Don't Fall for 'Financial Pimping'

she's a businesswoman without questioning. Is invested in eighty five businesses that I guess her family venture fund has put money in over her career, and it appears a dozen of those have company evaluations in to the billion dollar range, which is I don't know what portfolio, so I can't give you details on it. But it doesn't mean that that she owns all the company, by the way, means she made some smart bets and the bets paid off.

In other words, companies that she invested in rolled up into a larger overall valuation that she benefits from because she was an early venture capital investor. So kudos to her. I don't care what the structure is. It's a positive thing. And even I love how you can see her sort of doing her makeup. She's explaining very casually, very confidently, very comfortably, the structure of her investment. She clearly knows

what she's talking about. I want you to become an investor. Also, you may not be able to do it the way Serena Williams has done it, and that's okay. But you can do it the way you need to do it. That might be even fractional investing. So you're not Serena and her sister Venus. But maybe you don't play tennis either, but she can't roll and do some of the things that you do as a talent and a gift. Your life is different, Your life is appropriate for you, so

it make it all the way down. Do what I call fractual investing, which is you may find that you only have three hundred dollars to invest and the companies that you dream about maybe three thousand dollars stocks, or it might be one hundred thousand dollars worth of a stock basket, but you've got three hundred dollars. But with fractional investing, you can't still invest in those businesses successfully getting a fraction of each of those companies that you

believe in in their stock for your portfolio. Did you know that? You can also open a stock account, a proper start account. You can also can do one online through one of the online brokerage companies and buy whole shares of stock. You can buy digital currencies crypto if you want, if that's your thing. You can buy a range of you know, which is more of a riskier basket than of these digital investments, which I'm not saying don't do, or do I do or don't do, just

saying don't put your rint money in it. And you can also choose to invest in a mutual fund where you're sharing a risk basket. That's another option for you. You can invest in commercial paper, which is not traded on Wall Street. Is more risk, but it tends to be more reward. I'm actually recommending you don't do that. I'm just giving you the scale you can risk. You invest in a limited private placement, which is a private offering of stock. Make sure that your lawyer checks that

out if you decide to do that. You can invest in a crowdfunding platform if you like some small businesses raising some money in your neighborhood or some family member and you decide to invest in the crowdfunding opportunity that

could pay off for you. You can invest directly into a business, as my family has done with somebody that we know, and they've got a wellness business that serves a certain clientele in New Jersey, and it's one example, and they need XYZ to get equipment and certifications, and maybe we invest it in that directly and God shares

as a result of that. So I'll just give you all the way example, all the way from something that's very removed from you and very fractionalized, a FRAC no share investing, all the way up through a you know, buying a share of a publicly traded company, then by being participating participating in a mutual fund investment vehicle, which is probably the least risky too, you know, all the way through smaller cap investing, all the way up through

again as in not suggestion you don't do commercial paper that's very sophisticated and high high risk, and suggesting you don't do that, all the way up through finding a brick and mortar business that you want to back with your five hundred dollars, fifteen hundred dollars, twenty five hundred dollars twenty five thousand dollars. Make sure that you understand the risk and you check with an attorney, et cetera.

And you may decide that that's what you want to and maybe that business is just located right around the corner from you. They decide just to do that, or you may decide to just go start a business. You can do that through one million Black Business Initiative and you don't invest anything about your time and your energy. That's an option for you as well, but I suggest you just do something right. I want you to do something and start somewhere. Serena didn't just start at the

top of the market investing. She was making money as a tennis player, wasn't making money for a long time, and she wasn't investing. When she started making money. She understood the difference between making money and building wealth, and make money during the day, you build wealth in your sleep, and she was very good. It appears at the building wealth in your sleep part. So now she's actually her wealth is actually really coming from the investments and not

her professional tennis career. Anybody who became a billionaire, by the way in professional sports are the arts, did not do it through professional sports. Are the arts they all with corporate Think about Lebron, think about Magic Johnson, whoever your hero shero is. They got the profile in the arts, the public figure profile, you know them as a celebrity.

But they leveraged that and went and cut a deal with corporate America, got shares, equity in a corporate entity, or some kind of participation in Doctor dre and headphones, and that's how they became billionaires. I hope this has been helpful. This is John O'Brien. Money and Wealth is the iHeartRadio Black Effect Network podcast series John O'Brien Money and Wealth, dropping new episodes every Thursday.

I've written six books now, several are bestsellers on business. I'm one of a few people of color who's written bestsellers on business, by the way, But all those books, while relate to my work, the memo of how the Porcinsai Capitalism up from nothing, Love Leadership, Banking in Our Future, etc. All those books relate to the work. This is the work.

And while I can't counsel and coach every person to raise a critics or fifty four to one hundred points to lower their debt thirty eight hundred dollars, making fifty thousand dollars a year, to increase their savings a couple thousand dollars. While my team can't be with everybody every time. We can't be at your kitchen table, we can't be in your bedroom. We can't be with either car dealership

when you're making these decisions. We can't be at the mortgage table when you're buying a house, or worse, when you're renting for the rest of your life and missed out on home ownership and generational wealth. We can't be there, but now I can be. This book is your primer for your life. Hear me now when I say this, financial literacy is a civil rights issue of this generation. Hear me when I say this. This is John O'Brien.

I'm telling you a truth that I've learned in my life that changed my life, the one thing that changed everything else. If your day's not about God or love, your day's about money. Financial literacy is the civil rights issue of this generation, and it will affect your life more than almost anything else. Number what cause a divorce? Money, Number one calls for domestic abuse. Money, number one reason for heart attacks, stress, number one reason for stress. Money.

Why are ninety five percent of employees stressed out of the job? Economics and money. They're on the job, but their mind is someplace else. They're worrying about those red notices and those cutoff notices. They got too much month at the end of their money. I want you to turn your problems into promise. I want you to turn away from the darkness and into the light. And you're going to do that by setting yourself free. Because you're

not dumb, and you're not stupid. It's what you don't know that you don't know that is killing you, but you think you know. Pre order this book today. It comes out in mid April. Pre order today. Let's show the world and send the message that you understand what's really a priority in your life and you back the movement. This is the silver rights movement in the suites, where we get you from the streets to the suites and get the sweets to understand the power of the streets.

This is John O'Brien. This is financial literacy for all. A special shout out to Doug Miller, the CEO of Walmart, who did the forward, and all of the heroes and sheiroes who endorse the book. Jamie Dimon, the CEO of J B. Morgan, Chase and my friend Charlemagne thy God, so many heroes and shero Seraph Fryar. All these luminaries have already endorsed this book. They know the power of financial literacy because you make money during the day, you build wealth in your sleep. Hello, it's one of the

jewels in here. You make money during the day, you build wealth in your sleep. What are we obsessed about in our communities. I want to make this money and we get this bag. I want to get this dollar. I want to get paid. I want to get I want to get I want I want to get this. This mulah doesn't mean anything. Money is what is just a currency for your time to at work during the day. It's how you live. Literally as you're making it, you're

spending it. But you build wealth in your sleep. Home ownership is compounding stocks and bonds, real estate, even education compounds small business ownership. U These are things that when you're sleeping, it's growing for you and so you build generational wealth over time. This is a business plan for the rest of your life. It's financial literacy for all,

and I want you to pre order it today. John O'Brien I'm out hey, hey, hey, this is John O'Briant Money and Wealth on the Black Effect Network podcast series on iHeart. I gotta start using codes now. There's so much financial shenanigans going on and folks trying to separate you from your wallet. I'm gonna start using like sign language Like I don't mean like literal sign language, no disrespect intended there, I mean like financial signs like make

stuff obvious. What I mean by that is green light, red light, like do it, don't do it. So this one's a red light. This is a bright red light. So my man, Sir James Buchanan, who is one of my assistants and has been invaluable to me and Operation Hope and my family, who's just a good guy, who's also just sort of a very common sense financial literacy genius and what I call it bush attorney, Like he's not really an attorney, but he's the dude that you know,

the attorney. Real attorneys don't Hope, don't jump out of a bush somewhere, because he's smarter than them. And he's just real study like he don't play, and he loves hard and so he's got a very solid credit score. And I don't want to get in his business and tell you exactly what credit score is, but it's solid. Just take my word for it. And he works at Operation Hope as a chief Community Officer in addition to

being my assistant. And he called me one day he said, John, I can't believe this man, Like my credit score is slid. I know what it is. He can go to a bank and get a line of credit if he wants. And what happened was he got this notice in the mail from a finance company. I'm not going to name the name. It's not important, but you need to know how to defend yourself from folks trying to separate you

from your wallet capitalism. This is not personal. This is business in folks, business some people's businesses to separate you from your wallet, from your resources. And this company sent my man a note saying I'm sorry, send him a check. There was a check endorsemble check in the letter. Now, Sir James didn't ask for this, didn't request this, didn't reach out to anybody. Folks just came to him, sent him a note and said, here's fourteen hundred dollars. Now,

I'm gonna put this into context. Seventy percent of this country is living from paycheck to paycheck, the largest economy in the world. This is why I say financial literacy is a civil rights issue of this generation, the lard's economy in the world. Seventy percent of all Americans, not poor people, all people are living from paycheck to paycheck. Folks who got too much month at the end of

their money. I think it's something like sixty percent of Americans and change don't have four hundred dollars for an unplanned event. Half of those making one hundred thousand dollars a year live from paycheck to paycheck. So you know that I'm talking to you, every one of you listening to this. I don't care what your economic situation might be,

or as my dad would say, situation. If you're making a quarter million dollars a year, a third of those living from paycheck to paycheck, can I get an amen? It's the church of what's happening? And now what have you done for me lately? You live in Manhattan, New York. Hello, you make one hundred thousand dollars a year. It feels like thirty nine thousand dollars a year in Manhattan because the cost of living is so high. So wherever you are,

this message is for you. Because when my man got this check for fourteen hundred dollars, he realized what this company was doing, enticing people to disconnect their brain and connect their surviving mindset and their depression and their anxiety and the fact they got too much month into their money and they're trying to figure out which bill to pay. It's like Russian roulette at the kitchen table on Friday,

which bill to pay? And they know that when they see I noticed like this, and somebody just says, you're pre approved. Not actually you approved right now. Actually just endorsed his check and deposited the money's yours. He knows that most people that get this, a good number of people are just gonna say, my god, this is fantastic, just what I needed, and they're gonna endorse that check and take that money. Now. My man reads and he read the fine print, and this is what the print said.

He told me in this note, Chairman. The attached letter was sent to him, and they were you know, he hadn't applied for a loan with his company and hadn't asked him for anything. It just said number, real check, and all you do do it, it says, is just deposit it and the funds are immediately available to you.

The issue with these types of offers, he says, is that it come with a healthy prepayment penalty and other processing fees and gives you a payback over fifteen months with an annual percentage rage hold on now of forty point seventy six percent forty point seven six percent is the annual APR annual percentage rate to pay back this long. Let me now break this down into English. Why this is red light red light red light? Loan them out

fourteen hundred dollars. We covered that, prepaid financial finance charges prepaid Now you haven't cash his check the ninch you cash your check. Prepaid interest one hundred and forty four dollars and sixty one cents. You owe that immediately, But when I was gotten started yet, prepaid finance charges, pre computed interest now pre computed interest. A loan is two hundred and twenty dollars and fifty nine cents. You haven't written the minute you deposit this check. Okay, you owe this.

This is like sharecropping. This is pimping. This is financial pimping. Like sharecroppers, no matter how hard they work, you'll never pay the man off, you'll never get ahead. So let me let me continue write these numbers down now, one hundred and forty four dollars and sixty one cents, and prepaid finance charges two hundred twenty dollars and fifty nine cents in pre computed interests eight percent origination fee, which is a prepaid finance charge forty eight dollars four percent

origination fee. This is another origination fee, another prepaid finance charge of forty six dollars and sixty one cents. They're just making this stuff up. Why won't you have two prepaid finance Why woult you have two origination fees? Closing fees fifty dollars. That's a prepaid finance charge. What's a closing cost? It's no closing costs. They've already written the documentation and the loan agreement before they sent it to you.

Total monthly maintenance charges forty five dollars. What is a monthly maintenance charge? You sent me a check and told me what the monthly payments are. It's already laid out. What are you maintaining? I guess it's a servicing fee for the forty point seven to six percentag which you're charging me. Total monthly maintenance charge is forty five dollars. The grand total of said fees are four hundred and

ten dollars and twenty cents. The fees are assessed regardless, and you may be subject to a refund of said fees if you pay the loan off early. But in all In most cases you won't get a dime back because there's all kind of carve outs and subject tos and whereas is in the agreement. You end up paying back nearly two thousand dollars on a fourteen hundred dollars loan in a year. You could just walk down to

the bank if you got a decent credit score. Opera SHOA can help you with this and get an injury a twelve percent eleven percent credit card. If you have decent credit, fourteen percent credit card for sure and no fees, none of this stuff applies, and you're good to go. Maybe even qualify for about this line of credit. Maybe if you have a home, a home equity line of

credit costs you next to nothing. A consumer loan. There's all kind of options for you, but you shouldn't be paying forty dollars in seventy six cents to some stranger who's hitting you up with almost five hundred dollars in with four hundred dollars in pre paid charges before you

even say boo. And then you got to pay these payment back every month of one hundred and twenty dollars and sixty six cents, which is money that you don't think is a big problem to pay, but it's not edge part of your cash flow today, so it probably will be a problem to pay. And this company has calculated how many people are going to default. They realize that this is unsecured credit, but they're going out to people who got cut credit scores. So these are not

These are not dumb people. These are not people who don't pay their bills. These are people who pay their bills but may get caught up in the emotions of the moment. And remember I told you, whenever you make an emotional decision, it's a bad one and you get caught up in what did Malcolm X say. We've been bamboozled,

we've been tricked, We've been food. So I want you to understand this is a game that's being played, is being played on your emotions, is being targeted to people who folks think are financially unsophisticated, and they are emotionally depressed and desperate who are living in the moment with a surviving mindset. But you're not dumb and you're not stupid. It's what you don't know that you don't know that's

killing you. But you think you know and Now I'm here to tell you that you can do better, because I'm gonna help you know better. Go to a Hope counselor today for free, and we will introduce you to folks that won't rob you blind, for whom we have no economic interest or don't go to who will we introduce you to. Just have us educate you on the

process and go to whoever you like. But you don't have to pay somebody almost forty five percent interest rate just because they found your email address and targeted you and made it easy. If success was easy, everybody would be doing it right. Only in the dictionary does the word success come before the word work because it's alphabetical. Do not take these offers unless literally it is your

only choice, because this will choke you. It will choke your cash flow in you until you economically die, all right. John O'Brien on the Black Effect Network on iHeart, this is a red light. Hey, John O'Briant, this is money and wealth all in the Black Effect Network, iHeart Radio and the Black Effect Network. And this is a fan question from at DF Underscore Nicole at DF Underscore Nicole on Instagram. What are wise retirement investment focuses for someone

at thirty five who just started. First of all, great question at a great time. Thirty five years old is a perfect time for you to get serious about life. You've had your fun in your twenties, you dis stuff in your teens that you don't anybody know about. It's all a blur, and now you're in your thirties you're like, Okay, I guess I should grow up and get serious about

this thing. The first thing you should do is, if you're working at any kind of mature company or certainly major company, they're gonna have some kind of retirement program. They're gonna have a four to oh one K plan. The number one thing you should do is invest in that four oh one K. If they're matching you dollar for dollar, you invest five dollars every paycheck into your four one K program. They invest five dollars to match you. It's dollar for dollar. That's free money. That's that five

dollar match is free money. And that ten dollars now is going to be invested in the stock market or whatever it is that you signed up for with your employer. Check your four oh one K program and make sure that you are signed up for the kind of investment and the kind of risk tolerance that you're comfortable with with your money. But whatever it is, you're getting the magic of compounding and free money. Again, you put in your five dollars, they had matched you five dollars in

this example. The company then took, through typically a fiduciary a third party, the ten dollars now in this example from the pay period, and they've invest that in stocks or bonds or treasury bills or whatever it is you've authorized them to invest in. And that's going to start building momentum in the investment market and over time will

build equity. And there's no guarantees and investments that will work out prosperous, but the likelihood is if you stick to it over the long term, you'll probably do better than okay. And if you keep investing every two weeks, as you get a paycheck, put it on allo pay, don't think about it, set and release. In fact, I encourage employers to have an opt out strategy for four

oh one K for their employees versus opt in. People are finitially illiterate or not finanially literate are not going to opt in to four oh one K. Investing and I going to say, hey, take some money out of my paycheck. They're going to take We'll take every one of their dollars. Short term thinking, surviving mindset from my book Up from Nothing. Have a new book out by the way, it's called Financial Literacy for all that you should get but which is a great private for this conversation.

But my book Up from Nothing talked about people have a surviving mindset, a thriving mindset, and a winning mindset, and will winners or builders have a long term outlook, but those are the surviving mindset. Want to get theirs right now, so we'll take every one of the piece of that paycheck and go spend it or whatever. I want the employers to have an opt out strategy, meaning that you are an investor in Every employee is immediately enrolled in for a one K matching program. They have

to request to opt out of that. Likewise, when you sign up as an employee E, when you go to HR department, sign your documents, tell them you want to opt in to the four one K program, and then you tell them how much of your paycheck, either by dollar amount or a percentage you want taken out of your paycheck, and don't get upfraid. If you have a crisis or emergency, there are ways to get your money out. It's not locked up forever. This is your money and

when you leave, that goes with you. Four one k's in most places have almost replaced what used to be called pension funds and traditional retirement accounts like that. So this is really important for building for the future. And it's free money, and it's the smartest, easiest thing for you to do. And then you get to determine what that four oh one K investment is going to go into for your money, plus the free money from your employer,

which is yours for life and government. You have a crisis your life, you can go and get an emergency withdrawal, et cetera, et cetera, et cetera. So, and it's with regards to thee of investments I would invest suggest maybe starting with a mutual fund or that you know, start with if you want to buy individual stocks, if that's your thing, then do things that you recognize from your own life. But you know, I'm over answering the question when I say do things you recognize the stuff that

you love? Right, the kind of companies that are that occupy your daily life, though both of those companies are publicly traded. But to answer the question, four oh one K matching program, all day, all night, free money. And when I looked at the operation up one day at a very small percentage of my employees, we're taking advantage of that. I was embarrassed because I'm running a financial

literacy organization. Now proud to say the vast majority of my employees, the overwhelming majority of my employees are now participants in the four Way K program. We are helping them to build wealth and not just make money. It's John O'Bryant re the book Financial Ducy for raw pre order it. Tell your friends to subscribe to this podcast, get your financial coaching through Operation Hope and change your life. John O'Briant, Money of Wealth, I'm out Thank you at

df underscore Nicole on Instagram. Money and Wealth with John O'Brien is a production of the Black Effect Podcast Network. For more podcasts from the Black Effect Podcast Network, visit the iHeartRadio app, Apple Podcasts, or wherever you listen to your favorite shows.