THE MICHIGAN CITIZEN APRIL 19 - 25,1987
1
a
d
By Jame athan d Robert
. T ylor
Last week e began our dis-
cu ion of Bl c Economic
enda de igned to increa the
level of wealth among Ameri
can Blac . The point of de
parture for the proposed Black
Economic enda was the fol
lowing: Poverty in general and
the lack of high levels of wealth
among tho Black who are
not poor constitute the greatest
contributing factor to all the
problems facing Blacks in
Americatoda
If you are to become full
citizens in this rich nation and
end the degrading cycle of con
stantly having to beg others
for job and fair treatment,
we mu launch an economic
development program which
m es Blacks wealthier both as
individuals and as a group.
Last week we listed the fIT t
two points of the Black Eco
nomic Agenda as these:
- The Gro th And Develop-
ment of Bl c Bu· u
Be Th Priority! Jobs are not
enough. In order to generate
wealth in America you must
be in busine .
-BJ c Wealth Build· Oub
u Be Formed And Become
The Chief Vehicle For R . .
The oney ecessary To De-
elop And Expand B Bu .
ne . These clubs with mem
bership ranging in size from
50 to 35 will do everything
from sponsor money-making
events to borrow as a group in
order to raise money.
This week, we would like
to continv-:
F· oney-Rai . g
ctivity Of A Bl Wealth
Buildin Club u Be To
Sponsor A Well Publicized
eco
o
Financial Seminar. This series
of seminars will serve three
purpo s. First, it will make
money for the club. Remem
ber, a seminar which draws just
500 people paying $25 each
to attend will raise $ 12,500 for
the wealth building group or
person.
Secondly, the financial semi
nars will serve to educate the
Blac public. Solid fmancial
and wealth building information
is badly needed in most Black
communities. Further, the sue
ce of the wealth building club
will be limited if the com
munity or city in which it is
operating does not see what it
is attempting to do as capable
of success.
Third, the fmancial minars
will give the club a lot of
p blic exposure. Remember,
the more exposure you have
•
po
the more opportunities com
your way.
-The im Of The Money-
Raising ctiviti I To Buy
n Exi ting Income-Producin
Busine. The wealth building
clubs want to get into business.
In order to increa your
chances of succe stay away
from start-up situations. You
stand a much better chance
of success if you acquire a
business which already has
customers and income rolling
into the door. Even if that
business is not yet profitable,
it is generally a better ri than
starting from scratch.
As indicated in a previous
column, one of the first wealth
building clubs we helped form
was in Hartford, Connecticut
just six months ago. Today,
that club owns its first restau
rant. It was paid for in cash!
er
In other word d n't y u dare
y it can't be d ne!
-During Their Fir t Three
Year Of Operation mall Bu .
ne Should Be E empted
From P yin Federal od Loc I
T e. This is where our politi
cal leaders can play a major
role. The first three years are
generally the most critical. This
is when success or failure is
determined. The federal and
local governments should be
encouraged to help by simply
lifting the tax burden during
this crucial period.
Fore more information on
how to form a wealth building
club and sponsor success
financial seminars write to Law
Tay Inc., P.O. Box 54041
ashington DC 20032. The
Black Wealth Building Guide is
available for 19.95.
Are municipal securites a good investment?
from
o
income oriented investor con-
ider maximizing their fter tax
return a their primary objective.
It i preci ly thi re n that
le ds many inve or to the
municipal curitie market.
an inve tment, municipal
bond, or munis, are a very
u ful income producing vehicle.
en-th usand dollars invested at
7 percent for fifteen ye r
ould yield veri-hundred dol
l rs in tax-free income annually.
Over the life of the bond this
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would add up to ten-thousand
five-hundred dollars in tax-free
income. In order to receive
comparable return in a taxable
investment, a taxpayer in the
38 precent bracket would need
11.2 percent return in order
to keep seven-hundred dollars
fter paying Federal income
taxes. Put another way, sixteen
thousand eight-hundred dollars
in taxable income is needed
over a fifteen year period in
order for an investor in a 38
percent tax bracket to earn
ten-thousand five-hundred dol
lars to spend after paying
taxes.
There are veral types of
munis available. Let's look at
three examples-
General Obligation Bond are
tax-free investments in which
the principal and interest pay
ments are secured by the full
faith and credit of the issuer
(i.e., tate, county, etc.).
These bonds are usually accom
panied by the issuer's unlimited
or limited taxing power.
Therefore, the issuer is able to
raise taxes or re-allocate exist
ing tax revenues in order to pay
bond interest and principal.
Special tax bonds are bonds
secured by a special tax or
series of taxes such as a gasoline
tax or utility franchise tax.
The bonds are backed solely
by the revenues received from
the taxes mentioned in the
bond offering.
Finally, one of the more
popular bond issues are revenue
bond. These bonds are issued
to finance specific projects.
The revenue from tho pro
jects is used to make the interest
and principal payments. Typi
cally, revenue bonds are issued
to finance hospitals, power
plants low-cost housing, waste
water wer treatment facilities,
etc.
There are three ways to
invest in municipal securities.
Tax-free bond may be pur
chased in denominations of
five-thousand dollars. This
allows a direct investment in a
specific project. Another way to
invest in municipal curities
is through a unit trust. A
unit trust consists of a port
folio of bonds put together
to provide a fixed income
tream over a predetermined
period of time, usually be
tween twelve and thirty years.
Bonds in a trust are not traded
(actively bought and sold).
Once placed in the trust they
will only be removed if their
credit worthine decreases sisni-
HOW CAN BLACKS BUILD GREATER WEALTH?·
ficantly. Unit trusts are avail
able in increments of one
thousand dollars and are a
very liquid investment. The
third option is the municipal
bond fund. Bond funds are
portfolios of tax-free bonds
professionally managed in order
to miximize portfolio income
and to take advantage of move
ments in the bond market.
They provide in estors with the
ability to receive income month
ly or to reinvest principal
interest and capital gains back
into the fund. Bond funds
have small minimum investment
requirements usually five
hun red dollars and are very
liquid. Their continuous
management allows the investor
2:00 P.M.
MERCHANTS HALL
Fairplain Piau
Ber. Cnty. Oem. Party
to achieve a better than
average total return.
Although the new tax bill
proposals reduce the maximum
tax bracket to 28 percent
beginning January 1, 19 the
appeal of receiving a high rate
of return without having to
pay Federal income taxes on the
income will continue to
attract informed inve tors to
this lucrative market:
� \ \ I ',It 'I r : -. )ldllt'llll lit'
You can learn how to build greater wealth as an individual or
as part of a group by subscribing to the nation's only monthly
Black wealth building newsletter:
MERCHANTS HALL
Fairplain Plaza
Young Dem�4th C.D.D.C.
.3 .M.
MERCHANTS HALL
Fairplain Plaza
Exec. Comm-4th C.D.D.C.
ATTIE E.
RODDY
Licensed Sales Representative
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6:30 �M.
MERCHANTS HALL
Fairplain Plaza
4th Congo Dist. Oem. Comm.
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