Change Your Blueprint By Giving!

Giving is a universal principle that many people follow, not because they are expecting something in return, but because it feels good to make an impact on a family or  an individual. When I worked at JP Morgan in the Private Bank, wealthy people would donate religiously to great causes or just to a foundation. I’m sure some of them did it for the tax break, but I am also sure that many of them wanted to offer more hope to children and families that were less fortunate than they were. Recently I have been researching good charities for my family and I to partner with for a cause that we believe in. There are so many charities and so many causes, how can someone choose the best charity that meets their prerequisites? I did a google search for top charities in America and I received a plethora of websites with a ton of information about large and small charities and about every imaginable cause. I was overwhelmed at the number of charities that were available to potential givers like myself. As I watched the Today show on NBC, I saw an opportunity to give to St. Judes Children Hospital in New York for their “Thanks and Giving” program that they promote during the holidays. I thought it would be excellent opportunity to donate and give to a cause to help children as they go through difficult times in their life at such a young age.

Many may ask, how does giving help me? What if I don’t have any money to give? Those are all valid questions, however there is still something that you can do to make an impact. You can donate your time to help organizations during the holidays. Some of the clothing that you no longer use can help homeless people as well as other people. There is a reason that people like Oprah Winfrey and Ellen Degeneres continue to be successful in their careers and I am firm believer it is because they give. Most people are receivers and not givers by nature. When you move to that next level of giving it can change your life forever. One of my Twitter buddies (Holly Robinson Peete) has a foundation that is dedicated to providing education and getting funding for Parkinson’s Disease and Autism. I recommend checking out this foundation to get an idea of the impact that you can make, just by being educating and giving to a great cause.

As I was reading Kiplinger’s, which is one of my favorite personal finance magazines, I came across another interesting piece of information in which giving can have a positive impact on my family and I. When you give a cash donation of $250 or a $500 non cash donation, it is typically a tax deduction with a receipt. What I didn’t know is what is going to change my life forever and it is a wealthy tip that most people don’t talk about. Most people donate with cash, but if you were to donate with appreciated stock to your favorite charity then you would be eligible for a double tax break as long as you owned the stock for a year or longer. How crazy is that? What’s even more crazy is that you don’t have to pay any capital gains tax on the gift and you get to deduct the full market value, not what you originally paid for it. That is insane! Where has then rule been all of my life. I would have been purchasing shares of stock to give as opposed to writing a check. The best thing about this rule is that the charity doesn’t have to pay taxes on it either. This can change your blueprint too, imagine getting a double tax break for making a decision to give.

Most of my clients had private foundations to be able to donate their specific causes, but you don’t need that. You can start out by contacting several different charities and making a payment over the phone. My goal is to save $10,000 and start a donor advised fund, where I can partner with a bank and direct my gifts to charities of my choice.

Make an impact on an organization, a family, or an individual today because it can be life changing. Below are a list of charities that I am following and plan on donating to in the future, please check out their websites:

March of Dimes

Autism

Breast Cancer

Diabetes

Boys and Girls Clubs of America

Children’s Hospital of Philadelphia

Black Friday Shoppers Spend $10 Billion

Okay, when I started this blog, I wanted to create something that would enrich people’s lives and empower them to do something different. My financial mentor always says, “live like no one else, so you can live like no one else.” I normally participate in Black Friday every year or at least the last 6 years. I enjoy going out and standing in line for the sales and the doorbuster deals. This year was different, I did not participate in an effort to be more frugal with my money. It looks like nobody missed me because Americans spent $10.66 billion. That is an insane amount of money in one day. Most retailers are in the red until Black Friday and then they make a resounding resurrgence back to the black. Now maybe I missed something because I thought unemployment was at a record high and homeowners were struggling making payments on their homes.

Perhaps I may be naive about what’s going on in the marketplace, but I don’t think so. I believe that people are using their credit cards again. That report won’t be available until the middle to end of January. The fact of the matter is that Americans are continuing to use credit for the short term and pay for it on the backend. People are not gaining jobs at the same rate that they are being lost, so where is the money coming from? ShopperTrak, a sales and tracking firm, reported that the increase in sales from last year’s Black Friday is only a 0.5% increase over last year. The only area where spending decreased was in the Northeast according to the report. Some shoppers resorted to using the internet to shop and spent an average of $170 per transaction up from $126.00 in 2008. Approximately 5,000 people waited in line to get into the NY flagship Macy’s store to take advantage of sales and discounts at 5 am. Overall, it looks like electronics were the big winner as consumers spent the most amount of money on ipods, LCD televisions, and video console units like the Nintendo Wii.

Let’s hope that as the deals disappear, so do the buyers because if not, things could get a lot worse. The only way to change your future is to learn how to budget and make money work for you, not the other way around.

Shaq Pays For NC Girl’s Funeral

Often times athletes get a bad rap for what they are doing off the court and what they are not doing right on the court, but this story just touched my heart. As a person that works with these high profile athletes, it excites me to know that people like Shaquile O’Neal still exist in the world today. This story made national headlines as the body of little Shaniya Davis was found on the side of the road in North Carolina. As the father of two girls I am disgusted by the act that took place, in which someone felt they needed to violate and murder a five year old. I have said time after time that these people who commit sex crimes should have an example made out of them. A violent act like this in another country is punishable by stone throwing or castration. Jail time is not enough to keep an individual from committing future crimes against children.

Shaquile O’Neal said that he was touched and that the story bought a tear to his eye. The cost of the funeral were not revealed, but most experts say that typical cost for a child’s funeral is approximately $4500. That is awesome that a person of his stature can still be touched as a human being and step up and do something out of the kindness of his heart. The lesson in my opinion is that giving and touching is one the most empowering acts that an individual can do to make an impact on others. Shaquile O’Neal is a special player in NBA history, but he understands that he can make a much larger impact off the court.

Iverson Retires, But At What Cost?

One of the most prolific scorers in NBA history has decided to walk away from the game of basketball. Was it because of frustration? Or, was it because he wanted to walk away from the game of basketball on his own terms. AI has played the game only one way since entering the NBA 14 years ago. He was one of the most fiercest competitors in the game for his size and stature. I can remember when he first entered the league and he played against my favorite player, Michael Jordan. There was this buzz around the country on this particular night, people were going crazy over the “killer crossover” move on MJ. I must admit it was hard to make MJ look bad on the basketball court, but on this night, AI made it happen. Although I was never an Allen Iverson fan, I had the utmost respect for him on the basketball court. I think most people either loved Allen or they hated him. I do not believe many fans straddled the fence about Allen Iverson.

He was also known for one of the craziest rants in NBA history too. To this day people reference “practice” in the form of humor to pay homage to Allen Iverson’s rant. Iverson also has the unofficial title as the Ambassador of the hip hop “thuggish” era in the NBA. He was the first NBA athlete that I know of that had multiple tattoos across his body. He was the first to ignore the NBA dress code in favor of the fitted cap and the saggy jeans. He was the first to have cornrolls. He was an icon on and off the court for many fans, except for me.

The issue that I have with Allen Iverson is that it seems that he is unwilling to change his position as basketball player in the NBA. For years he was the superstar on the Philadelphia 76ers and while he was exciting and dominant at times, he never made any of the players around him better. That is the case for every team that he has played for in his career. As a matter of fact, Allen Iverson’s career field goal percentage is 42%. I can remember more Sixers games in which he shot less than 50% in the majority of the games he played. He always looked for his own shot first and passed later. Iverson was also a liability on defense. He managed to be a league leader in steals through out his career, but he gambled too much and in many cases paid for the gamble by being exposed by his counterpart. Most people in NBA circles will say that while he is a competitor, he has never changed his game and that he isn’t the same player that he was in 2001 when the Sixers played the LA Lakers for the NBA Championship. Most superstars have the ability to make players better and Allen has never, in my opinion been able to do that. This past summer when he was a free agent for the first time in his career, he was not heavily courted by NBA teams. It was reported that only the Grizzlies and the Clippers had mild interest in Iverson. We’re talking about a bona fide NBA scorer that has scored over 24,000 points. No one had interest in signing him because he wasn’t willing to accept a lesser role. Iverson wasn’t willing to change his game in order to be picked up by a contending team. He decided to go to the Memphis Grizzlies, an under achieving team so he could continue to try to be the player he isn’t anymore. After 3 games with the Grizzlies and coming off the bench, he started chirping about his time and role with the team.

On November 25th, Stephen A. Smith reported that Allen Iverson had decided to retire. His statement read that, “I would like to announce my plans to retire from the National Basketball Association,” Iverson said in a statement released to Stephen A. Smith, who first announced Iverson’s decision on his personal web site. “I always thought that when I left the game, it would be because I couldn’t help my team the way that I was accustomed to. However, that is not the case. “I still have tremendous love for the game, the desire to play, and a whole lot left in my tank. I feel strongly that I can still compete at the highest level.” Some how I have this feeling that this decision to retire has something to do with his ego because most respectable players and coaches, say that he has more in the tank. As a matter of fact, I find it interesting that coach Larry Brown is supposed to meet with Allen Iverson to discuss his decision, but if coach Brown still believes in Iverson, why isn’t he playing for the Charlotte Bobcats?

Lastly, I am concerned with Allen Iverson’s willingness to listen to people who want to help him. I hope that he has managed his money properly and that he won’t be another statistic that has become debt ridden and bankrupt. I’m sure he has had the opportunity to have knowledgeable people in his corner to provide proper education and advice, my only hope is that he listened and that he is only stubborn and egotistical on the court. I am sure that we have not seen the last of Allen Iverson in the league, but I believe this situation is just a microcosm of his career and personality.  Let’s just say that the “answer” has more questions to ponder.

Iverson Update as of 11/28.

Why Athletes Go Broke

Source for this post comes from Brian Carter.

The “Real Deal” is broke.

Former Heavyweight champion Evander Holyfield is playing the real life game of Deal Or No Deal. It has been reported that his $10 million estate in suburban Atlanta is under foreclosure, the mother of one of his children is suing for unpaid child support, and a Utah consulting company has gone to court claiming the boxer failed to pay back more than a half million dollars for landscaping. Just one more high profile athlete having to scale back his lifestyle to the level to which you have I have been accustomed. Why is it that athletes who seem to have everything are often completely unable to control anything related to finances?

We all played our violins to death when we heard of Latrell Sprewell’s financial troubles. On Halloween 2004, Sprewell, who was in the final season of a $62-million five-year contract with the New York Knicks, said he was insulted by the Minnesota Timberwolve’s offer of a contract extension that was reportedly worth between $27 million and $30 million for three seasons. Sprewell stated, “I’ve got my family to feed.” That quote become a national moniker for the public perception of athletes as greedy, out of touch individuals. Apparently, Sprewell still can’t feed his family. His yacht was recently repossessed and his multi-million dollar mansion is about to be foreclosed on.

While there is certainly the stereotype of the financially irresponsible NBA athlete, no professional sport is immune.

Let’s take a look at some high profile athlete financial sob stories over the years:

1. No one my age can forget Jack”The Ripper” Clark , star player for the Boston Red Sox who filed for bankruptcy in 1992 in the middle of his second year of a three-year, $8.7 million contract with Boston; he listed $6.7 million in debts. Jack was a master of financial planning and prudent asset acquisition. His bankruptcy petition listed assets such as 18 automobiles, including a 1990 Ferrari that cost $717,000 and three 1992 Mercedes Benz cars costing between $103,000 and $143,000. He owed money on 17 of the automobiles and was liable for about $400,000 in Federal and state taxes. He had also lost about $1 million in a drag-racing venture. Sounds like Jack would have been more at home in the NBA. You can read about it here

2. Johnny Unitas, Hall of Fame quarterback for the Baltimore Colts, filed for bankruptcy in 1991 citing numerous failed business ventures in his petition These failed bits included bowling alleys, land deals and restaurants. He filed for Chapter 11 bankruptcy in 1991.

3. Mike Tyson The name speaks for itself. Mike’s bankruptcy was highly publicized. Despite earning hundreds of millions during his boxing career, Mike kept it simple. His bankruptcy petition simply stated: ” I am unable to pay my bills”. According to federal court records, his liabilities totaled about $27 million. You can read that story here.

4. Dorothy Hamill, the women’s figure-skating gold medalist in the 1976 Winter Games, filed for bankruptcy after a series of financial setbacks. Hamill said she has experienced financial setbacks as a result of poor financial investment advice and management.

These are just a few of many athletes’ tales of woe. It is not a phenomenon limited to professional sports — just ask M.C Hammer. Prior to his declaring bankruptcy, it was made public that his day to day living expenses far exceeded his income of $33 million. If I am going to veer off to celebrities, I certainly have to mention Kim Basinger and Michael Jackson.

When the Toronto Star ran an article alleging that a shocking 60 percent of NBA athletes “go broke” five years after retiring, did we not all pull out that very tiny violin we have reserved for such occasions? The NBA players union and the NBA have both disputed that assertion. The article goes on to talk about all the people taking advantage of and “scamming” these athletes. While I have no doubt there is truth to this, I can also understand how such a generalization would make the NBA uncomfortable. It leaves you with the impression that 60 percent of NBA players are not only financially inept but also idiots in general. This is simply not true. While good business sense is often lacking, I view many of their mistakes as being more mistakes of trust, credibility and lack of life experience than anything else. Smart, busy people who can afford it, hire people with targeted expertise to help them. This allows them to focus on their expertise. Sometime mistakes are made and bad judgment is used in who we hire and hang out with. That is not unique to the NBA or professional sports. This happens to everyone. That is life. It happens all the time. It just does not make front page when we screw up. If there is any question at all as to how badly we as the general public screw up, just look at the personal bankruptcy filing statistics.

In order to get a perspective from the inside, I contacted Jordan Woy, a highly respected sports agent and a principal in the sports marketing/management firm of Schlegel Sports. Jordan has represented numerous high profile athletes

Here is what Jordon had to say:

I think there are several reasons why so many athletes “go broke”. First, whether it is a lottery winner, an athlete or a star entertainer, if they are not equipped with the knowledge on how to make and save money they are in trouble. When they didn’t earn it through disciplined business practices and they don’t have those skills they usually go through it quickly. Most lottery winners or athletes make a great deal of money in a short period of time. They start spending it on things that only go down in value (cars, jewelry, partying, entourage, etc) and start to evaporate the money they do have. They can carry this off until they stop earning big money. This is when the trouble starts. It is hard to believe that MC Hammer, Mike Tyson, Evander Holyfield and now Ed McMahon are broke. These are people who earned hundreds of millions over time and it disappeared. Lavish spending and entourages were probably the downfall for the first three for sure.

Most athletes play for four to ten years if they are lucky. After they pay taxes (can be 40 to 50%) and agent fees and buy their first homes, cars, outfits, jewelry (plus, cars, clothes and jewelry for friends and family), they are left with very little. When they first “strike it rich” all of their longtime friends and family expect help. Most athletes feel obligated to help everyone out at first then they wise up. They also want to keep up with their teammates. If someone buys a Bentley, they have to buy one; if someone buys a $75,000 watch, they have to buy one to keep up the appearance. Then, of course, when the career ends and they are still living in a multi million dollar house, driving 3 expensive cars (and insurance), traveling in private planes and taking Limo’s when they go out on the town, reality sets in. The money dries up very quickly.

However, if athletes educate themselves, learn money management skills and make smart, safe investments along the way, they are usually in very good shape. After representing athletes for over 20 years, we call this our “life plan”. We take out clients on working vacations in the off season to places like Las Vegas, Cancun and on a cruise to the Bahamas to learn business networking. We have people from industries such as real estate, oil and gas, financial planning, credit repair, asset protection/estate planning, etc come to educate the players and their wives so they can learn about these business and also determine if they are interested in any of these industries for life after sports. One of the financial planners who comes always says most people die coming down from Mt. Everest not going up. The goal is for these athletes to get to their Mt. Everest AND to get down safely.

So, what do you think? Are the financial mistakes that athletes make any different than your mistakes or mine? They are certainly mistakes made with a higher downside. When we hear these stories are we just unable to comprehend that someone could have that much money and spend it all? Can we learn lessons on how to live our lives from their highly publicized financial gaffes? Do we even care at all?

With all due respect to Latrell Sprewell, we have our own families to feed….

©2008 Brian Cuban

What Does Change Mean To You?

The President of the United States started off his campaign by saying that, “change was hope that you could believe in.” That phrase or the buzz word “change” was the theme for all of 2008 and it was the most used word and searched word on the internet. I have been thinking about what change really means to an individual. Everybody likes using the word change and corporations believe in change to carry out ambitious objectives, but what does it really mean. I posed this question to my Facebook community and I had a ton of different answers and thoughts, but the most important thought that I received came from a former colleague. He believes that, “change is simply the recognition that something is either wrong or can be improved. Creating a gameplan, accepting it and taking the applicable action to effect the change the hard. Thus why we all “talk” about change instead of taking action.”

I can remember on election night President Obama saying that change could not take place if every American did not do their part in the change that they want. Why is it that people opt to do the same thing as opposed to changing their situation. I have learned that change makes people uncomfortable. It creates a feeling of discomfort and they hate it. People want change, but they don’t want the growing pains of change. For example, it has been documented that a person most likely will never change the bank that they are with. They will go through every bank merger and deal with additional fees and perhaps poor customer service instead of making a change. Another example is how people hate to change their phone service to a better provider or a low cost provider. Verizon will stay in business for landline service for years to come because people have paralysis in making a change to a VoIP service (computer phone service). These are two small examples, but to get a better idea, check out this book: Who Moved My Cheese.

Here is my definition of change: Change is making a conscious decision to open your mind to a new way of living or operating and then putting forth effort to make it a reality. There are always opportunities to make changes to your life, but the question is, will you? Will you make the decision to change and then put forth the action to change your life. Only you can make that decision. Let’s apply this to President Obama’s plea for help in changing America. If you believe that healthcare, education, and energy need an overhaul, what are you going to do to help the cause. What doors are you knocking on? Who are you calling? I have noticed that people have a difficult time making a commitment to change, they would rather complain because it is easier than making an effort to change.

This will be an ongoing process, just as it has since the beginning of time. We all possess the power to change because it is inside of us, we have to make the decision to change. We have to inspire ourselves to change because true change is inner directed. Outside motivation is temporal, but inside determination is everlasting.

Government Spending Just Cost You (The Taxpayer) $2.3 Billion

Normally I will not write about things that are out of our control, but I have a serious issue with the US Government. I was reading the Wall Street Journal on November 2nd and I learned that CIT, which is one of the largest small business lenders has filed for chapter 11 bankruptcy. What makes me upset about this situation is that CIT was given a $2.3 billion bailout by the Bush Administration and yesterday the US Government said that CIT did not have to pay back the money. That is $2.3 billion of taxpayers money. You know how many people have to work for years to cover $2.3 billion of money that this country will never see again. Furthermore, this allows CIT to get back on their feet with minimal pain.

You may be asking how does this apply to me, well many of the fabrics for your clothes and the upholstery for your furniture depend on cash advances from CIT. The federal government keeps stepping in to save embattled companies like Citi and General Motors. To tell a company that they don’t have to payback taxpayer money is incomprehensible and political suicide. I understand what President Obama is trying to accomplish, but this was a decision that was made for the short-term and further decreases the idea of capitalism. I guess when the budget is $11 trillion, what’s another $2.3 billion.

Any thoughts?