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It’s common for people to want to make “smart” decisions with their hard earned money, and yet with the number of complex options, confusing jargon, and potential for catastrophic mistakes, it’s no wonder so many opt to stay on the outside and look in. Fortunately, the Chicago Defender convened a discussion between a real estate appraiser and financial professional in an attempt to dispel some money myths and provide keen insight into the most burning questions.
The Chicago Defender spoke with Tiffany Allen, a financial professional with Prudential, and Joyce Douglas, a real estate appraiser for Douglas Valuation & Review, to gain a better understanding as to how people can both manage and maximize their money.
Defender: How do pensions impact financial institutions as well as families throughout the Chicagoland area?
Allen: Pensions have really gone away, and what I encourage people to think about is if you’re saving in a 401k, it’s not going to be enough. If you’re banking on social security, that’s just not going to be enough. It’s really imperative that people take a step back and look at their financial situation and prepare. My biggest fear is that there will be people who will work forever and what we know as retirement today won’t exist for the next generation.
Defender: Why is homeownership so impactful for the African American community?
Douglas: Owning property is the start to financial wealth. It can provide retirement income for you down the road. It could provide something to pass down to your family. In our communities we don’t save a lot. You have a job and you work from day to day, paycheck to paycheck, and you have nothing to look forward to. I would say owning property is a great investment tool to provide for your family and retirement.
Defender: What are some smart tips people can lean on for the future?
Douglas: How you look on paper is very important. Educate yourself about credit, save something, I don’t care how much it is, because how you look on paper is very important in making investments.
Allen: I would second that, and when you think about your financial plan, the basis of that financial plan should start with life insurance. You want to make sure that you protect your loved ones in the case of your untimely death. When you review your entire plan, you want to make sure that you have all the things necessary, whether it’s disability, pension, long-term care, you want to make sure you’re saving a percentage of your income, whatever makes sense.
Defender: What are the best ways to plan for your future? Investing in Bitcoin? Establishing a ROTH IRA?
Allen: I am a big fan of the ROTH IRA. I think everyone should have a ROTH IRA. It’s a great vehicle to put away money, and when you take that money out in retirement, it is tax free. However, investing is not cookie cutter. It is my opinion that each person should understand what [his/her] goals are and working with a planner is really going to determine what your plan is.
Defender: How can people begin the process of homeownership?
Douglas: When you rent, make sure that you pay your rent on time because when you want to buy a home, that’s the first thing they’re going to want to look at; if you’re able to pay your rent on time you can pay your mortgage on time. Always try to save, pay your bills on time, because the higher your credit score, the lower your interest.
Defender: How do you invest in yourself to develop the skills you will need moving forward?
Allen: I would say that if there’s something you have a passion for, read up on it. We live in an environment now where a lot of information is free. You have podcasts, YouTube, Google; there’s a lot of information that’s given out to you. You definitely want to put yourself in a position to win and get as many certifications as possible in your field to set you aside from the next person.
Defender: What are the ways to break the cycle of debt?
Allen: I would say a lot of times when we are in debt and overspending, we have an emotional connection to money. We buy something when we don’t feel good. Sometimes we women call it “retail therapy” and so it is all very emotional. We have to make sure we are smarter about money and we are not living outside of our means, and sometimes we have to take a deep look inside self and say, “what are some of the things we can start doing to prepare for our future.”