Since this is my last post for the week, I thought I’d end by giving you something to really, really think about. It’s a topic I first wrote about on blackpeoplesmoney.com, but it deserves to be examined in many, many more places:

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I had to come back to the topic of home buying one more time to illustrate the points I was making in responding to Jessica D.’s question about being ready to buy. This column in the Washington Post from a few weeks ago makes the point about what happens when you’re unprepared very well:

oForeclosures Bloom at Corner Of Prosperity and Gullibility

I originally wrote about this months ago on blackpeoplesmoney.com, but I flipped the channels past a show called Bridezillas that brought it all back to me. Figured I’d share: Read more »

Aprelle W., a friend of a friend, asks: “As an entrepreneur is it best to start a company
with your own money or should you begin finance options with larger corporations such as a bank?”

Good question, Aprelle, and assuming this means you’re starting your own company, good luck. As for whether it’s better to self-finance or seek finance, there’s no simple answer. Read more »

A younger friend of mine had a question for me a few weeks ago that I had to post here: “What should I do with all the money I have saved since high school?”

Since high school? I could resist asking — exactly how much were we talking?

$17 grand.

Good. Lawd.

My only advice is pat yourself on the back for being so disciplined. I’ve had all kinds of hustles since high school: Victoria’s Secret stockboy, two weeks at McDonalds, rental car associate, blogger, college newspaper editor, magazine freelancer, college R.A. Ask me how many pennies I still have left from that time? Hell, ask anybody.

That said, despite how impressed I was, I still did manage to give some sound advice. Since my friend, who’s 23, is nearing the end of a fellowship, my best advice is to leave a big chunk of the cash liquid (in layman’s terms, but it into some kind of account where the money is easily accessible.) Financial planners say you should have between three and six months of expenses saved for emergencies or in case you’re out of work.

In an expensive city like Boston or New York, that’s at least $2,000 or more, which would eat up between $6,000 and $12,000. I’d say split the difference and put about $9,000 ino an online savings account or CD where interest rates are much higher than brick and mortar banks.

There are any number of good moves for the rest, such as a mutual fund which can provide the returns of the stock market while taking away some risk by spreading the money among several investments, an IRA, which augments retirement savings while giving a potential tax savings or even just setting the remaining money aside in a separate savings account to help with a home down payment when you’re ready to buy.

I wrote earlier this week about credit card debt, so I thought I’d follow up with this piece of information I found online: There’s a report out that suggests that African-Americans and Latinos and single women are actually helping people with more money get lower interest rates on their credit cards. How? By paying exorbitant interest rates on our own.

Ever wonder how it is that some people pay interest rates that seem like next to nothing while your rate is in the high-teens? Part of it, of course, is credit scoring. If you have a history of late payments and the like, your rate’s gonna be high. But the new report also suggests that those high interest rates and other fees you pay are basically subsidizing low rates for others.

What’s race got to do with it? Blacks and Latinos are more likely than any other racial group to pay more than 20 percent interest on their credit card purchases. Only 7 percent of whites pay that much, while 15 percent of African-Americans and 13 percent of Latinos do.

Need anymore reasons to shred those pre-approved applications that come in the mail?

Today’s question: Traycee G., a single mother from Baltimore says, “I just bought a home in October in Baltimore and I’ve recently discovered that if I pay my mortgage biweekly that this would shave off 7 years of interest payments on my 30 year loan. When I tried to set this up, I learned that the company that I have my loan through does not do this Can you give me some advice?” Read more »

Jessica D., a twenty-something in South Carolina wants to know:

“Let’s say I want to buy a house at my age, but I have a substantial amount of loan debt and little credit card debt (I’m talking, say, less than $3,500 combined with credit cards and line of credit). What’s the best way for a young person, still fresh out of college, to purchase a home without paying more than they should on a down payment and on the interest rates? Would there be specialized lenders for minorities or young, first-time buyers?

“I only ask because I know folk who make considerably less than me who can buy properties without an issue and frankly, I’m ready to purchase a townhome.”

I’m lovin’ this question because buying that first crib is not only important, but something I haven’t yet done (YOU try moving to Boston and see if you’d pay $300k for a closet). But seriously, Jessica’s situation makes me question whether she’s really ready to take that leap.

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A lot of readers send me money questions all the time, and of course, I can’t answer them all without help or research because I’m not a financial adviser.

I’m still going to answer as many “common sense” questions as I can, starting with this one from Christopher W. at North Carolina Central University: “What are ways for young people to become independent with their finances and not credit cards?”

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When BET asked me to write this blog, I knew it would spark conversation. I’ve been blogging about wealth in the black community for more than a year and having a celeb in the mix always gets a big response. A blog tied to an Oprah interview? I hit the jackpot.

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