Lessons From the Impending Recession

Lately, the economy has taken center stage in the media and the upcoming election.  With the collapse of Lehman Brothers and Merrill Lynch, coupled with the Feds taking over Fannie and Freddie, Wall Street is getting religion in a major way.  What does this mean to the average person?  Why should you care about the credit crisis?  Have you made sense of it?

We Need Workers, Not Volunteers

I’m just as excited as the next activist to see so many people engaging in the electoral process this year. People are phone-banking, canvasing, knocking on doors, calling their congress members, etc. All of this volunteerism is beautiful, an expression what passionate political participation by an informed and interested citizenry should look like in a democracy.

What’s not to like?

Well, there is actually one big thing not to like: Very, very little of this is sustainable. That’s right. 95% of this enthusiasm and participation will likely die the day after election day, with the other 5% dying the day after inauguration day.

Why is this not sustainable?

One word: money.

Money Management at Mint.com

What’s up fam,

As folks scramble to prepare for the holidays, I want to put you up on a financial management website called Mint.com
If you are like me, you are very detailed when it comes to keeping track of your money and this is a tool that might help. If you are paranoid about sharing financial info, this is not for you but if you can get over that initial fear, the website will help you categorize all of your expenses  and make nice graphs to help you really understand where your money goes. More than that though, the site provides analysis on your spending trends and tips on how you can save money. Check it out, let me know what you think.

Stay up fam,

Brandon Q.

The Cares of This World

“Do not wear yourself out to become rich; have the wisdom to show restraint”

-Proverbs 23:4

“One man pretends to be rich, yet has nothing; another pretends to be poor, yet has great wealth.”

-Proverbs 13:7

“Havin’ money aint everything, not having it is”-Kanye West

I have spoken of this many times, but it is a topic that has turned up many times as of late.  So I am taking that as a sign that I should revisit this topic.  And topic has to do with money and our relation to it.

The Unforgivable Sin

What is the unforgivable sin for a black man?  One would think calling a black woman out of her name, but apparently hip-hop and Isaiah Thomas have taken the sting out of that one.  It used to be taboo to participate in interracial dating, but even that has lost its bite. 

Actually, it is something a lot less politically charged than that or is it?  It took me 24 years to figure it out, but the unforgivable sin for a black man is…to be unemployed.  I did not realize it, now I am faced with the looming prospect of unemployment upon completing my post-graduate studies.  And as the song says, I am living under pressure.

Up until this point, I have tried to be a pretty responsible guy.  I have done my best to be the Dream of Dr. King and what not.  But apparently, I did not realize how quickly that accounts for nothing when you do not have a J-O-B. 

Surprise! There’s discrimination in lending.

Captain obvious says: Black folks and Latino folks get jerked more often when financing/refinancing mortgages.

Isn’t this the same thing Martin Luther King Jr. was marching against in Chicago during the 60s? This is yet another piece of rebuttal material to the “Race no longer matters” crowd.

One Love. One II

What is independence?

Many moons ago, I wrote a piece about the concept of Indivisible Freedom, which essentially came to the conclusion that the notion is does not really exist in practical terms. Today, this “Independence” Day, I’d like to do a similar exploration of the the concept of independence.

Actively wanting less

After reading Garlin’s fantastic post on the Black Middle Class, I was inspired to think of ways that we can maintain an engaged and active middle class. This idea is not original, but I think the answer comes from actively wanting less.

The National Priorities Project

This morning on the radio I heard about a group called the National Priorities Project. This group gives people an easy way to visualize how the government spends money. This is an important thing to know.

Guerrilla Banking

Many of you may not know who Muhammad Yunus is, or what the Grameen Bank is, but this cat won a Nobel Prize yesterday for his system. Basically, it is a people-powered lending network that allows people to lend others in the community small amounts of money without requiring collateral like traditional loans. Instead, it has kind of a barter system approach, with the theory being that other things besides money have value.

My question is, could we pull this off in our own neighborhoods and communities here? Here are some benefits:

1. The money stays in the community longer and passes through more community members’ hands before leaving it (if it ever does).
2. Since most of the time we probably only need small loans (say, $100 or less) for day-to-day stuff, the anxiety of being in debt will be reduced.
3. It is a great way to combat gentrification.

I think this could really work. Could it?

One Love. One II.

Categories:
Economics
Financial
Banking

Black folks and money (or lack thereof)

You know what I hate? It’s when Black people who have somewhat of a handle on managing their money don’t pass on that information to other people. We here at Superspade are well aware of all the financial trials that Black people face on a regular. (Like when the only “good” groceries you get are the week after payday but you’re eating peanut butter and jelly sandwiches the week of payday) But rarely do you see discussions focused on the tools others have used to reach their financial goals. This is where you come in.

If you have made some moves financially, whether it was learning how to budget or buy stocks, or you want to know how others have done it, you need to make your presence known on this post. I’ll go first. I am a recent college graduate and I am currently working my first “real” job. As such, there are several things I learned that have really helped me out. For starters, I realized the difference between needs and wants. For example, I used to buy Reynold’s Wrap just because I saw it on TV. But did I really need name brand aluminum foil? Probably not, so I made the switch. And if you multiply this example many times over, you will get an idea of how I spend my money.

The other thing I learned was balancing a checkbook didn’t help me keep things in perspective. So I started a budget in Excel such that I have three columns for each pay period. The first column shows all the money I have coming in and the second column shows all the bills and expenses I have to pay. The third column is my cash flow that I use to keep track of everything I pay with cash. The advantage I found with this method is that by using addition and subtraction functions within Excel, bills never sneak up on me and I can quickly see where I can cut back and where I am spending too much. Now I still use my checkbook but using Excel helps me see the big picture.

I have also started to take out cash that is strictly used for groceries and gas. For example, on a typical week I may spend anywhere between $30 and $40 on gas so I take out $40 for gas and I keep track of gas spending in my Excel spreadsheet as well. The same thing goes for food. I make a point to shop once a week and I am one of those people who shop with a calculator, notebook, and pen. Because I know it’s hard for me to put something back after the cashier rang up my bill, even if I am over budget. So rather than cross my fingers, I already know how much I am getting before I get in line.

Right now, I am preparing to go to Law school in fall of 2007 but I don’t know how people make the financial transition from working full time to going to school full time. So for all my Superspades who have been there, help a brother out.

For all my shareholders out there, what books/websites were helpful in allowing you to get a handle on investing?

I want everyone reading this post to put a comment that shows something you learned to help you financially and something you would like to know. Because whether you are in high school, a college graduate, or a seasoned investor, we are all in this together and we learn as we go. And while you may think your financial woes will end if you made more money, they won’t unless you learn how to budget, save, and invest. Essentially, I am tired of Black folk getting all riled up over anything political, but get all quiet when someone asks us about our finances. Let’s step our game up because solutions have a weird way of canceling out sorrows.

Stay up fam,

Brandon

Financial Insecurity & Money Mentees

My generation is one faced with economic challenges that are different from those of previous generations. The Christian Science Monitor has a nice story about this. We’ve talked about this before on The SuperSpade, but the issue isn’t going anywhere, and thus warrants further thought and action.

I have said it before and I will say it again: instant gratification, especially when applied to financial decisions, is a sure way to monetary suicide. I used to be under the impression that this was simply a Black problem. However, more and more I see my compatriots from all backgrounds and makeups drinking the same Kool-Aid. The article says:

“Compounding these generational challenges is what Ms. Yochim calls ‘incessant commercial wooing’…with commercials filling 20 minutes of every televised hour, she adds, ‘No wonder we all suffer from *the wants.*’”

This ‘incessant commercial wooing’ is the pull of instant gratification. It’s what says that Hummers are more important than Houses and platinum jewelry is more important than the debt that [usually] comes with it.

How do we break this cycle? It is obviously not enough to provide counterexamples. No, the approach must be much more personal. This knowledge must be transferred, like all wisdom, one on one. This follows from the notion that an individual can and often will make a better decision when taken out of the context of the masses. This is a charge to the wealthy of the current and previous and current generations to get a “Money Mentee.”

It is proven that the Apprentice Model of teaching is the most effective: learning by following an example. For the purposes of this exercise, we will call this the Mentor-Mentee Model. The qualifications are simple, to be a mentee, you simply have to have a desire to learn about how money works. You may or may not be in financial trouble, that doesn’t matter. In order to be a mentor, we ask a bit more.

The first criteria is that you must “have money.” Note please that “having money” does not equal “having income.” This means that the amount of money you make is not the only deciding factor in the amount of money you have. To be a mentor you will have to present demonstrated success of your own economic plan (how much you save, how much you invest, etc.). After all, you need to have something to tell the mentee.

The interaction is straightforward. Weekly conversations over the phone, at least bi-weekly electronic email communication, at-least monthly face-to-face interaction. The content of these interactions should include, but not be limited to:

- discussion of past financial success and failure stories
- discussion of finance related books to read
- discussion of finance resources available (newspapers, magazines, websites, etc.)
- apprentice/internship opportunities (if the mentor is a business owner)
- reference to financial advising centers

The list goes on to infinity, but you get the idea. Such a program will thrive on the personal interaction between the Money Mentor and the Money Mentee.

This is how we will slay the savage beast of irresponsibility.

Can Money Buy Life?

The Associated Press has an interesting story on why there currently exists no HIV vaccine (http://freep.com/apps/pbcs.dll/article?AID=/20051226/NEWS07/512260307/1009). The article says:

“Private-sector efforts amount to just $100 million annually. This is mainly due to the lack of incentives for the private sector to invest in an AIDS vaccine – the science is difficult, and the developing countries that need a vaccine most are least able to pay.”

There are some who say HIV/AIDS is a manufactured disease; a biological weapon, if you will. Whether that is true or not, it is a sad moment in humanity’s history when one needs financial incentives to work towards eradicating a disease that exterminates millions annually. The selfishness and greed of man is perhaps the world’s mot amazing phenomenon.

What can we do? The International AIDS Vaccine Initiative (https://www.iavi.org/), mentioned in the article, is working on this problem in spite of the drug companies’ reluctance. Donations to this group are examples of grassroots dollars at work. I encourage you all to consider such organizations when deciding how to become a part of these efforts.

–
Garlin Gilchrist II
http://www.TheSuperSpade.com

Sent via Windows Mobile 5.0

Money and Hybrid Vigor

B and I obviously are on the same page with this financial stuff. Here is another story about my generation, which has more debt than any generation prior. We have been talking a lot on this blog about future money (or the lack there of), and this story is cut from the same fabric. Three posts (and probably many more); thrice the importance.

The story asserts that “this is the first generation who won’t necessarily do better than their parents.” That may or may not be true. Hybrid vigor is the rule, not the exception, or at least it has been up to this point. There are very few, very possible reasons that this trend could be discontinued:

1. The offspring of the previous generation are lazy and rest on the laurels of their parents
2. The progeny of the previous generation tries something new and fails (elimination by evolution)
3. There is no next generation

How does this apply to us? Are we lazy? Are we dommed to failure and elimination? Do we even exist? Don’t know a definitive answer to these questions, except maybe the third one. But I do know that this selfish generation is on a decent looking path towards #2. The problem with instant gratification is its tunnel vision. If you are ridiculously concerned with right now, you have no concept of building on the past and preparing for the future. I am not saying that the present is unimportant, but I am saying this:

If you had a choice between feeling good now or feeling good in a year, which would you choose? If you had a choice of having money now or having money in 10 years, which would you choose?

Instant gratification is gratifying. Delayed gratification is gratifying. Pardon me for a moment, but let’s just be stupid about it. If the goal is gratification, then shouldn’t I be just as happy if I get it in 10 years? Shouldn’t I be willing to work now so that I can be happy in 10 years, even if that means I am [temporarily] less happy (NOT unhappy, less happy) right now? If that is the case, then I have no need to run up credit card debt to buy trash I can’t afford now or ever.

What’s more dangerous? Terrorism, Violent extremism, Me-ism? I think I have a definitive answer to that one.