

Goldberg: Know what your money is doing. There was a time when I didn’t pay attention and my money disappeared. You can’t just assume that a company or financial adviser has your best interests at heart. If you’re not looking at something, then you don’t know what’s going on. It’s also important to understand how things like taxes are impacting your money.

If you make $1 million, that doesn’t mean that you’re taking $1 million home. Then, for me, there’s agents, FICA, MICA, you name it. I had to learn to figure all of that into the equation.

BE.com: It sounds like you’re talking about financial literacy.

Goldberg: Yes. Financial literacy is a big problem: We (black folks), didn’t get to accumulate wealth and are playing catch-up. We’ve got to learn how the stuff works. Why you need a will in order to protect your family. What is interest? How does it affect my taxes? You’ve really got to know what’s going on and be patient with yourself. We’ve all got to be more empathetic with each other when it comes to money.

BE.com: Can you elaborate on what you mean by being more empathetic?

Goldberg: The way the world is now, we can’t build wealth the way our parents did. For example, oil prices have come down, but the airlines didn’t drop ticket prices. People are having a hard time just taking care of their kids, yet black people and poor people will give whatever they have to help someone else, that’s just how we were raised.

We really have to see that everybody is struggling and look at them with compassion, yet find the balance between helping others and keeping our own financial house in order.

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Financial Education Guru, John Hope Bryant, Shares Most Important Money Lessons

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(Image: Cliff Robinson Photography) (Image: Cliff Robinson Photography)

The following was written by Stacey Tisdale:

John Hope Bryant has, without question, enhanced the financial lives of millions by empowering them with knowledge, confidence, and guidance through his financial literacy organization, Operation HOPE.

Operation HOPE, which Bryant created in 1992 in response to the economic devastation he witnessed in the wake of riots in his native Los Angeles, has served more than 2.5 million individuals and raised nearly $2 billion in private capital for its financial literacy work in the U.S., South Africa, the United Arab Emirates, Saudi Arabia, and Morocco. Through Operation HOPE’s Banking On Our Future (BOOF), financial literacy curriculum, 900,000 students, have been exposed to financial education.

As we celebrate Financial Literacy Month in the United States, the financial literacy guru, who will be speaking at BE’s Entrepreneurs Summit in Miami, Florida, May 4–7, shares what he has seen to be the most important things we should know about money and the impact they’ve had on his life.

BlackEnterprise.com: What are the three most important lessons you’ve learned about money?

Bryant: First, it isn’t about money. Money, itself, is not capital. Money is an agent of change, but capital comes from the Latin root word, “capitis” meaning knowledge in the head. People make money their end-all-be-all, their value, their definition, their identity.

Second, there are two ways to make money: make more or spend less. It’s amazing how easily we waste money on little things…

Finally, if you don’t understand money, you’re in slavery. Being part of a capitalist system and not knowing the rules, or how things work, means that you aren’t included.

How did you learn these lessons?

I learned these lessons primarily from my parents. The fact that my mother told me she loved me every day ensured I didn’t have a self-esteem problem. The fact that my dad was a business owner for 54 years gave me a real example of entrepreneurism—so through them I had a sense of both, yes I am, and yes I can. My mother was a great financial planner. She has an 867 credit score! My father, on the other hand, was too prideful to admit that he didn’t understand money and needed help. I understand now that that dynamic was at the root of their divorce and the eventual loss of his business.

If you had one lesson you could convey to people about money, what would it be?

You’re being pimped. If wherever you live is not a 700-credit score community—if there’s a check-cashing store, next to a payday lender, next to a rent-to-own store, next to a title lender, next to a liquor store—know that they’re preying on you, and work to change that. The shackles are no longer on your feet, they’re on your hearts and minds; they’re on your aspirations. Instead of 40 acres and a mule, we need 40 books and a bank account.

Money

5 Simple Options For This Year’s Tax Refund

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iStock_000024208067_MediumAs tax day zeros in on us, you may be wondering what you should do with this year’s tax refund. If you anticipate receiving a refund over the next few weeks and spent last year’s return haphazardly, here are five options that are sure to last longer than any spending spree. For many of you this is the only time during the year that you’ll have access to a lump sum of money, so dividing it up to help you accomplish multiple goals may be a favorable option. We’re even going to solve the ongoing debate of whether to save first or pay down your debts.

Based on the IRS average refund amount of $3,120

5% – Start saving for the holidays. One hundred and fifty-six dollars to start will keep holiday spending from taking you by surprise this December. If you can commit to add the same amount every month for the remainder of the year, you’ll have more than $1,400 in cash for your holiday budget.

10% – Do something nice for yourself. That’s $312 to spend any way you like. Whether you choose to do a little shopping, visit a day spa, or use it as a down payment toward a dream vacation is completely up to you.

15% – Invest it. You’ll have $468 to start. You may consider investing in a hobby that has potential as a side business or take that certificate course you’ve been postponing. No matter which option you choose, pick something in this category that will lead to a return on investment. If you always wanted to open a personal brokerage account, now may just be the right time. First, take some time to learn about investing. Then decide if you will open a brokerage account with a firm like TIAA.

30% – Save it. That’s $936 to start an emergency fund if you don’t have one already, or an extra layer of padding to boost your account if you’ve already been building one. The unemployment rate may be down to 5%, but can you survive for six to nine months on no income or would you need some supplemental cash? Saving for a rainy day should always be a top priority.

40% – Pay down debt. $1,248 is a nice lump sum to put toward paying down a credit card, car loan, or student loan. You may ask why not save this or combine this with the savings to pay down even more debt, but saving cash allows you a buffer if you hit an emergency so you won’t have to rely on debt again, it’s better to apply funds to both categories.

Have you received your refund yet? How will you spend it?

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In God We Trust? Bringing ‘The Force’ into Your Finances

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(Image: iStock.com/ Kevork Djansezian) (Image: iStock.com/ Kevork Djansezian)

I’m just sayin’…There have been times when I have gone through periods and used the Deepak Chopra A to Z wealth exercise described below, and indeed, stuff has happened.

In the book, Creating Affluence:  The A to Z steps to a Richer Life, Chopra lists 26 principles, which he says will make financial and spiritual wealth and abundance part of your life. The spiritual teacher and author, who gained widespread popularity after an interview on The Oprah Winfrey show in the 1990’s, and is followed by trailblazers such as Russell Simmons, says simply reading or listening to the list once a day, allows attitudes and behaviors to undergo a transformation that will spontaneously bring wealth into your life.

Chopra uses the letters of the alphabet to make the principles easy for his audience to follow and remember. ‘D,’ for example, stands for Dharma. Each of us has a Dharma, or ‘purpose’ in life; Chopra says connect to that purpose and the demand will come.  Whatever, your take on spirituality and money, millions of people follow Chopra’s teachings and use him as a guide in their efforts to connect with something bigger than the limitations of their minds.

Watch the principles below, and please share your thoughts and experiences with me @stisdale1.

Money

This Black Entrepreneur Has “Secret” Formula for Wealth Creation

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(Image: Ludi Leito, All Shades of Gray) (Image: Ludi Leito, All Shades of Gray)

Robert L. Wallace, an engineer by training, has a formula that determines wealth creation:

W=M x T x I/ R

If you’re formula-phobic, W stands for wealth, M for material resources, T for technology, I for intelligence, R for resistance. You get W when you multiply the first three variables, then divide by R.

[Related: Should You Ever Borrow From Your 401(k)?]

If you’re a wealthy entrepreneur, you know the formula well.

Wallace is an entrepreneur. He’s the founder and CEO of BITHGroup Technologies, a Baltimore-based company that provides information and technology solutions to corporations and government agencies.

He is also a member of The Presidents’ Roundtable Inc., an organization of 20 African American entrepreneurs in the Baltimore-Washington, D.C. area.

Wallace presented his formula on March 31 at the Maryland-D.C. Economic Summit, an event organized by The Presidents’ Roundtable.

Not every African American can be an entrepreneur. Building a business could mean years of stress with no guarantee of success. But if you prosper, you will join the ranks of the wealthy.

Wealth creation is no mystery, Wallace says. It comes from personal achievement. The achievement of many individuals drives the economic power of communities. To build economic power in their communities, Wallace implores would-be black entrepreneurs to heed the formula.

You must harness material resources, adopt technology, apply your intelligence and confront resistance.

“Resistance is both external and internal,” he says. “External resistance is marketplace competition.”

Internal resistance is the siren of self-doubt that can keep African Americans from closing the yawning wealth gap between blacks and whites.

Wallace knows something about the wealth gap. He served on the advisory board of a 2014 study by Credit Suisse on the wealth patterns among the top 5% of African Americans.

While wealth creation is important, Wallace learned that the composition of wealth also matters.

The study shows that African Americans invest a greater proportion of their wealth in lower-volatility assets relative to a white comparison group, including insurance, savings bonds and CDs. For example:

* CDs and saving bonds represent 12% for the top 5% of African Americans and only 4% for the white comparable group.

  • Cash value of life insurance at 6% is much higher than the 2% for the white comparison group.
  • Portfolios are nearly one-half less weighted toward stocks, bonds, and mutual funds.
  •   Primary residence represents 31% of total assets relative to 22% for the white comparable group.
  • Assets invested in real estate outside the primary home (such as multi-family homes, rental properties, time shares and vacation homes) at 41% are nearly twice the 22% for the white group.
  • Almost 69% of the African Americans at the 95th percentile of net worth have a college degree, compared with 64% for the study’s white comparison group.

The study suggests the conservative investment approach reflects, in part, the historically limited access to capital.

Whatever the reasons, Wallace has advice for wealthy African-Americans: Your portfolio allocations need to change. This may be easier said then done. The question is, where should the money come from?

The short answer: entrepreneurship. And that means applying the formula.

Money

401(k) Plans Fail Hispanic and African American workers

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iStock_000054444120_MediumA recent survey by the Economic Policy Institute reveals that 401(k) defined contribution retirement plans have failed African American and Hispanic workers.

In the days of traditional pensions, black workers’ participation in retirement plans used to be similar to that of white workers, according to the study released March 3. But black workers began lagging behind white workers in the 401(k) era. Hispanic workers fell even further behind.

[Related: You’re Contributing To Your 401(K), Now What?]

“Much of the 401(k) era coincided with rising stock and housing prices that propped up family wealth measures even as the savings rate declined,” writes Monique Morrissey in the study. “This house of cards collapsed in 2000–2001 and again in 2007–2009.”

The findings, part of a broader study on retirement inequality in 2013, show that most black and Hispanic families have no retirement account saving:

  •  Only 41% of black families and 26% of Hispanic families had retirement account savings, compared with 65% of white non-Hispanic families.
  • Even among families nearing retirement (age 56–61), the majority of black and Hispanic families have no retirement account savings.
  • Almost two-thirds (65%) of white non-Hispanic families had retirement savings in 2013, a share only slightly below the 2007 peak (67%).

The study showed that black and Hispanic gaps in retirement account balances are even larger than participation gaps—and growing.

  • The median white non-Hispanic family with retirement savings had over three times as much saved in a retirement account ($73,000) as the median black or Hispanic family with savings ($22,000 in both cases).

Clearly, the shift from defined benefit to defined contribution plans has exacerbated racial and ethnic disparities.

For many blacks and Hispanics, the dream of a safe, secure retirement looks unrealistic. Bluntly speaking, if you’re a working-class black or Hispanic, you may be unable to fund your retirement.

If you’re unemployed, participating in a 401(k) plan is not an option. Retirement inequality has grown because most 401(k) participants are required to contribute to the plans in order to participate.

You may be willing but unable to participate in your employer’s 401(k) plan. You may lack the marginal income to make contributions; all you earn is earmarked for one expense or another.

Thus, higher-income workers (with their greater capacity to make contributions) are more likely to participate in defined-contribution plans.

The Economic Policy Institute survey presents a discouraging picture for blacks and Hispanics. But never surrender to despair. The survey reflects yesterday’s reality – not tomorrow’s.

It’s never too late to make contributions to your 401(k) plan.
You might be leery to commit to a 401(k), worrying about tying the money up,” says Kerry Hannon, a nationally recognized expert on retirement.

You’ve got to start someplace. And there is no ideal time,” says Hannon, a member of TIAA’s expert panel on Woman2Woman.“Down the road, these savings can be key to having financial security in your 60s, 70s and beyond.”

Money

A Must-Have Financial Priorities Checklist for Married Couples

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iStock_000053133474_MediumFrom deciding when to co-mingle funds to setting your financial boundaries, your financial life will change significantly upon tying the knot.

The goal is to handle your finances as a couple and not leave all the responsibility on one person’s plate. After the honeymoon’s over it’s time to set up your first married money meeting and establish your financial priorities. Even if you have been married for quite some time and you’ve never had this conversation with your spouse, it’s never too late to schedule it.

Here is a list of the top items you want to tackle in those meetings, whether you’ve been married 6 months or 10 years.

[Related: Don’t Delay Your Retirement Savings Another Minute]

The exciting part about being a couple is that now you have the option to tackle financial goals with funds from 2 incomes instead of one— which will help eliminate debts and build nest eggs faster! Start with a financial priorities kick off meeting, to set the tone, expectations, and goals for the year.

This can be held any month you choose. It’s the meeting where you plan, which will impact your monthly money meetings for the rest of the year.

Keep the full list handy during your monthly meetings as well, so you can revisit it further down the road for updates or adjustments.

Financial Priorities Kick-Off Meeting Checklist

  •    Discuss all your goals and dreams for the next 5 years.
  •    Pick which goals to tackle over the next 6 to 12 months.
  •   Check your credit reports and score.
  •   Create your annual and monthly budgets.
  •   Review your insurance coverage (Auto, health, life).
  •   Make a list of all your debts to be paid.
  •   Create an actionable plan to tackle debts and savings goals.

In your actionable plan, you will want to assign roles based on you and your strengths, who will be responsible for opening the bills and who will set the monthly meeting reminder?

Set the meetings as an appointment on both of your calendars. If one of you is a spender and the other is a saver, remember to leave wiggle room in your budget that meets in the middle. Don’t expect the spender to suddenly stop spending. Allot a line item in your budget for spending that still allows your goals to be met, without letting the spender feel deprived.

One of the best parts of having your collective goals written down along with your action plan is that it will assist both of you in holding each other accountable to what was agreed upon. After the kick-off reconvene at least once a month to pay bills, assess spending, and check in on goals.

Monthly Financial Check In Meeting

  •  Review or adjust your monthly budget.
  •  Allocate funds to savings or debt payoff goals.
  •  Pay other household bills.
  •  Allot petty cash for spending.
  •  Celebrate another month of being on the right financial track!

Accountability is the cornerstone that is usually missing from couples financial houses, which is why they fold. If no one is willing to take responsibility for what was agreed to or how much was agreed to be spent, financial goals cannot be met.