Home Ownership and Wealth Building

[bobo21]

If you guys are up to a little latino input, several people recommended a book called "Get a Financial Life", which I read and liked.  It is a good basic starting point.  Wheny you get to a position where you want more specificity, i.e. buying a house or investing in individual stocks, they point you in the right direction.

[HBCU.EDU]

HBCU - I just went to amazon.com to try to find some books on investing.  You're right, there's a whole lot to choose from.  I'm completely new to investing and have no background in business whatsoever so I'm looking for book (or books) that's basic but thorough.  So far, it looks like I may buy "The Four Pillars of Investing: Lessons for building a Winning Portfolio" since it has good reviews on amazon.  Are there any books that you would personally recommend I check out?

I've read many. But, I'll look at a few and def. post the ones that I like best. I'll do that soon.

[Ladyday]

I just read a column recently in either the WSJ or the NYT about wealth building and privatization of social security which claimed that private accounts would help black families build wealth because the $$ could be passed on to heirs. Apparently now, elderly people collect Social Security until they die (or until their spouse dies) but if both die relatively young, they could have paid more into the system than they take out. Since blacks on average have shorter life spans than whites, I believe the argument was that, on average, blacks are not getting as much benefit from social security as whites. I thought this was an unusual argument, and I don't really know much about privatization plans. Of course, now that I go back and try to search for the article (I think it was an op-ed piece) I can't find it... sorry to be so vague here. But I wonder if anyone else knows more or has strong opinions about the capacity for social security changes to help/hinder wealth building?

Hmmmm, interesting, I just read an article that says the assumption that blacks get less benefit from lower life expectancy is not as correct, but I can't find the article anymore, if I come across it again I will post it.

But I meant to post all the the great things from the conference but never got a chance, but I'm happy you brought up social security  . In Maxine Waters speech, this issue was one that she spent the most time talking about. Ultimately she was saying that all this talk about Social Security not being around is a bunch of BS that the republican machine is spitting out to both the older and younger generations (especially the younger) in attempt to scare us into believing we will no longer have benefits and so that we'll support privatization. For the most part, privatization helps the 1% of the population get richer, and like someone pointed out before, you could potentially lose everything. Social security was designed for you to have guaranteed benefits not gamble and lose it. She said that there is enough money currently in the system up to year 2052. Furthermore, even Pres Bush admits that privatization will not solve the current problem. Basically, don't believe the hype

[SheLaw]

Bobo21- Thanks for the recommendation.  I'm definitely gonna look into that book as well.

[_BP_]

As a stockbroker, I would definitely say you could look into stocks, bonds, mutual funds and a myriad of other investment products that you can find in the market. Its not easy to tell you exactly where you should put your money because there is no such thing as a “one size fits all” investment strategy. You have to look at things like your current debt, annual/monthly income, your education and your family life. Your 5-10 year goals are important. It’s important for a investment advisor to know if you have kids, a wife and if you own a home. I would say that before you make any big decision to get in the market you should definitely buy a home first. Well, unless you feel like you have a “sure thing” and we are dealing with a 90s market for example. I mean, if the opportunity presents itself I say go for it. However, that’s another issue all together: risk tolerance. Who knows, perhaps you want large caps, small caps, options, or you may even want to do day trading or long term investing. There are really so many ways you can approach the market. With that said I would just go to the library and read a few books on investing. You know, I use to read IBD, Barrons, and the wall street journal a lot. Be smart about it though. Do some research on the subject first that way you will have more specific question about the market if you feel like that is where you want to go. There are so many books on investing that it will make your nose bleed.

HTH     

Sorry I'm late to this thread, I just never saw it.

Good post HBCU.  One thing that HBCU hit on that you never see mentioned in the Social Security discourse is the concept of risk.  They mention higher potential returns without mentioning the higher risk.  This is one of the most prevalent cognitive errors people make when thinking about finances: thinking about return without taking risk into account.  This is similar to people who say, "I can't wait to get my Biglaw job and be making 100K per year, while ignoring the fact that at an 80 hour week, this works out to $25 per hour, which is the same as someone working a regular 40 hour week, making 50K per year.  The same way you can't look at the 100K per year (return) while ignoring the input (hours worked), one cannot make investment judgements based on higher potential returns without considering the input, which is RISK.

I have to give it to the Republican machine though, they're good.

[BadAssOne]

Maybe instead of blaming Republicans you ought to blame the black rappers/athletes that basically swindle black youth into spending what money they have on jewelry and basketball shoes.  Blacks need to get their priorities straight.

By the way, privatization does not hurt the poor, rather it helps them.  Why would you not want build wealth that can be passed onto your children in the event that you don't live to realize the full amount of your social security benefits?  I find it funny that liberals have swindled so many blacks into believing that being beholdent to the government will somehow improve their lot in life. 

[HBCU.EDU]

Maybe instead of blaming Republicans you ought to blame the black rappers/athletes that basically swindle black youth into spending what money they have on jewelry and basketball shoes.  Blacks need to get their priorities straight.

By the way, privatization does not hurt the poor, rather it helps them.  Why would you not want build wealth that can be passed onto your children in the event that you don't live to realize the full amount of your social security benefits?  I find it funny that liberals have swindled so many blacks into believing that being beholdent to the government will somehow improve their lot in life. 

I'm a Republican and I don't believe in privatization. As a stockbroker I can see who really benefits for this a mile away. INVESTMENT FIRMS! PERIOD! Hell, they are going to make so much money on commissions that you would have to be crazy not to buy stock in etrade, scott trade, merrill lynch, etc.

See, in finance, there is this concept of diversification. The way social security is set up now helps SPREAD THE RISK. Buddy, if you bring in privatization you are going to put the RISK in the hands of INDIVIDUAL investors who don't know jack sh*t about the market! They don't know a stop order from a market order. Also, depending on how the market is doing some people will make more money than others depening on the ebb and flow of the DOW.

Think of the word SOCIAL SECURITY. It's not SOCIAL SPECULATION.

By the way, this is why Black Democrats need to have more respect for Black Republicans. It's possible for Black Dem and Black Rep to come together and work on issues that are important for black people. We may not agree on everything but it would be good to have a friend in the Rep. party, like myself, to help you when your party is not in power.

[blk_reign]

HBCU-i love to hear u speak about financial power...

Badassone- it's obvious that you don't know what you're talking about.. black rappers and black athletes aren't holding a gun or a noose over anyone's head and saying hey be like me...

are you black?

[One Step Ahead]

I'm a Republican and I don't believe in privatization. As a stockbroker I can see who really benefits for this a mile away. INVESTMENT FIRMS! PERIOD! Hell, they are going to make so much money on commissions that you would have to be crazy not to buy stock in etrade, scott trade, merrill lynch, etc.

See, in finance, there is this concept of diversification. The way social security is set up now helps SPREAD THE RISK. Buddy, if you bring in privatization you are going to put the RISK in the hands of INDIVIDUAL investors who don't know jack sh*t about the market! They don't know a stop order from a market order. Also, depending on how the market is doing some people will make more money than others depening on the ebb and flow of the DOW.

Think of the word SOCIAL SECURITY. It's not SOCIAL SPECULATION.

By the way, this is why Black Democrats need to have more respect for Black Republicans. It's possible for Black Dem and Black Rep to come together and work on issues that are important for black people. We may not agree on everything but it would be good to have a friend in the Rep. party, like myself, to help you when your party is not in power.

HBCU, man, you best stop it with that "I'm a Republican" mess  Say you are an Independent; hell, say you hate the Democratic Party with a vengeance, but don't put yourself in the party of those who would continue to rape and pillage your people if they could get away with it.

[_BP_]

Maybe instead of blaming Republicans you ought to blame the black rappers/athletes that basically swindle black youth into spending what money they have on jewelry and basketball shoes.  Blacks need to get their priorities straight.

By the way, privatization does not hurt the poor, rather it helps them.  Why would you not want build wealth that can be passed onto your children in the event that you don't live to realize the full amount of your social security benefits?  I find it funny that liberals have swindled so many blacks into believing that being beholdent to the government will somehow improve their lot in life. 

First let me take back my Republican dig, cause I realize that there are Republicans out there who are capable of independent thought and are not just drones to be programmed and sent to push certain agendas (Kudos HBCU!).  I'm working on becoming more open-minded on this.

As for your post "newbie":  It's interesting how some folks cannot see pass the rhetoric and recognize the real.  You don't even have to be a finance head to see this.  Okay, let's stick with my employment analogy: Imagine  you have two choices 1) a job that pays a flat 50K per year and 2)a commision based sales job that has the potential to pay more than 50K per year. Ofcourse the sales job can pay more than 50K, but you would not want to ignore the fact that the sales job could potentially pay far less than 50K depending on how you do.  This is my point.  The machine ignores this possibility, and further ignores the fact that risk is multiplied (risk measured by volatility of returns or just shortfall risk (possibility of not achieving your goals))
 
Consider the worst periods in recent market history (1973-74, Dow Jones down 45%; 1977-1978, Dow down 25.6%; 1987 -- crash, Dow down 36%; 2000-2002, Nasdaq down 78%.  Now show this to an old lady who would have retired in one of these years under a private program.  She would would have had to delay retirement (or get a supermarket job) for another 15 years just to break even.

It's not even a black and white thing kid.  This is reality.