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Dr. Boyce Watkins is a Finance Professor at Syracuse University. He is also the author of "Financial Lovemaking 101: Merging assets with your partner in ways that feel good." He does regular commentary in national media, including CNN, CBS, NBC and BET. You can read more from Dr. Watkins by going to www.BoyceWatkins.net |
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Dr. Boyce Watkins Rips Sean Hannity on Fox News Click the music player's pause button located at the bottom of this page in order to disable the music |
Some of you know that I have been in an on-going campaign to challenge the NCAA on the fact that they do not compensate the families of college athletes for what they bring to campus. Below is an article I contributed to in the Atlanta Journal Constitution and Sunday, there should be a syndicated column I wrote opposite NCAA President Myles Brand on the topic. You know that I am pretty candid in my thoughts (love it or hate it), so here are some reasons I feel that we should be outraged over this issue. I speak on this issue based on my 15 years teaching on college campuses with big time athletics programs, as a Finance Professor who understands how money works, and also as a black male who has seen the devastation of this system up close. Also, as a faculty affiliate with the College Sports Research Institute at The University of North Carolina Chapel Hill, I made it clear to the director that I intend to pursue the racial element of NCAA compensation inequity. I am not a fan of preferential treatment for athletes. I only want fairness for the athletes and their mothers. I am sick of seeing an athlete generate millions for his coach, while simultaneously watching his family struggle to pay the rent every month: 1) The NCAA extracts somewhere near $1 Billion dollars per year from the black community. The revenues earned by collegiate athletics are on the magnitude of the NBA, NFL and NHL. However, unlike these other leagues, the players are only compensated with a scholarship. Scholarships are valuable, but only a drop in the bucket relative to the money players bring to campus. 2) The NCAA contract with CBS sports for the TV rights to March Madness was worth over $6 billion dollars. This does not include hundreds of millions earned each year in concessions, endorsement deals and other extraneous benefits. This money goes into someone's pockets, so the question is "Who takes this cash home? Those who earn it, or those on the sidelines?" 3) NCAA coaches in revenue generating sports earn as much as $4 million dollars per year, with a large percentage of that revenue coming from endorsement deals based on the clothing that players wear and appearances that players make on national television. 4) In contrast to the luxury experienced by NCAA coaches and their families, nearly half of all black college basketball and football players come from dire poverty. 5) The NCAA spends millions every year in a massive propaganda campaign. Their goal is to convince the world that paying college athletes or their families would be unethical and impractical. At the same time, many of the arguments they make about player families do not apply to their own families. For example, in the CBS Sports special I was on last year, nearly every single person on the special (Coach K from Duke, Billy Packer, Clark Kellogg, NCAA President Myles Brand, etc.) was earning hundreds of thousands, even millions from athletes, while simultaneously explaining why athlete families should not be paid. That’s worse than Dick Cheney and George Bush sending young people to die in a war that they or their families refuse to fight. 6) The mission of collegiate athletics, unfortunately, is more commercial than educational. Players are admitted to college every year with full knowledge that the player is only going to be there for a little while. Also, athletes are not allowed to miss big games or practice sessions to prepare for exams. Finally, coaches with high graduation rates who do not win games are fired, while winning coaches with low graduation rates are promoted and given raises. This creates poor institutional incentives and leads to a mountain of academic hypocrisy. 7) As an African American, I find it ironic that many HBCUs can’t pay the light bill, yet the NCAA is earning over a billion dollars every year from black athletes and their families. This amounts to a massive wealth extraction from the black community, where some of our most valuable financial assets are being depleted, no different from mining being done in Africa. 8) While one might wonder why the players don’t simply take another option, the problem is that the NCAA is allowed to operate as a business cartel, effectively allowing them to implement nearly any and every rule they wish in order to keep athletes from having other options. This form of operation is due to a political blank check being written by Congress that allows the NCAA to do things that would be illegal in nearly any other industry. The very idea that they’ve warped our minds to the point that we think it should be illegal or immoral to fairly compensate a young man or his family for their labor is simply unbelievable. Players don’t even have the same rights to negotiation that are given to coaches, administrators, or sports commentators, all of whom earn millions from the activities of players on the court. Personally, I think this is wrong. The article in the Atlanta Journal Constitution is below, and I believe the op-ed is going to be in the Sunday edition (also in the LA Times, Chicago Tribune and some other places around the country). Finally, I am working on a CNN special to deal with this topic. I’ll keep you posted. |
Jesse Jackson & Barack Obama I spoke last night with someone from Jesse jackson'scamp, and I wanted to share some quick thoughts on the unfortunate comments made by Rev. Jackson about Senator Barack Obama. I should start by saying that I support Senator Obama's candidacy for the White House, and I also firmly believe that he has the right to keep his testicles (just a joke, I can’t help it). I should also note that I love and respect the Jackson family, especially Rev. Jackson's daughter Santita, from whom I have received a great deal of support. Quick thoughts on Rev. Jackson's comments, made in response to Senator Obama's statements in black churches, particularly about the African American male: 1) Whether we agree with Rev. Jackson's sentiments about Senator Obama or not, I consider this to be a wonderful opportunity to begin a powerful national discussion regarding what it means to strengthen our community (please feel free to comment on my blog if you have something to say). How do we draw the line between constructive criticism and destructive stereotyping? Every community has flaws, so the idea that black men are somehow less moral, less productive or have less compassion for their loved ones than other ethnic groups is not only problematic, but it feeds directly into historical stereotypes of the black male (remember the comments about black men “going AWOL”, “being boys instead of men” or “denying their responsibility”?). Remember: the way the Nazis justified their extermination of the Jews was by using media and propaganda to convince the public that Jews were less than human, less able to love, and less worthy of compassion than other ethnic groups. The same thing is being done to the black male in America, as it is not a coincidence that the same group being disdained and dehumanized by our society JUST HAPPENS to be the group most likely to be incarcerated and most likely to be defined by our public schools as having behavioral disorders. Also, have you ever noticed that the most hated athlete in America is almost always a black man? (Barry Bonds, Ron Artest, Terrell Owens, Michael Vick, Latrell Sprewell, Jack Johnson, Muhammad Ali……) – What do they always say about these guys (even the ones who never committed a crime)? That they have poor character. That is what many of my colleagues at Syracuse say about ME. This problem reaches all of us. 2) I do not feel that Rev. Jackson's comments were made out of jealousy. If he didn't like Senator Obama, he would not have endorsed him. If he were truly working to undermine Senator Obama's campaign, he would have made his comments publicly (using different words, of course). Instead, he has been disciplined, as we all have, in keeping his disagreements to himself. Leaders are going to disagree, and disagreement doesn't make you into a "hater". 3) While we are quick to attack and condemn the black male, we must remember that all groups have flaws, and if I shine a spotlight hard enough on any ethnic group, I can find poor behavior. It seems as though we have collectively decided that one group’s flaws are ok to spotlight, while those of other groups are off the table for discussion. It’s sort of like saying “You’re a bad person because your feet stink, but you can’t talk about the smell of my feet.” I never understood why the black male has been deemed to have sole responsibility for the breakdown of black families. Aren’t there women in these relationships too? Don’t the majority of white men divorce their wives and leave the home as well? It’s not to condone any of these behaviors, but it implies that we all have our hands dirty in this, not just black men. It is also easy to be confused into believing that if black men would simply choose to behave, the media would have nothing to stereotype. Beyond the impossible task of getting 18 million well-behaved people walking in lockstep, the reality is that if the media or anyone else wants to see the negative in you, they are always going to find it. They will always be able to find another Flavor Flav to put on TV. They will always be able to find another 50 Cent, Lil Wayne or prison inmate to glamorize. You see, the easiest thing for an abused person or group to believe is that if they would just stop being so pathetic, then the abuse will stop. But if someone hates you, they will always find something to hate. When black men demand that our government create policies that open up more job opportunities, they are chastised for being pathetic and asking for a handout. When we endorse the idea of supporting black businesses and working together, we are accused of being separatist or hating white people. America has been trained for 400 years to hate black people and we have been trained to hate ourselves. There will always be something to hate, no matter how much our behavior changes. Anyone tempted to justify Senator Obama’s statements by saying “Well, he was telling the truth!” should also realize that Jeremiah Wright spoke 40 years of truth in his fight for racial equality, but his truth was shut down by Senator Obama and others. Truth should not know racial boundaries. If Obama can “tell it like it is” with black men, I encourage him and others to “tell it like it is” with other ethnic groups as well. If he can’t do that, we have to ask ourselves why we’ve chosen to relegate ourselves to this form of second-class citizenship. Is it OK to tell us that we are bad people for doing the same thing that other people do? That is a textbook version of racial oppression, white supremacy and nasty double standards. Obama is not a Black Presidential candidate, he is an AMERICAN presidential candidate. What he says to black men should be allowed in every other venue. I hear those who say that there is a time and place for everything (we are in the middle of an election, after all), so if Obama wishes for black leaders to remain quiet on racial inequality, then perhaps Obama can remain quiet on racial degradation (which requires us to defend ourselves). It can’t be one over the other. 4) Black love is a critical element of any dialogue that takes place about our community. Have you ever heard someone say “We’re so messed up”, “Black men are trifling”, or “What’s wrong with our kids?” Such comments, whether we realize it or not, are subconsciously degrading, demoralizing and encouraging of the wrong behavior. I will never motivate my daughter to behave by saying that she is nothing but a dirty little SOB. When we see one black person doing something silly, we somehow feel the need to extrapolate that individual’s actions to imply that all of us are flawed (i.e. “I am embarrassed by Flavor Flav”, or “Did you see the youtube video of the girl cussing out the old lady on the subway? What’s wrong with our kids?”). However, I have never seen a white man look at a group of white kids and say “White people, our community is just so messed up”, or “I was so embarrassed by the guys on the MTV show, Jackass. They make white men look so bad.” Such nasty, negative self-judgments not only erode your self-esteem, but they serve as justifications for racism against the black community. These statements make the argument that: “The black community is torn to shreds and black people are poor and jobless because they don’t have good morals, they make terrible decisions and they just choose to be bad people.” I am a believer that positive reinforcement is a better way to change behavior. Rather than saying that “Black men should stop being little boys instead of men”, perhaps Obama could have said “Look at the fine men on this stage we are celebrating on Father’s Day. This represents the best of black men and what we can all become if we just try our best.” Again, I support Senator Obama and I feel no need to make disparaging remarks about him as he runs for the White House. But I make no apologies for the fact that I also support Rev. Jackson. Both of these men deserve our support and respect, and both of them must be challenged to earn it. Truth be told, Reverend Jackson has spent 40 years working toward Dr. King’s dream, whether we agree with him or not. I would take a moment of pause before we express a willingness to trade in 40 years of Black leadership for a president with a Black face. If he is going to be everyone’s president and not just the Black president, this implies that his ability and desire to get in the trenches and fight for the next Sean Bell, Jena Six or Hurricane Katrina might be limited. Keep backing Obama, but make sure you keep your mind open in the process. Don’t let him, or anyone else, take your vote for granted. Dr. Boyce Watkins |
Dr. Boyce Watkin's Response To The Recent Fox News Segment: "Why Black Women On TV Tend To Be Angry"For those who may not understand why I had to critique Barack Obama's contribution to the perception of black men being irresponsible, perhaps you can get it now. Fox News recently did a segment about "why black women on TV tend to be angry". In the segment, they make continuous reference to the "angry black woman", and point to several examples of black women who tend to be angry during interviews. The video clip is at the bottom of this comment. I have heard alot of brothers write off black women as angry, bitter and nasty, and with equal force, I INSIST that they not characterize the entire black female population by the actions of a subset. Although I've had much personal experience with negative black women, I choose to describe them as collectively beautiful and marvelous, without allowing bad apples to spoil the bunch. I only ask that the same respect be given to black men, without using the actions of bad men to describe us as a collective. Instead, I am hopeful that you can focus on the many black men who've chosen to "man up" and do what is right with their lives.
I received about 130 emails yesterday from people who had mixed opinions about my article on Senator Obama's comments about black men needing to learn the art of fatherhood. They've been interesting and seem to call for more discourse. I noticed that the opinions were right down the middle and many of them were very strong in either direction. I also noticed that many of the emails came from a position of intense pain: Brothers dealing with "baby mama drama" who wanted to see their kids but were pushed out of their lives, or women dealing with some pathetic man who has chosen to ignore his responsibilities. I too know this pain personally, as my father abandoned me when I was a child, and I've also fought like hell (sometimes unsuccessfully) to find a place in the life of my own child. I have 7 god children and I mentor dozens of black youth around the country, many of whom do not have fathers or mothers who are doing the right thing, so I know the problem quite well. I will do a video on the topic soon, but I wanted to pose some quick thoughts I had while reading your emails (and yes, I do read my email and try to respond to you. I only ignore people who come off as flat out lunatics, since I don't mess with crazy people). Here are my thoughts.
1) Why do we assume that a broken family implies that a man "ran away from his responsibility"? Is it not also the case that many relationships end due to actions of the woman as well? All of us know of at least one "insane baby's mama" - either you have dealt with one, been in a relationship with a man who was dealing with one, or perhaps you have BEEN ONE! This does not imply that the end of the relationship is most likely the fault of the woman, but it does take two to tango.
2) No. I didn't make my statements for political purposes or to make money. I don't get paid for what I do on the internet, and I am NOT a politician. I honestly don't trust politicians and life is too short for me to spend all my time hoping that people like me. Telling the truth is the only way I can sleep at night, even if it implies that some people don't like what I have to say. One thing you will always get from me is a straight shot, I assure you of that. I guarantee that if you know me long enough, you will eventually disagree with me.
3) Yes, I support Obama 100% . Critiquing someone and keeping them honest doesn't mean you hate them. I critique my mama and I love my mama. Also, even though I love Barack, I put him in the same category as most "selectively honest" politicians. If a man loves his pastor and church for 20 years, and then suddenly realizes that he should disown them, I can't believe that he just had the wool pulled over his eyes for two decades. I am not in the business of abandoning those who've remained loyal to me for 20 years straight, that's not how I was raised. That's also why I'll never be a successful politician.
4) Obama has made a commitment to being race neutral in this election. However, if he or anyone else chooses to address race in this election I ONLY ASK THAT THEY BE FAIR. For Barack (or anyone else) to shut down anyone who speaks honestly about racism, and then to contribute to racial stereotypes about black male irresponsibility is not balanced. For those who feel that Obama was "telling it like it is", please remember this: Dr. Jeremiah Wright was also "telling it like it is", but he was attacked, disowned and told that his words needed to be muted. Honesty should not know racial boundaries. If Barack Obama is not comfortable going into a group of white males and being honest about their weaknesses, then it is not acceptable for him to do that to black men. Being bi-racial, Obama has just as much moral authority to speak on the negative choices of white males as he does for black males.
5) There are ALWAYS going to be people in every group who do the wrong thing. White women are not stereotyped by the actions of Britney Spears and Paris Hilton. I would never stereotype black women for the actions of a few "insane baby's mamas". So, the notion that it is ok to define black men by the actions of a select few is equally problematic. However, it is comfortable to say "these brothers need to start doing right" because it alleviates anyone else of the guilt of whatever role they play in the breakdown of their families, and it also contributes to the 400 year tradition of defining black men as being socially inferior. A person could just as easily celebrate the great choices of positive black men as he could mulling over the actions of the irresponsible.
Here is the issue: I do not feel that Barack would go into any other venue and paint any other group with a blanket indictment. He would not say "too many Jews support killing Palestinians", or "too many Catholic Priests are molesting little children". So, I am not sure why it is ok to say that "too many black men are ignoring their responsibilities and not being fathers". While all three of these stereotypes may have some element of truth to them and one could claim you are "helping" the group by criticizing their collective behavior, it seems that "truth in stereotyping" is only acceptable when dealing with black folks.
Additionally, one-dimensional analysis is usually incorrect. If I were to define Bill Cosby as "the man who cheated on his wife, had an illegitimate child, abandoned that child to live without her father, and had the child thrown in jail", such a statement could be considered true. However, it would be flawed, myopic and ultimately incorrect. If doing this to one man is wrong, then doing it to 18 million men is damn near criminal. Black men and black women are equally worthy of love and protection and it is only via mutual respect that we are going to rebuild our families. Blaming men for all broken relationships is not the answer, and neither is defining all black women as "angry". We should all spend time looking in the mirror if we want to find the truth.
Finally, racial conversation by political figures must be HONEST AND BALANCED. If you would not say something to a group of white men, then please don't say it to me. I refuse to accept someone else's label.Bless you, Dr. Boyce Watkins |
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I was speaking to a friend at ABC News about the Lebron James situation. She asked me if I thought there was a direct comparison to King Kong being made in the Vogue cover featuring James. I stated that there was some probability that there might be a word play on the fact that Lebron is known as “King James”. I also stated that, given that James is the first man to ever grace the cover of Vogue, the image of an angry black man might not be a good start. She sneakily asked me, “What’s the chance this was deliberate?” I said “I’m not sure”. She sent me this picture…..now I’m sure. |
Three Myths About Black Wealth and Investing |
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When it comes to money, there is a lot of hoopla. As I witness the financial frenzy that comes with each fad, I am reminded of the days of snake oil salesmen, taking advantage of the hopes and dreams of many to fill the coffers of the immoral. When I watch the late night “Get rich quick” schemes, I wonder if anyone is getting rich other than the professional, perpetrator or pastor selling the book being featured. Some of the advice shown on television isn’t bad, but as a Finance Professor, some of the advice makes me shudder. Not to say that all of the self-proclaimed “financial experts” are immoral or incorrect, but it is not hard to find flaws in their perspective.
Being mislead causes the most pain to those who do not understand money. Many people do not understand the basics, which can make them vulnerable to those who use long words to confuse them. When I teach Finance courses to my students, I enjoy finding simply ways to communicate complicated concepts. The ultimate goal is for the student to be able to discern the good advice from the bad.
I have compiled a list of quick and dirty myths about money and finance that can help you to get started on your path toward financial understanding. While this is just the tip of the iceberg, perhaps the ice will whet your appetite to learn more about the world of financial management.
Myth #1) An investment is only good if it helps you to earn more money
According to quite a few financial advisors, every penny you invest should be put into assets and ventures that are going to give you a financial return. The “gurus” tell stories about how investing your money to make more money implies that you are smarter than the person next to you. By virtue of your being smarter, you are therefore entitled to a happier life. Money is also made into the most important thing on earth, and you end up feeling bad if you are not, as you are sometimes told, hoarding every penny and allowing those pennies to dominate your personal life.
There are quite a few scenarios in which money should be used to make more money, and there is nothing wrong with that. But more money doesn’t always imply you will have a wealthier life. There are times when buying a car or taking a vacation can be much better uses of your money than buying another stock, bond or piece of real estate.
In fact, if the sole objective of money is to make more money, then that means you should just send your children to Dr. Kervorkian (the man who kills people for a living), since kids are expensive and don’t give you any of your money back. Don’t be so hard on yourself when it comes to investing. Investment is like working at the office or having sex: it’s ok, as long as it’s done in moderation.
Myth #2) Only some investors have a portfolio
What is a portfolio? A portfolio is a set of valuable investments that give you something back. When I ask my students “How many of you have a portfolio?”, only a few of them raise their hands. I then explain that making an investment is equivalent to putting a scarce and valuable resource toward the creation of something more valuable over time. Most of the students fail to realize that money is NOT the only scarce resource you can invest. You can also invest your time, your energy, your health and even your love. All of these amount to allocations of scarce resources, and most of us make these investments every single day. The decision to get out of bed is an investment, since you could easily spend your time lying around watching TV. The clothes on your back are part of your portfolio, since you have invested to obtain them, and they do provide you a return (your reward for investing in clothes is that you get the peace of mind of looking good and not having to walk around naked!).
The point here is that you should have a more complete way of thinking about investing. Money is only one type of investment, and it is sometimes the least valuable asset in our life portfolio. You have probably heard people say “time is money”. Well, that’s not exactly true. The truth is that time is MORE VALUABLE than money! If you are 22 years old, and you waste your time, you will never get to be 22 years old again. No amount of money can make up for being, say, falsely incarcerated for 15 or 20 years. However, if you lose money, you can usually get it back later. So, whether we have money or not, we are always investing.
Myth #3) The stock market is one of the best places to make money
The stock market is not a great place to make money, at least not in the short-run. It is a great place to keep the money you’ve already made. Don’t get me wrong. There are many people who’ve made their fortunes trading stocks, but that is not the norm. Additionally, even though there are many who’ve made a fortune trading stocks, more fortunes have been made using other investments. The stock market is what they call an “efficient market”, which means that it is tough to find a good bargain. This is a lot different from some other markets, where you can find a pretty good deal if you look hard enough.
When looking for a place to invest your money first, you should start with the investments that offer the highest return for the lowest risk. In other words, if you find something you are familiar with, you are likely to have a better outcome. One place to start might be with an investment in YOUR SELF. Do you have enough education to have the kind of career you would like? How about going back to school for that college degree or MBA? In my own research, I have determined that the returns to this kind of investing far exceed the returns generated from the stock market or other places.
You might also consider investing in Real Estate or even in the business of a relative. If you have a friend that is going into business, and you have reason to believe that this person is fulfilling an unmet need, has a guaranteed customer base, and is reliably going to give you your money back, then this kind of investment might be better than going right to the stock market. Just make sure that you sign a legal contract so there are no misunderstandings.
You can also make a lot of money by cutting your spending. Consider the following two options. Let’s say you have a credit card that charges 15% interest with a balance of $10,000. You have $10,000 available for investment, and you can either use the money to pay off the credit card or invest in stocks. Let’s also assume that you expect to earn 10% on the stock market (roughly what the US stock market earned during the 1997 – 2001 time period). There are two things you must remember about this investment:
1) The amount you are paying on your credit cards is greater than what you would earn from the stock market.
2) The amount you would earn from the stock market is risky, so it could be higher or lower than the average. The amount you are paying on your credit card is going to be the same, no matter what.
So, you have two choices: You can either a) invest the $10,000 in the stock market, earning an average of 10%, or you can b) Use the money to pay off your credit cards, ridding yourself of the 15% interest expense. If you go with option a) (investing in the stock market) and assume that you are guaranteed 10% on your money, you will earn $1,000 and have to pay $1500 in credit card interest (15% x $10,000). This leads to a net loss of $500.
If you go with option b) (paying off the credit cards and not investing in the stock market), you can save $1500. So, there is a $2,000 ($1500 – (-$500)) difference between these two choices.
The point is simple: “A penny saved is a penny earned”. You can rephrase this statement as “A penny not paid in interest is a penny earned in interest.” By using excess funds to pay off high interest debt, you have found one of the best investments around.
The point of this article is the following: Investing in the stock market is nice and glamorous, but it’s not the way to make money. If you really want to make money, you should start with investments around you: Buying a home, paying off credit cards, or going back to school. These investments give higher returns than the stock market and lead to a wealthier life.
Myth #4) Putting all your eggs in one basket might be OK
“Diversification” is an important investment concept that most investors do not think about. It is the idea that you should not put all your eggs in one basket when investing. Many investors do not follow this rule, instead putting all of their money in one place. This is a BAD idea! Consider the employees at Enron (the company that went bankrupt a few years ago). Some of the Enron employees had their entire retirement plan with one company. Many of these people lost their life savings when the company went bankrupt.
Every good thing eventually comes to an end, and if you are properly diversified, you are protected when things really do fall apart with your investments. Diversification means that you not only buy a large selection of stocks, but you keep your money in different types of investments. For example, if a person has a portfolio to invest, they should keep a few thousand in different kinds of stock, some of the money in their savings account for a rainy day, some of the money in real estate, and some of it in the family business. Spreading your money around protects you well when things go bad in the market.
Another thing about investing is that it should be GLOBAL. If you buy a portfolio of stocks, you do not want to have your money focused on the United States. There are mutual funds which allow you to invest all over the world, where many of the best opportunities are. Make sure that you are diversified across boarders, so if one country’s market fails, you will have investments all over the world to protect you.
Myth #5) If a stock has done well in the past, it will continue to do well in the future
Most people think that if a stock has a good past performance, it is going to continue to be a good stock in the future. All of my own academic research, as well as the academic research of many others, shows that this assumption is almost always WRONG. There are some rare exceptions in special cases, but for the most part, the past performance of a stock or mutual fund manager is no indicator of what is going to happen in the future.
You see it all the time: magazines will rank the best performing stocks, top industries, and best performing mutual fund managers. This publicity is great for the fund manager, because he/she knows that most investors do not know the truth. The truth is that when ranking investment managers and stocks on the prior year’s performance, there is almost no positive relationship between the performance of the past and that of the future. Notice that I say “almost no positive relationship”. That is because my research shows there are some rare cases in which there is some relationship, but this is not something worth betting the house on.
The best way to invest in stocks is not to chase winners. The best approach is to simply invest in solid companies for the long haul and keep your portfolio diversified. If your portfolio is properly diversified and you leave money in your investments for several years, you will most likely find a natural growth which allows you to sleep at night. Those who chase every hot stock down the street end up driving themselves nuts.
Dr. Boyce D. Watkins
www.myfinanceprofessor.com |
Using Financial Liposuction To Work Your Way Out Of Debt By Dr. Boyce D. Watkins |
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Black people, as beautiful as we are, are not usually the first ones to line up for any form of cosmetic surgery. God made you the envy of the world and it’s going to stay that way. But being the trendsetters of our world, you’re known for changing the game. So, please allow me, your personal Financial Physician, to help you make your financial body as perfect as your physical one. I’m not a plastic surgeon, but as a Finance Professor, I’ve done surgery on the credit card plastic of a lot of people just like you. It’s called “Financial Liposuction”, and it’s a technique I created to help all of us who feel “financially chubby” and don’t know why. You have 150 pounds of student loans, 200 pounds of credit card debt, and perhaps even a deadbeat relative who continues to hold you back. You may not know why you overeat financially, but you are sick of it. You are ready for a positive, productive financial lifestyle that will lead you down the road to financial security, and you don’t care what it takes to get there. The Financial Liposuction procedure is painful, traumatic and invasive and therefore, not for the faint of spirit. But in the end, it can be the most rewarding decision you’ve ever made. You can find your way out of debt, and out of the grips of modern day slave masters, otherwise known as credit card companies. Most importantly, the head surgeon in the procedure is you. My job is to guide your hands during the procedure, to ensure you don’t remove a lung while aiming for the kidneys. Here are the steps you can take right now to get your financial life together. Remember: Your life is nothing more than a culmination of YOUR day-to-day choices. Make the right choices, and you are creating the right life, even if the steps are small. Step 1: Find out why you engage in financial overeating in the first place. The reasons you overspend are between you and Dr. Phil, but some psychological house cleaning might be necessary. Filling a bucket does nothing if you never find the leak. Pay attention to your habits, documenting all of your spending for one week, or thinking about some of your worst financial choices. Make a decision right now to address these habits and improve upon them. The path to financial independence is a long one, and the first few miles of this road go through a town called “You”.
Step 2: Engage in Financial Anorexia for about 3 Months - You spent so much money last month that your friends are calling you “Creflo Dollar Fifty”, now it's time to deny yourself a few things. Cut any excess fat from your budget, and consider even slicing at the bone. Pay necessary bills only, give yourself no credit card access, and keep a limited amount of cash in your pocket. You may even want to have your spouse put a WANTED poster of you in all major department stores for your own good. This part of the Financial Liposuction procedure gives you the chance to make dramatic changes in your lifestyle. They say that it takes 40 days to break a habit, so consider this day one.
Step3: Get to Slicing one of your favorite credit cards - You’ve been in an Ike and Tina relationship with this credit card for far too long. The card makes you feel good inside, and then it beats you down at the end of the month with a massive bill. It’s time for you to have the courage to walk away. Yes, you and this card have been through a lot together, and your “love” has created a lot of expensive financial babies (some of whom are 10 years old). But there are more loving credit cards out there. Once you are financially prepared for a new relationship, you can move forward. But for right now, you need to get this credit card out of your life for good.
Step 4: Find out how much you owe and then find out the terms - Some people deal with the chubbiness of financial debt by living in denial. Feeling they are too far gone to be helped, they just pretend that the debt doesn’t exist. You might think bill collectors are going to disappear just because you’ve stopped answering the phone, but that’s wrong. You’ve got to face the problem. Make a list of all your debts, determining the interest rates you are paying, and the amount of the monthly payment. Then, either approach a company about consolidating the loans under a lower interest rate, or simply start making higher payments, focusing first on the loan with the highest interest rate. It’s hard to know where you are going if you don’t fully understand where you are. Step 5: Forgive yourself and look forward. You are human. Our most valuable lessons come from our most costly mistakes. You are not a bad person for making financial mistakes, all Americans do (believe me, I’ve done the research on this). The question is: What are you going to do now? Get your back up off the wall and start becoming an active player in your own financial independence. A child is not going to learn if his parents do not actively shape his future. Like this child, your financial future is not going to have a healthy development without being nurtured through a series of good choices. Be smart, be strong, and don’t be afraid. This procedure is painful at first, but you’ll look and feel great in the end. |
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Music On This Page: "Shaft" by Isaac Hayes. |
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