The book in the spotlight this week is a sequel, if you will, to the previous book. This time Ms. Bridgforth had some help from the VP of Financial Services at Oppenheimer & Co., Inc. to write it - Ms. Gail Perry-Mason. This time around I'm just going to bring out some main points from each chapter. Let's dig in, shall we?
Chapter One: Sisters Can't Afford Not to Invest
One fundamental truth to keep in mind is if you work hard for your money then you deserve to see it grow not go. Over time, investing allows you to stop working for your rent or mortgage, car payments, utility bills, etc. so that you can start working for yourself. (Italics theirs.) According to Mellody Hobson, president of Ariel Captial Management, Inc., the best way to make your money grow is to adopt a long-term view of investing. You watch your money and you move it when necessary, but don't be overly concerned about a week's or a month's performance. Investing is not for the short term, so don't go into it thinking that you'll just take your money out after two years. Yet still remain aware of current economic conditions and how they affect certain industries. The sooner you start investing the better! Remember the Rule of 72: If your rate of return is 8% per year, then you divide 8 into 72, which equals 9. So in 9 years your investment of $1,000 would be worth $2,000 but only if you do not touch it.
Still, some people are reluctant to start investing because they worry about keeping an eye on their investments 24/7 and that they'll never learn how to read stock pages. But according to this book, once you get the hang of it, it's easy. To familiarize yourself with terms, try watching the news or reading USA Today. One way to speed up your investment education is to find an investment adviser. Another easy approach to educating yourself is by paying attention to the brands you buy when you go grocery shopping. Pay attention to which companies own which products. By buying from them, you are contributing to the share value their company. Why not invest so you can get a little of that money back?
Chapter Two: Clear the Debt and Clear the Deck - for Investing
First things first. You must check (and keep track of) your spending. I don't think this point can be stressed enough. No matter how well you plan to spend your paycheck, if you continue to increase your debt load, it's unlikely that you will make your money grow. Debt doesn't just mean credit cards either. Committing to anything that you can't afford puts you further in the hole. Glinda and Gail recommend another book entitled How to Get Out of Debt, Stay Out of Debt and Live Prosperously by Jerrold Mundis. His book is based on the principles of Debtors Anonymous.
Chapter Three: Living on Fifth Avenue: Exciting Ways to Create Five Streams of Income
Take a look at the hobbies or things that you enjoy doing in your spare time. Is there a possible way that you can make some extra income by helping others to do the same? If not, there are a few other ways to generate some extra income:
1. Mystery Shoppers - While this is not recommended for compulsive shoppers or buyers, this gig is a fun way to make some extra money. Mystery shoppers work market research companies and make about $15 to $25 per shopping trip. Check out Athpower.com, Secretshopnet.com, and Bestmark.com to get you started.
2. Consignment Selling and Buying - If you have clothes that are in good shape but that you no longer wear, take them to a consignment shop! Be sure to check whether the store pays you in cash or with store credit.
3. Own a Diebold ATM or Vending Machine - Your main responsibility with this venture is to find the right location. Diebold offers several options for owning a machine so check them out at http://www.diebold.com/. Be sure to do your homework first! If you go the vending machine route, you will be responsible for resupplying it.
4. Giving Your Opinion - Becoming a participant in a focus group is another way to make money outside of your regular job. You may be paid as much as $75 per hour and up to $800 per day. Do a Web search for focus groups.
Chapter Four: Fire Up Your Imagination to Dream Again
You can use your talents, savings, and opportunities to move toward a larger purpose. By identifying your dreams and goals, you'll gain the motivation to continue transforming any damaging beliefs and spending patterns. Create your own personal Mission Statement. It can give you a renewed sense of clarity and purpose. Mission Statements help us to recognize our hearts' desires and then keep them in sight despite the day-to-day obligations we face.
Chapter Five: Insuring Yourself and Your Investments
This chapter basically covers various types of insurance and professional companies to help you make sense of it all. They cover health, life, homeowner's, renter's, mortgage, disability, and long-term care insurance.
Chapter Six: Don't Let Your Assets Retire Before You
In this chapter, Glinda and Gail list the things you can do at different stages in your life. In your twenties and mid-thirties, you can enroll in your company's retirement plan, open both regular and Roth IRA accounts, and DO NOT borrow from your 401(k). From your mid-thirties through forty-five, increase your contribution in your retirement plan, review your financial statements more often, balance your investments annually, and request a benefit printout from the Social Security Administration. From your mid-forties through sixty-two, do all of the above and remember not to take early distributions from your retirement plan before age 59 1/2. From sixty-two to eighty and beyond, get investment checkups annually, check your investment strategies for income for a larger percentage of your investments.
Chapter Seven: Owning Your Piece of the Rock
After reading just the first few parts of this chapter, I must say I'm ready to own a house! Lol. The emotional benefits of homeownership include increased indoor and outdoor living space, the comforting sense of privacy and stability, and personal security. Not long ago, African Americans owned more land per capita than any other American ethnic group. Too many of us spend disproportionately more on vehicles and material possessions than on real estate. I can't help but think of this fact when I see a Range Rover, Mercedes-Benz or similar cars regularly parked in an apartment complex's parking lot. There is nothing wrong with owning a vehicle that's worth $40k or more however if you are still paying rent to a landlord, you may want to reexamine your priorities. Four good economic reasons to purchase a home are tax deductions, budget stability, appreciation, and investment leverage. Of course, the book goes into further detail on each reason. But you'll have to read it to find out more. :-) She also talks about buying on a land contract, investing in income property (one thing I've considered before), inherited property, and other income property investment options.
Chapter Eight: Taking the Mystery Out of the Market
Look at products that you use regularly and ask yourself the following questions: Where do I shop? What do I buy? What makeup do I wear? Where do I bank? What kind of purse do I carry? Where do I go for vacation? What do I eat? What kind of car do I drive? What kind of gas do I use? What type of computer do I own? What types of entertainment do I like?
When you think about it with those questions, there are really tons of companies to invest in. Remember that by investing in a company, you are becoming a shareholder and therefore are a part owner (no matter how small) of that company. Research the stock symbols for the companies you are interested in investing in. After you purchase a stock, recheck the broker ratings and "insider" trading activity on a regular basis.
Chapter Nine: Investing in Stocks, Bonds, and Mutual Funds
This chapter helps you to understand in depth just what stocks, bond, and mutual funds are all about. There is soooo much information in this chapter that if I tried to simplify it or bring out major points, I would no doubt be leaving out much, much more that you would need to know. So, of course and as always, I thoroughly recommend reading this book.
Chapter Ten: What's Your Investment Style?
The last but certainly not least important chapter is on your investment style. Black women have long been known for their style and the unique ways in which they express it. You can have the same kind of attitude and confidence towards your investment style. The part I especially enjoyed reading (and would like to implement soon) is starting an investment club. There are 13 things to do in order to get your club on the right track: 1. Introduce the idea to someone you know. 2. Agree on a common investment philosophy. 3. Establish rules. 4. Vote on a monthly contribution amount. 5. Elect officers and adopt an investment club agreement. 6. Schedule a regular club meeting date and time. 7. Delegate responsibilities. 8. Promote education. 9. Allow for debate. 10. Invite professionals to some of your meetings. 11. Consider enrolling the club with the NAIC (National Association of Investors Corporation). 12. Place your club online. and 13. Hold a special club dinner to socialize.
When I think about those guidelines seem like a good fit for most productive clubs that anyone is thinking of starting! Tidbits to remember while building your portfolio are start with cash, fully fund your retirement plan at work first, and be clear on the amount of risk your comfortable with.
I think with the many, many helpful points brought out in this book, everyone (not just my African-American ladies but all ladies) can rest assured that making your money grow is not as hard as it may seem. It just takes a cup of determination, a tablespoon of research, and a gallon of discipline lol. This book is a must-have guide for any woman who wants to have power over her money.
~BB~
