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Are you leaving a Legacy of "Wealth for Life"? We can learn from Black Enterprise

By Regina P. Brown

Real Estate Broker/Owner with MBA Broker Consultants CalBRE Broker #00983670

February 22, 2009 03:19 PM

And we can learn from our great-grandparents, too, for that matter. How many of them had a credit card? None. Did they buy something they couldn't afford? Nope. Did they buy a house and own it (without a mortgage)? Probably, most did. Did they put aside a little bit every month, just in case there was a rainy day? Oh, so that is what's in all those cans buried in the back yard! Did they do business with other local businesses, who supported them? Well, yes, they maybe were even skeptical of big businesses and giant corporations. And who taught you conservative principles, like "Waste not, want not"; "Use what you have"; and "A lender not a borrower be"? Wasn't that dear old Granny? And we know that Grandpa doesn't "give" an allowance; you have to work to earn it from him!

From the FEB 2009 issue of Black Enterprise, a master plan, worth its weight in gold, is layed out:

THE 10 "WEALTH FOR LIFE" PRINCIPLES:

1. I will live within my means.

2. I will maximize my income potential through education and training.

3. I will effectively manage my budget, credit, debt, and tax obligation.

4. I will save at least 10% of my income.

5. I will use homeownership as a foundation for building wealth.

6. I will devise an investment plan for my retirement needs and children's education.

7. I will ensure that my entire family adheres to sensible money management principles.

8. I will support the creation and growth of minority-owned businesses.

9. I will guarantee my wealth is passed on to future generations through property insurance and estate planning.

10. I will strengthen my community through philanthropy.

From their web site, http://www.blackenterprise.com/magazine/2009/02/12/wealth-for-life:

Rein in poor spending habits. One of the first steps toward financial stability is learning to develop and maintain good money management skills. Smart money moves such as devising and sticking to a budget are vital for a secure financial future. Adkins says he made it a priority to spend less. For tips on how to improve money management and cut costs, visit www.blackenterprise.com and click on the Wealth for Life tab.

Live below your means. The old adage, "it's not how much you make, but how much you keep," still holds true today. Even if you have a million-dollar budget, you don't have to spend like it. Spend only what you need, and commit to socking away at least 10% of your take-home pay in a high-yield savings account. Once Adkins' career as a track and field star came to a close, he began to see the truth held within this adage and made the decision to live a simple lifestyle.

Separate needs from wants. Before you purchase an item, ask yourself if you really need it or if it's merely a fleeting want. For example, do you really need another car or are you just trying to keep up with your friends, colleagues, and neighbors? When buying big-ticket items, give yourself at least one week to think about whether you really need to make that purchase. Adkins makes an effort to buy things only within reason. For example, he has made a conscious effort to cut out excess by not following in the footsteps of his single peers who have purchased multiple cars and houses.

Use cash whenever possible. By using cash instead of credit, you'll be more aware of how much you spend and what you spent your money on. With credit cards, on the other hand, it's a lot easier to lose track of your spending. For big shopping trips, it's best to keep the cards at home and bring cash instead.

Now, what would happen if EACH OF US committed to these wealth principles? And we taught them to our children?

And what if our business owners and politicians and government municipalities adhered to sound financial principles such as there? Where would we be financially as a nation?

Hmmmmm.... well we can't change our past financial decisions, but we can vow to do something better in the future -- like adopt these 10 WEALTH principles.