Cash Rules Everyhing Around Me
/ We all want it, but none of us seem to have it. Yeah thafs right, money. For some reason African- \
Americans don't invest, or even save for that matter. But that needs to change. We need to pt m the mvest-
ment eame and it is easier than it seems. The book "High Finance on a Low Budget" by Mark and Jo Ann
Skousen ourtines some easy steps that can help students secure a hefty retirement fund. Here are the seven
golden rules for financial success.
1. Put saving first- Okay, I know this rule is the hardest for us*®
all, but we need to put our saving first. After all expenses are
taken care of, don't run to the n\all. Those Jordans are looking
HOT right now aren't they? Resist temptation, stop at Wachovia
and deposit that money!
2 . Save at least 10 percent of your income- This theor>- is calkd
the "10 percent solution." Ten percent is easy to figure. If you
make $300 a month, put $30 in the bank. It's also affordable. As
college students, we may make $50 a week. Sa\’ing 10 percent
may mean forgoing a movie or Wendy’s for a day. The key to
building wealth is to have a consistent savings pfC^ram, so pay
yourself 10 percent every time you get paid. Youll be surprised
how 10 percent of your income can build up. (The average
American makes over one million dollars in a lifetijise.) By saving
just 10 percent, a minimum of $100,000 will accrue. Can you
imagine what that can yield if this is invested properly?
3 . Make it easy to deposit your savings- I’m sure you retiJed
of reading rules on savings, but it’s the most important part o£
investing. So make it easy to save. You can write a check every
time you get paid to either deposit or invest, or even have a cer
tain amount (yes, it can be done) automatically deducted from
your paycheck. This way you never see the money you could
have had, and it’s either saved or invested. Most banks even otter
"automatic purchase plans" in which money is automaHcally
withdrawn from your checking account and placed mto a variety,
of investments. You can also take advantage of Automatic
Investment Plans offered by brokerage firms. Charles Schwb
One Source (1-800-435-4000) or Fidelity Funds Network (1-800-
544-9697) each offer hundreds of no-load funds you can automat
ically buy at no commission each month.
4 . Make it difficult to withdraw your savings- This is the last
savings rule but it’s very important. If you want to build up a con
siderable savings program, make it hard to get your money out of
the bank or investment. Some ways to do that are to get invo ye
in programs that charge for withdrawals, tax investment profits,
make them hard to sell, or simply cause severe inconveniences on
withdrawals. For short-term investments, these are the types of
things to avoid, but if you’re really trying to make money, they
may help you avoid wasting your money on something that has
«no lasting value,
5 . Invest our savings wisely- What can we invest our newly
saved money in? Well first of all, we have to use common sense.
Sure, those stocks may yield a greater profit than anything, but
they also come with a greater risk. Invest in variety for the least
loss. Money Funds are a good way to start and they require a very
small minimum investment of about $100, while stocks require
about $500. Call Security Cash Fund (1-800-888-2461). Also, use
bank mbn^ market accounts for short-term cash. When invest
ing in the stock market, choose a stock for safety, growth and
profit. There are so many stocks to suit our particulars.
Bltie Chip Stocks- Stocks of major mulfi-million dollar corpora-
tions. They are the most safe and stable. They've been around and
are likely to stay.
Penny Stocks- Sell in pennies rather than dollars. They are very
risky'b^use some triple in value, others never go anywhere.
. Utiiity Stocks- These are stocks of ufilifies companies. These have
a guaranteed profit. But they can be deregulated, so diversify and
buy several stocks.
Mutual Funds- These companies take your money and invest it
in a variety of companies. This means less risk, but also less
return,
6. Control your spending- A simple concept that’s hard to do.
Put down those jeans, even if they are on sale, unless you really
neeii thero. Oon t buy what isn t necessary.
7 • Control your debt- Cut up those credit cards and use your
Visa check card. Sure, those credit cards are for emergencies, but
unless you pay your full bill at the end of each month, they
shouldn't be used. And also, consolidate the debt that you have.
Call your creditors and tell them about your plans to pay off all
5 your debt. They'll work with you!
It's never too early or too late to start. Actually, as college stu
dents, we have an advantage when starring early. We can all
become financially secure while sfill having the freedom to spend
our money and enjoy life.
By Jamiyla Bolton
jbolton@email.unc.edu
10
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