Financial Markets

3 Pages 664 Words

The statement that African Americans are making strives in numerous areas, achieving high academic levels, starting their own businesses to increase their incomes is seemly losing its creditability. It is being replaced by the statement that African Americans are no longer the largest minority class in the US. While the latter statistically can¡¦t be denied or overcome through proactive actions, the first statement can regain its prominence and believability. Financial professionals suggest that though it will take work by the entire African American community to strive toward tangible wealth to shore up the achievement status argument, there is one thing that must be done individually. Everyone must increase their financial knowledge, specifically in the areas of Credit and Assets and Governmental Benefits.

Financial knowledge is critical to achievement for without it an increase in income or wealth is impossible. There are two areas which one must increase in financial knowledge, use of credit and the positioning and acquisition of assets. Credit should be used to secure wealth building assets such as appreciating luxury items or businesses and should not be used for items that offer no tangible return such as a vacation. Once these items are acquired they should be positioned to produce additional income. For example, the purchase of a home can use extracted equity to purchase rental property that returns income. A luxury auto could be sold for a profit and that profit used to finance a child¡¦s education.
Other financial lessons include:
„« Increasing cash reserves to negate short term cash flow problems
„« Using financial products such as Individual Retirement Accounts (IRA) and Mutual Funds to gain and protect wealth
„« Securing adequate insurance to protect against key family members loss of income
„« Following an investment, debt reduction and retirement plan

Government benefits do not refer t...