Monthly Archives: May 2012

HBCU Money™ B-School: House Poor

A situation that describes a person who spends a large proportion of his or her total income on home ownership, including mortgage payments, property taxes, maintenance and utilities. House poor individuals are short of cash for discretionary items and tend to have trouble meeting other financial obligations like vehicle payments.

People typically become house poor because they buy more house than they can afford, but there are other ways that people can become house poor as well. For example, some people will become house poor after the birth of a child, when one spouse decides to stay at home with the new addition, rather than going back to work.
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HBCU Money™ Business Book Feature – The Healing of America: A Global Quest for Better, Cheaper, & Fairer Health Care

How is it that all other industrialized democracies provide health care for their citizens as a reasonable cost-something the United States has never managed to do? In The Healing of America, New York Times bestselling author T.S. Reid shows how they do it, bringing to bear his talent for explaining complex issues in a clear, engaging way. In his global quest to find a prescription for American health care, Reid finds that it’s not all “socialized medicine” out there. Instead, many industrialized democracies rely on free-market models the U.S. could use to cure a health system that has failed us.

HBCU Money™ Histronomics: The Chronological Order Of Federal Reserve Chairmans


Charles Hamlin (Harvard University)  Aug. 10, 1914-Aug. 9, 1916

W.P.G. Harding (University of Alabama) Aug. 10, 1916-Aug. 9, 1922

Daniel R. Crissinger (University of Akron) May 1, 1923-Sept. 15, 1927

Roy A. Young (Unknown) Oct. 4, 1927-Aug. 31, 1930

Eugene Meyer (Yale University) Sept. 16, 1930-May 10, 1933

Eugene R. Black (University of Georgia) May 19, 1933-Aug. 15, 1934

Marriner S. Eccles (Brigham Young University) Nov. 15, 1934-Jan. 31, 1948

Thomas B. McCabe (Swarthmore College) Apr. 15, 1948-Mar. 31, 1951

William Martin, Jr (Yale University) Apr. 2, 1951-Jan. 31, 1970

Arthur F. Burns (Columbia University) Feb. 1, 1970-Jan. 31, 1978

G. William Miller (U.S. Coast Guard Academy) Mar. 8, 1978-Aug. 6, 1979

Paul A. Volcker (Princeton University) Aug. 6, 1979-Aug. 11, 1987

Alan Greenspan (New York University) Aug. 11, 1987-Jan. 31, 2006

Ben S. Bernanke (Harvard University) Feb. 1, 2006-Feb. 3, 2014

Janet Yellen (Brown University) Feb. 3 2014 – Present

Source: Federal Reserve

African America Cut Your Own Grass: The Social And Economic Investment Of A Lawnmower

The most substantial people are the most frugal, and make the least show, and live at the least expense. – Francis Moore


I’m not sure when it happened exactly. The moment America stopped cutting its own grass. As a child I remember my father always allowing me to cut the backyard but rarely the front yard. The backyard was my proving ground. The front yard was the family’s statement. It said to anyone who passed by it we care about where we live. We hope you care about where you live as well.

One of the things we constantly hear about in capitalism is that competition pushes the boundaries and creates innovation. However, there is a part of capitalism that often goes unmentioned and that is the social capital part of it. You see there are three components of development to any community, nation, or Diaspora. They are social, economic, and political. The first being the foundation upon which the other two are built. The social values that bind the community and promote the values be they positive or negative, of that community, nation, or Diaspora. Social capital creates norms or the rule as they say. If going to college and graduating is the norm or rule of that community things will be done to promote it in such a way that a child that does not do it will have an invisible scarlet letter on their chest. On the other side however if going to jail or crime is the norm or rule (circumstances withstanding) then a child or young adult who spends time in that institution or ends up there will not be shamed upon their return to the community for going. As it is in many African American communities unfortunately becoming a part of the judicial system is too often the norm and when a child of the community avoids this fate they are the exception to the rule or norm. The goal is always to make the norm or rule something that uplifts and develops the institutional strength of a community not tears it down or weakens it. The exception to the rule is 1 child out of 100 making it to college. The rule will expect 99 children out of 100 to graduate from college.

The social benefit of cutting your own yard is simple when one really thinks about it. You’re setting the norm in your community that you value your home and its appearance in the community. Therefore, you value your community and expect other people in it to as well. Mr. Randle, my seventy plus year old neighbor still gets out every week and cuts his own grass. His work is so spotless I feel ashamed as a young body thirty something that I can’t keep up my own yard to be as nice as his. The fact that he takes pride in how his yard looks in every way imaginable pushes and influences me to do so as well. I compare my yard against Mr. Randle’s yard. It also gives us the opportunity to interact with our neighbors who might be out walking, leaving or coming home, or doing their own yards. This allows us to strengthen neighborhood bonds through interaction. It also lights their own fire to make sure their homes and yards are cared for. It becomes a chain reaction.

Then there is the cold hard cash of the matter. African America’s median net worth is $2,170. We are the poorest ancestral group in the United States. Something I can’t stress enough. We’re the poorest by a wide margin. If European and Asian America lost 50% of its wealth right now they’d still have twenty times the wealth African America has. We have very little institutional power and institutional wealth. Yet, most of us can’t be convinced that if we make $80,000 a year we aren’t middle class (and in some cases aren’t rich). The continued confusion between income and wealth is a never ending battle for African America.

Let’s examine the finances of mowing your own yard. Where I live Latino American yardmen have all but monopolized the yard trade. I see a few African American men from time to time but for the most part it has been monopolized much like Asian Americans who now dominate the African American hair care industry. What I find most ironic is that African Americans with $2,170 think they should be conducting themselves financially in the same way as European Americans who have a median net worth of $98,000. There is a big difference in the luxuries one can afford. Yes, having someone cut your yard is a luxury.

The majority of yardmen I’ve come across charge thirty dollars to cut your front and back yard. Depending on seasons, more in spring and summer but less in winter and fall, one can safely assume you need to have your yard cut annually on average twice a month. Quick math there says it cost $720 annually to have your yard cut. What if you did it yourself? Well first I need a lawnmower. A view of Wal-Mart’s lawnmower section the majority of lawnmowers fall between $250 to $500 dollars. Let’s be sensible and buy the $375 dollar lawnmower. According to a JD Power & Associates study the average lawnmower is kept between seven to ten years. This means that our lawnmower cost approximately $4.46 a month if kept for seven years and approximately $3.13 a month if kept for ten years. A regular unleaded gallon of gas averages $3.69. It typically does not take an entire gallon to cut an entire typical front and backyard. Now twice a month that adds up to $7.40 in gas expenditure. Next we can factor in annual tune-up of your lawn mower which if you do it yourself will cost you a whopping $15 dollars annually or $1.25 per month. So the cost to mow your own yard twice monthly will cost at a range of $11.78 to $13.11 depending on whether you keep your lawn mower seven or ten years. That is a savings of $46.89 to $48.22 a month or $3,938.76 over seven years and up to $5,786.40 over ten years. Did I mention that the African American median net worth is $2,170?

If you running a race and you’re behind then logic says you can’t run at the same rate of speed as your competition and ever catch up. That is to say we can’t engage the same luxuries and conduct ourselves with the same strategy and assume we can start to close the power gap. To build stronger communities socially and economically we can start by cutting our own yards.

HBCU Money™ B-School: Portfolio

A grouping of financial assets such as stocks, bonds and cash equivalents, as well as their mutual, exchange-traded and closed-fund counterparts. Portfolios are held directly by investors and/or managed by financial professionals.

Prudence suggests that investors should construct an investment portfolio in accordance with risk tolerance and investing objectives. Think of an investment portfolio as a pie that is divided into pieces of varying sizes representing a variety of asset classes and/or types of investments to accomplish an appropriate risk-return portfolio allocation.

For example, a conservative investor might favor a portfolio with large cap value stocks, broad-based market index funds, investment-grade bonds and a position in liquid, high-grade cash equivalents. In contrast, a risk loving investor might add some small cap growth stocks to an aggressive, large cap growth stock position, assume some high-yield bond exposure, and look to real estate, international, and alternative investment opportunities for his or her portfolio.

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