Since everyone has various stats, regarding the economic state of Black Folks.....I decided to grab some from Black Enterprise......and this is what I found:


-According to Target Market News, a Chicago-based research firm, in 1998, African Americans earned more than $441 billion collectively. But blacks also spent more than $20.5 billion on clothing alone. Apparel was the fourth-highest spending category for blacks, behind housing ($114 billion), food ($44.9 billion), and new and used automobiles ($25.6 billion). Clothing expenditures far exceeded the $3.3 billion invested in education, ranking 15th on the list of 25 items.

-the 1998 omnibus study by the Burrell Communications Group, the Burrell Barometer, showed that 38% of African Americans surveyed nationwide own homes. At the same time, just 25% have 401(k) plans and far less invest in stocks, bonds or mutual funds.

-According to the book Black Wealth/White Wealth: A New Perspective on Racial Inequality by Melvin L. Oliver and Thomas M. Shapiro (Routledge, $18.99), a typical black family holds on average just 11% of the wealth of a white family. (The most recent data from the U.S. Census Bureau showed that the median net worth of blacks was only $4,418, whereas whites' median net worth was 10 times higher at $45,740.) Among the middle class, the figure improves to where a typical black family possesses on average 25% of what a white family does.

-Moreover, the authors found that the differences in black-white income levels alone could not explain the racial wealth gap. Even among households earning $50,000 or more, where the wealth gap is narrowest, blacks possessed barely one-half the median net worth of their high-earning white counterparts. And poor whites control nearly as many mean net assets as the highest-earning blacks, $26,683 to $28,310.

-In 2000, total money income in the United States may rise to $6 trillion. Income received by African Americans may increase to $485 billion, equal to 8.2% of the total. However, to achieve parity, blacks would need to receive $697 billion. Thus, says Brimmer, the African American income deficit would amount to $212 billion, or a 30.4% gap.

-African Americans have considerably less wealth stockpiled than their white counterparts when taking into account total savings and investment. Of those surveyed, African Americans reported an average of $117,000 in investable as-sets (excluding real estate) compared to $224,000 for whites.

If you want to read the whole articles, click here:

http://www.blackenterprise.com/S1/Pageopen.asp?source=/archive1999s1/01/0199-28.htm
http://www.blackenterprise.com/S1/Pageopen.asp?source=/articless1/07202000089.htm
http://www.blackenterprise.com/S1/Pageopen.asp?source=/articless1/93.htm


Here is some good news I got from Target Market News: http://www.targetmarketnews.com/


-Blacks are increasing the amounts they invest faster then Whites, although the total amount invested is still much lower then whites.
-Black incomes are rising at about 10%/year, faster then any other ethnic group.

According to the Coalition of Black Investors: http://www.cobinvest.com/Pages/census.html

1 in 10 Black Investors is on track to become a millionaire by their "golden years"


The point?

Well that Blacks need to focus a great deal more on Investing, Saving and Managing their money properly. We've come a long way, but have an even longer road to travel. Finally, we need to shift our priorities more towards economics & education.

Everyone talks about investing in the community, but this post and my community investment post will get about 30 responses total......while the thread on fries at McDonalds not being Vegetarian already has 80.

My people my people, when will we stop being economic victims?




Peace,





M2

The Blog: http://www.analyticalwealth.com/

An assassin’s life is never easy. Still, it beats being an assassin’s target.

Enjoy your money, but live below your means, lest you become a 70-yr old Wal-Mart Greeter.

>-According to Target Market News, a
>Chicago-based research firm, in 1998,
>African Americans earned more than
>$441 billion collectively. But blacks
>also spent more than $20.5
>billion on clothing alone. Apparel
>was the fourth-highest spending category
>for blacks, behind housing ($114
>billion), food ($44.9 billion), and
>new and used automobiles ($25.6
>billion). Clothing expenditures far exceeded
>the $3.3 billion invested in
>education, ranking 15th on the
>list of 25 items.
Damn, I didn't know that. I knew that food, shelter, and transportation took up a good portion of black disposable income, but clothing is that much? You learn something new everyday.

>-the 1998 omnibus study by the
>Burrell Communications Group, the Burrell
>Barometer, showed that 38% of
>African Americans surveyed nationwide own
>homes. At the same time,
>just 25% have 401(k) plans
>and far less invest in
>stocks, bonds or mutual funds.
Well, access to the money market isn't exactly a first priority for black people. If most of black disposable income is directed to "necessities" such as food, shelter, and transportation, what's left to invest? The rest is arguably going to provide some sort of savings for the household, or directed to their children. Another thing is, how many black people honestly know what to invest in, or how to invest their money? Not a lot of people know how/what/where to invest their money to get the greatest rate of return.

>-According to the book Black Wealth/White
>Wealth: A New Perspective on
>Racial Inequality by Melvin L.
>Oliver and Thomas M. Shapiro
>(Routledge, $18.99), a typical black
>family holds on average just
>11% of the wealth of
>a white family. (The most
>recent data from the U.S.
>Census Bureau showed that the
>median net worth of blacks
>was only $4,418, whereas whites'
>median net worth was 10
>times higher at $45,740.) Among
>the middle class, the figure
>improves to where a typical
>black family possesses on average
>25% of what a white
>family does.
Statistics can be deceiving. First of all, Whites outnumber blacks 10-1, so they would hold a distinct advantage statistically. That alone can skew the results. Secondly...again blacks do not have as much disposable income (generally speaking). Another thing is that net worth is measured usually by assets, meaning the amount the house is worth (assuming they live in a house), coupled with any other large assets (cars, house improvements, etc.) Property value is a very biased measuring tool, and for the most part, not very accurate.

>-Moreover, the authors found that the
>differences in black-white income levels
>alone could not explain the
>racial wealth gap. Even among
>households earning $50,000 or more,
>where the wealth gap is
>narrowest, blacks possessed barely one-half
>the median net worth of
>their high-earning white counterparts. And
>poor whites control nearly as
>many mean net assets as
>the highest-earning blacks, $26,683 to
>$28,310.

>-In 2000, total money income in
>the United States may rise
>to $6 trillion. Income received
>by African Americans may increase
>to $485 billion, equal to
>8.2% of the total. However,
>to achieve parity, blacks would
>need to receive $697 billion.
>Thus, says Brimmer, the African
>American income deficit would amount
>to $212 billion, or a
>30.4% gap.
Again, a statistical deception. 10% of the population have to make up that much ground is damn near impossible.

>-African Americans have considerably less wealth
>stockpiled than their white counterparts
>when taking into account total
>savings and investment. Of those
>surveyed, African Americans reported an
>average of $117,000 in investable
>as-sets (excluding real estate) compared
>to $224,000 for whites.
The thing is, that isn't much of a priority these days for black people. As time goes on, I would hope that as earnings go up, black people would be able to have enough time and disposable income to be concerned about accumulation of wealth through investment.

>Well that Blacks need to focus
>a great deal more on
>Investing, Saving and Managing their
>money properly. We've come a
>long way, but have an
>even longer road to travel.
>Finally, we need to shift
>our priorities more towards economics
>& education.
That's true...but on the same token, blacks pretty much are putting their priorities on survival in the present. Investment (and opportunities) sound nice if you got the time and the money to do it...blacks have more to worry about, since most of their income is already directed to necessary items for survival in America (food, shelter, transportation)...the clothing thing you got me on, that shocked me. As for education, that should be a universal investment by everybody. Education about economics and tips on money can improve the situation, something that people should learn in high school.

>Everyone talks about investing in the
>community, but this post and
>my community investment post will
>get about 30 responses total......while
>the thread on fries at
>McDonalds not being Vegetarian already
>has 80.
Well, you got at least 1, that's a start

>My people my people, when will
>we stop being economic victims?
When they have more income for leisure

Peace
Rex

Abdul Jabbar, Muggsy Malone you
I don't know what that means but you know what I meant when I told you (c) Sean Price

If most
>of black disposable income is
>directed to "necessities" such as
>food, shelter, and transportation, what's
>left to invest? The rest
>is arguably going to provide
>some sort of savings for
>the household, or directed to
>their children. Another thing is,
>how many black people honestly
>know what to invest in,
>or how to invest their
>money? Not a lot of
>people know how/what/where to invest
>their money to get the
>greatest rate of return.

Blacks actually save their $ better then whites, but they don't invest it. It's a psychological thing were a lot of Blacks feel that there money should be in the Bank where they can get it in case of an emergency.

They don't realize that they can do the same thing with Brokerage accounts. I have a Visa/ATM Debit Card and Checkbook for my Brokerage account, if I needed the money....I could sell the stock and access the funds almost immediately.

Furthermore, these studies compare Blacks & Whites of like income, (in particular it focused on those making more then 50k/year) so whether a Black person is affluent or poor.....whites of similar income levels/economic situations are finding ways to invest. 401k plans are a great place to start, and you usually come out ahead because of the tax benefits, there are programs that let you buy partial shares, etc. etc. You'd be surprised what $50/month can build up to over 10 years.....provided you invest it.

There are a lot of factors here, but I think education is the biggest one. Poor people can and DO invest; when I read about poor white people who built up a million $ through investing and paid for 4 kids to go to school....just through being frugal and sacrificing...it makes me sad because a lot of poor Blacks don't

>>Census Bureau showed that the
>>median net worth of blacks
>>was only $4,418, whereas whites'
>>median net worth was 10
>>times higher at $45,740.) Among
>>the middle class, the figure
>>improves to where a typical
>>black family possesses on average
>>25% of what a white
>>family does.

>Statistics can be deceiving. First of
>all, Whites outnumber blacks 10-1,
>so they would hold a
>distinct advantage statistically. That alone
>can skew the results. Secondly...again
>blacks do not have as
>much disposable income (generally speaking).
>Another thing is that net
>worth is measured usually by
>assets, meaning the amount the
>house is worth (assuming they
>live in a house), coupled
>with any other large assets
>(cars, house improvements, etc.) Property
>value is a very biased
>measuring tool, and for the
>most part, not very accurate.

The outnumbering part isn't a big deal, since this is a per capita measure of wealth..not total wealth. Typically when calculating someone's personal net worth, they include your house BUT when the Census Bureau does it to calculate the number of millionaires and what not......they leave out the house. Cars are never counted (because they depreciate) and home improvements are just part of the house value....which in this case....isn't counted.





>That's true...but on the same token,
>blacks pretty much are putting
>their priorities on survival in
>the present. Investment (and opportunities)
>sound nice if you got
>the time and the money
>to do it...blacks have more
>to worry about, since most
>of their income is already
>directed to necessary items for
>survival in America (food, shelter,
>transportation)...the clothing thing you got
>me on, that shocked me.
>As for education, that should
>be a universal investment by
>everybody. Education about economics and
>tips on money can improve
>the situation, something that people
>should learn in high school.

I disagree that it's completely a money thing, I could get ANYONE started investing for as a little as $10/month. So that's an educational deal. Not all Blacks are so poor that they can only worry about survival either.

Finally, when you look at the fact that only 38% of Blacks own homes, and that they spend a great deal more on cars and clothing then whites of comparable incomes do, there is a lot of economic room for increased savings and investments. The mean income of Blacks is 38k (http://ferret.bls.census.gov/macro/032000/hhinc/new02_003.htm) which is enough to buy a house and to build up *some* savings..even if the Bulk of it is in 401k plans.

Obviously, a change in our spending patters needs to occur.




>>Everyone talks about investing in the
>>community, but this post and
>>my community investment post will
>>get about 30 responses total......while
>>the thread on fries at
>>McDonalds not being Vegetarian already
>>has 80.
>Well, you got at least 1,
>that's a start

Thanks!

>>My people my people, when will
>>we stop being economic victims?
>When they have more income for
>leisure

Blacks already spend a disporportionate amount on leisure and Blacks who do have a high disposable income aren't investing it at the same rate as Whites. This is more of an educational one then a financial one, because the Blacks who have the money, still aren't managing it correctly.

Sound fiscal management, is independent of how much you make. In other words, Blacks with low incomes need to stop buying designer clothes, expensive jewlery, nice cars and what not and start investing/saving their money.




Peace,



M2.



P.S. Blacks can make up the income Gap, the 30% income Gap is in terms of porportionate amount of income. I.e. Blacks only earn about 8% of the total American income in a given year, as opposed to the 12.5% we should be earning......it's growing faster then others 10% Vs. .5% for the country as a whole.......but the rate we're going....we're only going to reach economic parity (net worth & incomes) in the 23rd century.

The Blog: http://www.analyticalwealth.com/

An assassin’s life is never easy. Still, it beats being an assassin’s target.

Enjoy your money, but live below your means, lest you become a 70-yr old Wal-Mart Greeter.

Too often the discussion of Black wealth turns to the fact that Blacks live in areas where the home are worth as much, that Blacks don't have as much disposable incomes, that Blacks don't have parents and inheritances that support them in building wealth. These things are true, but they detract from the real issue.

Blacks aren't managing their finances properly.

Blacks of all income levels, spend disporportionately more money on:

Clothing
Entertainment
Consumer Electronics
Music/Videos
Jewlery
Cars.

If poor and lower income Blacks have no money to invest, why are they living above their means and spending their money on things that aren't assets and depreciate? In other words, why are they throwing their money away?

It's no wonder that my Forbes & Fortune magazines, whose average reader is a millionaire no less, have less luxury car ads COMBINED then 1 issue Black Enterprise, whose average reader is middle to upper middle class. BMW, Lexus & Mercedes know that we're more likely to buy their cars on a per capita basis.

Shoot, I'd even hazard a guess that BE which comes out once a Month. Has more luxury car ads then a month's worth of Forbes & Fortune.....and they're Bi-Weekly!

Blacks that do have money to invest, STILL have less invested and are less likely to Invest then whites. Furthermore, they are much less likely to build up 401k retirement plans, despite the tax benefits and despite your employer matching your contributions.

So the real issues here are:

Education
Education
Education
Modification of spending and consumption patterns.

Black Ad Agencies weren't taken seriously just 10 or years ago, UNTIL Black Ad Agencies started compiling research on putting out reports showing how our incomes were growing faster then anyone elses, and that we spent a disporportionate amount of those incomes on non survival related consumer items: Entertainment, Cars, Clothing, Jewlery, etc.

Once those reports started coming out in the early to mid 90s...you know what started happening:

-More Blacks in commercials
-Corporate America went from just giving Black Agencies a little bit of their Business, to giving them a big chunk....because they knew they would get more return on their investment.
-Black Ad Agencies that were ignored by White Agencies as potential acquisition targets/partners/, or who were rebuffed by large White Agencies when the Black Agencies went looking for investors....had White Agencies pounding down their doors....with big Checks, because they wanted that Black Consumer Market.

Don Coleman Advertising, Burrell Communications..two examples of Black Agencies who are not partly owned by White Ones. In fact, the top Black Agencies have pretty much all been Bought by White Agencies or at least have a White Agency as a Strategic partner.

We're pissing our money away and spending money we should be investing/saving, Corporate America has known it for years now and it's about time we figured it out and woke up.

Don't buy Coke.....you spend $3 on a 6 pack and have nothing to show for it. INVEST IN COKE, Spend $30/month through a dollar cost averaging program......and end up with a 6 figure sum down the road. Make money off of them, not the other way around.


Notice: The White Investment Banks aren't exactly pounding down the doors of Black ones......I wonder why.....



Peace,





M2

The Blog: http://www.analyticalwealth.com/

An assassin’s life is never easy. Still, it beats being an assassin’s target.

Enjoy your money, but live below your means, lest you become a 70-yr old Wal-Mart Greeter.

So true about education and culturally, we save versus invest.
My daughter attends a great school: Pre-K-5, African American, private, very academically rigorous. It isn't cheap but the public schools here(Oakland) suck!!!!

Anyway, the children open bank accounts and make deposits evey Friday. Every month the Savers of Tommorow are announced based on consistent savings the max they can bring to school is 5 dollars. Begining in the fourth grade, they learn to read the stock pages and pick stocks.

The PTA and the administration brought in a financial analyst to talk about Black folks and investing. People were very honest about their issues with investing-fear being the biggest impediment next to lack of knowledge.

One parent runs a mortuary and shared that while white families request 10-20 copies of death certificates, we typically request 1-3. The number of death certificates speaks to the number of investments held by the deceased.

Another parent spoke to his upbringing. Raised by his grandmother, savings was preached but not investing.

At the end of the session, we were implored to at least know what the markets closed at every day. We talked about the indicies and what they represent as well as where to go to get the information we need to become informed, confident investors.

That was real education. The type that is sorely missing in our community. Most people feel like they don't have enough to invest. But judging by their waistlines and the $200 outfits, there is money there.

I think one of the biggest impediments for us as Blacks to investing is we feel like we need to catch up to and keep up with the Joneses eg the Whites. If Madonna can wear Versace, damit so should we! We lost site of what is important to us.

Essense magazine is one example of rampant consumerism. While there are articles about money, investing and entreprenuership, right next to the article will be a fashion spread of ridiculously overpriced (and usually ugly) clothes one must have for the given season.

I also think that we as Americans in general are too short sighted. We don't as a rule have 5 and 10 year plans let alone 20-30 year plans the way the real power brokers do.

Most of us are proud if our daughters just graduate high school with out a baby, if our sons never get arrested or get jail time. We don't value ourselves enough to invest money in our future.

Programs like the one you have at your school, is precisely what is needed.....particularly what is being what the kids. It's wonderful! I wish more Black kids had that kind of knowledge growing up.

It starts in the home though, I inherited my financial Savvy from my Father. He was a very good money manager, always saving....trying to save more, investing, purchasing real estate. He showed me how to live well and save at the same time.

I think the next generation will be in much better shape then ours.



Peace,




M2

The Blog: http://www.analyticalwealth.com/

An assassin’s life is never easy. Still, it beats being an assassin’s target.

Enjoy your money, but live below your means, lest you become a 70-yr old Wal-Mart Greeter.

Instead of always saying that Blacks "should manage their finances" better, I figure it's high time I say "How they should manage their finances better"

So in an effort to keep this thread alive, I'm going to periodically post some tips/strategies that I use with my own finances. While I may not be a financial wizard (yet), I hope that someone finds this stuff useful.


Track your spending: Spend at least two weeks, (preferably a month) keeping track of ALL the money you spend. Even if it's little things like beverages you buy while at work, or even the morning paper.

For instance, I've discovered that I can save $50/month by buying Nantucket Nectars from BJ's as a 24 pack, then purchasing them individually. Doesn't seem like much, but if I were to invest $50/month for 30 years and get a 12% average (after inflation) return...I'd have about $200,000 (in today's buying power) more to retire off of.

It's not unfeasible either, it's not hard (provided you invest wisely and for the long haul) to get a 12% return after inflation on the Stock Market.

You dig?

Think about saving money in terms of rates of return. In other words, think to yourself: I can save $40/month on this, and at 12% I'll have this in X time period.

Use the rule of 72, divide an interest rate into 72 and that's how many years it takes for your money to double. Better yet, familiarize yourself with Financial calculations and calculate how much money you would have at various interest rates over time.

Or you can do a quick search on the Internet, there are tons of financial calculators out there, that will tell you how much your savings/investments will be worth after inflation, without inflation, after taxes, or any other combination you can think of.


You don't need to be rich to invest: Go to www.sharebuilder.com it's an online Brokerage designed for people of modest means. You can set up a "sharebuilder plan" where you can invest amounts as little as $10/month in various stocks of your choosing.

If you've got more cash to throw around, try an Online Brokerage Account. An advantage to online Brokerages is that you don't have to buy 100 shares at a time, if you can afford 10 shares, or 20 shares...fine. Just remember that you're stocks will need to appreciate an amount greater then the commission paid per share.

I.e. If you buy 20 shares, and the commission is $20, then your shares need to appreciate buy more then $1/share in order for you to see a profit.

Myth: If you put money in a Brokerage account, you won't be able to get it when you need it. WRONG!

Most Brokerage Accounts provide Visa Debit Card and Check access to your money, and will wire money into your Bank account at a Moment's notice. If a Brokerage won't provide these features, it's not worth getting!

I will say that if you have to sell stocks because you need the money, you may have to wait 1-3 days to be able to access the funds.....so you should have some emergency funds.......which leads to:

Try to save up 3-6 months expenses in cash, keep it in a Money Market fund at your bank...or even in your Brokerage account (Brokerage Accounts usually pay higher interest). I keep mine in a Money Market at my bank though, I'd rather be able to run down there and grab it in cash if I have to.

You don't have to wait until you have the 3-6 months to invest though. My Advice is to save up twice the minimum for the Brokerage Account you select, and then put 1/2 in the Brokerage account and half in a Money Market account at your Bank. Each month figure out how much you can set aside for saving, put half in the Brokerage Account and the other half in the Money Market. When you save up the 3-6 months expenses, I'd put 70% in the Brokerage Account and 30% in the Money Market.

A lot of Financial Advisors would tell you to put 80-95% in the Brokerage account, but for me personally....I feel safer with a nice wad of cash I can access at a moments notice.



Anyway, that's enough for now.



Peace,





M2

The Blog: http://www.analyticalwealth.com/

An assassin’s life is never easy. Still, it beats being an assassin’s target.

Enjoy your money, but live below your means, lest you become a 70-yr old Wal-Mart Greeter.

Good going man,

this is tuff we need to get out there. I got friends that got all the new CDs but who don't have a clue what a stock is. People be spending money on assets that depreciate instead of investing in stuff that appreciates. And most of the stuff they really do NOT need. I'm not saying I wanna live like a miser or nothing, but I do know I don't need to have a 1,000 cds to have a nice life! Once I got my four Kast CDs, Roots , Talib, Common, etc I'm okay. And who needs that expensive Armani shit? People don't realize that's it's all about marketing. Those clothes are only worth that much coz people think so! I look good wearing what I like AND can afford. Shit, by the time I'm 50, I'll be wearing anything I want to wear. Then we'll see who'll be laughing.

You feel me?

----------------------------------------------------------------
To all my wall street nigg**s in the spot, say "ohh ohh ohhh"

-----I'm feeling this!--------------

Mediocrity is self inflicted and genius is self bestowed...Walter Russell

"Some patients mistakenly believe that their loneliness is a product of another person's absence"...a psychology book I don't know the name of

Here is an excerpt from an Article in Black Enterprise:

"The fallacy in the argument is that many people give off the illusion of upscale living when studies have shown the typical self-made millionaire is quite frugal. In "The Millionaire Next Door" (Longstreet Press, $22), authors Thomas J. Stanley and William D. Danko unveil the secrets of America's wealthy. The average American millionaire has never spent more than $399 for a suit, they found. As a matter of fact, one in 10 millionaires paid $195 or less for his most expensive suit, $73 or less for a pair of shoes and $47 or less for a wristwatch."

Part of the reason for the 100k average wealth gap between Black & White households, is that we spend our wealth away.

There are 35 Million Blacks, and let's say that the Average Black Household has 4 people. So we have about 8.75 million households. If you divide 37 Billion dollars by 8.75 million, you'd get $4,225 in wealth per household, which would knock 4% off the Wealth Gap.

Now let's say that in that same six years, we get manage to increase the number of Blacks owning homes from 38% to 45% or by 600,000 (households who live in a home, one of the them owns) and let's say that through equity and appreciation, they each manage to build up 25k (on average) in value in their homes, or 15 million.

Let's say that the other Black Home Owners, increase their equity in their homes by 25k (on average) as well. That would result in about about 9,000 in additional Black Wealth.

Now let's say that through better money management, saving, investing, etc. Blacks Manage to build an average of another 6,000 in wealth per household.

All told, that would be about $20,000/wealth/household, and would knock 20% off the Wealth Gap in 6 years.

If we change our spending/investing habits, Blacks in their 30s (possibly even 40s and 50s) could possible see Blacks close a good portion of the wealth gap.....maybe even equal it.

Granted, this assumes that Black wealth would grow faster then White Wealth (which it has for some time - plus our incomes grow about 3-4 times faster then theirs) but you see what we could do if we would just our attitudes towards money.

Let's say we gain 15% every 6 years, 42 years...we catch up...(and surpass)

At the rate we're going no it will take us 200 years, because we're only gaining 3%/year.

Methinks a reorganization of how we approach money is in order.



Peace,



M2

The Blog: http://www.analyticalwealth.com/

An assassin’s life is never easy. Still, it beats being an assassin’s target.

Enjoy your money, but live below your means, lest you become a 70-yr old Wal-Mart Greeter.

I like how you took your post a step further..

that's peace..

peace..

https://twitter.com/onnextlevel

Finish what you started, M2.

WE need it.

PEace
Solarus

***Words of Wisdom***

"If it's not about NATIONBUILDING, it's not about ANYTHING."- Dr. John Henrik Clarke

"We are not the victims! We are just fighting forces that we cannot see!"-2001 Sankofa Conference

"You don't have the RIGHT to have free time from your children."-Kwame Agyei Akoto

"It is the worst feeling to hear the call of the drum and not be able to respond."-Solarus

On understanding Afrakan thought:
"it's like explaining astrophysics to a whino, the explanation can't be done like that. when people try to simplify it, they ask the other person to tailor the answers their cultural context. and trying to cater afrikan ideals to european understanding is a REAL sin."-utamaroho

____________________________
"the real pyramids were built with such precision that you can't slide a piece of paper between two 4,000 lb stones, and have shafts perfectly aligned so that you can see a tiny aperture through dozens of these mammoth blocks

I was wondering if I was the only one who wanted to see this thread live.


Ok, I'll pose a question to the Activists.........what topic should I cover next?

-Mortgages: I can provide some great insights on this one, particularly how they screw Black folks over, by denying us loans or through predatory lending... I did some work for a Mortgage company, so I have some first hand/inside knowledge.

-Buying a Home: Mortgages and buying a home can be 2 different topics, because this on relates more to choosing a property, improvements, etc, etc.

-More in depth with Stocks?

-Other Investments?

-Starting a Business?

-Credit?

-A Business Issue?



Let me know, my vote is for mortgages and/or home buying, increased Home Ownership is probably the #1. thing that Blacks need to close to wealth gap.



Peace,





M2

The Blog: http://www.analyticalwealth.com/

An assassin’s life is never easy. Still, it beats being an assassin’s target.

Enjoy your money, but live below your means, lest you become a 70-yr old Wal-Mart Greeter.

mortgages and home buying

This is a very complicated topic, so let's approach it like this:

Pt. 1:

-Economic Benefits of Owning Vs. Renting
-Preparation (financial)
-Background Info on Mortgages

Pt. 2:

-Selecting A House
-Townhouses Vs. Detached Homes
-Resale Value/Property Values
-Working with Banks, Lenders & Mortgage Brokers


First let's start with the economic benefits: While the responsibility may seem tremendous and the initial costs in terms of downpayments can be a good sum of money, it is typically cheaper to Buy a house then to rent. This is true for several reasons:

As you pay off your mortgage you build up equity in your home, I.e. If you've paid off $40,000 of the principle of your mortgage, you have 40,000 in equity + the difference between the home's value and the amount of the loan. For instance, you borrowed 175,000 to buy a 200,000 home (25k was your down payment) after some improvements your home is now worth 220,000. Your total equity is the 40,000 you paid towards the principle, plus 45,000 (220,000 - 175,000) which equals $85,000.

That won't happen if you're renting.

You can borrow against your house (home equity loan) and use that money to start a Business, pay for schooling, emergencies, etc. It's real property that you own.

One of the reasons behind the wealth gap between Whites and Blacks is that a higher % of Whites own homes then Blacks.

Let's say you pay $40,000 over time period X on your house, and when you sell you get that $40,000 back, your down payment back ($25,000) and an additional $5, for a total of $65,005.00...plus you got to live in the house too.

If you rented, you would be out of 40k over that time period...nice for your landlord..not for you.

Still not convinced?
http://www.homefair.com/usr/rentbuyform.html

Put in your tax bracket, your rent, use a number like 2-4 for property taxes and 3-5 for appreciation (depending on where you would buy/how much work you would do) interest rates are low, so put in 6.5 for the interest rate. I'll leave the rest up to you, some of you may find that the amount you save is close to the amount you pay in rent now....if not greater.

Final word: Don't think of your primary residence as an investment so much as a money saver, due to building up equity, saving $ vs. renting, deducting the mortgage interest on your taxes, etc. The reason I say this, is because your home isn't going to provide the kind of returns the stock market will, BUT if you can save $12,000/yr by buying a house......you can pump that money into the market.

Just think of your home.........as your home and the foundation for your wealth. But as an investment on par with your stock portfolio.

Of course it's a whole nother ball game when you buy houses to rent to other people


Now let's discuss financial preparation, please note that I'm discussing this outside the realm of government programs, that can help low income people buy homes...simply because I don't know enough about them to provide any useful information them.


First of all, you need a household income of $25,000 to purchase a home and you also need 2 years worth of tax returns, at or above that income level as well.


Once that's squared away you need to check your credit, you can pull your credit report from the 3 credit reporting agencies from the following Web Sites:

Transunion: http://www.transunion.com
Equifax: http://www.equifax.com
Experian: http://www.experian.com

Each of the reports can easily have different information on them, so it's important to check all 3. If you have anything that looks suspicious and/or a negative account...investigate it! If it isn't suspicious you'll at least get info on who it is and how to take care of it, if it's just a Bill you didn't pay...the company may not respond in time and it will get deleted Can't hurt to try.

Now some of the credit reporting agencies are starting to offer "credit scores" the same scores that lenders will use to evaluate your credit. Use the information they provide you to determine by how much you need to increase your credit score (if neccessary)

Ok, so now you're all set to get a Mortgage...so now you need to do some research on Mortgages themselves.

http://www.homefair.com/homefair/first.html

In general homefair is a great resource, I'm using it as part of my own home purchasing activities (hopefully in the next 12-18 months). The link I provided will take you to a page that gives you a lot of information on how mortgages work.

BUT, here is a some background info anyway.

Interest Rates, study the federal prime rate in determining your interest rate....you want to be as close to that as possible. Right now it's about 4.5% so a Mortgage rate of about 6 - 7 is good. If it was @ 8% you're probably going to be looking at a rate of 10% or more. The idea is to have as low as an interest rate as possible, even if it means waiting 6-12 months to improve your credit...but just know it's affected by the federal rate.

The interest rate is VERY important (often called the A.P.R.), because the interest is compounded monthly. If you borrow 200k at 6.5%, you'll pay about 254k in interest over the life of the loan, for a total of 454k. If you borrow 200k at 13%, you'll end up paying about 594k in interest over the life of the loan, for a total of 794k. Nasty eh?

(same goes for Car loans)

The lesson is to avoid sub prime (loans to people with bad credit) loans and to improve your credit, instead of taking a bad deal. However, if you have no choice......DO NOT take a loan with an interest rate of over 13.3%.........because it's illegal! Lenders can't charge over 13.3% for home loans by federal law, (although sub prime lenders do it all the time) that is not a company you want to work for.

Also, find out if your state/municipality has High Cost loan laws and find out what the maximum interest rate is. Residents of NY, NC, MA, Philly this means you.

I'm sure the thought of paying extra towards your mortgage is coming to some of your minds. You would simply pay 25% more then your mortgage payment (it would get applied to the principle) so that you could save money on interest payments. It may or may not be a good idea, depending your situation. Basically, you need to determine if the money paid towards the mortgage can be better spend elsewhere. If that extra 25% can be invested and generate a 10% annualized return, vs. the 6% you're paying on your mortgage...invest it. BUT, it's still something you need to figure out depending on your situation.

Points: 1% equals 1 point. Lenders charge these as part of the up front costs of the loan, so if you borrow 200,000 and the loan has 5 points, you owe them 10k. Try to get as low points as possible, it's another way they try to squeeze money out of you.

Prepayment Penalty: If you sell a house you haven't paid the mortgage off on, it's a prepayment. If you have 120k left on the principle and you sell the house for 200k, you give the bank the 120k to satisfy the debt and bounce. You don't have to pay the interest you would've paid if you had kept the house for 30 years, because the interest accrues monthly. You dig?

Banks don't neccessarily like this, because it cuts into their profits. They would (obviously) like to receive 254k in interest instead of 100k, so they have prepayment penalties to cover them if you sell the house too soon....usually less then 5 years. Look out for these as well, particularly if you're planning on selling the house in a time period that could incur the fee. Negotiate the lowest fee possible, or see if you can get a loan without a fee.

LTV: This stands for Loan to Value, or the % of the home's value the lender will lend to you. This number will also tell you how much of a downpayment you need to come up with.

If you want to borrow 200k and the LTV is 95%, then you only need 10k. If it's 80% then you need 40k.

Pre-Qualification: This is where a lender will check your credit, your income and tell you the largest loan you can afford. DO NOT TAKE THIS DEAL! Get something cheaper, and put that extra money towards saving for your retirement, investing or just to have spare cash around. They want you to take that deal so they an make more money......but don't take it.

If they say you can afford a 250,000 house, get a 200,000 one..and pocket the extra money.

The typical rule of thumb is that you can afford 28 - 33% of your Gross monthly income as a Mortgage payment. I'd advise you to go for 22-28% unless your income or family situation dictates otherwise. I say this because your home shouldn't crush you to the point that renting becomes cheaper, OR that it prevents you from investing and saving.

Better to live in a Modest house and have a ton of money in investments and savings socked away that you can live off of in a economic downturn, pay for Jr's college and/or retire off of, then to have the big house with the pool and have a small portfolio. n/m?

Ok, that's it for now.

Tommorrow or Wednesday, we'll deal with the MOST important part of all this. Selecting the house, choosing the right house is the difference between the house growing into a real asset, coming out ahead when you sell it AND it actually being cheaper then renting. So in the meantime, you really need to play with the calculator at: http://www.homefair.com/usr/rentbuyform.html

In general, buying is always better.....but if you make the wrong choices it only becomes marginally better. You could end up in a situation where you lose 25,000 on the house, but would've paid 28,000 in rent....it's almost moot then.......

But we'll discuss that later........

I'd also advise you to pick up a copy of the "The New Rules of Money" by Ric Edelman. Great advice for first time home buyers and the pitfalls to avoid, in terms of making buying a house work for your financially.




Peace,






M2

The Blog: http://www.analyticalwealth.com/

An assassin’s life is never easy. Still, it beats being an assassin’s target.

Enjoy your money, but live below your means, lest you become a 70-yr old Wal-Mart Greeter.

m2, very insightful bro. trip shit that i stumble on this forum in between studyin for a econ final. yo'd you get the name from the bank deposit???hahahah. anyway you definitely know your ish, and you seem to have benefitted from a higher education from some place whether university or the library. either way i'm extremely impressed. however where you lost me was w/ the stats. as it was pointed out on one of the posts, stats are good however still very deceiving. what about all the other ethnicities???? the whole issue of inequality always seems to revolve around only the black and white races, however where i live my "color" is definitely outmassed by several other races. i am speakin as a caucasion by the way, and i live in the most beautiful place in the world...Vancouver, BC. our standard of livin is one of the highest in the world if not the highest, and what i'm tryin to figure out is why being a 'white' guy in higher education, i'm automatically stereotyped w/ 'rich white guy' syndrome where my parents have been supporting my ass constantly, or i have some inheritance in the bank or on the way. i did grow up in a predominately white middleclass environment, but in no way has that ever jaded my thinking on other ethnicities. i've been raised to work my ass off in whatever i chose to do, and i'm currently livin off a student loan that to my recollection never asked me my 'color' on the application. i'm not tryin to roast your forum, more than anything i enjoyed reading it, but when i read all the posts i didn't see 'black' people on the other end of the line.....i simply saw intelligent people's insights on an issue that everyone should be paying attention to: education. its the key to success, no matter what shape or form it comes in. the fact is that never did anyone i know even ask me or teach me about post secondary education. i had to find out everything on my own,i'm the first one in a long line of successful individuals that has even went to post sec. ed. and those individuals are successful because they worked their asses of to make it that way. i just wanted to clear that ish up, i hope it's not taken personally. you definitely seem to have a very influential stance on the issues you brought up, and you get full respect for that. but remember this: although the civil rights movement was a fight for equality and was predominately attended by/for african americans, martin luther king jr. did not limit his resources to that of 'only' african americans. it was and still is a fight for equality and the more barriers that we draw upon ourselves the operation of our societies as a 'whole' will never be achieved, and dr.kings' dreams will never be realized. respect where it is due, and that my friend is to you. feel free to lay down some more of that bad-ass econ talk bro. definitely not the econ study break i was lookin for though! even shout my e-mail. piwidimesack@hotmail.com
peace
elaborate

Generational Poverty is the cause behind most economic problems Blacks have, even if they have money.....not coming from a middle class family doesn't teach them how to use it. BUT, the reason a lot of Blacks were poor or not able to succeed say 60 or so years ago was Racism....and that poverty was passed on to their kids...which makes it harder for them to succeed, even if they have fewer barriers.

I think that discussions on race and economics usually focuses on Blacks & Whites, because Blacks have most often been the victims of economic oppression....I've often wondered if Blacks have served as "Blockers" for other races, since most racial oppression is focused on us.

I feel you on the "Rich White Kid" thing, I'm not White....but growing up pretty much all of my friends were. Not all of them were wealthy, and even the wealthy ones didn't waltz through life. Just because your parents are lawyers doesn't gurantee that you'll get into that Ivy League school and just waltz through life. I think that non-whites often overestimate benefits of being White in America (or even Canada) and/or see things as being race related as being white related.

The myth doesn't jive with reality.

I think Blacks have been facing racism for so long, that we haven't learned to differentiate what's racism and what isn't...or what problems are combination of several factors......not just racism.

Furthermore, I'm beginning to think that Blacks have superimposed the image of a wealthy person like George W. or any other super privaleged white person onto the entire white population....so they think of them as having those kind of advantages......the same way a lot of Whites think of us as being uneducated and poor.


Damn shame really.


Glad you appreciated my post.


M2

The Blog: http://www.analyticalwealth.com/

An assassin’s life is never easy. Still, it beats being an assassin’s target.

Enjoy your money, but live below your means, lest you become a 70-yr old Wal-Mart Greeter.

>I think that non-whites
>often overestimate benefits of being
>White in America (or even
>Canada) and/or see things as
>being race related as being
>white related.

Umm no.

Middle to upper class minority kids with financially educated parents, still face a lot more burdens than their caucasian counterparts. And they have a much smaller social network to resolve those issues with.

I've seen both sides, and the stuff that middle class white kids get away with, is unspeakable for most minority middle class kids.

peace
k. orr

http://breddanansi.tumblr.com/

>Middle to upper class minority kids
>with financially educated parents, still
>face a lot more burdens
>than their caucasian counterparts.
>And they have a much
>smaller social network to resolve
>those issues with.
>I've seen both sides, and the
>stuff that middle class white
>kids get away with, is
>unspeakable for most minority middle
>class kids.

True, but I dont think that's the point.

There is no question that black upper and middle class kids have a smaller support network than white kids may have. But that wasn't the question (at least I dont think it was). The question was has that support network that some white kids have been overestimated and bloated. I agree with M2 in saying yes.

Once again, it's all in how people define wealth, and by what numbers, and the history involved in that wealth. For example, Bill Gates has tons more money than the Rockefeller family now, but the Rockefellers have been billionaires for more than a century (or at least the monetary equivalent of the times stated). It's more likely that the Rockefeller family has established more connections, and stabilized more of their wealth than Gates has. However, Gates has an opportunity in the future to build a stronger network due to his huge size of the estate and the ever increasing potential for him to build more wealth and make more money.

In addition, I think the support systems and opportunities that blacks have are underestimated. There is no doubt that African-Americans continue to be ignorant in financial dealings and education and do not make our money work for us. Instead we simply work for the money. That is not how support systems are made. It's made by building, not by financial stalemating.

New Quotes....

Fascist ethics begin ... with the acknowledgment that it is not the individual who confers a meaning upon society, but it is, instead, the existence of a human society which determines the human character of the individual. According to Fascism, a true, a great spiritual life cannot take place unless the State has risen to a position of pre-eminence in the world of man. The curtailment of liberty thus becomes justified at once, and this need of rising the State to its rightful position. - Mario Palmieri, "The Philosophy of Fascism" 1936

The urge to save humanity is almost always only a false-face for the urge to rule it. - H.L. Mencken

When will the world learn that a million men are of no importance compared with one man? - Henry David Thoreau

"In the end they will lay their freedom at our feet and say to us, 'Make us your slaves, but feed us.'" - Dosteovsky's Grand Inquisitor.

"The smallest minority on earth is the individual. Those who deny individual rights cannot claim to be defenders of minorities." - Ayn Rand

And always...my favorite....
Life is insensitive, and the truth can be highly offensive. To hide from either is to hide from the reality of life. Take comfort in the fact that I am an equal opportunity offender. You today. Someone else tomorrow. You have no Constitutional right not to be offended. - Neal Boortz

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>Middle to upper class minority kids
>with financially educated parents, still
>face a lot more burdens
>than their caucasian counterparts.
>And they have a much
>smaller social network to resolve
>those issues with.

I'm disputing the that, I'm just saying that Blacks often Overestimate the power of the networks and financial support that the White Kids have and Underestimate The power of their Own Money and Networks.

I've grown up and lived around Upper Middle Class Whites my entire life and while I see the things they can do that I can't. I feel that my Black friends (poor and affluent) consistently over estimate the power these people have AND underestimate the power of their own finances and networks.

IMHO, the former is MUCH MORE important then the latter.

I think that this happens because our definition of connected and wealthy is defined by Race, not by the connections one has or their net worth. This is particularly important because it hinders us in determing our own strength and power, or the strength and power we have in relation to white folks. What this does, is prevent us from truly knowing the doors/opportunities/ that are available to use due to the money we have or because of our education.

How can we elevate if we aren't aware of what we have the power to do? And/Or overestimate the power of others with respect to our own?



Let's take finances for example, read the posts I've made on this thread. There is a Wealth gap, some of it is due to Racism.....but a LARGE part of it, is due to our attitudes towards money.

My White friends/colleagues who are getting near that magical sixth digit on their incomes and/or have gotten in the 80,000+ range, usually think about buying a home, even if they're single and don't have children.

I have a White friend who has managed to finally start making a good income after struggling for years, he married his long time girlfriend and they now jointly pull in over 100k/year. Their goal is to buy a new house in the next 18 months, invest more and in 2-3 years after the get the house to buy new cars.....nothing fancy....just better then her 5 year old Saturn and his 8 year old civic.

I know another white dude, who is looking at houses too.....he was thinking about the BMW...it was his life goal to get one by a certain age....but he realizes that buying a house is a better idea.

I could go on and on.......about white people I know who are buying property and investing instead of spending.

My Black friends/colleagues (except 1) who are in similar situations, usually think about buying BMWs....well until I drop some science on em'.

BUT, in 25 years.....the kids of the Blacks who focused on material things instead of wealth building and buying real property....will be in a worse position in terms of networks and financial support....and it will have nothing (largely) to do with Race....it will because Mommy and Daddy spend it away.


I won't even get into networking, this is something that Blacks really need to start doing or recognizing the power of the networks they have. We're not used to having them...hence the face that we don't always use em'.



Peace,





M2

The Blog: http://www.analyticalwealth.com/

An assassin’s life is never easy. Still, it beats being an assassin’s target.

Enjoy your money, but live below your means, lest you become a 70-yr old Wal-Mart Greeter.

>Well that Blacks need to focus
>a great deal more on
>Investing, Saving and Managing their
>money properly. We've come a
>long way, but have an
>even longer road to travel.
>Finally, we need to shift
>our priorities more towards economics
>& education.

So, so true. I think the biggest problem with Black people is that we can be so concerned about survival that we only see day-to-day. Twenty years down the road--if we even get there--just isn't as salient. But it should be.

I fully admit that I've been guilty of economic apathy in my own life. I know I need to know more about how my money can work for me.

Part of my problem (and others might agree) is the idea that if I'm not "rich," then investing isn't going to do anything for me. Now I know that's far from the truth, but it's almost intimidating. When are mutual funds advertised? On political talk shows. Or a newsmagazine. And they're all over talk radio. Generally, you don't see Merrill Lynch ads popping up in the middle of a "The Hughleys" broadcast.

Just a tangent on how the media can play into these attitudes.

My thoughts on this are all over the place...excuse me. Carry on...


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~~~~
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LIMITS" INSTOSNOW.
Buy my shit.

Ok, now you've read about Mortgages, Financial Preparation and buying a home and are ready to go......now we're ready for the most important part:

SELECTING A HOUSE TO BUY!

If you don't pick the right house, all the advantages I mentioned earlier can go right out the window. If I were to break down by percentages the most important things in buying a house, I'd say that 15% is financial prepartion, 75% is picking the right house and 10% is how you deal with the lender...in terms of determing if your home purchase is successful....both in terms of you having a nice place to live AND it being successful on a financial basis as well.

So how do you pick a house, well first...you should pick "areas" then look for houses in those areas. How do you do that? Simple:

Research the area and find information on:

Property Taxes: (these will get rolled into your mortgage payment)
Schools: Key Stat: What is the % of the students that attend college after graduation and what kind of colleges do they go to? If you're kids are/may be interested in sports, it can't hurt to evaluate the sports teams too.

Something else I'd throw in, is proximity to colleges in case you want to go back to school, or just take a few classes for enrichment.

Crime Rate

Economy: What kinds of Business are in the area? is the area expanding in terms of building a lot of new homes and offices? Is a major company planning on building a facility near by?

Access: Is it easy to get to major highways and roadways from that area? How about airports?

Cachet: Is this an area that people want to live in? Are people looking to move there? That can affect your property values significantly. If the area is happening now, and people are leaving...your home values will drop. If the area is happening, or getting there.....and people are moving in....your property values will increase.

Hands On Research: After you have a few areas picked out, pick up a Sunday paper and make a list of houses that appear to be in your price range......and just drive around and decide if you like the area or not, look for things like proximity to supermarkets, can the kids walk to school, is the place quiet, etc, etc. The Basic questions are: are you attracted to this place? Do you want to live here?

Final Note: The area you pick to buy property in, is tremendously important in terms of whether or not the house will appreciate AND a big a part of making sure your investment pays off.

Ok, you've picked you area and now you want to look at houses. I'll leave the layout up to you, but here are some key things you need to when choosing a house:

Inspection: Hire someone who knows what they're doing to THROUGHLY inspect the house, someone really anal who'd notice a grain of rice on a rug from 30 feet away. You want to know EVERY possible thing that is may be wrong with the house and that may cost you money later.

The goal here is to put a dollar value on things that will need to be upgraded/enhanced/fixed after you buy the house. For instance, I'm considering purchasing the house I'm currently renting in 12-18 months. BUT, I know the furnance/central air unit needs to be replaced in 2-3 years...so whatever I pay for the house needs to account for that.

Major Things I'd be looking out for would be:

-Furnances/Central Air Units
-Stoves/Ovens
-Refridgerators
-Electrical Systems
-Plumbing
-Dishwashers

If you're going to have to get these things looked at in the next couple of years, the price should be adjusted to reflect that OR you should pass on that house.

Your Inspection: When you look at the house, take detailed notes on ANYTHING you'd like to change in each room of the house. Also make note of things that you're going to need for each room. If you have a window that looks like it may require a special blind or curtain, it would be wise to measure that window and get an estimate on how much it's going to cost.

After you've made the list, split the things you want to change into 4 categories:

-Furnishings/Appliances: Shower Curtains, Window Dressings, Rugs, Refridgerators, Washer/Dryers, etc.
-Critical: What must be taken care of, in terms of improvements. Could be Bathroom tile that is butt ugly, dinged up cabinets, walls that need painting, exterior painting, etc.
-Like to have: You could live without changing it, but you want to change it (it is your house after all) and would do so in 2-3 years.
-The Rest: Things that you would change, but really wouldn't bother you. E.g. You don't like the washer, but hey it works and gets the job done.

Input this information into a spreadsheet, breaking down improvements by room. Get estimates on the cost of each item and add them up. Also enter in the cost of things that need to be fixed. E.g. Replacing a Furnace.

Look at the cost of each category, as well as the total cost, now look at the cost of the house. Does it still seem worth it?

What you're trying to avoid, is putting a lot of money into the house and not getting a return. So, here is what I would do:

Consider 2 secenarios, one where you sell the house in 3 years and other where you sell the house in 5.

Calculate the cost of the house, the repairs, the critical enhancements and the like to have enhancements. Now add 6% to account for the Real Estate Agent's commission.

Assume the house will appreciate by 3%/year between your improvements and general cost of real estate rising. Over 3 years that's a 9.2% compounded return, 15.9% for 5 years.

Based on those numbers, will the house appreciate enough for you to make a profit?

No?


Then move on to the next house, you may not sell it in 5 years, the house my increase by 25% over the next 5 years.....but better safe then sorry. Even if you're mortgage is cheaper then your rent, I'd look at another house. Between the strain on your finances to get the repairs done, and the the fact that it may take you 5-10 years to sell the house for a profit....it's just not worth it.


Condos: Don't do it. Condo fees can rise quickly AND cost you a lot of money, furthermore the price you can get for your condo will be determined largely by the amount other owners sell theirs for. Chances are, you'll take a bath.


Townhouses: Townhouses are quirky, sometimes you can make a profit.....sometimes you don't. Usually, you can make a profit if the area becomes more upscale...and you can determine that by looking in the paper over a period of time and seeing of people who rent their homes are raising the rents. However, you get into the same problem where your selling price can be determined by what someone else sold theirs for....and they may have tore their house up and not taken care of it.

I will say this: Townhomes are almost always cheaper then renting something of similar size, if you buy into a nice development you can charge high rents later and/or it stands to reason that your home will appreciate significantly.

Again, be warned that the housing association fee will rise as well, although not normally as fast as condo fees.

Appraisal: Have an independent person appraise the house so you can get a good idea of what it's worth and do some research on how much similar houses sold for in the area, it can help you with the negotiation process.

Neighboors: This may sound elitist, but try to get a feel for who you may be living next door to. #1. They may just get on your nerves #2. They may hurt your property values, if they're annoying or lacking in class & general manners, the person you sell to, may not want to live next door to them. See also #1.

Ok, you know who you want to live next to, you've picked a house and you're good to go.


Now dealing with the Mortgage people:


-Be careful with Mortgage Brokers, these people will try to screw you over with a quickness....and they usually work more with Subprime lenders e.g. Lenders who specialize in working with people with bad credit, and try outrageous interest. Quite frankly, I'd avoid them.

-Loan Officers can easily discriminate against Blacks, it's so easy it's not even funny. Even though credit scores are becoming increasingly common and loan decisions are being made more and more by computers, the loan officer can still modify the loan because of his/her impression of your credit worthiness, because he/she still has final say. Conversely, the loan officer can give you a loan even if your credit looks bad, if they believe you'll pay it, based on your job, personal background, etc. It's called "deal repair", however what usually happens to Blacks is "deal destruction" where your qualified and they decide to knock you down a notch because they don't believe you'll pay it.

This results in Blacks getting denied, being forced to take out a subprime mortgage (those loan sharks love lending to Blacks) or paying a higher interest rate then you should.

In any event, the way to avoid this is to #1. Make sure your credit is straight #2. Apply for a loan over the Internet and/or over the phone. If they can't see you, they can't screw you. In most cases, you'll be offered a deal before they meet you.....and once they offer a deal on a Home Loan it's illegal for them to rescind that offer.

Anyway, I think I've written a small novel on this subject. That's all for now.....I'm tired.



Peace,




M2

The Blog: http://www.analyticalwealth.com/

An assassin’s life is never easy. Still, it beats being an assassin’s target.

Enjoy your money, but live below your means, lest you become a 70-yr old Wal-Mart Greeter.

DAMNIT!

The Blog: http://www.analyticalwealth.com/

An assassin’s life is never easy. Still, it beats being an assassin’s target.

Enjoy your money, but live below your means, lest you become a 70-yr old Wal-Mart Greeter.

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