An Education In Investing - Black Enterprise

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Black Enterprise Magazine July/August 2018 Issue

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Linda R. Paul’s situation mirrors many African Americans who graduate from college strapped with student loan payments and other debts. The 24-year-old financial analyst has about $15,000 in student loans, $1,500 in credit card balances, and $2,000 left on an auto loan. The good news is that she’s managing everything on a $44,000 salary, which is more than a lot of college graduates her age have to work with.

One of Paul’s biggest worries is the used 1995 Ford Aspire she purchased during her sophomore year in college. She has credit card debt primarily because of her charging bills from constantly repairing the car (which she says needs even more repairs).
When she bought the car, she went to a Budget dealer. Looking back, Paul says she should have gone to a Ford or Honda dealership, instead. Her monthly car payment is $228 a month, but she usually pays $250.

In terms of student loans, Paul was fortunate to get scholarship money for her first two years of college, which helped her borrow less. Most of that money covered nearly $8,000 in tuition and expenses for a semester overseas (four months in the Netherlands) and two summers. After graduating from Indiana University in May 2000, she relocated to Arlington, Texas, to work in the corporate finance department of Allegiance, a healthcare company headquartered in Waukegan, Illinois.

Dedicated to improving her fortunes, Paul recently took the exam to become a certified public accountant. The prep course cost her $1,800 and took nearly four months to complete. But it will be well worth it since passing the exam could mean a bump in her salary from $44,000 to around $54,000. Paul also hopes to pursue an M.B.A. in another two years. To help offset the cost of higher learning, she intends to apply for, and hopefully secure, funds from the Consortium for Graduate Study in Management. The Consortium is an alliance of 14 business schools in partnership with corporate America that recruits minority college graduates to compete for merit-based fellowships.

For Paul, it is simply a matter of gaining control of her finances and contributing more to her retirement savings. BLACK ENTERPRISE had Paul confer with Colin Cumberbatch, a Houston-based financial consultant with SalomonSmithBarney. “Relatively speaking, she is not in bad shape,” he says. She adheres to a budget and spends on basic necessities; her only extravagance is the $50 to $100 a month she spends on CDs and books. Cumberbatch says Paul should try buying such items on the Internet. For instance, she can buy used books at, and used or discounted CDs at His other recommendations are as follows:

Use the $2,000 Financial Fitness Contest winnings to pay off the $1,500 credit card balance. Also, contact Citibank about getting a lower interest rate on her credit card, around 10% to 12% vs. 19%. If they refuse, she should close out that account and apply for a credit card from her credit union which offers a better rate, advises

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