Financial Tips Presented At The National Black Book Festival

At the beginning of June, I attended the National Black Book Festival in Houston, TX.  While there, I facilitated a seminar on the Rags to Riches Financial Model.  The presentation highlighted the essential components needed to lay a foundation for financial success.  Included below are some of the helpful tips that were shared with seminar participants:

  • Money matters are matters of the heart.  If you have a personal mission for your life, it becomes easier to be disciplined in your finances.  In order to succeed financially, you must have a mission for your money
  • To increase the amount of surplus (income-expenses) you have on a monthly basis, consider the following:
    • Combine your insurance policies in order to receive the multiple policy discount
    • Interest rates are at historic lows.  Explore opportunities to refinance your home and / or vehicle.  If you are struggling to pay your mortgage, consider investigating several of the governmental programs that have been established to help homeowners stay in their homes.  My post, Don’t Walk Away From Your Investment, outlines a few of these programs
    • If you have a cell phone, consider eliminating your home phone or opt for basic service
    • Measure your financial health based on your net worth and not your annual salary.  Your net worth is the difference between your assets (what you own) and your liabilities (what you owe.)  You can evaluate your net worth by using the following formula:

Net Worth = Age X Pre-Tax Income (Gross) / 10

  • You can’t fix what you’re not aware of.  That being said, you should obtain your credit report from the three major credit bureaus on an annual basis by visiting  This is a free service
  • Know your credit score.  For tips on improving your credit score, please review my post, Three Ways to Increase Your Credit Score
    • A low credit score will increase your liabilities and expenses and decrease your surplus and net worth
  • Set sound financial goals.  The following four steps are key ingredients to goal setting:
    • Be Precise – Include dates, times, and amounts so you can measure achievement
    • Be Realistic – It’s important to set goals you can achieve
    • Set Priorities – We often have several goals; give each a priority
    • Write Down Your Goals – Documenting your goals activates them and increases your chances of success

I hope you find the tips in this post helpful.  Establishing a solid financial future requires a plan, time, and money, but it’s never too late to get started.  To review the seminar presentation in its entirety, please click here:  NBBF Rags to Riches Seminar Presentation

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Posted by on June 19, 2012 in personal finance, wealth


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Three Ways to Increase Your Credit Score

Credit is a significant factor in building wealth.  The truth of the matter is people without credit or with poor credit pay more for basic services (e.g., home mortgages, auto loans and insurance.)  Additionally, it’s important to know that no credit is the equivalent of poor credit.  That being said, whether you use it or not, if you want to build wealth, you need credit.  To ensure we’re on the same page, I’d like to introduce three key terms:  credit, credit reports, and credit scores.

Credit is the ability to buy now with a promise to pay later.  According to the Federal Trade Commission (FTC), if you’ve ever applied for a loan, credit card, insurance, or job, you have a credit report.  Your credit report is similar to a report card; it conveys a story to creditors.  It shows whether you’ve been a conscientious consumer, if you honor your credit agreements, and whether or not you’re carrying too much debt.  In today’s economy, credit is more important now than ever before.  Not only will it prevent you from being able to purchase or rent the home you desire, it can also prevent you from obtaining the job you want.  If you’ve never reviewed your credit report, there’s no time like the present.  Each year, consumers qualify for a free credit report from the three major credit bureaus.  To request your free credit reports, please visit .

If you have a credit report, you have a credit score.  In an effort to ensure objectivity, many creditors use credit scores to assess an applicant’s credit worthiness.  A credit score is a numeric value that ranks an individual according to their credit history at a given point in time.  Credit scores typically range from 400 to 850 – the higher, the better.  Although obtaining your credit score from the three credit bureaus is not free, it’s worth the investment.  You can obtain your credit score from Experian, one of the three major credit bureaus, by visiting .  Because the information in your credit report may vary, you should obtain your credit score from all three major credit bureaus.

If you’re credit challenged, the following steps will help you improve your credit score:

  1.  Pay Your Bills on Time.  Creditors do not report your account as late to the credit bureaus until your account is 31 days past due.  Because we now have the ability to pay our bills online, many creditors have eliminated the grace period for late fees.  For example, if your credit card bill is due on June 1, most creditors will assess a late fee if your payment does not post to your account by that day.  Although you may incur a late fee, your account will not be reported as late to the credit bureau until it’s 31 days past due.
  2. Keep credit card balances below 50% of your approved credit limit.  Your credit score factors in how much credit you use.  In essence, just because you have it doesn’t mean you have to use it.  If you can’t pay off your balance at the end of the month, keep your balances low.
  3. Pay outstanding judgments.  If you have debts that are not in good standing, it’s important to make arrangements and pay them.  As you develop a plan to pay outstanding debts, you should focus on the most recently reported first.  You should also take an opportunity to request settlements.  Most creditors will accept settlements on bad debts.  As you work with a creditor on a potential settlement, try to settle the account for 50-60% of the outstanding balance, and make sure you obtain the terms of the settlement agreement in writing and honor them.

Restoring credit takes time, but it’s worth it.  Proverbs 22:1 states, “A good name is more desirable than great riches; to be esteemed is better than silver and gold.”  If you desire to build wealth for future generations, it begins with striving to maintain your credit worthiness.  For more information on how to restore your credit, please consider the book, Rags to Riches.

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Posted by on May 30, 2012 in personal finance, wealth


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The Best Time to Act is Now

Do you have some decisions in your life that you keep putting off?  We often delay making decisions on the very things that need our attention the most.  What we fail to realize is not making a decision is making a decision, and most times, our delay leads to more consequences.  Recently, I was watching a sermon by Bishop T.D. Jakes, and during his sermon he said, “Procrastination will never produce purpose.”  Regardless of your religious affiliation, I’m sure you’ll agree that most of us are striving to either identify our purpose or live it out.  And, most of us discover our purpose through day to day experiences and failures.

Unfortunately, as we experience life we can begin to doubt our ability to make sound decisions.  As fear sets in, we become afraid to take risks and we delay acting on those things that will move us one step closer to living out our purpose.  So, are there decisions that require your attention?  If so, the best time to act is now.  If you are struggling with procrastination, the following steps can help you move forward:

  1. Define the root cause for your delay.  Are you afraid to ‘move’ because of fear of failure?  In the book, An Enemy Called Average, the author states, “Even a turtle has to stick its head out to get ahead.”  He goes on to say, “Security and opportunity are total strangers.  If an undertaking does not include faith, it is not worthy of being called God’s direction.”  Fear is a strong emotion that in most instances does not depict reality.  In essence, the scenario we play out in our head is often far worse than reality.  Identify the root, acknowledge it, and act.
  2. Tell someone you respect about your plans.  Talking about your plan gives life to it.  I’m sure we’ve all met a ‘talker’- someone who talks a great game but does not follow through.  Perhaps you’ve been that person.  One way to ensure that you make the tough decisions is by discussing your plans with individuals you hold in high regard.  In doing so, you create a level of accountability that doesn’t exist when you’re the only one who knows your intentions.  Another benefit to discussing your plans is you may gain support or counsel that you would not have had if you had chosen not to share.
  3. Act.  We’re all familiar with Nike’s tag line, “Just Do It.”  Sometimes in life, you have to just do it.  There will always be reasons to delay, but successful people don’t spend time creating excuses.  The reality is if you make a habit of delaying decisions because of fear, you will not rise above it.  In a way, emotions are like muscles – the more you exercise it, the easier it becomes.  If you begin to move in spite of fear, over time it will become much easier to make the tough decisions.

I am not a stranger to procrastination.  During high school, my friends and I created a club called “Procrastinators Anonymous.”  There were four of us and we all struggled with waiting to the last minute to complete tasks.  At my graduation party, we had a cake to honor graduating from the club;  I wish it was that easy to leave the habit of procrastination behind.  I still struggle at times, but as I’ve matured, I’ve learned to perform the steps listed above.  You too can move beyond procrastination.  I hope you find this Post helpful, and I’d love to hear from you.

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Posted by on May 20, 2012 in Entrepreneurship, wealth


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Be Vulnerable And Deal With Shame

Are you aspiring to run a marathon or try your hand at writing a novel?  Perhaps you want to start your own business or go back to school, but you keep saying it’s not the right time.  I was looking at the news this morning and they were discussing the anniversary of Osama bin Laden’s death.  My husband and I looked at each other in disbelief!  Where has the time gone?  Do you remember when we were kids and it seemed like a year took forever?  As adults, we often find ourselves wishing that time would stand still.  Needless to say, if you’re waiting for the right time to pursue your goals and dreams, the perfect time is now.

Maybe you’re not waiting for the right time.  Perhaps you’ve started pursuing your goals, but you’re not giving it your all.  Or, maybe you’re on the cusp of success but you’re choosing to stay under the radar.  Could it be you’re afraid of what others will think; if they’ll approve or stand in judgment?  I will admit that I’ve been there and still experience this emotion often.  If you’re not achieving the level of success you desire, or you keep putting off your ‘start,’ it’s time to look inward to figure out why. 

Recently, a dear friend sent me a link to a presentation by Brené Brown.  During her presentation at a TED conference, she discussed the difference between guilt and shame and the requirement of vulnerability.  Before viewing her presentation, I thought guilt and shame were the same.  Ms. Brown states shame is a focus on self and guilt is a focus on behavior.  We all have a ‘tape’ that plays over and over in our heads.  Shame is the ‘tape’ that says you’re not good enough.  Guilt is the ability to acknowledge a behavior, apologize for it, and move forward.   

Pursuing our goals can often leave us exposed.  Ultimately, greatness requires us to take risks and move beyond the safe choices.  No one likes to be vulnerable, but Ms. Brown believes that it is a prerequisite for success.  She goes on to say that vulnerability is not weakness, but it is the birthplace of innovation, creativity, and change.  I am familiar with the fear of failure; we know each other well.  However, I have to admit that I don’t care about my private failures as much as I care about the public ones.  During Ms. Brown’s speech she mentions Theodore Roosevelt’s quote:

It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood, who strives valiantly; who errs and comes short again and again; because there is not effort without error and shortcomings; but who does actually strive to do the deed; who knows the great enthusiasm, the great devotion, who spends himself in a worthy cause, who at the best knows in the end the triumph of high achievement and who at the worst, if he fails, at least he fails while daring greatly. So that his place shall never be with those cold and timid souls who know neither victory nor defeat.

Mr. Roosevelt’s quote shares all the reasons why we should choose to get in the ‘arena’ and change the ‘tape.’  If you’re waiting for the perfect time to pursue your goals, or you refuse to be vulnerable as you do it, you may never achieve the level of success that God has predestined for you.  To listen to Ms. Brown’s full presentation, please click on the following link:  Listening to Shame.

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Posted by on April 29, 2012 in Entrepreneurship, wealth


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What’s Your Effective Tax Rate?

This year’s tax season is now over, but I suspect the discussion on taxable income and effective tax rates is just beginning.  With the upcoming presidential election, there’s been a lot of media attention placed on the percentage of income that each candidate pays in taxes.  While I believe each candidate’s position on the issues should be the focus of this year’s campaign season, ‘spirited’ arguments on income and taxes will likely be a hot topic.  Although we all pay taxes, unless you’re a financial professional, you may or may not know how to calculate your effective tax rate.  The purpose of this Post is to provide instructions on how to calculate it.

I know you’ve heard the news that Warren Buffet’s secretary has a higher tax rate than he does, and I’m sure you’re wondering how this is even possible.  The short answer is not all sources of income are created equally.  Most middle class Americans work in order to earn a living, but wealthy people focus on creating income without having to ‘work’ to get it.  The term used by the IRS to describe this form of income is passive.  According to, examples of passive income include rental properties, partnership returns, and qualified dividends.  In an ABC News Special, Warren Buffet communicated that he hardly pays any payroll taxes, but his secretary and the average working American’s primary tax is likely payroll taxes.  During the interview, Buffet disclosed that his tax rate was 17.4 while his secretary’s rate was 35.8. 

If you’d like to compare your rate to Warren Buffet’s, you can use the following formula:

Effective Tax Rate = Total Taxes (Line 61) / Total Income (Line 22)

If you filed a 1040 tax form, the diagram included below can assist you in pulling the appropriate line items for the calculation:


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Posted by on April 24, 2012 in wealth


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To Rent or Buy

Homeownership has always been a key component of the American Dream, but as a result of the recession, many Americans are beginning to question if it’s worth it.  Since 2008, home values have declined at record levels.  In the African American community, home equity is one of the most significant contributors to an individual’s net worth.  Although many of us focus on what we make or our annual salary, the true measure of wealth is net worth.  Net worth is the difference in the value of your assets (what you own) and your liabilities (what you owe.)

While home values in most communities were impacted by the increase in the number of foreclosures, African American communities were affected at a greater level due to the number of sub-prime mortgages issued to African Americans.  The State of the Dream 2010:  Drained, published by United for a Fair Economy reported that over half of the mortgages issued to Blacks in recent years were sub-prime loans mostly to people who qualified for regular loans.

There are a host of calculators and charts that can be used to assess whether it’s better to rent or buy, but I believe the decision should be based on more than math.  If you are faced with making the decision to rent or buy, please consider the following:

  • Mortgage rates and home values are at historical lows.  This should not serve as a notice to buy more house than you can afford.  It simply means that individuals who couldn’t afford to purchase a home years ago may now be able to experience home ownership.  Additionally, we have to stop looking for the quick pay-off.  Many of us want equity in our homes right away, but I have a question for you – how much equity will you earn while renting?  A key takeaway from the recent housing crisis is to be weary of quick equity.  According to the Federal Reserve Bank of Cleveland, a reasonable estimate for home appreciation is approximately 2% annually.  As such, it is important to be realistic and patient
  • Credit worthiness is required for renting and buying.  If you are choosing to rent because you are afraid of being turned down by the bank when applying for a loan, you can also be turned down when applying to rent.  Another consideration is that more people are renting today, which means landlords have the ability to be selective when interviewing potential occupants for their property.  If you are concerned about your credit profile, take an opportunity to go to and request your credit report from all three major credit bureaus.  You can also go to to receive your Experian credit score for free
  • Do your homework by researching different loan products.  You don’t have to become an expert on mortgages and the home buying process, but you should know the basics.  There are a number of credible sites that can provide a baseline of information for you.  Be realistic about what you can afford and ask questions.  Avoid creative loan products that may allow you to purchase more ‘house’ today, but can carry hidden costs or balloon payments that could very well mean trouble later

The choice to rent or buy may vary from person to person, but for the African American community, I believe the answer should be to ‘buy’.  There are a record number of foreclosures on the market right now and there are investors purchasing them for ‘pennies on the dollar.’  To achieve anything in life you have to be willing to take a risk.  The same holds true for investing.  Many of us only want to purchase something when others see the value in it, but true investors see the value before others.  This is how wealth is accumulated.  I know that renting may appear safe in today’s market, but if you want to accumulate wealth, you must take the risk and choose to buy instead.

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Posted by on April 10, 2012 in african americans, blacks, wealth


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Is Your Child College Bound?

The end of the school year is quickly closing in on us.  While most students are preparing to relax and enjoy the summer, if you have a rising senior, the remainder of the school year and the summer break are critical times.  If and where your child will go to college is a big decision; one that requires more than one year of preparation.  Nevertheless, if you’re just getting started or perhaps you’ve been planning all along, the following steps may be helpful to you:

1.       Meet with your child’s guidance counselor to review course curriculum and ensure that your child is enrolled in college preparatory courses.  If your child’s grades are mediocre or your child has been enrolled in the vocational diploma program, you may want to consider enrolling your child in enrichment courses at the local community college

2.       Review your child’s top five college choices, assess admission requirements, and tuition costs.  Developing a matrix will ensure that you are consistent in your assessment of each school.  You should also plan a trip to tour each campus

3.       Review the results of your child’s college admissions tests (i.e., SAT, ACT, etc.) and confirm that the scores meet the minimum requirements for your child’s top five college choices.  If your child’s test scores are low, consider a SAT or ACT prep course

4.       Create a budget.  The budget should breakdown how much you plan to contribute, what portion will be covered by scholarships and other financial aid sources, and the amount your child will be responsible for paying.  I know that every parent wants to do as much as they can to help their child, but please remember that this is your child’s education.  That being said, they should have some ‘skin in the game’ too.

5.       Evaluate your child’s volunteer and extracurricular activities.  If their volunteer hours are low or non-existent, volunteering should be at the top of your child’s priority list for this summer.  Although it may not be listed as an admissions requirement, colleges may review this information when awarding scholarships and grants

6.       Review your child’s social media sites.  According to an article on, a survey conducted in 2011 revealed that approximately 80% of college admission officers will check the social media profiles of potential students.  As a result, students should clean-up their profiles and photos before submitting their college applications.  The article mentions that students should leverage their social network platform to highlight volunteer activities and other key interests

College is a time of preparation and transition.  While most 18 year olds believe they no longer need their parents’ assistance in making decisions, we all know this is far from true.  The intent of this Post is to provide guidance on how to assist your child in the college selection process.  It is important that as parents, we don’t step in and take over the process.  If you have to hold your child’s hand and make all of the decisions on their behalf, you should be concerned.  In essence, your child should want their education more than you do.  Overall, this should be an exciting time for you and your family.  Your child is about to embark on a journey that will likely become one of the most memorable times in their life.  Your love and wisdom can act as a compass for them as they navigate through unchartered waters.

If you don’t have a rising senior but you would like to know how you can begin preparations for your child, please visit

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Posted by on March 28, 2012 in Career, wealth


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