6 Ways Money Smart People Become Wealthy While We Struggle to Make Ends Meet

BY: - 6 Mar '17 | Money

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How is it that some people seem to have truly mastered the money game? They enjoy life, free of financial distress, while the rest of us struggle to make ends meet. Are they born smarter than the rest of us? Do they possess some special money secret? Not necessarily. Money smart people simply do what the rest of us are unwilling to do.

1. Money smart people take charge of their financial situation.

“You have to believe that you are the one who creates your success, that you are the one who creates your mediocrity, and that you are the one creating your struggles around money and success. Consciously or unconsciously, it’s still you.” — T. Harv Eker

Here’s a sobering but simple truth. No one cares about you or your money. They could care less if you’re suffocating in credit card debt. They don’t care if you’re constantly stuck with more month than money. They’re oblivious to the fact that your meager retirement savings doom you to spending your Golden Years eking out a meager existence on social security.

No, they are too interested in seducing you into purchasing the latest iPhone, leasing more car than you can afford, or buying more home than your budget can handle.

We’re alone in a sea of financial predators, and like pigs we make our way gleefully to the financial slaughterhouse. But for many of us, that’s fine because the future isn’t immediate. There is always tomorrow, until there isn’t, and the day of reckoning arrives.

If you don’t take charge of your financial situation, no one else will. You must become your own financial advocate. Motivational speaker Wayne Dyer once said, “Our lives are a sum total of the choices we have made.”

Money smart people understand that financial success is created one decision at a time. Take charge. Become mindful of every spending decision. Become aware of every earning opportunity.

2. Money smart people people become owners

With few exceptions, you’ll never become rich working for someone else. It’s a simple fact. In America, financial independence is achieved through ownership, whether it’s owning your own business, controlling your own side hustle, investing in rental property, or purchasing stocks and bonds.

Unfortunately, in the Black community we’re raised to be consumers rather than owners. We’d rather buy iPhones than purchase Apple stock. We’d rather complain about a problem than build a side-hustle that solves it. We’d rather let others build businesses in our own communities than starting our own.

3. Leverage time and money to become an owner.

1. Stop wasting time. Use it instead to work on becoming an owner. Trade time spent with Facebook, for instance, for time spent developing your side hustle.

2. Create the capital needed for becoming an owner by spending less than you earn. Use the difference to invest in your business/side hustle, purchase investment properties, or buy stocks/bonds.

4. Money smart people invest in themselves.

You are a walking, talking ATM machine. Your skills, experiences, and creativity hold the keys to creating immense wealth for you and your family. Investments in knowledge and learning are the best investments that anyone craving financial success can make.

“An investment in knowledge pays the best interest.” –Benjamin Franklin

Any one of us have the God given ability to learn a skill that will command a higher paying job. Consider attending a local community college, enrolling in an online course, or finding a mentor who will help you obtain premium skills.

Click Here to Download a FREE Copy of the BMWK Generational Wealth Pledge for Black Families!

5. Turn off the television and pick up a book.

African-American households watch more than seven hours of television per day. African-American millionaires, on the other hand, read nearly two books per month. Reading just one book a month in your career field could make you an expert at your company in less than a year, and the expert in your field within three to five years.

6. Take responsibility for your actions.

You can blame your poor financial state of affairs on a host of factors, – lack of education, lack-luster economy, divorce or racism – but in the end, you are responsible for your station in life. Money smart people take responsibility for their actions. They don’t blame external forces but become active participants in building the futures they desire.

BMWK, what are you doing to become financially successful?

About the author

Alonzo Peters wrote 292 articles on this blog.

Alonzo Peters is founder of MochaMoney.com, a personal finance website dedicated to helping Black America achieve financial independence.

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Black Buyers Beware: How to Avoid the Retail “Black Tax”

BY: - 20 Mar '17 | Money

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I still remember the afternoon I went in search of a new car. Inside the Toyota showroom a Black salesperson casually strolled my way making amiable small talk. When I asked how much I could get off the sticker price (also known as the MSRP or Manufacturer Suggested Retail Price) he looked me straight in the eye and without flinching told me that the sticker price was the price I’d have to pay.

I don’t know what made me more furious, the fact that the salesman considered me too naive to know that the sticker price is an artificially inflated price that no savvy consumer should ever pay, or that perhaps the salesperson, seeing that I was Black, was targeting me as an easy mark?

Unfortunately, all too often, African-Americans and other minorities shell out more than their white counterparts just because of the color of their skin.

In the classic 1995 study, economists Ian Ayres and Peter Siegleman sent secret shoppers to nearly 200 Chicago car dealerships. The black and female shoppers were consistently quoted higher prices than their White male shoppers. Black males, in particular, were quoted prices nearly $1000 higher than White males.

And while the study is over 20 years old, recent accusations suggest that Black auto buyers still face the same challenges. The Consumer Financial Protection Bureau, for instance, recently reached a settlement with Honda over charges that the company charged African-American borrowers higher dealer markups for their auto loans than non-Hispanic white borrowers. Honda was forced to pay $24 million to victims of its discriminatory practices.

TNMMoneySaveCoinsHandsOnce they drive the car off the lot, African-Americans face even more discriminatory pricing. Motorists with good driving records living in Black neighborhoods pay far more than drivers elsewhere. According to a survey by the Consumer Federation of America, quoted premiums were as much as 70% higher for the drivers living in Black neighborhoods.

What I call the retail “black tax” applies to other large ticket items as well. Research data of over two million home sales in four metropolitan areas found that African-Americans and Latinos pay more for homes. “We find that black and Hispanic homebuyers pay premiums of about three percent on average across the four cities, differences that are not explained by variation in buyer income, wealth or access to credit,” The study’s authors concluded.

“We find that black and Hispanic homebuyers pay premiums of about three percent on average across the four cities, differences that are not explained by variation in buyer income, wealth or access to credit,”

But having to pay a premium for a home is not the only barrier to the American dream for people of color. African-Americans also pay higher rates when trying to obtain mortgages for those homes, even when they have similar creditworthiness as their white counterparts.

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In 2012, the Justice Department reached a $175 million settlement with WellsFargo Bank. The bank was found to have pushed Black borrowers into subprime mortgage loans even when they qualified for less expensive and less risky conventional mortgages. This was not an isolated practice as research by the National Bureau of Economic Research reveals that African-Americans are 105% more likely than whites to carry high cost mortgages on their homes, even when controlling for credit scores and other factors.

Why are Blacks forced to pay more for the significant purchases in their lives? Clearly naked racism plays a part, but economist Robert J. Stonebraker suggests another reason:

“While dealers and/or salespeople may know little or nothing about a particular customer, they know quite a bit about statistical differences among races and genders.  They know that women and African-Americans typically enter the showroom with less information and less proclivity to bargain.  Although white males often salivate at the chance to lock horns with car dealers in a bargaining struggle, females and African-Americans may be unaware that bargaining is even possible.”

In essence, he argues that retailers may believe that customers of color are less knowledgeable about their intended transaction, and as such are more susceptible to being taken advantaged of. This a more nuanced, but equally damaging, form of prejudice.

This lack of information concerning the purchasing process is also alluded to by the researchers who noted the higher home prices paid by buyers of color.

“The relative inexperience of black and Hispanic buyers, due to the historically lower rates of home ownership among the black and Hispanic households, may contribute to the higher prices that they initially pay upon entering the market,” they noted.

The inevitable conclusion: As a consumer of color, car dealers, insurance agents, and mortgage brokers may assume that you are less knowledgeable about the process, and therefore ripe for exploitation

You have a target on your back. Either by way of implicit racism or the belief that because of your skin color you are a naive consumer, you are at risk of being taken advantage of financially.

You have a target on your back.

To avoid becoming a victim, flip the script. Knowledge is power. Take the time to become well-informed about any significant purchase you plan on making. My suggestion is that if you’re going to spend more than $5000 on any purchase, take at least two hours researching your intended purchase, paying particular attention to how much others are paying for the same product or service.

A little amount of planning and preparation in the beginning of the buying process will save you a significant amount of money down the road.

BMWK, how do you keep from getting ripped off when making a major purchase?

About the author

Alonzo Peters wrote 292 articles on this blog.

Alonzo Peters is founder of MochaMoney.com, a personal finance website dedicated to helping Black America achieve financial independence.

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