It's All Coming Together!

My last semester in GSU's MBA program is underway and has the makings of being the best one yet--and no, not because it's the last one (although that's just icing on the cake). In two of my courses, I'm given an opportunity to conduct research on financial planning topics of interest to me. Without hesitation, I knew exactly where I wanted to focus my efforts.

The first topical idea came to me after an interview I had with a noted financial planning firm in Atlanta. They were impressed with me and invited me to take the next step in the process, which was to determine my prospective target market. Obviously, my first instinct was to list my family and friends and extend the circle from there. As I started to jot down their names, I realized that most of my friends are successful, 30-something, mid-level professionals with average wealth for this stage in their lives. However, I recalled several classroom discussions about how our "typical" financial planning clients would be High Net Worth (HNW) individuals and that we shouldn't focus our efforts on any other demographic. This didn't sit well with me because the rising middle class works hard for their money, needs guidance, and deserves the same opportunities for financial stability and freedom as the wealthy. So, I ask the following question, "is financial planning only for the wealthy or are there other people interested enough to seek out and obtain guidance from a financial professional"?

Focused on that question, I created a 100% anonymous survey where respondents can express their interest or disinterest in financial planning services. If you'd like to take my Financial Planning Interest Survey 2010, please follow this link Click here to take survey

The second topical idea, was a no-brainer and stemmed from the greatest global, financial crisis that I have experienced in my lifetime. In an environment marked by government bailouts, low economic activity, tighter credit markets, and rising unemployment, many wonder when America, and the global economy, will recover. During this time, Americans’ net worth has been decimated as a result of stock market and housing price declines. It is estimated that Americans lost $14 trillion in net worth from 2Q2007 through 1Q2009.

During 2009, investors held their breath as the Dow reached 6,626—a level not seen in the past 12 years. They were panicking and started reaching out to their advisors for guidance. However, the information received did not quell many of their fears. A study conducted by The Sales Quality Research Group noted that client dissatisfaction with their financial advisors had increased. Clients felt that their advisor misguided them or did not make sufficient preparations to shelter their wealth from the downturn. As a result, many investors lost trust in their advisors and concluded they no longer needed their services. Trust is the critical foundation of any client-planner relationship. Now that the “circle of trust” has been broken, can it be rebuilt?

For this project, I'm searching for financial advisors from across the country to share their experiences and knowledge. If you or someone you know would be interested in speaking with me, please let me know!

A Lucky Bet?

This afternoon, I entered my local gas station to purchase gas. While waiting in line for the patron ahead of me to finish, I couldn’t figure out why it was taking her so long to complete her transaction. As I listened closer, I noticed she was purchasing several lottery tickets, which totaled about $11. She walked out the door happy and filled with optimism that today could be her “lucky” day. After she left, I began to question…how many times this week or even this month had she purchased lottery tickets. Or, for that matter, how much do Americans spend on playing the lottery each year?


In 2008, Americans spent roughly $60 BILLION on lottery tickets with the average household spending approximately $525 a year. Since the odds of winning are stacked against you, why play? I know most do it for enjoyment, but I ask you to take a critical look at this spending habit—yes, I consider it a habit.

Consider the following example:

If you saved $44 a month ($525 annual lottery expenditure/12 months) and invested it in an asset that produced a 5% annual, average rate of return you would have $18,085 in 20 years! I don’t know about you, but that sounds like a safer gamble.


Even more disturbing were the demographics of lottery ticket purchasers. Hispanics, Asians, and African Americans spent more on lotteries as compared to Caucasians. Also, those with a reported household income below $13,000 spent 9% of their money on lotteries as compared to only 0.3% of those with household income of $130,000. What do the rich know that they aren’t telling you? GAMBLING DOESN’T PAY! They know that their financial interests would be better served by investing the money in a manner that actually provides a return (surprise, surprise).


What happens to the money that nobody wins? Last year, roughly $18 BILLION of YOUR money went back to the government to fund scholarships, education funds, senior programs, and more. As yourself the following question—Did you intend to pay the government before paying yourself and your family? If so, I applaud you for being so civic minded and putting the needs of strangers ahead of yours. Now, please don’t mistake my sarcasm for anti-philanthropy talk, but some of us need to remember the old adage “PAY YOURSELF FIRST”.


We have to start thinking like the rich in order to improve our financial future. If you don’t have enough education about personal finance—seek out someone who is knowledgeable, grab a book from your local public library, or do some internet research. The information is at your fingertips.


Most importantly, keep in mind that there is no magic potion, shot in the arm, or “get rich quick pill”. Building a wealthy future takes time. So, the next time you head out to pick up some lottery tickets, please ask yourself if there is a better use for your money. If so, don’t buy it. But, I will bet you 9 times out of 10 you can always find one. Now those are odds you can take to the bank!


Reference: “Q&A with The Lottery Wars author Matthew Sweeney”. Brad Tuttle. 61909. http://money.blogs.time.com/2009/06/16/qa-with-the-lottery-wars-author-matthew-sweeney/#ixzz0a4uzo1JI

National Wealth Tour 2009 Notes

For those of you who know me, you know that I am a huge advocate of increasing financial literacy so that we may all become more financially empowered. I’ve decided to conduct a small research study to ascertain the depth of information given at these seminars, whether or not I feel it’s appropriate for the audience, and whether or not the information is solid and can be implemented by those listening.

Ephren W. Taylor II is the youngest African-American CEO of any publicly traded company ever City Capital Corporation (stock symbol:CTCC). Described as “walking history” by popular radio show host Tom Joyner, Taylor started his first business venture at age 12, when he began making video games. By age 17, he built a multi-million dollar technology company; GoFerretGo.com. His career highlights include the following:
• Made first million by 16
• Youngest Black CEO of a Publicly Traded Company
• Oversees over 250 Million in Assets
• Starting Investment Clubs at schools across the nation
• Developing national business plan competition for university students
• Started business ventures at the age of 12
• Works with superstar entertainers such as Snoop Dogg and Fat Joe
• Diverse client list ranges from Stock Market Day Traders to Hip Hop Icons

This year, he created his Wealth Tour Live 2009 in which he seeks to help everyone “rebuild America’s promise by making socially conscious investments”. In Atlanta, Ephren made several appearances promoting his tour on local radio and television. He sold the audience on his success and how he would impart strategies to help the everyday person “unlock the doors to financial freedom”. However, I have to say that this did not occur at the level I was hoping for and was a little disappointed. Ignoring my professional opinion, I will leave you with some of the advice given during the presentation.

The first speaker, Delatorro McNeal II, an author and friend of Ephran’s, dropped the following jewels on why most people can’t change their current economic situation:

• “Today’s problems can’t be solved with yesterday’s thinking”—Albert Einstein
• “Build your dreams or else someone else will hire you to build theirs.”
• We are made in God’s image and he gave us the power to GO, be productive, and successful.
• Too many of us are losing our dreams due to NSF
o NSFaith
o NSFocus
o NSFollow-through

• Don’t doubt in darkness what God has promised you in the light”

Ephram’s Presentation Notes

Wealth—Is a measure of one’s ability to generate income, without direct involvement.

How Wealth Doesn’t Work
• Putting money under your mattress (doing this is a result of having a poverty mindset).
• Bank CD’s+ Predatory Savings Plans (interest rate too low)
• Annuities (cash flow is too low and only makes money for the seller)
• Reverse Mortgages (hefty fees and not good for seniors)
• Common Mutual Funds (returns are too low)
• Low Yield Bonds (returns are too low)
• Any investments in which you receive less than a 7% rate of return, because most of your return is consumed through higher inflation; thereby resulting in a minimal return to you.

Economic Survival 101
• Expenses—Control IT
• Debt—Re-Allocate IT
• Credit—Let’s Rehab IT
• College—Spend for IT
• Cash—Let’s Engage IT

Recession Wealth 101
• Real Estate—Tangible Investment
• Royalties—perpetual Income
o Write a book
o Buy and lease out a house
o Licensing rights
• Energy—Fuel for your portfolio (consider buying a gas station with a group of people)
• Agriculture—Cash cows, literally, consider buying a cow
• Acquisitions—Ownership beats jobership (not really a word..I know)

Retirement Checkup
• Average pension is underfunded
• Traditional Retirement
o Included your 401K, pension, and Social Security.
o However, this strategy has put some in a financial prison and forced them to work during retirement.

Retire Now, Not Later
You Need:
• Self-directed retirement—using your IRA/cash to invest in higher return producing assets.
• Acquire wealth producing assets
o Small business (Subway food chain or whatever your dreams are)
• High yield debentures (can be risky)
• Royalties—book, licensing, etc. (Hard for most people to get a book published)
• Energy—invest in what people struggle with the most i.e., gas (get a gas station or buy an apartment building)

My overall thoughts were that while the seminar was inspiring and challenged us to do better with our money, the investment strategies presented are very risky for the novice investor and should not be entered in to without thorough due diligence and professional advice. Basically, he shunned traditional savings vehicles, which may be good for a novice investor (as they are more liquid) and may be needed as a part of one’s entire portfolio. In my opinion, he’s asking people (in a down economy) to make risky investments. We all know that there is no reward without risk, but not everyone has the same level of risk tolerance or assets to even invest in such an option. Also, he didn’t tell you how to flip real estate or land a book deal, like he has, which is another aspect of the seminar that I felt was not well delivered. You can’t get people excited to see how life could be for them without giving them the tools to build a bridge to get there.


That’s just my two cents. Let me know what you think about the seminars.

The Wealth Tour Live 2009 will be in Baltimore, MD from November 15-18.

Please visit http://www.wealthtourlive.com/index.php for further information.

Boosting your Credit Score

Your credit score is your LIFE as it can give a current or prospective lender insight on your character (or your propensity to repay the debt). What does your credit score say about you? Have you ordered your credit report this year? Every American is entitled to one FREE credit report a year. Visit annualcreditreport.com to get a copy of your report from each of the three credit bureaus: Equifax, Experian, and TransUnion. To obtain your credit score (also known as your FICO score); you will have to pay a fee. If you visit myFICO.com they will give you the Equifax score for free.

So, you’ve obtained your credit report and scores, but didn't get that 700 you were shooting for…it’s ok…pick your chin up and follow these tips to improve your score:

1. Check your Report for Errors—Go over your credit report with a fine-toothed comb looking for errors that could hurt your score. You are looking for the following:

• Late payments, charge-offs, collections and other items that aren’t yours.
• Credit limits that are lower than they should be.
• Items over 7 years old, which should have fallen off the report.

If you find one, contact the creditor and the agency reporting the discrepancy to dispute the item. This may be a painstaking process taking over 30 days to rectify, but it’s in your best interest.


2. Pay Your Credit Card Bills on Time—This is critical! If you can, pay off the balance in full each month. If not, strive to make the minimum payment. Paying your bills late lowers your credit score and may result in a higher interest rate.

With our busy lives, it’s easy to miss the payment date, but there are lots of tools to help you remember. Set a reminder in your cell phone, use the calendar in your email account, or use the automatic bill pay feature from your creditor or bank to set a regular payment date in advance of the due date. These options only take a few minutes to set up, but can save you a lot of frustration later.

Also, if you’ve been a good customer, but just happened to miss a payment talk with your lender, explain the situation, and ask them to waive the late fee (most likely they will). A word of caution: don’t try to do this more than once within a 12 month period, because they won’t buy it.


3. Pay off Collections or Judgments First—While paying off a collection account or judgment won’t be removed from your credit report for seven years, paying off the item will boost your score.


4. Improve your Outstanding Balance to Total Available Credit Ratio—A portion of your credit score is determined by how much credit you have already used compared to your available credit line. When you are close to the max it signals, to creditors, that you may be having financial difficulty. Try to keep this ratio around 30%.

Example: If you have a credit card with a $5,000 credit line, try to keep the outstanding balance below $1,500.


5. Don’t Close your Credit Accounts—Part of your credit score is based on how long you’ve had the account. Closing the account removes this history, which may lower your score. It’s better to keep long-standing accounts open with a zero balance.


6. Don’t Shop Around for Credit—We’ve all been tempted to do this...we want to save an extra 10% by opening a new charge card at the local department store. Well my friends please resist the urge. Every time an organization requests your credit report, an inquiry notation is made in your file, which dings your credit score. Too many inquiries signal that you are looking for new credit, which may lower your score.

7. Pay off Debt, Don’t Reshuffle it—Even though you’ve just received an offer to consolidate higher balances on one card to another, this may not help your score. One of the factors affecting your score is your outstanding balance/ available credit line ratio (discussed in Tip #4). Moving the debt from one card, will lower the ratio on that card only, but will increase the ratio on the other one; thereby leaving you with the same result (nothing gained). Reshuffling balances may work to lower your interest rate, but you should then focus your efforts on paying off that account.


8. Get at Least One Credit Card—For some, our parents told us that credit is evil and we need to stay away from it, but this simply isn’t true. Not having an established credit history is just as damaging as poorly managing your credit. Plus, how can you get a credit score if you don’t have credit? It’s best to open at least one card. Fill up your tank or buy groceries, but make sure you can pay the bill off in full when it arrives. This will allow you to establish a good credit history and credit score.



These tips will help anyone improve a credit score less than 700. If you’ve made it past the 700 mark, CONGRATS!! You can still implement some of these measures, but may not see the same improvement as others.

Remember, take it slow. Fix what you can, when you can. Improving your credit score is essential to obtaining the lowest interest rates on mortgages, automobiles, and credit cards, which can save you thousands of dollars over the years.

I hope you found these tips helpful. If you have any specific questions, unique to your situation, please send me a private message on LinkedIn or Facebook.

My Call to Action

I studied Finance at a university known for producing Wall Street investment bankers. After graduating from college and spending seven years in commercial lending, underwriting multi-million dollar deals, many have asked what prompted my career change to personal financial planning.

It started with some troubling statistics, some of which haven’t changed much over the years:

• African American investors earning over $55,000, per year, have roughly $48,000 in savings compared to $100,000 for Whites. This means that Blacks are saving roughly 52% less than their counterparts (as noted in the 2006 Ariel-Schwab Black Investor Survey).

• The median net worth for African American and Hispanic families is between “$20,600 and $18,600, respectively as compared to $140,700 for Whites. At this rate, it would take 634 years for us to achieve wealth equality”, as noted by Dedrick Muhammad in his 2008 article “The economy discriminates against blacks, Latinos”.

• In the wake of the subprime crisis, minorities experienced the greatest decrease in home-value wealth. African Americans lost $71-$92 billion and Hispanics lost $75-98 billion, according to the Center for Responsible Lending. The United for a Fair Economy non-profit organization described this decline as the “greatest loss of wealth for people of color in modern U.S. history”.

These statistics were alarming and called me to action. In our communities, we have strong family ties and none of us want to see our parents (or ourselves) retire in poverty. However, this is the risk we face if we don’t step up our level of savings and investing. This not only affects our generation, but could preclude us from establishing generational wealth.

Despite the lower rate of savings, many minorities report they are willing to make the commitment to improve their situations, but need more guidance and education to help them reach their goals. This is where I come in. I have made the commitment to focus my efforts on increasing wealth among minorities through education and financial consulting.

This blog will serve to introduce you to me and my beliefs about the color of money. The goal is that this blog will provide a place where minorities can open up and start to discuss our feelings about money, ways to increase our wealth, and some of the issues that impede us from reaching our personal financial goals. Lastly, I will be sharing my tips on how to save money, many of which have saved me and my family members thousands of dollars over the years.