Knowledge Hoop

Although Black History month is now over, I wanted to take an opportunity to complete my series on African-American Self-Made Millionaires.  For my regular readers, I apologize for my delay in completing the series, but I had a delivery date that I couldn’t miss.  On February 25, my husband and I welcomed a new baby boy into our family.  Things are going well and we are adjusting to having a baby in the house!

As I thought about how I’d like to close this series, I decided to highlight someone that has dedicated their life to helping others pursue their financial goals.  For this reason, this week I’ve chosen to feature Ms. Mellody Hobson.  Mellody Hobson is President of Ariel Investments, a Chicago investment firm which is also one of the largest African-American owned money management and mutual fund companies in the United States.  In addition to serving as Chairwoman of the Board of Trustees for Ariel Mutual Funds, she also serves on the Board of Directors for Starbucks Corporation, Dreamworks Animation, and The Estee Lauder Companies.  I am only ‘scratching the surface’ on Ms. Hobson’s accomplishments, but based on the information above, I’m sure you’ll agree that she has quite an impressive resume.

As I reviewed Ariel Investment’s website, along with other informative news articles about Ms. Hobson, I became intrigued by her story.  While her biography is impressive, I’ve decided to highlight some of Ms. Hobson’s financial advice.  An article on B. Couleur features advice that Ms. Hobson gave to parents during a 2008 interview.  Although the interview occurred several years ago, the advice is still relevant.  If you’re a parent, consider the following:

• Give children stock instead of toys or money for Christmas.  This tip was also highlighted in our December post, Financial Gift Ideas for Teens
• Start a ‘family 401K’ by matching every dollar your child saves with a dollar of your own
• Divide allowances into short term expenses, long term expenses and money for charity.  This concept is similar to the Money Savvy Piggy Bank  highlighted in the post,  Financial Gift Ideas for Young Children

In addition to the advice given above, during a segment on Good Morning America, Ms. Hobson highlighted Three Things You Should Never Carry in Your Wallet.  Her comments included the following:

• Do not store receipts in your wallet.  She mentioned that receipts not only clutter your wallet, but they can also contain key information that identity thieves can use against you.  If you struggle in this area, consider carrying a smaller wallet; it will force you to only carry the essentials
• Do not carry your social security card in your wallet.  I have to admit that I was guilty of not adhering to this piece of advice.  However, it makes a lot of sense.  An identity thief has ‘hit the jackpot’ if they are able to obtain this small piece of paper.  She also mentions that you should never carry a list of pins and passwords in your wallet
• Do not carry expired credit cards or membership cards in your wallet.  She stresses that just because they’re expired doesn’t mean that thieves won’t try to use them.  Additionally, the cards may provide personal information that shouldn’t be in the hands of others

In addition to highlighting those items we should never carry in our wallet, Ms. Hobson mentions that the following items should be in our wallet:

• You should carry a credit card, but just one.  Carrying additional credit cards may cause you to overextend yourself.  If you have more than one card, don’t close the accounts because this may have a negative impact on your credit rating, but practice restraint by carrying only one
• Carry some cash for incidentals.  During this segment, Ms. Hobson mentioned studies have shown that people spend 12-18 percent more on purchases when they use credit cards vs. cash

Ms. Hobson has definitely succeeded in spite of the odds.  A recent study performed by Insight Center for Community Economic Development reported that the average African-American woman has a net worth of $5.  Given this statistic it is clear that we have a lot of work to do, but if we take an opportunity to learn from individuals like Ms. Hobson, we can achieve the financial success we desire.  Most people don’t become wealthy overnight; it takes patience and perseverance.  Ariel Investments was founded on this principle and it is still a part of the company’s ‘fabric’ today – hence the firm’s logo, “slow and steady wins the race.”   To learn more about Ms. Hobson or Ariel Investments, please visit http://www.arielinvestments.com.