Boyce Watkins - Downturn Investing Tips

Black Money, Black Marriage, Black People

By Dr. Boyce Watkins
www.FinancialLovemaking.net

People fall in love every day. Some fall in love forever, and some just love the idea of falling in love. We are all familiar with the bliss and agony of love, and our mating, dating and procreating choices define much of the quality of our earthly existence.

But many of us love in all the wrong ways and make short-term choices with serious lifelong consequences. For long-term relationships, reality eventually sets in, and we learn that LOVING together means LIVING together. The thrill you once got from a long, seductive kiss is replaced by the excitement of a good home appraisal or bank account increase. Financial insecurity and emotional insecurity become one and the same, as we find there is a strong correlation between financial deception and emotional betrayal. A big part of living is MONEY. According to a study by the Council of Relationships, money is the number one reason for divorce. This alarming reality is a strong reminder that not discussing the financial and practical dimensions of your relationship can cause you a lifetime of misery.



Some consider it taboo to discuss love and money in the same sentence. I consider it ESSENTIAL. While we might mull all day over a potential mate’s emotional compatibility, sexual compatibility, professional compatibility and spiritual compatibility, most of us don’t spend one second thinking about financial compatibility. Many couples step into serious relationships and marriage without knowing their partner’s income levels, debt levels, credit score, retirement savings, or any of the other significant pieces of information that are going to have a dramatic effect on their love life. Merging your life with a financially irresponsible person is like putting your children into a car with a drunk driver. Once you are in the car, your fates are inextricably linked.

Money plays a huge role in our quality of life, emotional well-being, ability to raise our children properly or ability to spend time together. Money can either be a tool to enhance your love or a weapon to destroy it. Many people have seen their love and relationships ruined by financial problems, financial deception or financial exploitation. How we manage, confront and conceptualize the power of money plays a huge role in how our relationships evolve. That is what Financial Lovemaking is all about.

You think money doesn’t matter in a relationship? Well, here is just a small list of ways that someone could ruin your life financially:

• A partner with horrible credit could keep you from ever getting loan.
• A partner with terrible spending habits can ruin a family’s financial security.
• A partner with a substance abuse or other costly addiction could deplete a family’s assets.
• A partner with unhealthy connections to deadbeat relatives, who always need money, may drain your assets.
• A partner with an income that is too low due to a lack of education or poor professional choices could ruin you financially.

• A partner may steal money from you or borrow it without your permission and use it for something frivolous (i.e. a bad business investment, gambling, etc.)
• A partner who makes bad financial choices may get you into trouble with the IRS.
• A partner who decides to separate from you may end up dragging you and your money through a long and costly legal battle.

I just gave you the short list of ways that money directly impacts your love life. I am sure you can think of experiences you’ve had or those of your friends. In fact, I encourage you to visit our Financial Lovemaking blog to share your personal story on how love and money have impacted your life.

I am not here there to say there’s nothing going on but the rent. However, I can say that nothing else goes on if the rent is not being paid. So, good Financial Lovemaking is necessary for good love. Don’t forget that.

Dr. Boyce Watkins is a Finance Professor at Syracuse University and author of “Financial Lovemaking 101: Merging Assets with Your Partner in Ways that Feel Good.” He does regular commentary in national media, including CNN, NBC, CBS, MSNBC and BET. For more information, please visit www.FinancialLovemaking.net.

Financial Leadership Gone Wild: Our Government's Response to the Recession

by Dr. Boyce Watkins

The United States is respected throughout the world for its powerful economy. We are also, unfortunately, known for our arrogance. U.S. Monetary policy, headed by Federal Reserve Chairman Ben Bernanke, is both art and science, and the success of Alan Greenspan has forced any subsequent Fed Chairman to become a Financial Da Vinci.

The 2008 recession provides just the right landscape for an allegedly great monetary artist to strut his stuff. The US economy saw its financial chickens coming home to roost, and the recession was a long time coming. These financial chickens included excessive spending by American consumers, mixed with irresponsible borrowing and lending on the part of both individuals and banks. Personal responsibility is thrown out the window when discussing wealthy and middle class Americans, as financial leaders are called upon to bail out the banks, the consumers and everyone else.

Two great weapons in the arsenal of the Federal Reserve are government spending and interest rate cuts. Higher government spending increases consumer demand for the goods and services we continue to buy but almost never need. Interest rate cuts reduce the cost of borrowing for everyone in the economy. This marginal decline in rates serves to stimulate investment by all Americans, since the cost of borrowed money is lowered.

The government bailout package for 2008 included a massive spending bill, one that featured tax refunds and support to help consumers keep their homes, even if they were the causes of their own demise. Another financial steroid being employed has been the strong and consistent cuts of the Federal Funds rate by Federal Reserve Chairman Ben Bernanke. Bernanke has become known as “Bold Ben” by the media, who are consistently stunned by the Chairman’s massive and powerful attempts to control the economic downturn.

The strong and bold financial leadership by our government has been applauded by some, and demonized by others.

Republicans, known for being fiscally responsible, have created budget deficits our country has never seen. Between the Iraq War and the 2008 recession, spending continues to go up, even when tax revenues are expected to go down. The ready availability of additional lending to support our massive spending bills has our financial leaders behaving like teenagers holding a “really awesome” American Express card.

Continuously cutting interest rates may provide additional stimulation to the economy, but the problem is that cutting interest rates, allowing the value of the dollar to slide and frivolous government spending is a recipe for serious, horrific and uncontrollable inflation. Inflation is like a Pandora’s Box: Once it’s out, it’s extremely difficult to reign it back in. It’s hard not to feel that “Bold Ben” and “Big Bad Bush” aren’t gambling with our children’s futures and current taxpayer resources.

Sometimes, when you party too hard, you are forced to deal with the hangover. Americans have been blessed with a financial celebration that has lasted over a decade. We danced with lamp shades on our heads: not saving effectively, spending like crazy and borrowing to cover our financial insanity. But rather than simply allowing the party to end and letting everyone sober up, our financial leadership has taken on the irresponsible behavioral norms of American consumers. Their excessive rate cuts and spending increases have kept us pumped up on Financial Dope in order to avoid the impending crash.

This is not solid financial leadership, and something has GOT to give.