THE MVET WAY CEMN NEWSLETTER_NOV_DEC_JAN_2016 – 2017_ISSUE_V

The Value of the “One-Quarter.” By Steve Smith

Part 2 of 3 In Part 1, we discussed the need to understand how a quarter of a point can add up. By not being financially savvy, you can become a victim of predatory lending. This article will continue the importance of understanding interest rates in regards to credit cards and home loans. A credit card offer, for example, that offers an introductory rate of anything over 20% is not to any consumer’s advantage even to establish or re-establish credit, or to satisfy an immediate need. A competitive interest rate should always be the goal of any educated consumer no matter what their current financial status presently is. While consulting, and advising many personal clients, I’ve come across decisions that were made in a time of need that has hampered, if not destroyed any potential progress that they may have in the future. On many occasions, ridiculous interest rates were directly related to subsequent tax liens, repossessions, and bankruptcies they incurred. Thousands of extra dollars can be paid on a mortgage with as little as an eighth of a point added to the interest rate on that loan. A $20,000 auto loan with an above prime rate can allow for as much as 50-75% above the actual cost of the vehicle over a 4-6 year period. In the last few years, I’ve seen 84-month loans on vehicles that double the original cost of the purchase price. That’s seven years to pay for a vehicle that has practically no value by the time the loan has been paid off. We have to consider these facts before signing away our rights. Many of the facts previously stated are obvious to most consumers, but the thought that “this is just a temporary situation, and I’ll refinance in 6 months or a year” is the ultimate goal. Unfortunately, due to unexpected situations, the goal of refinancing these obligations prematurely never comes to fruition. A laissez-faire approach to what might have a profound effect on future financial health is never to anyone’s benefit. We have to pay attention to current interest rates offered to consumers with good to excellent credit and use that as a reference point. Make it a personal goal to obtain excellent credit and use the resources available to subscribers of this newsletter to do just that. Every component of the MVET Way model is designed to inspire and educate all racial and ethnic backgrounds. Never underestimate the difference in a “quarter point”.

A Personal Story By Professor Harlin, M.A. Part 2 of 3

Hope for Our Community In the first article, I shared a personal story of one of my clients, how he chose not to change, and my hope for him and his family. In this article, I will focus on the hope for our communities and the improvement efforts through financial literacy. It was once thought that a college education was the answer to solving some of, if not most of, the major issues that many communities have historically faced and continue to face today. In an article “Racial Wealth Gap Persists Despite, study says- in The New York Times” it stated “A college degree has long been recognized as a great equalizer, a path for minorities to help bridge the economic chasm that separates them from whites. But the report, raises troubling questions about the ability of a college education to narrow the racial and ethnic wealth gap.” If in fact this statement is true, then a different answer is needed for these communities. When considering and asking what is needed, the idea of teaching financial literacy and educating communities on how to use their monies may be of greater benefit and value to these real people. The next question might be, “How can this be done”? Much of the research indicates multiple factors that should be looked at when exploring how we can best introduce solutions for bringing about significant change within our communities. My list would begin with my top three. The first significant change would begin with financial literacy and education . The second relevant factor would identify core issues (You have to understand your own history to bring about effective change.). The third identified effort must be on teaching critical thinking skills . With the overall goal being changing communities one person at a time, we will have a greater chance of doing so with the three identified key areas as our base. Once again, that is looking at financial literacy, core issues, and critical thinking skills. How can these skill sets be applied to bring hope and change to our communities?