Tag Archives: Economy

Financial Literacy: Six Principles of Personal Finance | TD Ameritrade

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Imagine operating a boat without the basic understanding of nautical rules of the road or even how to operate a boat. Scary thought.

Here’s another scary circumstance – one that is all too real. Many Americans are making financial decisions with minimal financial knowledge of investing, budgeting, and credit. The TIAA Institute conducted a survey on U.S. financial literacy, asking 28 basic questions about retirement saving, debt management, budgeting, and other financial matters. The average respondent answered only about half of the questions correctly.

Another study, conducted by Pew Research, found that one in four Americans say that they won’t be able to pay their bills on time this month.

It has been said that knowledge is power, and if that’s true, then too many Americans lack the power to control their financial futures. Financial success rarely happens by accident; it is typically the outcome of a journey that starts with education.

Talking about money is one of the most important skills to being a fiscally responsible and a financially literate person. However, 44% of Americans surveyed would rather discuss death, religion or politics than talk about personal finance with a loved one, according to CNBC.

Why? Two major reasons are embarrassment and fear of conflict, even though the consequences can be grave: 50% of first marriages end in divorce, and financial conflict is often a key contributor. Additionally, it is considered rude to discuss money and wealth.

The missing component is financial literacy education and training.

Mastering personal finance requires you to look at your financial situation holistically and come up with a plan for how to manage your money. In this TD Ameritrade video, we’ll look at helpful principles for six personal finance topics:

  1. Budgeting – focus on the big ticket items by cutting cost on the expensive costs such as cars and homes
  2. Saving and investing – be specific about your destination and your plan on achieving your goal and reaching your destination
  3. Debt and Credit – avoid high interest debt and loans on items that will quickly lose value
  4. Reduce taxes – find ways to legally pay less taxes on the income you earn,
  5. Avoid insurance for expenses you can pay out of pocket – purpose of insurance is to protect you in unfortunate scenarios.  60% of all bankruptcy is related to medical expenses
  6. Investing for retirement. – don’t just save for retirement, invest for retirement.

Make high impact adjustments to your finances to improve your financial future.

References:

  1. https://www.cnbc.com/2019/04/30/the-us-is-in-a-financial-literacy-crisis-advisors-can-fix-the-problem.html
  2. https://www.tiaainstitute.org/publication/financial-well-being-and-literacy-midst-pandemic
  3. https://www.pewtrusts.org/en/research-and-analysis/articles/2017/04/06/can-economically-vulnerable-americans-benefit-from-financial-capability-services

Looming Threat of Inflation

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“Inflation destroys savings, impedes planning, and discourages investment. That means less productivity and a lower standard of living.” Kevin Brady

Brian Wesbury, Chief Economist at First Trust Advisors, is concerned about inflation increasing faster than the Federal Reserve anticipates. Wesbury said that he is focused on the rapid increase in the M2 measure of the money supply. This measure has soared since COVID-19 hit the US, up about 25% from a year ago, the fastest growth on record.

From his viewpoint, the rapid increase in M2 is the key difference between the current situation and the situation in the aftermath of the Financial Crisis of 2008-09. During that first round of Quantitative Easing and big spending bills (like TARP), the M2 measure remained subdued because the Fed kept banks from lending, in part by raising capital standards. As a result, inflation remained subdued as well.

The late great economist Milton Friedman stress that policy makers watch M2: Nominal economic growth and inflation will tend to track M2 broadly over time, adjusted for any fluctuations in the velocity of money, the speed with which money circulates through the economy.

The US economy is healing faster than expected, while the US Congress and President Biden are intent on pouring at least one more massive government spending stimulus into the system, according to Wesbury. They are doing this even though the pandemic is waning, and a double-dip recession seems highly unlikely.

The big risk for the next couple of years is an upward surge in inflation that’s larger than anything we’ve experienced in the past couple of decades.

“I think the inflation prospects for the U.S. over the next five or six, seven years, are quite serious. You cannot have a bumper crop in apples without the value or the price of each apple falling. The Fed has had the largest increase in the monetary base in the history of the U.S., from colonial times to the present, times ten.” Arthur Laffer, an Economist known for his tax revenue theory called the Laffer Curve

He still project 2.5% CPI inflation for 2021, as the government’s measure of housing rents holds the top-line inflation number down. But commodity prices are likely to continue rising and overall inflation will as well in in 2022 and beyond. There is an old saying: When the Fed is not worried about inflation, Wesbury states, “the market should be worried.”

References:

  1.  https://www.ftportfolios.com/Commentary/EconomicResearch/2021/3/1/powell-disses-uncle-milty

Rising Bond Yield Leads to Market Sell-off | CNBC

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The culprit behind the recent stock market sell-off was the rapid rise in 10-Year U.S. Treasury bond yields. The 10-year Treasury yield remained above 1.4%, after surging to 1.6% in the previous day session to its highest level since February 2021 and more than 0.5% higher since the end of January, according to CNBC.

The spike in the 10-year yield , which is used as a benchmark for mortgage rates and auto loans, is reacting to positive economics as vaccines are rolled out and GDP forecasts improve, which should benefit corporate profits. But the move could also signal faster-than-expected inflation ahead. The sheer pace of the rise has also had the effect of dampening investors’ appetite for richly valued areas of the market like technology and other growth stocks. Higher rates reduce the value of future cash flows so they can have the effect of compressing equity valuations.

All three stock benchmarks — Dow Jones Industrial Average , Nasdaq and S&P500 — were tracking for weekly losses ahead of the final trading day of February. The Nasdaq was down nearly 7% from its February 12, 2021, record closing high. The Dow and S&P 500 both remain solidly in the green for the month. However, the S&P 500 was off almost 2.7% from its last record closing high, also on February 12, 2021, and the Dow had its worst day in nearly a month on Thursday.

Additionally, inflation concerns are being stoked on the thought that the $1.9 trillion COVID-19 stimulus bill — which passed the House of Representatives — on top of accelerating growth could overheat the economy.

Economists and investment managers say the bond market is reacting to positive economics as vaccines are rolled out and GDP forecasts improve, which should benefit corporate profits. But the move could also signal faster-than-expected inflation ahead.

References:

  1. https://www.cnbc.com/2021/02/26/5-things-to-know-before-the-stock-market-opens-feb-26-2021.html

What Every Woman Needs To Know About Her Money

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“The lion’s share of wealth, two-thirds of wealth in the United States, is going to end up in the hands of women by the year 2030.” Jean Chatzky

The women that Jean Chatzky, New York Times Bestselling Author and financial editor at the NBC TODAY Show, has talked with “share a lack of confidence” regarding managing and investing their money. “Whether we’ve got one hundred, one hundred thousand, or one million dollars, we don’t always feel equipped to manage it, even when we’re doing exactly the right things,” she explained.

In order to create a better world, Chatzky suggests women should, “…use this power that’s coming our way to improve not just our lives, but the lives of the people that we love and care about, and the causes that  we believe in. We really do have an opportunity through giving and investing to create the world we want.”

Women…”have an opportunity through giving and investing to create the world we want.” Jean Chatzky

Chatzky offers 15 tips to help you get a handle on your finances and to create the financial future you want for yourself.  A future that aligns with your goals, values and purpose in life.

1. Talk openly about money

Chatzky explains, “We gather groups of women who don’t make a habit of talking about money with the specific purpose of talking about money…and it’s really freeing.” One open ended question she asks is, “What do you want your money to do for you?”.

2. Track your spending to see what you really value

Do you want a clear picture of your spending? More so, do you want to uncover whether or not what you say are priorities are aligned with your expenditures?

3. Determine what your ideal life actually costs

“What do you want from your life?” This is a question Chatzky believe you need to consider so that you can determine what your ideal life actually costs. Write down what you want and next to each item, list the price to do or have it.

4. Use money as a resource to buy you more time

Money is a tool which creates freedom of time and choice. Chatzy shares, “The most important thing to realize is the opportunity that you’re wasting. Money we can get more of. Time, you absolutely can’t get more of…But by moving around some of our money, we can restructure our time in a way that feels much better, much more fulfilling, and much less stressful. We are so stressed, and using our money to swap for a little bit of extra time is one great way to reduce some of that stress.”

5. Identify your money scripts

“We all have stories around money which became ingrained as children. In some cases we mimic them, in others we rebel against them. In order to know where you’re going with your financial future, it’s helpful to identify the scripts that are overtly or subliminally impacting your views and habits around money,” advises Chatzky.

6. Find financial harmony in your primary relationship

Chatzy suggests, “Listening is the key to success within a relationship. You have to understand why your partner needs what they need as much as they need to understand what you need.”

7. Don’t let money injure your friendships

“Listen and read between the lines. We know an awful lot about our friends’ financial situations, even if they tell us not one thing. We see how they spend. We see how they manage. We know if they’re stressed financially. We just have to be a little bit empathetic and open-minded about the fact that they may not have the same choices or priorities that we have. And that doesn’t mean that we can’t be great friends,” shares Chatzky.

8. Teach your kids early

It can feel scary to talk to your kids about money, especially if you feel tentative about your own financial skills. Fortunately, it doesn’t have to be challenging: “Kids have to have money in order to learn to manage money.”

9. Get paid what you deserve

To charge or get paid what you deserve, “First, you must know what you deserve and once you know what that number is, you have to ask for it:

10. Negotiating won’t hurt your outcomes

The person on the other side of the table, they are waiting for you to negotiate, according to Chatzky. They’re not going to punish you for negotiating. You may not get the money. But asking is not going to hurt you.

11. To be or not to be (an entrepreneur)

30% of US businesses are women-owned, and that number is rising steadily.

12. Spend on others

Studies show that when you do for others, you’re guaranteed to feel happier. This includes when you spend on others. “There’s no sense in feeling guilty for spending money that’s not sabotaging our financial life”, says Chatzky.

13. Talk with aging parents

“If you haven’t had a conversation with your parents before you’ve hit age forty or they hit age seventy, it’s time”, she comments

14. Have a little fun with your money

Chatzky comes from a judgment-free zone when it comes to how you spend your money. But, “know how much it costs” since you earned that money and yours to do with as you want.

15. Consider your legacy

“You have to think about what’s important to you. That’s where a lot of us fall down when it comes to charitable giving”, Chatzky says.

Building wealth

If you want to build wealth, you need only do four things, according to Chatzky:

  1. Make a decent living.
  2. Spend less than you make.
  3. Invest the money you donʼt spend.
  4. Protect the financial world you build so that a disaster doesnʼt take it all away from you.

Building wealth sounds easy, so why is it so hard, particularly for women?  “Because women according to Chatzky, “make excuses”. We tell ourselves that we’re “just not good with money,” or that our husbands “like taking care of the finances.”

In short, “what successful women want from their money are: independence, security, choices, a better world, and–oh yes–way less stress, not just for themselves but for their kids, partners, parents, and friends.”

To read more: https://www.vunela.com/jean-chatzky-on-the-top-15-things-every-woman-needs-to-know-about-her-money/

References:

  1. https://www.vunela.com/jean-chatzky-on-the-top-15-things-every-woman-needs-to-know-about-her-money/
  2. https://www.jeanchatzky.com/books/

Vaccination and Economic Recovery

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As the Federal Reserve Chairman Jerome Powell reiterated, the economic recovery is dependent upon not only the course of the virus but also the vaccination progress. One silver lining is that some of the data trends, such as new cases and hospitalizations, appear to have peaked and are steadily improving. However, for a full return to normality, vaccinations for the majority of the population need to occur swiftly.

“Recovery will depend on the willingness of people to get on an airplane, stay in a hotel, and go out to dinner,” writes Raymond James chief economist Scott Brown. “A quicker rollout of vaccines will get us there sooner, but there is also a risk that vaccines will be less effective against new strains of the virus. Booster shots may be needed.”

The number of new daily COVID-19 cases has declined from recent highs, but remain elevated. Increased social distancing, whether state mandated or voluntary self-preservation, should slow the pace (and the economy) in the near term, according to Brown. The New York Fed’s Weekly Economic Index fell to -2.28% for the week ending January 23. The WEI is scaled to four- quarter GDP growth (for example, if the WEI reads -2% and the current level of the WEI persists for an entire quarter, we would expect, on average, GDP that quarter to be 2% lower than a year previously).

Yet, there are a few reasons for optimism.

  • First, President Biden’s original pledge of 100 doses in his first 100 days has been increased to 150 million as production and distribution capabilities expand. Purchasing 100 million doses of each of the high-efficacy Pfizer and Moderna vaccines is a positive.
  • Second, more experience should allow state administrators to improve communications and streamline the distribution process of the vaccine at the local level to maximize daily inoculations.
  • Third, while additional vaccines such as AstraZeneca and Johnson & Johnson have a lower efficacy rate than Modern and Pfizer, they will provide further accessibility (assuming emergency use authorization (EUA) is granted by the FDA) for people to receive some level of protection and hopefully avoid hospitalization.
  • The bottom line is that more effective distribution and additional second wave vaccine options keep the expectation of a return to normality for the US economy (and likely the rest of the world) around midyear. The biggest unknown and threat to this timeline remains the potential deterioration in vaccine effectiveness against the new mutations of the virus.

    • https://twitter.com/raymondjames/status/1353402346550644737?s=21

    References:

    1. https://www.raymondjames.com/commentary-and-insights/economy-policy/2021/01/29/weekly-economic-commentary

    Financial Literacy and COVID-19 | Charles Schwab Foundation

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    “89 percent of respondents to a Charles Schwab’s survey believe a lack of financial literacy contributes to larger social issues—from poverty, to fewer job opportunities, to wealth and gender inequality.” Carrie Schwab-Pomerantz

    • Even in the wake of a global health crisis, Americans value financial education.
    • An overwhelming majority of Americans believe that a lack of financial literacy contributes to larger social issues.
    • Americans want our schools to take the lead in providing our youth with a financial education.

    The impact of financial illiteracy is not lost on the American public. 89% of Americans agree that lack of financial education contributes to some of the biggest social issues our country faces, including poverty (58%), lack of job opportunities (53%), unemployment (53%), and wealth inequality (52%).

    “Financial illiteracy is insidious. The antidote is financial education, which gives people the skills they need to make smart money decision and can help improve their lives.” Carrie Schwab-Pomerantz, president of Charles Schwab Foundation.

    Americans indicated they wish they had better money management skills, according to a Charles Schwab survey. When asked what they would teach their younger selves about personal finance based on what they know today, Americans said the value of saving money (59%), basic money management (52%), and how to set financial goals and work toward them (51%).

    From the survey, it is apparent that every person in America should be taught the fundamentals of money management including budgeting, saving, avoiding debt, setting financial goals and investing.

    “The pandemic has underscored just how critical basic personal finance skills are in preparing for the unexpected. Financial literacy is a survival skill that everyone needs.” Carrie Schwab-Pomerantz

    Carrie Schwab-Pomerantz recommends five key steps every American can take to help shore up their finances during this period of global health crisis and economic uncertainty.

    • Start an emergency fund (or add more to it) to help protect yourself against an unexpected drop in income or expense shock. Set aside whatever you can – every little bit counts. Try to aim for $1,000-$2,000 to get started, and then work your way up to 3-6 month worth of essential expenses over time.
    • Create a budget to help you prioritize and assess your financial resources. Self-isolation has led to different spending patterns for many people, including cutting back on what we may have previously thought of as “essential.”
    • Create a financial plan to help you navigate from where you are to where you want to be. You don’t need to have a lot of money to need a financial plan. Consider it a roadmap to reach your financial goals, whether that’s to pay off debt, build savings, or make a large purchase.
    • Ask for help if you’re struggling. Given the scale of this economic crisis, the government, lenders and creditors are trying to work with borrowers through this difficult time. Don’t hide from creditors – that can make things worse.
    • Focus on what you can control. You can’t predict or control the market, but you can control how you manage your investments, your savings rate, having a financial plan and how you react to events.

    “The need for financial literacy is especially urgent for women and minorities, who continue to face unique challenges at home and in the workplace,” said Schwab-Pomerantz.

    However, financial literacy isn’t a cure-all, but it is an essential key to unlocking doors to opportunity and financial security.

    References:

    1. https://www.schwab.com/resource-center/insights/content/americans-want-financial-literacy-now?SM=URO#sf237483690
    2. https://pressroom.aboutschwab.com/press-releases/press-release/2020/Charles-Schwab-Financial-Literacy-Survey-Exposes-Grave-Impact-of-Lack-of-Financial-Education-During-COVID-19/default.aspx

    Return Kids to In-Person Classroom

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    Many parents are rightfully concerned that their kids are not receiving the quality of educational services that schools are required, by law, to provide when school districts implement a 100% virtual learning or hybrid classroom model [that ask students to come to school on alternating days] options.

    The American Academy of Pediatrics’ (AAP) contends that based on experience and research, remote learning is likely to result in severe learning loss and increased social isolation. Social isolation, in turn, can breed serious social, emotional and health issues: “child and adolescent physical or sexual abuse, substance use, depression, and suicidal ideation. Furthermore, these impacts will be visited more severely on Black and brown children, as well as low-income children and those with learning disabilities.”

    Children are safer in their schools. And, there are lots of kids in this country who are, for example, food insecure, who may be experiencing abuse at home — not to mention the obvious academic benefits of simply being in school. We know that remote learning is just not that good.

    Nation’s Pediatricians support in-person schooling

    The AAP guidance “strongly advocates that all policy considerations for the coming school year should start with a goal of having students physically present in school.” Their guidance says “schools are fundamental to child and adolescent development and well-being.”

    The AAP cites “mounting evidence that transmission of the coronavirus by young children is uncommon, partly because they are less likely to contract it in the first place. Tests showed lower coronavirus rates in schools than in their surrounding communities.”

    The guidance for in-person schooling includes recommendations to maintain physical distancing, cleaning and disinfection of classrooms, frequent hand-washing, and using outdoor spaces whenever possible.

    Largest school system

    New York City’s Mayor Bill de Blasio plans to reopen the city’s public elementary schools and return to partial in-person learning. The plan is to reopen schools at the pre-k and K5 levels because “we have so much proof now of how safe schools can be” amid the contagion”, de Blasio remarked.

    Yet, concern remains at what is the critical amount of community transmission that is at a safe enough level to open schools.

    Parents and schools responsibilities

    Schools are requiring parents to attest to the fact that their children are not showing symptoms and that they took their temperature in the morning prior to the student arriving at school.

    Additionally, many schools are segregating kids into what they’re calling cohort groups, so that the same small group of 10 or 12 kids will stay together all day. That way, if there is a reported infection from one of those kids, then ideally you’re only contact tracing and quarantining that group instead of every child in the building.

    Furthermore, students will be socially distanced and will be wearing masks. The challenge of footprint and the ability to space out desks remains a challenge for most schools. Some schools have put those kids in the gymnasium or had to start holding class outside, but that often requires more teachers.

    “There seems to be less transmission from kids to adults than there is adults to adults. Kids don’t seem to be super-spreaders”, said Pediatrician Aaron Carroll of Indiana University. “We don’t have reports of sort of, you know, a kid going somewhere and spreading it to a bunch of other kids or even a bunch of other adults.”

    Public health experts and infectious disease experts agree that we all have to do the right thing if we plan to send our kids back to school.

    References:

    1. https://www.npr.org/2020/07/15/891598558/is-school-safe-will-districts-test-for-covid-19-answering-back-to-school-questio
    2. https://pediatrics.aappublications.org/content/146/3/e20201440
    3. https://nypost.com/2020/11/29/nyc-elementary-schools-to-reopen-for-in-person-learning-dec-7/
    4. https://www.msn.com/en-us/news/us/american-academy-of-pediatrics-says-benefits-of-in-person-learning-outweigh-coronavirus-risks/ar-BB16b9W9

    COVID-19 Fatigue Feeds Market’s Rise | Forbes

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    Managing risk should remain a key in life and in investing.

    There is very little that is typical about Thanksgiving 2020. The CDC and other U.S. public health experts requested that Americans avoid traveling, opening your home to people outside of your immediate family and hosting large gatherings on Thanksgiving.  

    Dr. Henry Walke, the Centers for Disease Control and Prevention (CDC) Covid-19 incident manager, said during the press briefing, “Right now, especially as we’re seeing this sort of exponential growth in cases, and the opportunity to translocate disease or infection from one part of the country to another, it leads to our recommendation to avoid travel at this time.”   

    Yet, a lot of Americans aren’t heeding the warnings and recommendations of public health experts. In Florida, for example, popular restaurants and bars were packed with customers and had wait times for a table exceeding thirty minutes. Moreover, AAA projects that 50 million Americans will be traveling for Thanksgiving.

    https://twitter.com/i/events/1330235471012667392?s=21

    The surge of COVID-19 infections, hospitalizations and projected rise in related deaths combined with adverse economy effects is just the “right” condition for creating a double dip recession and bear market.

    Additionally, the dips could be fast and outsized because the surge is widespread and exponential. Moreover, it is occurring at a time of pervasive disregard for COVID-19 and stock market risks.

    COVID-19 resurgence

    During this COVID-19 pandemic and stock market runup, many people have been blaming “COVID-19 fatigue” for the reason they refuse to stand safely on the sidelines in safer assets and watch others ignore risks of a double dip recession and bear market, and ignoring warnings of exponential Coronavirus resurgence.

    There are “a confluence of troubling issues, challenging uncertainties and destructive possibilities that descend on the economy and financial markets”, according to Forbes.

    Focus on reality and risk

    The incoming economic data in the US suggests that the US may be in jeopardy of experiencing a double dip recession because of the latest Covid-19 resurgence. Moreover, the data also indicates that there is no healthcare – economy trade-off.

    Unemployment

    Recessions produce outsized unemployment with many unable to find work for over over six months – a reality that is apparenty present now.

    Consumer sentiment and spending

    Consumer spending is equivalent to about two-thirds of the GDP. It is especially dependent on both consumer income and consumer sentiment. Increased unemployment naturally reduces both items.

    Consumer spending, like GDP rebounded partially, but could stagnate or even fall due to higher unemployment and lower income, reflected by the decline in sentiment.

    Hope for best, prepare for worst

    Widely expected new government stimulus and broadly administered vaccinations are the current rationales for hope.

    But risks remain. With the prevailing risk to the economy and markets, coupled with COVID-19 resurgence and uncertainty, it may be a wise move to play it safe.

    References:

    1. https://www.forbes.com/sites/johntobey/2020/11/23/covid-19s-fatigue-feeds-stock-markets-rise–both-are-unhealthy/?sh=5b0d20301518
    2. https://newsroom.aaa.com/2020/11/fewer-americans-traveling-this-thanksgiving-amid-pandemic/

    Making the American Dream Available to Every American – CEO Newel Brands

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    How can we make the American dream available not just to a select few Americans, but to every American?

    African Americans don’t feel fully part of the fabric of America society because systemic racism, discrimination and economic/social injustice have been barriers that have effectively denied people of color their full rights and privileges of American citizenship. Blacks and people of color have had to fight and to demand for decades for their inalienable civil and human rights and privileges, which are accorded freely to the majority, to become full citizens in America.

    “As Americans, we need to proactively address aspects of our society in which discrimination and racism are systemic and root them out,” Ravi Saligram, Newel Brand’s President and CEO wrote. “We need to open our hearts and truly believe that every one of us is equal, not succumb to tawdry stereotypes or allow the insidious hand of unconscious bias to seep deep into our souls.”

    Saligram wrote in a letter to Newel Brand’s team members entitled “Embracing Our Humanity” that “his hope [is that] this tragedy will galvanize Americans—black, brown, white, Democrat, Independent, Republican, male, female or however one identifies—to come together to acknowledge and reject racism and discrimination of any kind. As Americans, we need to proactively address aspects of our society in which discrimination and racism are systemic and root them out. We need to open our hearts and truly believe that every one of us is equal, not succumb to tawdry stereotypes or allow the insidious hand of unconscious bias to seep deep into our souls.”

    Social scientists say crises like COVID-19 and the murder of George Floyd are “focusing events,” events that recalibrates public policy and cultural norms. It often takes a crisis or tragedy to get society to wake up, look in the mirror, face up to uncomfortable truths and find a better way forward.

    We require new and innovative thinking and actions in America to solve deep rooted societal problems of systematic racism and economic inequality, to repair the economic devastation caused by the pandemic and to heal and bring spiritual peace (free of the burdens of uncertainty, fear and anxiety) to the country and the world.  

    “It would be tragic if the narrative that the general public remembers is property damage and violent acts instead of focusing on the real issues at hand, namely justice, equality and ending systemic discrimination,” Saligram wrote. “We cannot revert to the old normal of ‘Us versus Them’ and perpetuate senseless killings of people of color.”

    References:

    1. https://www.marketwatch.com/story/i-can-be-a-three-time-ceo-because-ive-never-been-infected-by-systemic-racism-newell-chief-executive-vows-to-level-the-playing-field-for-black-employees-11603123364
    2. https://www.marketwatch.com/story/back-to-normal-we-can-do-better-here-are-the-best-new-ideas-in-money-11601997311?mod=bniim
    3. https://www.newellbrands.com/embracing-our-humanity
    4. https://www.cgg.org/index.cfm/library/article/id/273/the-fruit-of-spirit-peace.htm

    Without another round of financial assistance, Black business owners facing tough choices | Bizwomen

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    Without another round of financial assistance, Black business owners facing tough choices

    Caitlin Mullen, Bizwomen contributor, Sep 14, 2020, 9:01am EDT

    The pandemic has presented challenges for most business owners, but new research indicates recovery could take longer for Black-owned businesses. 

    About 4 in 10 Black small business owners who received Paycheck Protection Program loans have had to lay off staff or cut worker pay as that money has run out, Goldman Sachs discovered. By comparison, 32% of all respondents said they had done so. 

    Although just 16% of all business owners surveyed reported less than one-quarter of their pre-Covid revenues have returned, more Black business owners said this — almost 33%, reports Business Insider. 

    The situation has prompted Grammy-winner Alicia Keys to create a $1 billion fund to support Black-owned businesses; the NFL is one of the organizations contributing to the fund, per Billboard. 

    “As an artist, I’m always thinking about how can I use my platform to further racial equity. This fund is one of the answers and our goal is to empower Black America through investing in Black businesses, Black investors, institutions, entrepreneurs, schools and banks in a way to create sustainable solutions,” Keys told Billboard. 

    Keys acknowledged the initial $1 billion goal won’t close the economic gap, but it’s a start.

    “The next steps are to reach out to different industries to invite them to invest in racial justice and create a multi-billion dollar endowment across business sectors,” Keys told Billboard. 

    A National Bureau of Economic Research working paper released earlier this year indicated the spring’s pandemic lockdown was particularly devastating for Black business owners: The number of working Black business owners went from 1.1 million in February to 640,000 in April. 

    Black business owners also have faced discrimination as they’ve sought coronavirus-related financial assistance. About 95% of Black-owned businesses had little chance of receiving funds in the first wave of PPP loans, the Center for Responsible Lending said. 

    The National Community Reinvestment Coalition found Black business owners had a tougher time securing loans at banks and faced bias their white counterparts did not, reports The New York Times.

    The Federal Reserve Bank of New York recently noted counties with the highest concentration of Covid-19 also have the highest concentration of Black businesses and networks, and there were clear PPP coverage gaps in those communities.   

    “Covid has basically been a very severe, devastating scenario for Black-owned businesses that were already struggling to survive,” Kenneth L. Harris, national president and CEO of the National Business League, a trade association representing Black businesses, told the Detroit Free Press.

    The NBER working paper noted the pandemic’s effect on these businesses could result in near-term impacts on economic advancement and job creation, and long-term effects on wealth inequality. 

    Congress has yet to agree on legislation that would provide another round of funds and unemployment benefits. If Congress doesn’t take action this month, 43% of Black small business owners say their cash reserves will run out by the end of the year, Goldman Sachs found; 30% of all respondents said this. 

    And 40% of Black small business owners said they’ll have to cut wages or lay off workers without another round of stimulus funds; 36% overall expect they’ll have to do this.

    Babson College and David Binder Research conducted the Goldman Sachs survey of 860 small business owners in the U.S. and U.S. territories in early September; 55% of respondents were women.

    Main Street America has said almost 7.5 million businesses could close permanently this year due to the pandemic, leaving 35.7 million workers without jobs.

    Source: https://www.bizjournals.com/bizwomen/news/latest-news/2020/09/without-more-assistance-black-business-owners-fac.html