Financial efficiency…

Today,  I transferred the majority of my cash assets and direct deposits into two new bank accounts.  The significance being the I am helping to grow two minority-owned enterprises. I am now a proud customer of Liberty Bank & Trust and OneUnited Bank.

Last time, I introduced you all to my budgeting system.  Now that you see the importance of having a budget and how it helps you to build wealth, I am going to show you how to automate your finances.  I’m sure that I am not the only person that hates overdraft fees, so I’m going to show you how to eliminate them.

First there are two new terms we need to learn.

  1. Fixed Spending:  These are bills that have a known due date and payment amount.  Examples include rent, mortgage, utilities, student loans, cell phone, internet, cable
  2. Variable Spending:  This type of spending includes items of varying amounts.  Examples include, groceries, entertainment, investments, haircuts.

Now you are ready to automate your monthly expenses.

The two account system (1)


The chart above shows you how to divide your active and passive income streams  into a bank account for fixed spending and another for variable spending.  The first step here is to calculate your fixed expenses.  Next, simply allocate the necessary amount to that account from your income.  I understand utilities can vary so I suggest finding the average cost per month and adding a %10 buffer.  The remaining funds should go to you variable spending account to purchase basically everything else.  The investment bag is green because it is an asset, remember to always pay yourself first.

“$ave Dat Money”

While preparing to write this post, I began listening to the song “$ave Dat Money” by XXL freshman Lil Dicky.  Now, I don’t think Lil DIcky is a great rapper but this post is not about that. I think the song is funny in that he is basically giving  financial advice  to rappers about their extravagant spending habits. He touches on things like frugal spending, 401ks, and the business friendly laws of Delaware all with a decent flow over a hip-hop beat.  The song became a hit  and my students loved it.  I ask that you all teach your children financial literacy at home because they will not learn it in the schools.

Saving money and investing starts with a budget.  It is imperative you create one and stick to it.  I use the website and app for my budget needs.  I am sure there are more options, however I do not use them so I cannot offer my opinion on their services.  Mint is simple enough for my budgeting needs.

Before showing you my budget, I want to explain a few things.  First,  my budget will be presented in terms of percentages and not the actual numbers.  My reasoning for this is to show you that no matter how much money you make you can create a budget that is similar to mine but tailored to your individual needs. Second, this is the budget of someone whose financial responsibilities only includes himself.  Finally, this budget is the result of 3 years of learning and taking actionable steps, thus easily achievable for you.


  1. Paycheck                            %76.20
  2. AIRBNB Revenue                      %23.80

Total Income Percentage:                 %100


  1. Mobile Phone                         %1.43
  2. AIRBNB Business                      %16.67
  3. Groceries                            %4.76
  4. Rent, Utilities                     %20.83
  5. Haircut                              %2.38
  6. Loans                                %7.14
  7. Everything else                      %4.76
  8. Cash Buffer                          %7.02

Total Spending Percentage:             %64.99


  1. Emergency Fund                      %35.01
  2. Stock Purchase                      %0

Total Goals Percentage:                    %35.01

Total Spending + Total Goals:         %100


Remember, in my last post how i talked about knowing the difference between assets, liabilities, and expenses?  If you did not read it here is the link.

  • Assets:  I have three assets listed.  They are my AIRBNB business, emergency fund, and stock purchases.  Currently, I am not funding my brokerage account because I am trying to make an all out effort to complete my emergency fund goal by October which, if successful will place me one year ahead of schedule.  This results in over a third of my monthly income going toward that goal.  The fund is %64 complete.  Now, the AIRBNB business requires that I commit %16.67 of my income for purchase of the asset, but it accounts for nearly a quarter of my monthly income.  Hence I am able to commit %35 percent of my income to the emergency fund.   By the way (PLUG!!!), you should considering staying at my place if you are going to visit New Orleans.86681f4a-5e4d-4c8d-bdf7-ce917f8eb106


  • Liabilities:  The only real liabilities that I have are my student loans at %7.14 of my income.  After filling my emergency fund I will become more aggressive in paying them off.  I don’t own a car because I live about a mile from my job, so I walk to work.  Actually even If i didn’t live as close I still would not own a car at the moment, too many expenses both expected and unexpected.  I have grown to appreciate public transportation, less pollution.
  • Expenses: My expenses include my cell phone,rent, utilities, groceries, haircut, and everything else.  The section titled “everything else” includes things I don’t normally plan for such as eating out, cleaning supplies, hobbies, furnishings, going out etc.  In total my expenses account for  about one third of my total income.  My cash buffer is there in case I go over  the amount allotted to “everything else”, or if I want to pay more on the student loans or START AN INVESTMENT CLUB WITH 25 LIKE-MINDED INDIVIDUALS.


Before signing off, I want you all to take note of a few things.  First, I save nearly a third of the amount of money I make each month into a liquid emergency fund.  I expense out nearly a third of the money I make and  the remaining third goes toward purchasing an asset, paying down a liability, and providing a monthly cash buffer.  Second, because of my preparation I am able to save %35 into an emergency fund, you make only be able to save %10 of your income and that is ok. Finally, “Save Dat Money” is actually a pretty good song that shows you how rich people think.


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Pay yourself first!!!

I started investing in 2013.  The significance of this year was that I completed my first year as a teacher and I  began a Masters program that would pay me a stipend of $1,000 per month.   As a young man, living rent free in my mother’s rental unit, I soon found myself with a nice nest egg.   My understanding of inflation taught me that as long as my cash sat in a savings account gaining 0% interest, I would lose about 3 percent of the spending power each year.  Basically, if I put $1000 in the account, the next year the spending power would decrease to about $970.   This course of events led me on my current journey toward financial freedom and wealth.  I hope this inspires you to do the same.

The first book I read on financial literacy was Rich Dad, Poor Dad by Robert Kiyosaki. I highly recommend reading this book. For many, this will be the foundation of your financial education, as it is surely mine, and through it you shall find that creating the type of wealth and prosperity that you seek is actually very attainable.  In the book, the author shows the income statements of three types of people: the poor, the middle class, and the rich.  Today, I am going to show you the same.

The Poor Person:


The income statement above shows you the cash-flow pattern of a poor person, or my former income statement.  As a young man collecting his first “career paycheck” and having no rent, I had money to burn, and that’s what I did.  To understand an income statement, be it a personal one or that of a business you want to invest in, you must first understand what an asset, liability, and expense are.

  • An asset is something that you own of value.  It may be a stock, bond, note, rental unit, or business.  Assets will produce income in the form of dividends, stock growth, rent, revenue etc.
  • A liability is a debt that has been taken on.  Typically these are car loans, student loans, residential mortgages, and credit card debt.
  • Finally an expense, is something you spend money on.  Examples include rent, food, taxes, credit card payments, student loan payments, car payments, pretty much everything else.

Learn to distinguish the difference between these words, you will hear and use them a lot from this day forward.

Now we can analyze this income statement.  From it we see that this person has money come in via a job and goes straight out of the expense column.  They have no assets so the only way for them to earn money is to sell their life by the hour.  A person with this type of income statement will never create wealth, thus  exiting the “rat race” will be nearly impossible.  This is also why many lottery winners go broke after 5 years.

The Middle Class:


Four months into my new job, my student loan payments began and I purchased a new car.   I effectively became  middle class, and the diagram above is how my income statement looked.Notice my move from poor to middle class did not come from an increase in income but in liabilities.I think this shows that you can make a lot of money and still be poor if you don’t understand the financials .  In the book Robert Kiyosaki, drives home the importance of paying yourself first.  What this means is that you should purchase an asset before paying your liabilites and expenses.  The reason for this is because assets generate income and they will change your cash flow pattern from the diagram above too the one below.

The Rich:


Currently this is my income statement, it is similar to that of the “rich”.  Again this is just a mentality switch.  By investing in an assets, you are able to trade your money and not your time  to produce income that will cover your expenses.  In truth, being rich is just having your assets generate enough income each month to cover your monthly expenses. Once that is accomplished you can effectively retire and explore your dreams.  Once I understood what an asset was I began trying to purchase as many as I could.

The key takeaway I would like to leave my readers with is that you must pay yourself first. We all have heard the phrase it takes money to make money, now you know how to apply it.

Mortal Man

I wanted my first post on this blog to describe the scope of things I sought to teach, this included social justice, financial literacy, and culture.  Inherently, I believe these components can be harnessed to create a prosperous life and future for black people in this world.   Yesterday, while discussing the current state of events in America, a friend asked the group, “Where is the modern-day Malcolm, Martin and Huey ?”  I thought to myself that it doesn’t matter where they are for no one is coming to save us.

I think these great men have left us with the tools to build the world that we want for ourselves, though each sought to reach the same goal they all took different means to achieve a common end.  The answer to our struggles lie in the convergence of their paths into one road, the yellow brick kind if that’s what you like.  Martin understood that we needed the political machine to change the laws.  Malcolm knew that the  power lie in the dollar and owning your community: the homes, the stores, the restaurants.   Finally, Huey.  Huey wanted to rally the lumpenproletariat, the class of society not interested in revolutionary advancement, to protect and serve the people.

Financial literacy  will transform us from consumers to investors. As a people we must organize the money in our communities.  That means to buy, support and advertise black owned businesses, to pool our funds in black owned banks, to fund the entrepreneurial dreams of black men and women across this nation. We must become businessman, not workers.  When we create products, we create jobs in our communities.  We can then build the communities as we see fit.    Money is power.

Chairman Mao Zedong said “Political power flows through the barrel of a gun”, I agree that is one way, but it also goes with the cash flow.  With a strong economic base, we may control our destiny in the political realm. The difference between the 60s and now is that we can place our own representatives, people who look and think just like us, into places of power.   Many people dislike the Tea Party Republicans but they are getting their voices heard in the loudest way.  With economic support we can educate our people on the importance of the local elections, working our way up to control states, taking over all offices from the judges, DAs, city councilmen, the state house and senate.  We can do it but we have to work together.  David Johns, told me that I make the mistake of thinking all black people are collectively woke when there has never been a time in history of such an accord.  I think that time really can be now.  The time when we organize the academics and the streets to lead ourselves out of this dark place we call America.  I wanted my first post to be about the things I hoped for, the knowledge I sought to impart.  Now you know my motive as well.