Over the weekend, the Los Angeles Housewives of Finance, a subsidiary of the Houston Housewives of Finance, offered a free L.A. Clippers Pre-Game Finance 101 Workshop held at the Staples Center in Los Angeles, California. The workshop provided tips to fans on how to become financially literate. Here were some key takeaways:
The Rule of 72
A formula which teaches you how to calculate compound interest. It’s a shortcut to estimate the number of years required to double your money at a given annual rate of return. By dividing 72 by the annual rate of return, you can get a rough estimate of how many years it will take for the initial investment to duplicate itself.
Interest can work for you or against you. Not receiving enough interest could mean a lifetime before your money doubles. Paying too much interest could mean a lifetime of paying someone you owe.
Building The Proper Financial Foundation
This includes addressing financial protection, investing, debt management and the creation of emergency funds.
The Formula to Build Wealth
Money, time, proper rate of return, inflation and taxes all affect our ability to accumulate wealth.
Paying Yourself First
You should pay yourself at least the first hour of your earnings daily. Paying every one else is a habit. Paying yourself and putting the money in a place where you can earn enough interest to double your money is great financial behavior.
It’s the 70/30 Rule. Seventy percent goes toward your responsibilities and liabilities and 30% to you. Over time, as you decrease your liabilities you can pay yourself more. Americans need to decrease their spending and increase their savings.
The Four Cornerstones of A Strong Financial Future
This includes growth, safety, tax advantages, and protection. Where are you putting your money? Will it grow to meet your goals? Is it safe from losses? Are you receiving tax advantages and do you have the proper protection for you and your assets?
“Statistically, Americans are struggling with understanding basic financial concepts, managing their money, and savings and they don’t want to talk about it,” co-founder, LaShonda Johnson, CFEd, told Black Enterprise. “The Houston Housewives of Finance and its chapters are focused on bringing financial education to the consumer and the community in fun and innovative ways.”
To learn more about the Los Angeles Housewives Of Finance and their parent company the Houston Housewives Of Finance, click here.