BlackPeople'sMoney

$12.87 an hour?

2007-08-15T08:30:00.000-04:00

"My job sucks."

Everybody I know, black or white, has said this before. But if you're black, you're more likely to mean it and with good reason: a new study from U.C. Berkeley's Center for Labor Research and Education says more than half of black workers in the US have jobs that, well, suck.

Whether you like your job is irrelevant; the point of the study was to show that race matters when it comes to finding work with decent pay and benefits. 56.4 percent of black workers make $12.87 or less. Only Hispanics had a higher percentage, but it's a good bet those numbers are skewed by immigrants doing manual labor and other low-paying jobs.

At first glance, $12.87 an hour might not sound that bad, but think about it this way: that's less than $28 grand a year, or $514 per week. And that's before taxes. My rent would eat up almost half that.

And you think YOU got it hard.

There's more to this story, I'm sure, but the full report won't come out for a few weeks. I'll come back to it then.

Got! (by online jackers)

2007-08-08T08:03:00.000-04:00

A couple months ago, while I was still blogging for AOL Black Voices, I posted an item about preventing identity theft. It's a huge problem, especially given how much business most people do electronically these days (how many times have you punched in your credit card number or address online this month?).

But even though I've talked about this topic on TV before, I never thought I'd know somebody who fell for one of those "phishing" schemes, you know, where they send you an email saying your lost aunt in Nigeria has a trillion dollars for you and all she needs is your social and bank account number to get it to you. They're so obviously scams that no reasonable person, I figured, would go for it.

I stand corrected. A friend of mine who I know is a really smart and pretty sophisticated woman, wasted no time replying with her social security number and bank account pin number after getting an email claiming she has refund money coming from the IRS. The money never came, of course and she spent the rest of her day cancelling credit cards, closing bank accounts and placing fraud alerts in her credit files.

All that is to say that I suppose not even smart people are immune to dumb scams when greed is involved. Free money? Great, here's my info! So in the interest of helping you protect yourself, here's a link to the Federal Trade Commission's tips on identity theft.

Why Blackpeoplesmoney?

2007-07-28T02:02:00.000-04:00

First a big shout out to all my former Ways & Means readers who followed me over here. Thanks for sticking with the kid.

With that in mind, one of the faithful W&M readers emailed me a question: Why is this blog called blackpeoplesmoney? Seems self-explanatory, but he had a point: all money is green, it all spends and everybody wants and needs it , no matter what color they are, right?

True. Because this blog is about everyone's favorite topic, money, pretty much anybody can get something out of reading it and I hope they do. But as there are social and cultural nuances to black American life, there are also economic ones. And as a professional business writer, I don't believe those are explored enough in the media, so I took the initiative to do it here.

Now, quick, shameless plug time before I end this: Look out for Ebony magazine's September cover story, written by yours truly. And don't forget that I'm guest-blogging for BET's Meet The Faith show for the next two weeks.

Homless in Prince George's

2007-07-20T15:38:00.000-04:00

Even in the wealthiest black county in America, foolishness and foreclosures go hand in hand:

Foreclosures Bloom at Corner Of Prosperity and Gullibility

Check me out on BET.com

2007-07-09T01:57:00.000-04:00

Just a quick reminder that my stint as guest blogger for BET's Meet the Faith Program kicks off today and will continue through July 19. As usual, I'm writing about financial matters among African-Americans. You can read it all at www.betintroduces.com/shows/meetthefaith.

Tyra on treating her workers

2007-06-29T10:46:00.001-04:00

Tyra Banks says she finds it easier to send her employees on vacation than to splurge on herself -- and that her workers reward her for it.

Kimora Lee Simmons on Learning to Handle Money

2007-06-23T16:25:00.001-04:00

Supermodel turned entrpreneur diva Kimora Lee Simmons talks about her biggest money mistake ever and what she learned from it.

My gratuitous Don Imus post

2007-04-15T22:27:00.000-04:00

"The civil rights movement for your generation is economic."

Those words were said to me by Nathan A. Chapman, the man who started the country's first, and thus far only black-controlled, publicly-traded investment bank, only weeks before I got my first job as a business reporter. It was seven years ago, five years before Nate's company spectacularly crumbled, before Nate himself was charged, tried, convicted and sentenced to a seven-year stretch in a white-collar scandal.

He said those words across the coffee table in his private office, on the 28th floor of the World Trade Center in Baltimore, with spectacular views overlooking the Inner Harbor, in a meeting my college's president hooked up for me. I was 23, and it was weeks before I got my degree, just as the dot-com sector and the stock market went bust, around the time the housing bubble started getting inflated, a half-decade before it burst under the pressure of exorbitant home prices and sub-prime mortgages. It was before it was hot for a twenty-something from the projects to write about Corporate America in the mainstream media.

And it was before Don Imus called the Rutgers women's basketball team some nappy-headed hoes.

How does Imus relate?

What happened to Imus in the wake of his comment shows how prescient Nate's words were in framing my then-infantile career as a business writer, the real challenges for my generation and even this blog, long before I ever imagined I'd write it. Imus' words created an uproar in the media and, of course, among old-school civil rights types. But it wasn't a march or a protest that ultimately brought him down. Imus made his comment during his Wednesday, April 4 radio show. By the following Monday he'd been told he would be suspended for two weeks, but was still on the air. But the next day, April 10, Staples and Procter & Gamble pulled their ads from his TV slot on MSNBC.

General Motors shook him off the next morning, as did American Express, which had been spending a reported $1.2 million in ad dollars on the program. By that evening, MSNBC dropped Imus' show altogether. No marches. No organized boycotts. No sit-ins. Some of America's biggest companies decided that sponsoring Imus wasn't worth the risk of potentially alienating millions of black checkbooks. Maybe Spike Lee said it best in an interview on the Today Show: "I'm going to spend $100 in Staples today. I'm buying Bigelow Tea. I'm buying Procter & Gamble..."

Economics -- the civil rights platform for my generation -- was the final arbiter in the disposal of Don Imus.

And with that, I bring you this new blog, "Ways & Means", a look at how we relate to the rest of America and the world, through our individual and collective economic condition. Most of my posts will be (a lot) shorter than this, and they'll also be short on, if not devoid of my own opinions and any financial advice -- I'm a journalist, not a pundit or financial adviser, after all. Much of what I talk about here will be in the form of anecdotes that hopefully put the financial condition of black folks -- particularly our generation of black folks -- in context. And since I need to write often, I hope you all read me, either here or at my other blog, and send me all the suggestions, criticisms or ideas you have to offer. Hope you enjoy.

We're getting bigger and better

2007-04-06T20:20:00.000-04:00

I said when BPM relaunched that I planned on growing the site and expanding beyond it with my writing on financial literacy. Now I'm happy to announce that my work here is baring fruit, and I've been approached by AOL BlackVoices to partner with them in creating a new blog called "Ways & Means".

Scheduled to launch at BlackVoices on April 16, Ways & Means will also be focused on financial literacy, particularly among young, professional African-Americans looking to get their economic footing right. Unlike here, where I post more sporadically, Ways & Means will have new posts daily, which means I'm hoping for a lot more feedback from you with suggestions of new topics to keep the flow going.

Just like here, what I write will be anecdotal, about sharing stories that relate to financial trends as opposed to advice, given I'm a journalist and not a financial professional. Blackpeoplesmoney.com will continue to exist and I hope you'll continue to check us out here while making Ways & Means one of the sites you visit on a regular basis.

Thanks for reading.

Cents-less violence?

2007-04-01T09:09:00.000-04:00

My last few posts were about the cause of the race-wealth gap. It's a subject that deserves attention, but more pressing is the conversation about the gap's effects on minority communities, especially in inner cities.

Two recent stories, in the Philadelphia Inquirer and the Boston Globe point out how a surge in violence among young, black and unemployed males -- is tied directly to lack of education and economic opportunity. (Recall, my last post asked whether the wealth gap was cause by lack of education or cultural factors).

In some cities, violent crime is up at an alarming rate. Philadelphia has already topped 100 murders this year. Boston, though its violent crime rate pales in comparison, has seen a spike in shootings, including a ridiculous incident last Friday when an 18 year old black male was shot in the head on a city bus -- just about a mile from both the Globe's offices and my own apartment. The increase in violence is happening as some economists say the economy is slowing down -- remember the adage about black folks catching the flu when the economy has a cold? In fact, Steve Bailey's column in the Globe points quotes a speech by Ben S. Bernake, the chairman of the Federal Reserve Bank, that warned about the consequences of a growing gap between "superstar" have and regular-people have-nots. (Coincidentally, Bernake quoted a story I wrote for the Globe earlier this year).

I talked to Steve after his column ran and he said he wanted to kick himself for forgetting to include one important stat from a study which pointed out that black male high school dropouts are employed at lower rates and earn far less money than either white or Hispanic dropouts. They also die violently at higher rates than whites or Hispanics. But for black males who go to college and graduate, the income gap narrows and the disparity in murder rates nearly disappears.

What's that mean? In short: regardless of what causes the wealth gap in America, a lack of education among black males equates to a lack of economic opportunity, which in turn equates, for far too many, to a quick trip to the graveyard. On the other hand, get some of these cats off the street and into a classroom, and there's a strong argument that not only does the wealth gap close, but the violence almost certainly disappears.

Culture or education, Part II

2007-03-22T22:11:00.000-04:00

My last post started a debate among readers: is a lack of financial savvy and education or cultural factors like racism and historic lack of access to financial institutions primarily responsible for the racial wealth gap in the US?

I'll keep my own opinion out of it, but will share some of the best points I got by email from a few readers.

A 28 year-old single mother from Boston with a degree in sociology and "a sh*tload of student loan debt", blames societal factors:

"I was thinking today about some of the early welfare laws of the 20th century and the impact they have had on "the black family"...if a man was found living in the house (man-in-the-house rule) with his woman and children, welfare benefits were automatically and drastically reduced. Just thinking of the impact this must have had...being penalized for trying to maintain your family unit! Then I thought about more recent rules prohibiting and penalizing people for having savings, once on welfare. While welfare is only a small part of the history of black folks, it does illustrate how government has systematically prevented economic mobility among our poor for years.

Then we have the middle class. How many news reports have we read and seen that deal with banks unfairly charging higher interest rates for Black/Latino consumers or car insurance companies charging higher rates in zip codes where the population is predominantly Black."

Still, she admits her own family is an example of how education plays a role. Several property owners preceded her, yet none of them ever discussed how to save for or acquire a home, leaving her to do the research on her own, she said.

Another reader, a 31-year-old publicist from suburban Maryland, says simply that "at the end of the day, no matter what happened in the past, there's no excuse for not handling your money right except [lack of] education. Culture has nothing to do with you not knowing..."

I'll post more feedback as it comes.

Education or Culture

2007-03-19T22:24:00.000-04:00

I came across this post on another personal finance blog: One columnist's take that the wealth gap between minorities and whites is cultural, and a blogger's counterpoint that the wealth gap is one born of a lack of education about finances.

I don't think you can separate the two: Unfortunately, the black community has always lacked sophistication and knowledge about wealth, and that's been paired with some very necessary, but bad habits. After all, it wasn't even a century ago when black folks could not deal with the financial mainstream -- not banks, brokerages, real estate agents and so on, so alternate means of saving, borrowing and investing evolved to meet the need. In the meantime, only in the past few years has financial literacy become a priority in American education and media.

So I say it's culture plus education. Tell us your take in the comments section.

Loans coming home to roost

2007-03-16T21:35:00.000-04:00

A new study first reported by one of my Globe colleagues shows that once again, when there's an economic cold going around, black folks catch the flu. This time the illness might be too much for many of black homeowners to survive.

The story, "A smoking gun on race and subprime loans", details that African-Americans are far more likely than whites and in some instances Latinos to have used such loans to buy their houses during the housing boom (which has now gone completely bust, in case anyone was still wondering).

What's a subprime mortgage? In short, it's a type of loan that's supposed to be targeted at people with poor credit. The important thing is that they're typified by higher interest rates than someone with a good credit score would pay. Not all subprime loans are bad, in fact they exist to help people who otherwise would not be able to borrow money for a house because of dings on their credit.

But too many people who shouldn't have had these typse of loans -- or who couldn't afford homes at all -- were using them to buy houses at overblown prices. What's worse is that many such loans not only came with high interest rates, but also had adjustable rates. For those people, who are disproportionately black, the worst-case scenario came true: home prices dropped while interest rates rose, meaning their monthly payments are now unaffordable and many of the homes they bought can't be sold because they are now worth less than the original price.

So why is this a "black community" problem as opposed to one for people with bad credit to worry about? For one, any number of factors contribute to African-Americans having lower credit scores than people of other ethnicities -- like less experience with credit and home buying or fewer family resources for down payments or to stave off credit card bills -- which makes it far more likely for us to have to pay higher interest rates on home mortgages.

Still, if you're college educated, professional and in a high income bracket, you're likely to have better credit and not have to worry about this, right? Actually, another report says that at least in Boston, affluent African-Americans were the most likely segment of the population to have used a subprime loan to buy a house. Assuming, again, that people with higher incomes are more likely to be eligible for cheaper loans, then, that's a trend that's both disturbing and not entirely explicable.

And since subprime mortgages are being blamed for a record number foreclosures all across the country, it's conceivable that many African-Americans across the country are in grave danger of losing their homes -- which could be disastrous in the long term for some black neighborhoods.

Not sure if you've got one? Right now interest rates on a 30-year, fixed rate mortgage are about 5.6 percent, give or take a few points. If you're borrowing, or have borrowed, at a significantly higher rate than that in recent years, you've likely got a subprime loan.

Know anyone who has a subprime mortgage, or think you have one and want to tell your story? Email us.

We're Back

2007-03-13T08:47:00.000-04:00

So sorry for the long delay, but finally comes the relaunch of Blackpeoplesmoney.com. You'll notice the page is redesigned for easier navigation and a livelier look and feel. I hope you enjoy.

We also plan on posting a lot more often going forward, and are making it easier for you to contact us by simply dropping a not to blackpeoplesmoney@gmail.com. (Hopefully this box won't get deluged with spam so that it won't have to be changed).

We also plan to add a few contributors to the site and some new interactive features. Stay tuned for those.

One thing you should immediately notice in our links section is a link to a free financial literacy kit from HSBC, a bank based in New York. I'm not shilling for or paid by HSBC, but the link is an example of one way we hope to improve, by regularly linking to resources that hopefully our readers will take advantage of as you try to educate yourselves about money and get your financial weight up.

The HSBC kit comes on either CD-ROM or as nine booklets on banking, credit history, financial planning, home ownership, insurance, investing, managing your money, retirement planning and using credit. It's available in English or Spanish. You can get the kit by clicking the link we provided or emailing HSBC.

Again, we hope you enjoy the redesign. Thanks for reading. Stop back soon. Tell a friend. Or a few.

-Keith T. Reed
Creator, blackpeoplesmoney.com

Intermission...

2006-11-29T13:44:00.000-05:00

Sorry once again for the lag between posts. I've been busy with Globe projects that have kept me away from here. That said, I am planning for 2007, when I hope to do a full relaunch of this blog, complete with a new design, better content and a few of the best and brightest business and personal finance writers from around the country as contributors -- look for the first posts from our first new contributor, Tory N. Parrish, a business reporter from upstate New York, before year's end. Until then, bear with me and pardon the dust as I spruce up the place a little bit. Thanks for reading.

-KR

Back to the hood again, part II

2006-11-08T22:37:00.000-05:00

One of the best parts of my job is interacting with some of the most successful businesspeople in America. In the last 48 hours alone, I had one-on-ones with the vice chairman of one of the largest banks in the country, the entrepreneur who founded a successful private jet company backed by Warren Buffett himself, and a man who owns professional basketball and hockey teams.

One of the common threads between them all, besides being filthy rich is that they're all white guys, and to a person, they're all cool with talking about provocative topics like race, which has made for some interesting conversations. Which brings me to today's topic -- actually, a follow-up to my last post about how dismal the neighborhood I grew up in in Pittsburgh looked when I visited a few weeks ago, and what could be done to change it.

I brought this up during yesterday's meeting with the bank vice chairman as we chopped it up about our backgrounds, educations, and what inspired us to do what we do. I told him how profoundly growing up in a neighborhood that hadn't seen any new jobs, homes or investments in my lifetime had affected me and influenced my ambitions in life, then he told me a story of his own about a similar neighborhood.

It was Boston, circa mid-1990s. Like my neighborhood in Pittsburgh and hundreds of other high-minority, low-income neighborhoods around the country, the Dorchester section of Boston was suffering under the weight of drugs and gang violence fueled by disinvestment. Sturdy buildings and solid houses stood vacant, almost screaming for entrepreneurs and families to make something useful out of them and make a profit in the process. Finally, the business community in Boston, the black clergy, the mayor decided enough was enough.

As the story was told to me, a crew dozens strong got together and went to Codman Square, at the time a particularly dilapidated part of Dorchester, and slept overnight in an abandoned building there -- a symbolic gesture that if a bunch of preachers and rich downtown white guys would sleep there, then maybe there was hope for the neighborhood. A few bankers, including the one I met with, made a point of lending money to entrepreneurs who would open up businesses there and giving loans to families who wanted to buy houses. A decade later, I live just about a mile from Codman Square. The neighborhood still has its problems, but people on the street tell me it's a thousand times better than it used to be. Houses around here (though overpriced and perhaps even teetering on even more steep value drops) are selling in the $400,000 to half-a-mil range.

Ok, so what's the point? Well, after my last post, I got quite a few emails from people like myself -- young, black professionals who left Pittsburgh in droves in the last decade to get away from suffocating neighborhoods like my own. And the common question I've gotten has been this: "Is Boston as racist as I heard it is? Is it as bad as the racism in Pittsburgh?"

It's a question that bothers me in the wake of what I saw at home and after my conversation with the banker -- not because I'm naive enough to think that racism doesn't exist, but because so many of the problems in our neighborhoods didn't start and won't end because of any white person's prejudices. Along Lincoln Ave., the main drag through my neighborhood back home, not even the barber shops or corner stores that were open when I grew up there survived. Vacant buildings and houses potentially worth hundreds of thousands of dollars get no more attention than the few cats who bother to stand in front of them and sell drugs. And half of them are my age, still in the same spot I last saw them in high school.

So sure, racism's a problem in my hometown and where I live now, but it ain't the number one problem we got if a bunch of white men are willing to sleep in abandoned buildings to help turn a black neighborhood around in one city, while in another, black males would rather pitch $20 cracks than buy and sell buildings that could turn their own lives, and so many others', into something better.

In another conversation in my senior year of college, a black investment banker who led what at the time was the only black-controlled company of its kind that was publicly-traded, told me something else that I remembered this week. He said: "The civil rights movement of your generation is economic." Truer words were never spoken. My mother's generation, and her mother's, may have had whitefolks' racism as a primary obstacle to what they could do in life, but I don't. Sure there are and will always be those who don't want to see a brotha, a sista, or a 'hood be anything good, but if there was anything that limited anybody from around my way from being successful, it had way more to do with the fact that my neighborhood was losing that economic battle, big time. A decade later, I'm in control of my own destiny because I want to be -- not because some white guy said I could or couldn't. Sad thing is, I still can't say the same for my old 'hood.

A letter from home, $75 Timberlands

2006-10-28T22:14:00.000-04:00

Sorry, again, for not posting for so long. Between helping launch an online project for the business section of the Globe, transitioning to a new beat writing about sports business and banking (which will both make for some good posts here), and some family drama, it's been hard to keep up.

This entry comes from my hometown of Pittsburgh. Besides having the greatest football team on Earth, Pittsburgh is a little like the land that the economy forgot. That's both good -- a decent house can still be had here for far less than $200 grand -- and bad, because many neighborhoods here, especially black 'hoods, haven't seen a new job, store or anything else in years. Ain't been a house built or a business opened around my way in my lifetime -- and I'll be 30 three months from now.

That said, I owe a lot of my own ambition, if not career success, to the 'Burgh's sorry economy. If I hadn't watched my overeducated mother and hard working aunts and uncles struggle to make ends meet here, and watched my own neighborhood slowly disintegrate under the weight of disinvestment, I may likely not have had the motivation or the stones to go away to college, land jobs in politics and journalism and end up at one of the biggest newspapers in the country while in my 20s.

But as an adult who makes his living writing about how people make money, coming home to see the fam and riding through my old hood is a crazy mix of depressing and ridiculously encouraging. Depressing because the fam still struggles -- peep how my uncle who picks me up from the airport runs down how he's out of work and trying to hold it down for his wife and kids, and because the neighborhood looks worse than ever, with no fewer than half the buildings on The Ave. (don't ask which one, it could be almost any Ave from Brooklyn to Watts) standing empty.

Those buildings, though, are the reason why I'm optimistic, perhaps foolishly. I mean, if anybody had a solid plan and any cash at all, they could make something out of those buildings, like a store or two since there are none for people to walk to, or some decent apartments in an abandoned school, or a renovated single family in a solid brick building that nobody's called home for years. Hell, how bout a salon, cuz damn if black folks are goin' spend their money on anything, it's going to be looking good!

If I had any money of my own, I'd definitely give it a go. Anybody have a story about what it looks like around your way?

A coupla sidenotes: I bought my 9-year-old son a pair of $75 Timberlands today. Did I do wrong? I mean, under normal circumstances, I let my boys pick out their own clothes, within reason. I'm definitely not raising label whores here, but I'm not of the mindset that the best way to teach kids to save instead of spend is to deprive them of any and everything just for the sake of them hearing Daddy say "no". Still, I normally wouldn't have paid that much for a pair of shoes for a nine year old. Thoughts?

Meanwhile, my seven-year-old sees me writing this and wants to know what I'm doing. Daddy is writing for a web site that he owns, I said. "That you own? You mean you're the boss of yourself? That's stupid!" he said. Apparently, that little one has a lot to learn.

Not by any means...

2006-10-09T02:21:00.000-04:00

A friend and reader asked me recently why I thought members of other ethnic groups tend to buy their first houses at an earlier age than we do.

Her theory: "I think it's lack of encouragement. I didn't think owning property was a big deal until my dad badgered me my entire year and a half of grad school to buy something small when I get my first job."

I think there are any number of reasons why we tend to buy our first houses later in life than other groups. First, beware the generalizations -- I know a few black folks my age (in the vicinity of the late 20s, thank you), who already own their houses and have for a few years. At least one person I know owns more than one property. And not every white person, of course, buys their first house in their early 20s.

That said, one obvious reasons is that we as a group have fewer financial resources, which means that young people starting out are less likely to get help with a down payment and to need a few more years to save up after high school or college to stash enough cash to get in the game. As far as the "encouragement" factor, I wouldn't put it in the same language as my friend, but yes, it is true that in many instances matters like buying a home, saving or investing are things that just don't get discussed in black households. In short, it does take many of us a lot longer to realize that buying is the thing to do because we haven't been taught the value of it from an early age. I plan to be much, much different with my sons.

That, though, brings me to my next point: While owning a house is clearly an important step that most people should try to take in their lives, I don't believe in homeownership by any means necessary.

Actually, I think that belief -- that everyone should own their own homes, no matter what their circumstance -- is what has the housing market in shambles now. Too many people in the last few years thought they NEEDED to own a crib when they were probably better off as renters.

Homeownership is great, but only under the right conditions, and you shouldn't be trying to buy a house you can't afford. In fact, it can be a terrible move if you're not otherwise financially stable.

Case in point: a study completed earlier this year found that not only are minorities more likely to have subprime mortgages -- basically loans that cost way more than they should for no good reason -- but that high income minorities (that's right, not poor folks, but educated people raking in that cake), are far more likely than poor or wealthy whites to have subprime loans.

This is very dangerous and puts many ostensibly stable black neighborhoods a rate increase away from being filled with foreclosures. And much of it happened because during the inflated housing market of the last few years, too many people who should have been perfectly comfortable renting allowed themselves to be convinced that owning, by any means necessary, was the way to go.

The sweet sound of wedding bells

2006-10-04T02:14:00.000-04:00

Months ago, I wrote a story for Heart & Soul magazine about "generational wealth", the concept that your family's ability to help you financially when you're young has a huge impact on your hunt for a piece of Americana.

With lower incomes and less in the bank than other ethnic groups, black folks tend not to give our kids much of a head start. But I never thought about how much that can be attributed to cultural differences until last weekend, when I went to a wedding reception for a 20-something Cambodian couple.

The reception was an hour's drive outside Boston, even though the couple lives in the city. I understood why once I got there. The location, along with everything else about the event, was set up to keep the young couple from having to spend money and to put some get-on-your-feet cash in their pockets.

The restaurant was owned by a family friend, who ate the cost of feeding and liquoring up what had to be 200 people. And gifts be damned: there were envelopes -- the kind you get in church -- at every table. The couple went from table to table, collecting their offerings and saying thanks for the cash stuffed in them.

I couldn't help but think that had I been at a black wedding, there'd be no envelopes and the couple likely would have paid for the whole thing, on their own, on credit.

The experience took me back to my interviews for the Heart & Soul story, in which young, black professional women recalled how they first realized that their families lacked either the means or a plan to help them get on their feet. For some, it was when they saw their white law school classmates get downpayments on expensive homes from parents, while they scrimped and saved for years to buy smaller ones. For others, it was the weddings their colleagues didn't have to pay for out of pocket.

That's where the cultural part comes in. The people at the reception were not wealthy, at least not outlandishly so. They weren't white, and many didn't speak English as a primary language. But they understood that as a community they could do something to help their own stave off debt and get a decent start to their lives. In that instant, they diverged from many blacks by starting a young couple's nest egg for them.

This is something most black folks just don't do, and not because we can't, but simply because this is not how we've been socialized to act.

Call me cynical; I say I'm a realist. I know how we do. And I know that until black folks start doing more to ensure their kids get a decent economic start to their adult lives, we'll continue to lag behind others in this country.

Blacks get more in Queens, et cetera

2006-10-03T23:34:00.000-04:00

First let me apologize for taking such a long time between posts. Now let's get right to it:

A story in the New York Times this week reported that in New York's Queens borough, the median income of blacks has actually surpassed that of whites. But, the article points out, black immigrants from the Caribbean are doing far better than African-Americans in Queens, and the income numbers might be skewed simply because the most affluent whites have already absconded to Long Island.
A Baltimore Sun story says the housing boom in that market was largely fueled by minorities, who took an increasing share of the mortgages let by banks over the past year. Good for the housing market and perhaps stats on wealth gaps, but too many of those mortgages were "interest-only", adjustable rate and so on, so there's a real danger the boom could be an even bigger bust for blacks and Hispanics now that rates are up and home values are tumbling.
Bob Johnson's at it again. The BET founder turned hotel magnate (more on that tomorrow) launched a community bank in D.C. last month. The press release announcing the opening of Urban Trust Bank said it would " be a community financial partner to the diverse Washington, DC community, providing outreach and financial education in a service-oriented environment to build wealth for diverse urban consumers including young professionals, emerging families seeking first home loans and established families seeking second mortgages, single mothers and those who have never established a banking account."

All good things, but I had a few questions for the folks running Urban Trust, and asked for an interview with Dwight Bush, the man Johnson picked to lead the bank. I also asked if Bush might be willing to write something up, in his own words, about how the bank could best deal with the overwhelming financial issues facing the black community. I was told one or the other would happen in short order, but as of yet, neither has. But my curiosity hasn't gone away, so I'm posting the questions I asked him, via an email with Urban Trust's PR firm, verbatim:

1) In what area does he think African-Americans, especially young black professionals are most lacking in terms of financial education, and how can a for-profit bank address that while still making money?

2) The housing market in many cities -- especially DC -- priced out many families looking to buy their first homes, and now rates are rising. Part of the problem was "creative financing" that had people take out loans they couldn't afford while pushing up sales prices. How -- specifically -- can you help both families that can't afford their first homes and those in trouble on mortgages they already hold?

3) This isn't the first effort at targeting the unbanked -- how can you be more successful at getting them through your doors?

4) How can you possibly compete with the Bank of Americas of the world?

Upcoming posts: More on Bob Johnson's hotel empire and how his fundraising could open the door for black entrepreneurs, a black financial advisor in Philly sets out to teach money skills to public school kids -- using real cash, and a question from a reader curious about homebuying.

Who's next?

2006-09-21T20:13:00.000-04:00

THESE are America's black billionaires. All two of them, according to Forbes magazine's annual list of the richest 400 Americans.

This year's list is all billionaires, meaning that for the first time, no one with fewer than 10 digits in the asset column qualified (and they say the rich aren't getting richer).

That only Oprah and Bob -- who needs last names or descriptors to know who they are -- are the only African-Americans in the Billionaire Boys and Girls Club is no surprise. He was the first to join in 2001 after he sold BET; she joined shortly thereafter and that, as they say, was that. For the record: Oprah tied with several other Billies at number 242 with an estimated $1.5 billion fortune, Bob and several others tied for 374th place with $1 billion even, proving, perhaps that it is lonely at the top but not necessarily so for middle of the road moguls.

But seriously, the perpetuity of Oprah and Bob on Forbes list begs a few questions, like when will black billionaires three, four, five or ten join them on the list and where will their money come from? A good percentage of the other Forbes-listers inherited their money, while the others made their fortunes on everything from oil to tech to sports. The lone two African-Americans on the list are self-made media entrepreneurs -- after all, nobody's black daddy until Bob had a billion to leave behind . Will the same hold true for the next to join the list, or will, say, a black investment banker or tech entrepreneur beat the next black media baron to the punch?

And perhaps the better question is when will someone take on the task of ranking the wealthiest African-Americans in the country? (If any of my editors are reading, I'm waiting for your call on this one.) One thing's for sure: we already know who will come in and first and second on that list.

Part 2: 'Brokest' it is

2006-09-15T11:12:00.000-04:00

I've finished comparing Black Enterprise's list of the top 10 cities for African-Americans with A.G. Edwards' "Nest Egg Index", which ranks cities where residents are doing better at building wealth against those where they aren't.

Only one city on the Black Enterprise list, Washington, D.C., was also in A.G. Edwards' top ten. It came in at number eight. The only other top black city in the top 100 on the nest egg list was Baltimore, at number 60 -- and those two cities are so close that they're really part of one big metro area. Atlanta, Black Enterprise's number one city for black folks, ranked 123d on the nest egg ranking.

It's hard to say definitively what this all means, but there are a few ways to look at it.

Black folks have smaller incomes, fewer assets, and lower rates of homeownership, on average than whites. So it follows that 'blacker' cities would not fare well in a comparison based on A.G. Edwards' criteria, which factored in a dozen variables -- from income, to home values, to homeownership rates, debt and investment trends .

Many of the cities that scored higher on the A.G. Edwards list did so for reasons that could make them bad places for a young person of any race to try to build a nest egg, and the opposite is true for lower-ranked cities.

Boston, for example, ranked 13th on the list, despite its enormous cost of living and overblown housing market. By A.G. Edwards' standards, higher home values boosted a city's nest egg standing. But Boston would be less attractive to anyone trying to get his or her financial sea legs, while Atlanta, who's lower home values hurt it in the nest-egg rankings, would be much more attractive.

However you slice it, here's what the data showed:

City-- Black Enterprise Rank-- A.G. Edwards "nest egg" rank

Atlanta --1 -- 123

Washington, D.C. -- 2 -- 8

Dallas -- 3 -- 343

Nashville -- 4 -- 303

Houston -- 5 -- 455

Charlotte -- 6 -- 173

Birmingham, Ala. -- 7 -- unranked

Memphis -- 8 -- unranked

Columbus, Ohio -- 9 -- 238

Baltimore -- 10 -- 60

Sources: A.G. Edwards; Blackenterprise.com

Required Reading, September '06

2006-09-14T00:25:00.000-04:00

Heart & Soul magazine, where yours truly is a contributing editor, ran part two of a series called Livin' Large on a Tiny Budget in its August/September issue. I wrote part one, which ran earlier this year.

Essence's Work & Wealth section follows up on its homeownership series, gives tips on raising your credit score and profiles Marsha E. Simms, the first black female partner at New York law firm Weil, Gotshal & Magnes LLP, in its September issue.

Black Enterprise lists the top 50 colleges for African-Americans, names its black executive of the year and leads with a cover story on black supermodels-turned-entrepreneurs in its September issue.

Vibe Vixen advice queen Beverly Smith counsels a 26 year-old reader on getting ready to get a mortgage, in its Fall 2006 issue.

Would you rock these?

2006-09-13T22:54:00.000-04:00

Would your kid? Would you buy them if you knew they were endorsed by the N.Y. Knicks' Stephon Marbury? Ok? Well how about if they only cost $15? You heard right. A black pro athlete with a shoe deal -- who's only charging 15 bucks for the sneakers.
Shrewd business move, or image killer? Who knows. Black kids since the Jordan era have typically shunned cheap sneaks. Marbury could be about to take a big loss here. Or, he could be onto something, or just out to make the point that there are more important things in life than shoes that cost more cash than you've got in your bank account. It'll be interesting to see how this one turns out.

Top 10: Best or Brokest, Part One

2006-09-11T22:54:00.000-04:00

I wrote recently about an annual survey by A.G. Edwards, the money management firm, which ranks the best and worst cities in the country for building a nest egg. A.G. & crew looked at 12 factors, from the rate of homeownership, to income levels, debt levels, home values, the percentage of a city's population that are investors and the percentage that at least owned savings accounts. Looking at the criteria itself, it was tough to tell whether they wanted to show the best areas to start building a nest egg, or where people already had a good head start at doing so.

Of course, this also got me thinking about whether A.G. Edwards' data could tell us anything else, namely, where black folks stand a better chance of gaining some financial ground, or at least the cities where we're already doing OK.

No, said Sophie Beckmann, financial planning specialist for the firm. A.G. Edwards didn't collect demographic data at all. Fair enough. Still, in her own words, the city-by-city rankings are important because they show where in the country people are getting ahead and where it might be tougher to do so -- important factors in an era when employers and the government are doing less and less to ensure smooth sailing into retirement.

So with that in mind, I'm planning a little experiment. In the next day or so, I'm going to compare A.G. Edwards' list to Black Enterprise's most recent list of the Top 10 cities for African-Americans to see whether the best cities for black folks to live are among the best -- or worst -- places in the country for building a nest egg. I hope to have this wrapped up soon so you can see the results.