Monthly Archives: February 2014

The HBCU Money™ Weekly Market Watch


Our Money Matters /\ February 21, 2014

A weekly snapshot of African American owned public companies and HBCU Money™ tracked African stock exchanges.

NAME TICKER PRICE (GAIN/LOSS %)

African American Publicly Traded Companies

Citizens Bancshares Georgia (CZBS) $7.95 (0.00% UNCH)

M&F Bancorp (MFBP) $3.90 (0.00% UNCH)

Radio One (ROIA) $5.29 (5.08% UP)

African Stock Exchanges

Bourse Regionale des Valeurs Mobilieres (BRVM)  243.40 (0.56% DN)

Botswana Stock Exchange (BSE)  9 232.55 (0.21% DN)

Ghana Stock Exchange (GSE)  2 439.20 (13.71% UP)*

Nairobi Stock Exchange (NSE)  138.44 (N/A)

Johannesburg Stock Exchange (JSE) 45 340.76 (0.79% UP)

International Stock Exchanges

New York Stock Exchange (NYSE) 10 330.19 (0.13% UP)

London Stock Exchange (LSE)  3 670.10 (0.40% UP)

Tokyo Stock Exchange (TOPIX)  1 222.31 (2.32% UP)

Commodities

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Currencies Of The African Diaspora – Central African Republic


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Subsistence agriculture, together with forestry and mining, remains the backbone of the economy of the Central African Republic (CAR), with about 60% of the population living in outlying areas. The agricultural sector generates more than half of GDP. Timber and diamonds account for most export earnings, followed by cotton. Important constraints to economic development include the CAR’s landlocked position, a poor transportation system, a largely unskilled work force, and a legacy of misdirected macroeconomic policies. Factional fighting between the government and its opponents remains a drag on economic revitalization. Since 2009 the IMF has worked closely with the government to institute reforms that have resulted in some improvement in budget transparency, but other problems remain. The government’s additional spending in the run-up to the election in 2011 worsened CAR’s fiscal situation. Distribution of income is extraordinarily unequal. Grants from France and the international community can only partially meet humanitarian needs. In 2012 the World Bank approved $125 million in funding for transport infrastructure and regional trade, focused on the route between CAR’s capital and the port of Douala in Cameroon. After a two year lag in donor support, the IMF’s first review of CAR’s extended credit facility for 2012-15 praised improvements in revenue collection but warned of weak management of spending.

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Source: Economy overview provided by CIA Factbook

You Must Have Questions About Car Buying: What We Didn’t Learn In College


By Troia Lyles

While working in the lucrative car business for over 4 years, I’ve come to learn that there are so many consumers that come into the dealership with an idea of their intelligence being higher than most people that work at said dealer. However, the look of confusion when they would sit in front of me (whether as a sales person, finance & insurance manager, or sales manager) was very frequent, and honestly, gratifying.

I loved the conversations that would come up about what they read on some website somewhere that will tell them that, in the car business, we are all liars, and that we just want to take advantage of every person that walks in the door. Well, it is not true. I’m sorry to have to pop your balloon of expectations, but every person that works there has several things in common with you. Some are listed here:

1) They are human.

2) They are working to provide for their family.

3) They are paid for their time that they spend with customers (fairly, and sometimes unfairly).

4) They are expected to understand the business they are in (they must research the brand, competitors, demand for the product, etc.)

5) They are human.

Yes, I repeated one of the points because that is very important to understand. There is a moral aspect in the business of sales (with most people in this business) and because of that, it is not as cut and dry as most “consumer reports” make it out to be. This leads into the point of this article, as well as the subsequent articles in this series that will have different subjects to give you a different prospective and ACTUAL education on what happens when it is time to purchase a vehicle.

So the first lesson is: What is GAP Insurance, and why do I need it!? GAP insurance is an acronym for Guaranteed Auto Protection (and in some companies its Asset Protection). The point of GAP insurance in a nutshell is to protect your money.

When you purchase a vehicle (and in this example I will refer to a new car), the car is expected to have a drastic depreciation as soon as you take possession of the vehicle. In dealership lingo, that means “to drive off the lot”. This depreciation is unavoidable. So this is when “putting money down” becomes important. It is understandable that not everyone has the cash flow to put down a significant amount of money for the purchase of a car. So let’s assume that you will not put ANY money down. In other words you want to finance 100% of the purchase.

This purchase will not only include the negotiated sale price of the vehicle, but it will include the taxes (according to the state you want to register the vehicle), license fees, and dealership processing fees. Dealer processing fees are indeed legal, but still can be negotiated, which I’ll cover this in the series in more detail. Now, take that entire total and assume you will have interest. The interest rate (or APR) of course is determined by your credit.

So you’ve purchased your car! Congrats! Inhale the new car smell, turn up the radio, and pat yourself on your back. You’ve made a large purchase, and in turn, increased your credit portfolio with more purchase power! Then you get into an accident, and you total the vehicle. Your insurance company does their job, and gives you a check for the value of your vehicle. You will look at the check, and look at the principal of your loan and see a huge difference. The value of the vehicle drops usually about 20% (with most American manufactures), and then of course all the other fees that were incorporated at the time of purchase is a part of your principal balance. For most buyers, this delta can range from anywhere from $500-$7000. That is a lot of money. You didn’t have the cash to put down at the time of purchase, so where would you come up with the difference?

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One of the biggest misconceptions is how soon can you pay off your loan after a total loss. Most banks require it to be paid off within 30 days. This is where GAP insurance becomes important. It simply pays the difference between the value of your vehicle at the time of total loss and the principal of your loan. Some insurances even pay up to $1000 of your car insurance deductible. (Ask the finance manager that is assisting you with your purchase if this would apply to you).

How much does GAP insurance cost? It usually ranges anywhere from $4-25 per month (depending on the APR). That is incredibly affordable considering the coverage it provides during the time of your loan. When would I NOT need GAP insurance? Usually if you are able to put down 15% or more at the time of purchase, you eliminate the need for the insurance. The reason for that is because the cash down provides “equity” towards your loan. It is bringing down the value of your loan, while the value of your car stays.

How long is the insurance active? If you do decide to include GAP insurance, it remains on your loan until it is paid off. For example, if you open a loan for 72 months, and you pay it off in 72 months, the GAP insurance has been included until the final payment was made. If you open a loan for 72 months, but pay it off early (48 months), the GAP insurance you purchased was for 72 months. Therefore you are due a refund of the 2 years you did not use it.

There are many little things to GAP insurance that can be explained by the finance manager you work with at the time of purchase. However, I am open to answering any additional questions you may have in regards to this program through comments below.

Take care, and as always, be smart.

Ms. Lyles is a graduate of Howard University with studies in Music and Business. Her career has seen her spend time as a financial services manager with one of the DMV’s largest regional auto dealerships where she developed expertise in consumer finances, credit, banking, and loan to value analysis. Currently, she is COO of a regional technology company and Founder/CEO of her own financial consulting firm.

HBCU Money™ Business Book Feature – History of Black Business in America: Capitalism, Race, Entrepreneurship


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Despite almost four centuries of black independent self-help enterprises, the agency of African Americans in attempting to forge their own economic liberation through business activities and entrepreneurship has remained noticeably absent from the historical record. Juliet Walker’s award-winning History of Black Business in America is the only source that provides a detailed study of the continuity, diversity, and multiplicity of independent self-help economic activities among African Americans.

This new, updated edition divides the original work into two volumes. The first volume covers African American business history through the end of the Civil War and features a new introduction, as well as the first comprehensive account of black business during the Civil War. By emphasizing the African origins of black business practices and highlighting the contributions of black women, enslaved and free, Walker casts aside the long-held assumption that a “lack of a business tradition” is responsible for the failure of African Americans to establish successful, large-scale enterprises.