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This is not what I was originally going to post this week, as I have been watching our government make what I consider more and more boneheaded mistakes. Now that the news media has gotten everyone worked into a lather.
On morning of Wednesday September 24, 2008 I was in a Suburb of Chicago after my 5:30am workout I was watching CNN & preparing for work in my hotel room and while watching what were the financial plans congress had to decide to tackle for the US on this day. You know the ones (because you are informed):
- $700,000,000,000 bailout of the Wall Street financial markets.
I also had the Steve Harvey Morning Show streaming through my computer (Gotta get my daily shock by the Strawberry Letter 23) but I was listening to Tommy’s Tips and as I believe “Behind every Joke there is some Truth.” So let me put it together like he did…
Today’s Title is “Can Bush go on and leave now, We got it from here… Onst again, Can Bush go on and leave now, We got it from here…” As they said on the show whats the worst that can happen... We go to War, We loose our Jobs, We loose our homes, Gas prices go up...
(btw... that is George W. Bush in the picture)
First, let me address the email blast that we have began, after the 23rd time I got the email asking if the rules on the Polling places (No banners, no buttons, no hats) were true.
by the way...YES, IT'S TRUE!!!
My dad lived across the street from Brown Highschool in the WestEnd of Atlanta in the early 80's and that highschool happened to be the polling precenct for the WestEnd in Athanta. the morning of the election I remember getting a knock at the door and it was a polling official informing us we had to remove the political signs in the front yard.
Black people, It is great that they are reiterating this rule, however in every election rule book in every state of the union their have always been rules on:
- How many ft/yrds campain paraphanelia can be from a polling venue
- What is considered passive campaigning (ie t-shirts, hats, buttons in polling area)
Sorry, I guess this wasn't for me... it was for the uninformed... LOL (hanging head & stepping down from the soapbox)
Now that, that is clear can my Friends and Frat brothers stop sending me this email!!! (Honorable Mention to Perry & Jon)
I origionally thought that I would put out "What Black Folk should do now..." every 6 months. However, With everything going on I decided to put out a listing of items for all to consider. I decide to put out another "What Black Folk should do now!!!"WHAT BLACK FOLK SHOULD DO NOW!!!
Early Vote to avoid Lines - Check with your respective county to see when it begins
The A-political person in me says If I don’t like the decisions that a person makes while in office at the next election I’ll vote them out and put someone else in. Many persons have alluded to the fact that this is an important election, therefore let me save you some time, headache, and frustration from the potential lines. Around the nation some jurisdictions have began early voting. To find out when your jurisdiction’s early voting process begins Google your county and/or state elections board (You can find it... My county in Texas starts October 20th at selected poll locations). Now, once you get the information "Go Early Vote!!!"
Manage Your Balance Sheet
Yea, I know I sound like a broken record, but I happen to like Old School. I believe that the Urban Ghetto Poet Charlie "Last Name" Wilson of the legendary Green Archer & Pine Band (The GAP Band for those of you who are uninformed) said it best “The Bigger the Headache, The Bigger the Pill…The Bigger the Doctor, The Bigger the Pill…” The government is handing the American taxpayer Bigger and more Bitter pills to swallow everyday. I want to address the current and future ramification of these actions. I also want to address “Personal Liquidity” and how you can build a Strong Balance sheet regardless of what the market is doing. First note: As I have said numerous times before a Strong Balance Sheet will help you avoid bankruptcy & retire in a respectable manner. If these companies had strong balance sheets they would not need a bailout.
ASSET Management (Grow Strong Assets)
- Cash - ("Cross Town Money") Facts about cash... Nothing spends like cash. I know I own it. I don't have to pay interest, People will pay me interest in the right vehicles. (Assuming it is held in a checking or Savings account) (Don't get it twisted, Know the Truth... See the FDIC Rules below)
- Money Market Accounts (Your Emergency Fund - 3-6 months of EXPENSES)
Some funds have “Broken the Buck” what that means is they have let their share value dip below the $1.00 mark. That does not mean that "All" Money markets are at risk. This still the one of the most liquid, most stable, & penalty free accounts that you can have. Money Markets invest in less risky more stable vehicles Treasury Securities, Municipal Securities ect. - Retirement accounts (ROTH's, IRA, SEP's, Simples, 401(k)
I have written in my post "Sometimes we do things & don't know why we do them..." sometimes we fail to realize that retirement takes planning. Planning is an active process it requires us to be fully engaged with the goal of knowing the lifestyle we plan to retire in. - Houses (Yea, I said it...)
Your house is an Asset, that will not change. I have a statastic that said that House Value (Equity) accounts for 60% of Middle Class wealth. I personally believe that it should account for No more than 45% if you build the Strong Assets listed above. Most people over the last 5 plus years purchased more house that they could not afford. This Over Zealous Exuberance and the Ill Founded Belief that realestate always goes up in value has put the US in the position it is currently in. The reason for my 45% versus 60% statement is that if at retirement you have $1 million in Assets (for most of us that amount is too low to retire in a comfortable manner given inflation) that tells me your home is $600,000 of your wealth, and in order to gain access to that $600,000 you have to either sell the home (where are you going to live?) or take out a loan (which is contrary to building a strong balance sheet!!!). My 45% calculation would give you a $450,000 home at $1 million in total assets, that means you have over half a million in cash and cash equivilents. You are more Liquid!! I would dare to say that at retirement you need $600,000 in cash you don't need a $600,000 minimally liquid house. If you disagree please write me...
LIABILITIES (Don’t Reduce… Get rid of them)
- 10 – 15 Year Fixed Rate Mortgage
Finally, they are going back to the old formula of granting mortgage debt. Simplisticly the formula was 20% down and your home should be no more than 3 times your income. (Oh my gosh, that takes us back to the stone ages, I will never be able to save that...) I agree, you will have a difficult time saving that if you are attempting to purchase more home that you can Afford (ie $525,000 home on a 55,000 total household income, thats $105,000 Down... that is also approx a $3,500 a month mortgage payment on a 15 year) A more realistic scenario is purchasing a home 3 times your income or less (ie 3 times $55,000 equals $165,000) putting 20% down or $33,000 and paying a mortgage of approx $1,113 or less on a 15 year. - Auto Loans
Finally, they are going back to the old formula of granting auto debt. The old formula is your total car debt should not be more that half you annual income (ie $55,000 times .5 equals $27,500) - Credit Cards, Student Loans, Heloc's & 2nd Mortgages
YOU SHOULD NOT HAVE THEM... YOU HAVE CASH IF YOU DID WHAT WAS STATED IN THE ASSET AREA.
- PROTECTION (These are not Balance sheet Assets but they are items that protect your balance sheet assets)
- Personal Protection
Life Insurance
Health Insurance - Government Protection
(FDIC) Federal Deposit Insurance Corporation
Today’s Title is “Can Bush go on and leave now, We got it from here… Onst again, Can Bush go on and leave now, We got it from here…” Bush misquoted this protection granted under the FDIC on last night in his bail out speach. Now people (I'm trying to stay A-Political on this...) if the President can't describe this protection correctly, whith all his advisors & speach writers, how is Joey six pack on the street going to understand it?
Per this rule your deposits at your respective bank is insured up to $100,000. Now that is not $100,000 per account (ie. You have 75,000 in your savings & 50,000 in your checking for a total of $125,000). That is $100,000 in total deposits at that bank.
When IndyMac bank in California failed and was taken over by regulators persons were standing out infront of the bank to get their money and some had $2-300,000 in one bank. But multiple accounts. They thought that they were protected, and they were not. For anything over the $100,000 insured amoung, you become a bank creditor and may get paid pennies on the dollar during liquidation.
Some of you will have to contend with estates from parrents & loved ones at sometime in your life. I offer this as information for persons who get inheiritances or insurance settlements it is not safe to have more than $100,000 in any one bank, At that level you need an investment advisor (you actually need one before that time).
For all of you conspiracy theorist out there:
- Yes, I know Jesus loves me, and its not going to increase if is send this email to 20 other people. I can get closer if I spend time with him. I don't think he has email.
- I don't need a $100,000 a year job selling items that I don't have to inventory or warehouse.
- The only thing that is going to get rid of those love handles, and get me the six pack that I desire is time in the gym and good eating habits.
- I don't need discount Herbal Viagra. (Men or Women's)
- No, The African Diplomat living in exile in Spain does not need my help to transfer 10 million dollars out of the war torn congo.
- I don't need a special program to wipe away my debt.
- I don't need a special credit report to Maximize my buying power.
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