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by Dr. Boyce Watkins, Finance Professor – Syracuse University
As a Finance Professor, I find it incredibly ironic that many people get married without talking about money. They talk about every kind of compatibility from emotional, to spiritual, sexual, and professional, but they seldom take the time necessary to ensure that they can tolerate the idea of sharing their financial life with a person who may not be on the same page. This problem is compounded in black relationships, where many women describe economic hurdles as one of the reasons that black women have trouble finding the right mate.
Chain’s new CEO expects international sales to surpass those in U.S. in 3-5 years.
An entrepreneur doesn’t think like everyone else. She is willing to take chances, disciplined enough to focus on a dream and passionate enough to pursue that dream. Towanna Freeman is in that category. AOL Black Voices had the chance to catch up with Towanna, to get some advice on striking out on your own, as well as managing a marriage, children and career, all at the same time.
1) What is your name and what do you do?
Have you noticed how so many people seem to be living an unbalanced life or living beneath their full potential? Well, I assist people, particularly women, who are ready to take life changing action to get that sense of balance back along with that greater feeling of fulfillment and happiness. I am also the principal consultant of Towanna Freeman & Associates, a management consulting firm with the primary emphasis on leadership coaching and employee performance improvement; the founder of the Young Women’s Empowerment Network a nonprofit organization that produces empowerment workshops, conferences, and other special events for teen girls; and the author of "Purposeful Action, 7 Steps to Fulfillment."
Lawrence Watkins and George Kilpatrick Break down the secrets to success. Click the image to listen!
His massive stimulus plan now signed into law, President Barack Obama is turning to attack the home foreclosure crisis at the heart of the nation’s deepening economic woes.
His goal is to prevent millions of American families from losing their houses because they can’t make mortgage payments.
"We must stem the spread of foreclosures and falling home values for all Americans, and do everything we can to help responsible homeowners stay in their homes," Obama said Tuesday as he signed his tax cut and spending package into law.
The ambitious plan he was announcing at a Phoenix high school Wednesday was expected to offer government cash to mortgage companies that reduce interest rates — and therefore monthly payments — for homeowners in danger of default, according to several people briefed on the plan. What remained unclear was how the government will decide who qualifies for relief.
One Democratic official familiar with the plan said it also would allow homeowners to refinance their mortgages if they owed more than their homes were valued. Still another section would give bankruptcy judges more authority to change mortgages. That last provision has been opposed by lenders, who said it would add risk and lead to higher interest rates.
by Dr. Boyce Watkins
If you listen carefully to the words of Treasury Secretary Henry “Hank” Paulson and Ben “Big Ben” Bernanke (chairman of the Federal Reserve) you might notice a trend in their language. The word “confidence” is used a lot when they speak. Many of their monetary proposals are not necessarily valuable for their financial power, but also for their psychological power.
Some of you may wonder what confidence has to do with anything. After all, if you’re broke, confidence doesn’t exactly put money in your pocket. If you’re 100 pounds overweight, confidence won’t help you win the Olympic 100 meter dash. When you are flying on a crashing plane, confidence doesn’t keep the plane from slamming into the ground. But confidence is important to an economy, and one of the most significant drivers of economic growth. In fact, over confidence has driven US economic growth for the past 10 years. Here are some reasons that confidence matters in the minds of Hank and Big Ben:
1) Confident consumers spend money
If you think you might lose your job next year, are you going to max out your credit cards? I certainly hope not. If you are worried about being able to make ends meet, are you going to buy that big screen TV? Not unless you want your wife to leave you. So, even if it doesn’t hold any truth, the mere forecast of a weak economy is enough to make many Americans hold off on consumer spending, one of the great driving forces of the American financial system.
2) Confident companies invest money and hire workers
Investments involve risk. Your hunch may work out, and it may not. If you don’t believe the economy is getting better, you are not going to consider taking that risk. No one plans to go to the beach if the weather man says that it’s going to rain. When economic rain is in the forecast, companies pull out their umbrellas and hold off on new projects. This reduces the number of jobs in the economy, because nearly every job created in America is the result of someone making an investment.
3) Confident Americans do not take their money out of banks
In case you didn’t know, your bank does not have your money. Your money is part of a large base of financial capital that is loaned out to individuals and consumers seeking to get a good return on their investment. So, without investing, your bank would have no interest in paying you any interest at all. So if, say, 30% of all customers of the same bank decide to get their money out at the same time, the bank would have serious financial problems. It is a lack of confidence that could cause customers to “run” on their bank and take out their money.
4) Confident investors keep their money in the stock market
The stock market is a place where fortunes are made and lost. Some part of that fortune is psychological, given that no asset can have a value which exceeds that which someone is willing to pay for it. When investors lose confidence, they take their money out of the stock market, and reductions in demand for stocks lead to massive paper losses in the market. Additionally, most Americans are “momentum traders”, meaning that when the market goes up, they tend to buy more, and when it goes down, they tend to sell. History shows that it is actually the opposite approach that tends to work best.
5) Confident banks make loans
Banks have to keep a certain portion of their funds on hand at all times to meet federal requirements. If they are fearful that their customers might come and demand their cash, they hold onto their capital to ensure that it is available. If they are afraid that their borrowing customers will not be able to repay loans due to a weak economy, they also hold back on issuing new loans. The truth is that when economic forecasts are grim, conservative bankers become even more fearful than the rest of us.
The bottom line of this article is that confidence matters. So, the next time you hear Ben Bernanke give a speech, you can be confident that he is going to use language that makes you feel more secure. Whether you choose to believe those words is up to you.
Dr. Boyce Watkins is a Finance Professor at Syracuse University and author of “Financial Lovemaking 101: Merging Assets with Your Partner in Ways that Feel Good”. For more information, please visit http://boycewatikns.com/
Let’s face it; we all don’t make millions of dollars a year, and the odds are that most of us won’t receive a large windfall inheritance either. However, that doesn’t mean that we can’t build sizeable wealth — it’ll just take some time. If you’re young, time is on your side and retiring a millionaire is achievable. Read on for some tips on how to increase your savings and work toward this goal.
Stop Senseless Spending
Unfortunately, people have a habit of spending their hard-earned cash on goods and services that they don’t need. Even relatively small expenses, such as indulging in a gourmet coffee from a premium coffee shop every morning, can really add up — and decrease the amount of money you can save. Larger expenses on luxury items also prevent many people from putting money into savings each month.
That said, it’s important to realize that it’s usually not just one item or one habit that must be cut out in order to accumulate sizable wealth (although it may be). Usually, in order to become wealthy one must adopt a disciplined lifestyle and budget. This means that people who are looking to build their nest eggs need to make sacrifices somewhere — this may mean eating out less frequently, using public transportation to get to work and/or cutting back on extra, unnecessary expenses.
This doesn’t mean that you shouldn’t go out and have fun, but you should try to do things in moderation — and set a budget if you hope to save money. Fortunately, particularly if you start saving young, saving up a sizeable nest egg only requires a few minor (and relatively painless) adjustments to your spending habits.
Fund Retirement Plans ASAP
When individuals earn money, their first responsibility is to pay current expenses such as the rent or mortgage expenses, food and other necessities. Once these expenses have been covered, the next step should be to fund a retirement plan or some other tax-advantaged vehicle.
Unfortunately, retirement planning is an afterthought for many young people. Here’s why it shouldn’t be: funding a 401(k) and/or a IRA early on in life means you can contribute less money overall and actually end up with significantly more in the end than someone who put in much more money but started later.
Tom Crean, head coach of the Indiana Hoosiers, just signed a 10-year deal for $23.6M. Crean is yet another coach made into a millionaire by the NCAA. However, those who go out on the court and earn the money, the players are paid nothing. Additionally, many cite as racist the rules the NBA and NFL have that force players to play in college for at least 1 year before they can go pro. Some argue that this rule is only in place to keep black players on the court and the field so billions can be earned from them for free. Tennis, hockey and baseball players, on the other hand, have no such limitation.
Questionable credit card company practices have been dogging consumers for years. But a Credit Card Bill of Rights is working its way to congress. Here are the details.
1. Get the headlines
The Credit Card Bill of Rights, authored by Rep. Caroline Maloney will be considered Thursday by a congressional committee. This is the final hurdle before it reaches a vote in the House of Representatives.
Here are some of the proposals in the bill:
- It prevents companies from applying interest rate hikes retroactively to old balances as long as the customer is in good standing with that particular card
- It prohibits card companies from arbitrarily changing the terms of their contract
- This bill requires that consumers get 45 days notice of interest rate increases and companies must mail billing statements 25 days before the due date.
Maloney emphasizes that credit card company practices, like penalty interest rates, universal default, interest rate changes and double-cycle billing may push more and more people into bankruptcy.
The rich are sharing your financial pain — and contributing to it.
It may have taken longer and it may not be as acute, but there are early hints that the economic slump is crimping the lifestyles of the wealthy.
They are investing more conservatively, spending less on luxury goods and are being more thrifty with their credit cards. Many are asking their personal shoppers and private-jet travel providers to seek the best deals rather than over-the-top extravagances.
That news may produce a shrug from many people who have lost their jobs or homes in this economy. The problem is that when the wealthy get stingy, it trickles down to the rest of us.
“It’s a sluggish economy, and its difficulties are felt all over,” said Joseph DiRenzo, a married 38-year-old father of three who left a hedge fund two years ago to enter commercial real estate.
DiRenzo says he’s feeling the hit in many places, especially in the value of his house on Long Island’s upscale Gold Coast in Muttontown, N.Y.
He owns the kind of place you’d expect a former hedge-fund manager would call home: six bedrooms, seven full baths, hand-crafted Italian doors throughout, high-tech security and sound systems, and 9,000 square feet of living space on 2.4 acres.
by Dr. Boyce Watkins
I have been accused of being a critic of Oprah Winfrey, due to comments I’ve made about her on CNN. But truth be told, Oprah is one of the 10 people I admire most in the world in terms of how good she is at her craft. What I like about Oprah is that she is not just a TV show host, she is a business woman. She didn’t just try to become famous: She built an institution.
Oprah’s cool $250 million per year dwarfs the incomes of other hosts with equally popular shows, primarily because Winfrey understands the importance of capital ownership. While Winfrey’s success is amazing, there is still more that we can do.
When I spoke with Rev. Jesse Jackson last week, I mentioned to both he and his daughter that we have grown beyond the point at which African American leaders and public figures should deem it necessary to get their message to the world through media outlets like Fox News. Fox News is a proven enemy of African Americans, and we should not have to go to our enemies to get vital messages to our people.
Winfrey has the right idea, but she is still owned by someone else. Personally, I long for the day when black media is not owned by others, and that we don’t always have a non-black person calling our shots. Other media: CNN, NBC, CBS and ESPN don’t have to answer to black people, so I would rather not answer to them. We should not
have to go through guys like Bill O’Reilly to speak to our people.
To reach this goal, we are going to have to continue instilling the spirit and expertise of entrepreneurship to black children, and teach those children how to raise money and understand the power of media. Finally, understanding the business behind media is critical, since fame is primarily a corporate phenomenon.
Dr. Boyce Watkins is a Finance Professor at Syracuse University. He does regular appearances in media, including CNN, ESPN, BET and CBS. For more information, please visit www.BoyceWatkins.net.
By: Leland C. Abraham, Esq.
While many politicians and talk show hosts debate whether America is in a “recession,” one thing is for certain, more people are filing for bankruptcy now than ever. The growing hysteria generated from the subprime mortgage crisis where companies like Bear Stearns, IndyMac, Freddie Mac and Fannie Mae are being bailed out or regulated by the federal government is of daily discussion by news media.
Growing unemployment and increased gas prices have taken a toll on individuals and corporations as well. However, individuals and corporations do have legal options to deal with their worsening financial situation related to inability to pay their mortgage payment or looming credit card debt. Bankruptcy is a method that allows individuals or corporations to satisfy debts when they do not have the financial resources to cure claims with creditors. This article is intended to give you an overview of Bankruptcy as well as the pros and cons if you choose to pursue this legal option.
Bankruptcy is a legal process through which people and businesses can obtain a fresh financial start when they are in such financial difficulty that they can not repay their debts as agreed. Bankruptcy is created by federal statute; hence, jurisdiction for bankruptcy is under the federal courts.
There are four (4) different forms of bankruptcy applicable to consumers or individuals. Chapter 11 bankruptcy is a form of bankruptcy given to corporate entities for restructuring their business. When businesses become insolvent, corporations will file Chapter 11 bankruptcy to satisfy debts with creditors while still continuing to exist as a corporate entity after the filing of bankruptcy. For example, Michael Vick and his associated legitimate business ventures filed for Chapter 11 bankruptcy protection recently.
Chapter 12 bankruptcy is used for agricultural purposes. This form of bankruptcy is used for farmers and fishermen. If there is a supply quota that the farmer or fisherman must meet and circumstances arise where he or she is not able to meet the quota for a specified amount of periods, he or she may file for Chapter 12 bankruptcy protection to satisfy those creditors whom they are not able to provide supply for.
Chapter 13 bankruptcy allows individual consumers to make monthly payments to save possession and ownership of real or personal property. Like Chapter 11 bankruptcy, Chapter 13 bankruptcy is a form of debt reorganization. People file for Chapter 13 bankruptcy when they either have a single asset with a lot of equity or a number of small assets that yield a high net value. Usually, individuals will file for Chapter 13 bankruptcy if they would like to save their home from foreclosure. The person would use Chapter 13 bankruptcy to reorganize their debts and the person would make a monthly payment plan to pay off the debt of the bankruptcy estate in three (3) to five (5) years. For example, if an individual had $50,000 worth of debt and an average interest rate of 50%, the bankruptcy would reorganize that person’s debt to where the person may owe $44,000 and have an interest rate of 40%. That person would be expected to pay off the new balance of the debt through a monthly plan payment for either a three (3) or five (5) year period.
Chapter 7 bankruptcy is the most common bankruptcy for individuals or corporations. This form of bankruptcy is for individuals or corporations who have accumulated so much debt that debt counseling or debt management is really not an option for them. The Chapter 7 bankruptcy serves as a debt liquidation in which all of the applicant’s debts are discharged and the applicant is given a “fresh start.” If a corporation files for Chapter 7 bankruptcy, they will no longer exist as an entity.
There are several qualifications for the Chapter 7 bankruptcy. One such qualification is the median income qualifications. All individuals who wish to file for Chapter 7 bankruptcy have to fall within an income range. This income range will vary by state, but it usually is around $37,000 for a household of one. There are incremental increases to this income qualification the more people are in the household.
Another qualification to the Chapter 7 bankruptcy is the residency requirement. Generally, an applicant for Chapter 7 bankruptcy must live in the state in which he or she files for at least six (6) months. Although this is the residency requirement to file for Chapter 7 bankruptcy, there is a separate residency requirement in order to qualify for the state’s exemption laws. An exemption allows a debtor to protect an asset from being included in the bankruptcy estate to be distributed by the Chapter 7 trustee to creditors.
Advantages and Disadvantages
There are advantages to filing for bankruptcy. First, debtors can obtain a financial fresh start after they receive a discharge. For example, a debtor who files a Chapter 7 bankruptcy will be able to be discharged from paying most credit card debts. Second, creditor’s collection efforts will stop as soon as an individual or corporate debtor files for bankruptcy protection under a Chapter 7 or Chapter 13. This is known as the automatic stay. If a creditor continues to try to collect on a debt after receiving notice of a bankruptcy filing by a debtor, the creditor may be cited for contempt of court and/or ordered to pay damages. Also, you cannot be fired from your job solely because you filed for bankruptcy. Furthermore, you can freeze your FICO credit score by filing for bankruptcy.
However, there are disadvantages to filing for bankruptcy. Bankruptcy filing will remain on your credit record for up to ten (10) years. This record may affect future finance opportunities. So, it would behoove any potential applicant to not obtain any new credit cards or high interest loans after filing for bankruptcy for some time. But, research has given mixed results to the time when people or corporations can obtain new finance opportunities even after filing for bankruptcy.
Alternatives to Bankruptcy Filing
Another option that an individual or corporation might pursue is to directly contact the creditor and see if they are wiling to allow a lower monthly payment or extend the time to remit payment to lower the payments. Also, you can consolidate your debts by taking out a big loan to pay off all smaller amounts of debts that you owe.
If interested in filing for bankruptcy, please consult your local bankruptcy attorney in your area. We have provided a link to the National Association of Consumer Bankruptcy Attorneys for you to consult on this webpage as well.Legal Disclaimer: This site provides information about the law designed to keep readers informed of pertinent legal matters affecting the African-American community. But legal information is not the same as legal advice — the application of law to an individual’s specific circumstances. Although we go to great lengths to make sure our information is accurate and useful, we recommend you consult a lawyer in your specific location if you want professional assurance that our information, and your interpretation of it, is appropriate to your particular situation.
Investors have a slew of gloomy news to digest today, and comments from Federal Reserve Chairman Ben Bernanke didn’t help things.
“The possibility of higher energy prices, tighter credit conditions, and a still-deeper contraction in housing markets all represent significant downside risks to the outlook for growth,” Bernanke said in a speech to the Senate Banking Committee this morning. “At the same time, upside risks to the inflation outlook have intensified lately.”
Inflation “seems likely to move temporarily higher in the near term,” Bernanke said.
Bernanke also highlighted the problems in the financial markets, which he said remain under “considerable stress.”
“Helping the financial markets to return to more normal functioning will continue to be a top priority of the Federal Reserve,” Bernanke said.
Stocks plunged after Bernanke’s comments were first released but pulled off their lows considerably by midmorning. At 11:55 a.m. ET, the Dow Jones Industrial Average was down 70 points to 10,984. The Nasdaq Composite Index had shed 5 points to 2,207, and the Standard & Poor’s 500 Index had lost 10 points to 1,218.
Stocks bounced back after light, sweet crude oil plunged $6.71 to $138.47 a barrel.
WASHINGTON (AP) — Government officials are in discussions about developing a plan for propping up the big mortgage companies Fannie Mae and Freddie Mac should they falter.
The Federal Reserve, the Treasury Department and other regulators are keeping in close consultation this weekend. Investors are worried about the companies’ finances and becoming convinced that the government will have to step with some kind of rescue. That sent the companies’ stock plummeting.
Fannie Mae and Freddie Mac either hold or back $5.3 trillion of mortgage debt. That’s about half the outstanding mortgages in the United States.
If one or both of the companies were to fail, it would wreak havoc on the already fragile financial system and the crippled housing market. The problems would spill over in the national economy, too.
Treasury Secretary Henry Paulson on Friday said the government’s focus was to support the pair “in their current form” without a takeover.
Short of a government takeover of the firms, one option is having the Fed or Treasury buy Freddie Mac or Fannie Mae securities, if investors were to shun them. Another option is to let the companies draw emergency loans — if they need them — from the Fed.
Hoping to bolster confidence, Senate Banking Committee Chairman Chris Dodd, D-Conn., told CNN on Sunday that Fannie and Freddie are financially sound.
“What’s important here are facts,” Dodd said. “And the facts are that Fannie and Freddie are in sound situation. They have more than adequate capital — in fact, more than the law requires. They have access to capital markets. They’re in good shape. The chairman of the Federal Reserve has said as much. The secretary of the Treasury as said as much.”
Last week Fed Chairman Ben Bernanke and Paulson, appearing before the House Financial Services Committee, made a point of saying that the regulator of Fannie and Freddie, the Office of Federal Housing Enterprise Oversight, has found both companies adequately capitalized.
WASHINGTON – Signs are emerging that the U.S. housing market’s long slump is likely to fester through the summer, and the real estate market may not recover for at least another year.
The latest report, the National Association of Realtors’ pending home sales index, slipped by 4.7 percent in May to the third-lowest reading on record. The decline “suggests we are not out of the woods by any means,” said the trade group’s chief economist Lawrence Yun.
The bad news came as the regulator for Fannie Mae and Freddie Mac tried to reassure investors that an accounting rule change wouldn’t force the government-chartered mortgage finance companies to raise tens of billions in capital to offset losses.
With more negative data about the housing market continuing to emerge as the economy weakens and job losses accelerate, economists are reluctant to say the worst is over.
“Even if housing market activity does manage to bottom out later this year, it is likely that any recovery would be exceedingly slow,” Jeffrey Lacker, president of the Federal Reserve Bank of Richmond said in a speech in Washington.
While home sales are likely to fall to their lowest point late this year or early next year, any recovery is likely to be weak through at least 2010, said Mark Vitner, senior economist with Wachovia Corp.