Investments

[ClassyLady]

By this point, we all have to know that Black people spend more money in this country than any other ethnic group. What you may not know is that Blacks invest less than any other ethnic group.

I think that our community has become too concerned with "looking" wealthy than actually being wealthy. We would rather spend $100,000 on a car than to invest that same amount so that our kids don't have to worry about college or so that we can retire and still have an income.

Do you invest? If so, how (i.e. stocks, bonds, mutual funds, savings accounts)? Why do you think Blacks invest so little?

[ZChi4Life]

I personally haven't saved/invested anything b/c I just graduated and I'm looking for a job. Once I find one, I definitely plan to either start saving or to take advantage of the company's stock option.
My parents have bonds and have also invested their money in some land that is going to house million dollar homes w/in the next 2-3 years. All of my sisters and brothers also have saving accts or have stock.
I'm not sure why more black people don't invest their money. I think one reason may be the lack of knowledge of how stocks, bonds, etc work.

[This message has been edited by ZChi4Life (edited July 06, 2001).]

[NYMinute]

Hello,

This is topic has always been a bone of contention for me as well. As a securities specialist, I can honestly say that one of the main reasons that more blacks do not invest is because the whole "investment and brokerage institution" is very intimidating to people if they are not familiar with the jargon and the culture in general. Even as a professional, I frequently encounter people who are arrogant and condescending. So to the average person, I am certain the experience can be overwhelming.
The other side to the puzzle is that most "black folk" don't have the discretionary income to invest. Most of their income must be used for life's basic necessities. Individuals should only invest IF they have "discretionary, or disaposable" income. However, with the changing market there are tools available to those who have little to invest. If you would like more information, email me privately.

[CrimsonTide4]

GREAT TOPIC. I was going to pull up an old thread in DST LAND but will do that later.

LAst week, I finally put my foot forward for my investments. I opened up a ROTH IRA. I already have a retirement fun from the school board but since I know that I will not be teaching forever , I wanted some more financial funding. Basically I opened it with $100 and as long as every year I deposit $2000, I will have close to $1,000,000 by the time I am 60 just from the IRA.

By the end of August, I am going to start a money market account for just $1000. The daily interest was 3%.

I only wish I had started my investments especially my IRA back in 98 after college because I would only have 2 more years to get a return that would equal a down payment on a home.

For all of the financial investors, what are some good websites that feature online advice about IRAs. I want my mom to open one so that she has "something else" retirement wise.

In as far as why so few people invest, we have a lot of people who are afraid to take a "risk" yet are being risky without having investments. I did a lot of reading on the Net and consulted trusted older coworkers who have investments.

My theory is MAKE MY MONEY WORK FOR ME so LATER I DON'T HAVE TO WORK FOR MY MONEY.

[AKA2D '91]

I also have a retirement plan. I have mutual fund and a savings account (you know how that is :rolleyes . I recently joined this investment group, made up primarily by CLOSE colleagues and friends. We meet monthly and discuss certain ventures along with our financial planner, to see what are the best investmnets out there.

All I know is that I want to be just like my moms when I retire. I don't want to do a dayum thing but travel and HELP take care of the grandchidren! I guess I got start having my own first, huh?

I don't think WE invest because we really don't trust too many with our money. You know back in the day folks used to bury their money in their yards(back) because they were apprehensive about banks. So, investing in stocks, bonds, propery etc. is not an option or it is not seen as something tangible.

Also, WE like to spend, spend, spend and not save, save, save. I like to do both!

[Happydaysf91]

Does anyone invest on-line? How did you go about finding which service to use?

Thanks....

[kiml122]

I invest, and have for sometime now. I have a 401k that I put in 14% of my income. I am about to increase that to 16% in a few days. I also have a pension plan from work, plus I own some rental property that I rent out, and I have several bonds, and several savings accounts. Saving for my future is something that I learned early from my mom. I have been investing in my 401k for about 10 years. It should be 14 years at this point, but I was laxed in joining, but all that changed 10 years ago.

Now for those of you that have investments, have you see a decrease since the Sept 11th attack. The last 2 quarters have hit me hard, I am at a cross roads as to ride it out, or to move my funds to something less risky. Anyone else at this cross road?

[snuggles12]

I invest in my company's 401K and I do about 10% of my income. I also invest in mutual funds since 1994. I also have a money market account.

Why don't African Americans invest? Because our community does not emphasize investing. Another reason is delayed gratification. Most people want things now. We emphasize getting the expensive clothes and cars which do not have any future value.


I learned about investing from a fellow coworker. He knew I was living at home with my parents and had money in a savings account. He told me why would I keep a substantial amount of money in a savings account, when I could earn more money in a mutual fund. I took his advice and invested money in several mutual funds and kept putting money in the mutual fund every month for 2 years. Well, that money was used as a down payment for my house.

[Imperial11]

Originally posted by snuggles12

Why don't African Americans invest? Because our community does not emphasize investing. Another reason is delayed gratification. Most people want things now. We emphasize getting the expensive clothes and cars which do not have any future value.

I have seen sooo many of my friends/associates go out and buy Range Rovers and vehicles of the like immediately after graduation from college. Buying an expensive vehicle is okay if you have some money left over to save after the monthly car payment. But if you are living with your parents or with a roomate because you don't have a full time job or you have a full time job, but it's not one that you'd need a degree for, then I think you're crazy for buying something like that.

Society as a whole is obsessed with having "things" right now, instead of thinking about "things" in the future. I don't invest now because I have nothing to invest, but when I graduate and start working, whoa watch out!!!!!

[kiml122]

Another thing with me is, I'm always thinking about what I am going to live off of when I retire. I make some nice change, and I want to continue the life style that I have become accustomed to once I retire. But I have tons of friends that aren't thinking anything about thier future or investing. I've been working at my job for 14 years, and I have a friend that works here as well. He only just started investing in 401k, and he only does about 5%. Mind you he has about 15 years with the company and has really nothing to show for it. My company does match up to the first 5% as well.

If you invest your money well, and save you can have all the things that you think you want like the nice house the nice cars and what ever else. I'm a prime example of that. So come my people stop procrastinating and thinking about then now and start thinking about the down the road.

[JJSP01]

I've been investing since I graduated from college. I actually work for an investment firm in Maryland and I love this industry. I have my 401K, multiple savings accounts, mutual fund accounts, money market account, and company stock.

I think Blacks tend to not invest because we assume you have to have $5000 or $10,000 to invest to make it "worth your while", but really, any type of automatic deposits on a monthly or bi-weekly basis will build wealth over the long run.

We, as a people, need to move away from the "get rich quick" mentality.

[Urbane]

Awesome topic!

I was actually thinking about something along these lines for another thread. But I agree with everyone in the assessment of why WE don’t invest/save. I think we know far too many people who are all about NOW and not enough about LATER. Plus, I think that WE as a people tend to be risk-adverse and chose not to take advantage of some of the higher return investments.

I started saving a little after graduation when I got my first real job and it was extremely hard!! I participated in a 401k program and continued to transfer when possible to new 401k programs (switching gigs, of course). Now some of my money is in an IRA. We (my husband and I) have also saved and purchased a house and now recently for start up costs for a small business. What makes it easier for us is having a portion of our paycheck directly deposited into a separate savings account. We pay bills, spend wisely and then deposit the rest (if only $20) into savings.

We did the stock market thing for a while… lost some, gained some. But we had some major financial goals this past year (2001) and decided to go back to the basics. Investing/saving takes sacrifice, sacrifice, sacrifice!! But the return is soooo great!

[Poplife]

I have 2 savings accounts, a mutual fund, and lots of bonds. My parents purchased some stocks for me but they manage them and to be honest I have forgotten what they are in. I don't do 401k now because I'm saving for a post-graduation home so I won't throw my money away renting. Actually I was reading an article in the Post about how not to depend on your 401K in lieu of the whole Enron thing. I think it's a good idea to spread your assets around so you don't have to worry about depending on one source of survival.

I'm thinking about a money market account, but I might hold off until the summer when I have more time. I got lucky and landed a job in a complex that houses both major retail and major financial institutions. I met my financial planner while she was getting a manicure (talk about luck!). It's feels funny being a 21 year-old undergrad sitting in the lobby of Merrill Lynch, but hey, her fees are good. Why not? It's also nice to be able to call someone up and ask questions when my parents or mentors are too busy to help me out.

I think blacks aren't investing for many reasons. Mostly it's because they think it's too hard, they think it's for rich people, or the they don't see the point. White people teach their kids how to make a financial cushion because whites have been in a position to do that for centuries. Now that black people are finally able to get into the money game we are finding that there are not many elders to teach us the tricks of the trade. Many people don't know where to start.

[AKAtude]

Originally posted by Happydaysf91
Does anyone invest on-line? How did you go about finding which service to use? Thanks....

Try sharebuilder.com.

[ENDROAD]

I don't have much to add to what has already been said.

But just recently my husband and I were talking and we think that we as young blacks need to ensure that we provide for our future as well as our children's future. We wonder why it is so hard for our children to make it on their own and assume that because a child is white he/she has an advantage. NO! The advantage is they are provided with a boost from their parents or grandparents who have something to offer them when they start out.

We have two nieces and a nephew who are basically fatherless and there mother is unemployed and living off the state. In our discussion we remarked how hard it will be for these children to rise above versus our son who has two working parents. This is my husband's sister so he commented that he would like to be able to provide something for them. I had to tell him that I could not foresee that possibility yet.

Anyway, I concur Invest, Save, Do Something With Your Money besides buying Gucci, Prada and the Escalade (unless you can afford it).