Taxes: Income and Property

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“In this world, nothing is certain except death and taxes.” Ben Franklin

After-tax income inequality has grown over the long term. Between 1979 and 2018, the share of aggregate after-tax income of the top 1% of households grew significantly from 7.4% to 13.6%. In contrast, the shares for the bottom 90 percent of households declined. Tax Policy CenterWealth inequality has also widened. The average white household had $402,000 in unrealized capital gains in 2019, compared with $94,000 for Black households and $130,000 for Hispanic or Latino households. These disparities have generally widened over time. Tax Policy Center

Virtually all families hold some amount of financial assets, broadly defined as brokerage, checking, savings and retirement accounts to name a few. While 98% of families held checking or savings accounts in 2019, only 50% of families held retirement accounts and 15% owned stocks. Tax Policy Center

Salaries and wages are the largest sources of income for most households. In 2018, they comprised 68% of total adjusted gross income across all individual income tax returns, but only 17% for those with incomes over $10 million. Tax Policy Center

Income from capital gains made up about 8% of aggregate adjusted gross income (AGI) in 2018, but this varied by income level. For those with AGI over $10 million, capital gains accounted for nearly half of their income. Tax Policy Center

In 2019, the median net worth for those with college degrees was four times higher than for those with high school diplomas and nearly 15 times higher than for those without high school diplomas. Tax Policy Center

Overall, the share of US families with education loan debt went from 9% in 1989 to 21% in 2019. About 30% of Black families had education loan debt in 2019, compared with 20% of White families and 14% of Latino families. Tax Policy Center

Federal taxes are moderately progressive overall. In 2018, the top 1% had 16.6% of total income before taxes and 13.6% after taxes. Contrastingly, the lowest quintile had 3.8% before taxes and 7.1% after taxes. Tax Policy Center

In fiscal year 2019, state and local governments raised $577 billion in property taxes. As a share of general revenue, New Hampshire relied the most on property tax revenue (36%) whereas Alabama and New Mexico relied the least (7%). Tax Policy Center

State and local taxes as a share of income ranged from 7% in Tennessee to 15% in North Dakota in 2019. This does not measure comparative tax burdens on states’ residents because it includes taxes on business activities borne by residents of other states. Tax Policy Center

Total tax revenue (including federal, state, and local taxes) as a share of GDP was 24.5% for the US in 2019. Tax Policy Center

Wealthier Americans may be more stressed regarding inflation, economic uncertainty and market volatility, but lower-income Americans have much more to fear from rising prices and are experiencing greater daily impact to their wallets. They tend to have less financial cushion to handle higher prices for food, gas, and other necessities, according to the Tax Policy Center.

The above financial inequality and tax snippets are interesting facts/information garnered from the nonprofit Tax Policy Center.

References:

  1. https://www.taxpolicycenter.org/fiscal-fact/top-1-income
  2. https://www.axios.com/wealth-inflation-fears-money-financial-assets-52779e2d-8940-4b87-85cd-29c65744fb29.html

How the Economy Works by Ray Dalio

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“Credit is important because it means borrowers can increase their spending. This is fundamental because one person’s spending is another person’s income.” Ray Dalio

Ray Dalio is one of most successful hedge fund managers and founder of Bridgewater Associates. He credits much of his success to guiding principles that he has used to make decisions both in his professional and in his personal life.

How the Economic Machine Works – “The economy is like a machine. At the most fundamental level it is a relatively simple machine, yet it is not well understood,” explains Ray Dalio.

Economic principles discussed:

  • Economy – The economy is simply the sum of all transactions repeated again and again over a long period of time. Money and credit account for the total spending in an economy.
  • Transactions – the exchange of money or credit between a buyer and seller for goods, services or financial assets.
  • Markets – “All buyers and sellers making transactions represent the market. For example, we have wheat markets, stock markets, steel markets, oil markets and so on.The combination of all of these sub-markets is the entire market, or the entire economy.” Ray Dalio
  • Governments – the biggest buyer and seller of goods, services and financial assets. The government consists of two parts: the central government that collect taxes and spend money; and, the central bank which controls the amount of money flowing through the economy. It does this by influencing interest rates and printing more money.
  • Central Bank – The Central Bank can only buy financial assets, not goods and services. To support the economy, the Central Bank buys Government bonds which gives the Central Government the ability to buy goods and service.
  • Price – the result of total spending / quantity sold.
  • Credit – Credit “is the most important part of the economy because it is the biggest and most volatile part”. Credit can be created out of thin air — in fact, in 2016, the US$50 trillion of the US$53 trillion in the economy was credit, as opposed to ‘real’ money. Credit is important because it means borrowers can increase their spending. This is fundamental because one person’s spending is another person’s income. Credit is bad when it finances over-consumption and borrowers are unable to pay the debt back.
  • Lenders – lend money to make more of it. When lenders believe borrowers will repay, credit is created.
  • Borrowers – borrowing is pulling spending forward which relates to borrowing money to buy something you can’t afford, such as a house, a car, a business or stocks. Borrowers promise to repay the amount borrowed (the principal) with interest. Borrowing creates cycles.
  • Debt – Debt allows you to consume more than you produce when it is acquired, and forces you to consume less when you have to pay it back. “When credit is issued it becomes debt. It’s a liability for the borrower, and an asset for the lender. It disappears when the transaction is settled.
  • Interest Rates – When interest rates are high, borrowing is low. When interest rates are low, borrowing is high.
  • Spending – one person’s spending is another person’s income. Total spending is the sum of money spent plus of credit spent.
  • Income – one person’s spending is another person’s income
  • Monetary Cycles – economy expansion and recession cycles.
  • Inflation – inflation is when prices rise. When spending is faster than the production of goods, it means that we have more demand than supply, which results in inflation.
  • Deflation – when spending decreases, prices tend to decline.
  • Expansion – growing markets and increasing transactions
  • Recession – Economic activity decreases, and if unchecked this can lead to a recession.
  • Bubbles – when the price of assets far exceed the value of the assets
  • Debt Burden – When incomes grow in relation to debt, things are kept in balance. But a debt burden emerges when debt growth exceeds income growth. This debt to income ratio is the debt burden.
  • Productivity – innovation and hard working raises productivity, which equates to the amount of goods and services produced.

Three rules of thumb for life

Source: Ray Dalio

According to Dalio, there are “three rules of thumb” with which to navigate the economy, be it in your own businesses, organisations you work at or your personal finances.

  1. Don’t have debt rise faster than income (because debt burdens will eventually crush you).
  2. Don’t have income rise faster than productivity — it will eventually render you uncompetitive.
  3. Do all you can to raise productivity — in the long run that’s what matters most.

References:

  1. https://www.nofilter.media/posts/ray-dalios-economic-machine-12-minute-summary
  2. https://www.amazon.com/gp/product/1501124021/ref=as_li_qf_asin_il_tl_nodl?

Visualization: Your Life In Focus

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“The key to effective visualization is to create the most detailed, clear, and vivid a picture to focus on.”

Research shows that the more you focus on the things you desire, the better chance you have at getting them. Thus, knowing what you want and focusing on what you want are essential for success and achieving your best life.

As you might ascertain, having a clear direction of where you’re headed or where you want to go is essential. Without a clear purpose and goals, it can be very easy to get caught up in things that aren’t actually moving you forward in your life’s journey.

For example, struggling comedian and actor, Jim Carrey used to picture himself being the greatest actor in the world. When Carey was still a “wannabe” during one of his appearances on “The Oprah Winfrey Show”, he spoke about his early days trying to make it in the entertainment business. He was broke and had no future. But he took a blank check and wrote out $10 million dollars to himself for acting services rendered and dated it five year in the future.

Subsequently, he carried that check in his wallet at all times and looked at it every morning, visualizing receiving $10 million. Five years after he wrote the check to himself, he found out that he was going to earn $10 million from the movie “Dumb and Dumber.”

“Create the highest, grandest vision possible for your life, because you become what you believe.” Oprah Winfrey

Vision boarding is an excellent way to get clear on your goals. Creating a vision board is a powerful way of getting to know yourself and what it is you truly want in your life.

A vision board is essentially a physical (or digital) manifestation of your goals. Vision boarding involves collecting images or objects that speak to the future you want to create and arranging them on a board for a tangible and aesthetically pleasing reminder of where you’re heading.

References:

  1. https://seatgeek.com/tba/articles/oprah-winfrey-2020-vision-tour-dates-tickets/
  2. https://www.mindbodygreen.com/0-20630/8-successful-people-who-use-the-power-of-visualization.html
  3. https://www.mindbodygreen.com/articles/how-to-make-a-vision-board

 

“Success = Knowing, Growing, Acting and Serving.”

True Gratitude

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“The more you are in a state of gratitude, the more you will attract things to be grateful for.” – Unknown

We, as Americans, have a lot to be grateful for. Especially, the many simple and common things that we take for granted daily in life.

Robert Emmons, perhaps the world’s leading scientific expert on gratitude, explains that gratitude has two key components:

  • First, “it’s an affirmation of goodness. We affirm that there are good things in the world, gifts and benefits we’ve received.”
  • The second part of gratitude is that, “we recognize that the sources of this goodness are outside of ourselves. … We acknowledge that other people—or even higher powers, if you’re of a spiritual mindset—gave us many gifts, big and small, to help us achieve the goodness in our lives.”

Essentially, the social and emotional dimensions are especially important to gratitude.

Gratitude, “true gratitude”, encourages us to appreciate tangible and intangible gifts we receive from others and to pay them forward. Effectively, gratitude strengthens the bonds between individuals who mutually help or show appreciation for each other. Additionally, gratitude enhances emotional well-being.

True gratitude is more than an action which we decide to do by an act of will power. It is a feeling that arises in the heart, not an act of will power. And it is a good feeling. When it rises in our hearts, we like it. It is part of happiness, not misery. True gratitude is a form of delight.

But true gratitude is more than delighting in a gift. It is more than feeling happy that you got something you wanted. It is a feeling of happiness directed toward a person for giving you something good. It is a happiness that comes not merely from the gift, but from the act of giving. True gratitude is a happy feeling you have about a giver because of his giving something good to you or doing something good for you.
Showing true gratitude is one of the simplest yet most powerful things we, as humans, can do for each other, states Emmons. Studies show that people who practice true gratitude consistently report a host of benefits:

Physical

  • Stronger immune systems
  • Less bothered by aches and pains
  • Lower blood pressure
  • Exercise more and take better care of their health
  • Sleep longer and feel more refreshed upon waking

Psychological

  • Higher levels of positive emotions
  • More alert, alive, and awake
  • More joy and pleasure
  • More optimism and happiness

Social

  • More helpful, generous, and compassionate
  • More forgiving
  • More outgoing
  • Feel less lonely and isolated.

The social benefits are especially significant here because, after all, true gratitude is all about social and emotional well-being.

In short, true gratitude is good for our bodies, our minds, and our relationships.

True gratitude is one of the best safeguards against excessive material attachment and also opens us up to real generosity. It implicitly acknowledges that all the good things in our lives are properly seen as gifts. We may have worked hard and lived prudently to attain our comforts and securities, but even if we have, we are always indebted to others for the opportunity to work hard and build good lives for ourselves and families.

References:

  1. https://greatergood.berkeley.edu/topic/gratitude/definition
  2. https://www.desiringgod.org/messages/grace-gratitude-and-the-glory-of-god
  3. https://www.ncregister.com/commentaries/in-gratitude-for-god-s-grace-and-mercy
  4. https://greatergood.berkeley.edu/article/item/why_gratitude_is_good

Staying Invested Matters

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Investors are more likely to reach their long-term goals if they remain invested and avoid short-term decisions that may take them off course.

Staying the course during market volatility is often difficult for many investors. Some choose to move to cash investments, while others try to time the market. Regrettably, these investors are often buying high and selling low—and miss the rallies that follow the challenging periods.

Yet, staying invested through market ups and downs can help you stay on track to reach your investment goals.

Once you’ve determined how much you want to invest, setting up automatic transfers to your investment account or periodic investments can help you stay on track.

For example, investors often make suboptimal investing decisions when emotions take over, tending to buy out of excitement when the market is going up and sell out of fear when the market is falling. Markets do ultimately normalize, and when they do, those who stay invested may benefit more than those who don’t.  Consider this:

  • By missing some of the market’s best days, investors can lose out on critical opportunities to grow their portfolio. Market timing can have devastating results.
  • Seven of the best 10 days occurred within two weeks of the 10 worst days.
  • The second worst day for the markets during the early days of the COVID-19 pandemic, March 12, 2020, was immediately followed by the second best day of the year.

Trying to time the bottom is never considered a sound strategy for long-term investing.

Staying invested during periods of heighten market volatility is an important strategy as, historically, six of the ten best days in the market occur within two weeks of the ten worst days; those who miss the best days miss out on performance.

Thus, the decision to stay invested during market turmoil is often better than timing
when to sell and buy.

References:

  1. https://am.jpmorgan.com/us/en/asset-management/adv/insights/market-insights/principles-for-investing/
  2. https://www.pimco.com/en-us/resources/education/the-benefits-of-staying-invested/

U.S. Fiscal Deficit and Federal Debt Challenges

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The Congressional Budget Office (CBO) projects that under current law the U.S. Federal Debt will double as a share of the economy over the next 30 years, rising from 100 percent of GDP in 2021 to 200 percent in 2051. The Concord Coalition

Elected leaders have long known that the federal budget is on an unsustainable trajectory, yet elected leaders of both parties have “delayed, dodged or simply ignored the warnings”, writes Robert L. Bixby, executive director of The Concord Coalition. In fact, elected leaders have recklessly piled on new fiscal spending and cut federal taxes.

In fiscal year 2020, the reported federal budget deficit increased for the fifth consecutive year. Driven largely by the federal government’s response to the COVID-19 pandemic, the federal budget deficit for fiscal year 2020 reached $3.1 trillion—triple the level in fiscal year 2019. This represents the largest budget deficit as a share of GDP since 1945.

The unsustainable fiscal path strains the federal budget and contributes to growing debt.

  • Federal Deficit – The federal deficit is the amount by which the government’s spending exceeds its revenues for a given period, usually a fiscal year.
  • Federal (National) Debt – Federal debt is the amount of money that the federal government owes, either to its investors (debt held by the public) or to itself (intragovernmental debt).

According to CBO, high and rising federal debt increases the likelihood of a fiscal crisis and could lead to a large drop in the value of the dollar or to a loss of confidence in the government’s ability or commitment to repay its debt in full.

Consequences of rising debt. Rising debt could also cause policymakers to feel restrained in their capacity to support the economy during a downturn or unexpected events, such as global military conflicts, natural disasters, or public health emergencies. After the current pandemic recedes and the economy substantially recovers, policymakers should turn their attention to swiftly developing a strategy to change the long-term fiscal path. The sooner actions are taken, the less drastic the changes will need to be.

Effects of compounding interest. Persistently low interest rates have resulted in lower spending on net interest. However, due to the substantial size of the debt, GAO projects net interest will become the largest category of spending by 2050, growing from 1.6 percent of GDP in 2020 to 8.9 percent of GDP by 2050. The costs of debt vary based on interest rates, and increased rates can have a compounding effect on the debt. Spending on net interest was $345 billion in fiscal year 2020 and is projected to exceed $1 trillion in fiscal year 2033.

As a result, the U.S. has arrived at a critical point with the National Debt nearing its highest level as a share of the economy since World War II and climbing steadily upward.

The nonpartisan Congressional Budget Office (CBO) projects that under current law the debt will double as a share of the economy over the next 30 years, rising from 100 percent of GDP in 2021 to 200 percent in 2051.

The main drivers of the escalating U.S. National Debt are the nation’s aging population and rising health care costs, which translate into ever-rising spending for popular benefit programs such as Social Security and Medicare. Revenues are projected to rise as well, but not by enough to keep pace with spending.

Health care. Total health care spending (public and private) in the United States continues to grow faster than the economy and is driven both by an increase in the proportion of the population enrolled in Medicare and by the increase in health care spending per beneficiary. GAO projects federal spending on major health care programs to grow from 5.9 percent of GDP in fiscal year 2020 to 8.0 percent of GDP in fiscal year 2050.

Social Security. Demographic factors, such as longer lifespans, an aging population, and slower labor force growth, are straining Social Security programs and contributing to a gap between program costs and revenues. GAO projects spending on Social Security will grow from 5.2 percent of GDP in fiscal year 2020 to 6.1 percent of GDP in fiscal year 2050.

As the trustees of those two programs warned in their respective 2021 report, Social Security and Medicare both face long-term cash shortfalls under currently scheduled benefits and financing. Both programs will experience cost growth substantially in excess of GDP growth through the mid-2030s due to rapid population aging. Medicare also sees its share of GDP grow through the late 2070s due to projected increases in the volume and intensity of services provided.

Trustees’ warnings over several decades have been consistent, and yet inaction has turned what was once seen as a long-term problem into a much more immediate concern. The trustees project that the combined Social Security trust funds will be exhausted by 2034 and the Medicare Hospital Insurance trust fund will be exhausted by 2026, leaving little time to phase in changes that would prevent sudden benefit cuts, tax increases, or higher deficits.

Whether it’s the Social Security and Medicare trust funds or the overall federal budget, delay does not just burdened future generations, it actually increases that cost. According to a 2020 estimate by the Congressional Budget Office, the annual amount of deficit reduction needed to keep the debt at 100 percent of GDP in 2050 would rise from 2.9 percent of GDP to 4.8 percent if actions were delayed by 10 years.

America’s growing fiscal deficit and federal debt

Historically, spikes in debt are often correlated with major events such as wars and economic disruptions, such as a pandemic. Deficits went up during the crisis and came down when the crisis passed. We are witness to that dynamic now after the pandemic-induced recession.

Deficit reduction is a natural phenomenon of an economic recovery after a recession or economic downturn. However, deficit reduction would change the preexisting and long-standing imbalance between revenues and spending. Increasingly, episodic crises will simply add to a trajectory of debt that is already on an unsustainable path.

One thing is certain. New unexpected future challenges that will require extraordinary measures will arise that will occur and surprise future presidents. And some future challenges should not be surprises at all, such as a new pandemic or a climate crisis.

“We have not put ourselves in a stronger fiscal or economic position to deal with today’s unanticipated events by allowing old problems to fester, nor will we be in a stronger position in the future if we continue forward with our heads in the sand,” states Bixby.

America’s net debt currently stands at approximately 124% of nominal GDP (historically high and unprecedented). The debt level continues to get worse, but at an accelerated pace over the ensuing decades. We have time to fix it, but this problem will not age well, and the sooner we start to fix it, the better. If we don’t fix the growing federal deficit and ballooning federal debt, it will morph itself into a fiscal and debt beast we won’t like.

References:

  1. https://thehill-com.cdn.ampproject.org/c/s/thehill.com/opinion/finance/596740-bidens-had-many-surprises-this-term-the-budget-crisis-isnt-one-of-them
  2. https://www.gao.gov/assets/gao-21-275sp.pdf
  3. https://www.thebalance.com/national-debt-by-year-compared-to-gdp-and-major-events-3306287

The Concord Coalition is a nationwide, non-partisan, grassroots organization advocating generationally responsible fiscal policy. The Coalition is dedicated to educating the public about the causes and consequences of large-and-growing federal budget deficits and national debt, the long-term challenges facing the economy and how to build a sound fiscal future for all generations.

The Power of Visualization

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“Successful people, such as professional athletes and other top performers, have used visualization techniques to visualize their desired outcomes for ages.”

Visualization is one of the most powerful tools you can use to accomplish any goal you set for yourself. Visualization can be applied to help you improve your performance and be successful in all aspects of your life.

Visualization works because when you visualize, your mind and body don’t really know the difference between what you visualize and reality. When you visualize your goal, you create the thoughts, focus and energy that will help to pull that goal towards you.

The Power of Visualization.When you visualize, your body and mind react as if they were true. Many people believe that when you believe something to be true, you attract it to you – you make it true.

However, believing something to be true doesn’t necessarily make it happen. For many people taking action is challenging due to lack of confidence or a lack of belief in their goal. Visualization, because it taps directly into these emotions, can strengthen your belief in yourself, in your abilities and in your goals.

Additionally, visualization helps paint the scene so you can better plan and prepare for success. When you visualize your success as reality you can also visualize your path to get there.

Before taking the stage to speak to a large audience, Matt Mayberry, Maximum Performance Strategist and a former NFL linebacker, always picture himself giving the “perfect” speech. He would begin weeks in advance by picturing the audience and the positive reaction from the crowd. 

Top performers, among many others, have mastered the technique of positive visualization and openly credit it as a success tactic. Practice makes improvement. Practicing visualization isn’t just a fun exercise – the better you become at visualization the faster you will achieve the success you desire.

When you think of a big goal or dream that you want to achieve, it’s natural to think of all of the obstacles that will come your way. 

All top performers, regardless of profession, know well the importance of and consistently practice of picturing themselves succeeding in their minds before they actually do in reality. It is extremely effective when harnessed and used correctly.

“The key to effective visualization is to create the most detailed, clear, and vivid a picture to focus on.”

Research shows that the more you focus on the things you desire, the better chance you have at getting them. For example, struggling comedian and actor, Jim Carrey used to picture himself being the greatest actor in the world. When Carey was still a “wannabe” during one of his appearances on “The Oprah Winfrey Show”, he spoke about his early days trying to make it in the entertainment business. He was broke and had no future. But he took a blank check and wrote out $10 million dollars to himself for acting services rendered and dated it five year in the future.

Subsequently, he carried that check in his wallet at all times and looked at it every morning, visualizing receiving $10 million. Five years after he wrote the check to himself, he found out that he was going to earn $10 million from the movie “Dumb and Dumber.”

Consider two other examples:

  • Boxing champion and legend Muhammad Ali was always stressing the importance of seeing himself victorious long before the actual fight. 
  • Michael Jordan always took the last shot in his mind before he ever took one in real life.

As the examples demonstrate, you to can visualize and create an image of what you most desire. You create a detailed mental scene of what it looks like as you achieve your goal. Visualize it happening now, and the scene that is playing out.

There is a big difference in imaging your goals and making them feel so real your mind believes it has already happened. The more you surround yourself with imagery or words related to your goal, the more real it will become to you.

To make any habit stick, you need to continue to do that habit. The same goes for visualization, the more you practice the quicker you will be in the frame of mind that helps pave the way to success.

Visualization is extremely powerful in helping you achieve success and realize your goals. However, you will still need to put in the hard work and dedication. Don’t forget to repeat, repeat, repeat!

  • Picture yourself victorious – If you can’t see it, then it’s not going to happen. In order to achieve your biggest goals and dreams, you have to picture yourself victorious. You have to look beyond your current circumstances and past failures. While visualizing, it’s necessary to visualize as many details as you can. Re-create any feelings that are in alignment with your dreams. Make it part of your daily routine. You will be amazed at the improvement in your life and astounded when your dream is realized.
  • Create a vision board. – A vision board gives you the opportunity to actually see your goals. This vision board can be a poster board, a piece of paper, the back of a cardboard box, or anything. On the vision board, put pictures that illustrate what you desire in your life. On your vision board, you can also post quotes that embodied what you want and read them every single day.
  • Utilize the power of a trigger card – Your biggest goal and dream can be placed on a note card to serve as your trigger card. From your 3×5 index cards, read daily the goal you desire most. Get in the habit of doing this every day. Each morning and each night, read those index cards, close your eyes, and imagine yourself accomplishing and following through on that major goal of yours.

Get in the habit of putting together a positive vision into your everyday life. Visualize yourself succeeding, achieving every goal, accomplishing every task. The key is to make your positive vision stronger than anything that can set you back. The more vivid you can get, the better it will work for you. Start thinking of your personal goals in life. Spend about 10 to 15 minutes picturing yourself achieving each one.

Get as detailed as possible. Picture what you will do once your goal is reached. How amazing does it feel? How will this change the course of your life? Remember, the little details increase the likelihood of the big picture.

It’s important to understand that visualization alone isn’t enough. But, it is an integral part of the process of you becoming the best version of yourself. That’s the power of visualizing your dreams. That’s the power of dreaming. That’s the power of relentlessly believing and working toward your vision every single day.

If you can’t visualize yourself being extremely successful, dominating your profession, and running a phenomenal business, then chances are you never will.

References:

  1. https://www.entrepreneur.com/article/242373
  2. https://www.selfgrowth.com/articles/How_Visualization_Creates_Wealth_and_Success.html
  3. https://www.mbswithcalie.com/visualization-for-success/
  4. https://www.entrepreneur.com/article/283241
  5. https://www.entrepreneur.com/article/242373

Wells Fargo rejected nearly half of their Black homeowners refinancing applications

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Only 47% of Black homeowners who submitted home mortgage loan refinance applications in 2020 were approved by Wells Fargo as opposed to 72% of white homeowners, according to a Bloomberg News analysis

While home mortgage rates in the U.S. hit an all-time low during the pandemic, African American homeowners did not have the same level of access to refinance and ultimately lower their long term interest costs as other homeowners.

“Only 47% of the Black homeowners who submitted refinance applications in 2020 were approved by Wells Fargo as opposed to 72% of white homeowners”, according to a Bloomberg News.

Wells Fargo rejected more Black homeowners refinance applications than it accepted.

While Black applicants had lower approval rates than White applicants at all major lenders, the data show, Wells Fargo lagged behind other major lenders in their approval rates for minority applicants and had the biggest disparity and was alone in rejecting more Black homeowners than it accepted. Overall, 71% of Black refinancing applicants in the country were approved in 2020, according to Bloomberg’s analysis.

Wells Fargo, the third largest bank in the United States by assets, was the sole lender that rejected more Black applicants than it accepted. Black homeowners faced more refinancing denials than other minority applicants such as Hispanic homeowners and Asian homeowners,

This remarkable wealth event has seen U.S. homeowners refinance almost $5 trillion in mortgages over the past two years. This refinancing has allowed White homeowners to save an estimated $3.8 billion annually by refinancing their mortgages in 2020, according to researchers at the U.S Federal Reserve. But it’s a door that barely opened for Black Americans, who make up 9% of all homeowners and locked in just $198 million a year, less than 4% of the savings.

Bias in Wells Fargo’s approvals for refinancing home mortgage loans

Wells Fargo approved a greater share of applications from low-income White homeowners than all but the highest-income Black applicants, who had an approval rate about the same as White borrowers in the lowest-income bracket.

The U.S. Justice Department has censored banks for lending practices that tend to elevate costs for minority borrowers. After the 2008 housing crisis revealed discriminatory treatment, authorities unleashed a wave of penalties against U.S. lending giants. Wells Fargo agreed in 2012 to pay more than $184 million to settle federal claims that it unfairly steered Black and Hispanic homeowners into subprime mortgages and charged them higher fees and interest rates.

References:

  1. https://www.bloomberg.com/graphics/2022-wells-fargo-black-home-loan-refinancing/
  2. https://www.msn.com/en-us/money/news/wells-fargo-rejected-nearly-half-of-their-black-homeowners-refinancing-applications/ar-AAVa7tL

Seven Steps to Success: John C. Maxwell

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“Attitude is the first quality that marks the successful man. If he has a positive attitude and is a positive thinker, who likes challenges and difficult situations, then he has half his success achieved.” John C. Maxwell

Although there is not a perfect formula to be successful, everyone has the capability to become successful. Success is a journey that you create for yourself if you strongly desire it and act on it. And, success can be learned and attained by you and everyone else. One ‘tried and true’ way to learn about becoming successful is to study the success of other people.

And that is what John C. Maxwell* has done. After over nearly fifty years of knowing successful people and studying the subject, John C. Maxwell has taught millions the principles of success and has embraced the following definition of success:

Success is…

  • Knowing your purpose in life,
  • Growing to reach your maximum potential, and
  • Sowing seeds that benefit others.

By this definition, success is a journey rather than a destination. No matter how long you live or what you decide to do in life, you will never exhaust your capacity to grow toward your potential, nor will you run out of opportunities to help others.

Additionally, Maxwell has developed a process of seven steps for success that are available to you and anyone else who desires to study and pursues the journey of success:

1. Make a commitment to grow daily.

“Success is… knowing your purpose in life, growing to reach your maximum potential, and sowing seeds that benefit others.” John C. Maxwell

Success comes from growing, not from achieving, acquiring or advancing. If you commit to growing each day, you will soon start noticing positive results in your life. Every action that you take towards growing will bring you closer to success, it doesn’t matter how small your action is or how slow you go as long as you keep going. As the poet Robert Browning said, “Why stay on earth except to grow?”

2. Value the process more than events.

“You’ll never change your life until you change something you do daily. The secret of your success is found in your daily routine.” John C. Maxwell

If your goal is to go to the next level in life, then strive for continuous improvement. Events in life are temporary, they teach you how to make better decisions. However, it is the process of change and growth that have lasting value. Choose to embrace the process and learn from both, the process and the event.

3. Don’t wait for inspiration.

“If you start today to do the right thing, you are already a success even if it doesn’t show yet.” John C. Maxwell

People who advance far in life find ways to motivate themselves and live the best they can regardless of how they feel. At times, they even have to push themselves to do something. Successful people persevere. Basketball great Jerry West said, “You can’t get much done in life if you only work on the days when you feel good.”

4. Be willing to sacrifice pleasure for opportunity.

“Success is peace of mind, which is a direct result of self-satisfaction in knowing you did your best to become the best that you are capable of becoming.” John C. Maxwell

There are two paths to follow: “You can play now and pay later, or pay now and play later. You choose whether you will first want to pay or play. Regardless of the path you choose to take, life will always demand a payment. If you choose “to pay first,” you will be more pleased with your results and enjoy greater and sweeter rewards

5. Dream big.

“Where success is concerned, people are not measured in inches, or pounds, or college degrees, or family background; they are measured by the size of their thinking.” John C. Maxwell

If you’re going to dream, dare to dream big. Dreaming small may keep you from discovering what you’re truly made of. Robert J. Kriegel and Louis Patler, authors of If Ain’t Broke, Brake It, assert, “We don’t have a clue as to what people’s limits are. All the tests, stopwatches, and finish lines in the world can’t measure human potential. When someone is pursuing their dream, they’ll go far beyond what seems to be their limitations. The potential that exists within us is limitless and largely untapped. When you think of limits, you create them.”

6. Plan your priorities.

“To Stay Focused in Life: You can’t know everyone. You can’t do everything. You can’t go everywhere. We have to pick and choose between good and a little bit better.” John C. Maxwell

Successful people have many things common and one of of them is that they have mastered the art of how to effectively manage their time. More than anything, they have organized themselves. Henry Kaiser, founder of Kaiser Aluminum and Kaiser Permanente Health Care, says, “Every minute spent in planning will save you two in execution. Time cannot be retrieved, so live every moment the best you can.

7. Give up to go up.

“One of the major keys to success is to keep moving forward on the journey, making the best of the detours and interruptions, turning adversity into advantage.” John C. Maxwell

Everything that has value comes as a result of making sacrifices. Life will present you with countless opportunities to trade something you value for something else. Keep your eyes open to identify those opportunities and once you do, make sure that what you decide to trade will be a trade up, not down.

In conclusion, “success is a journey” isn’t just a matter of words and ideas, it’s a matter of actions. It’s in you to act on what makes you achieve your success every day. Know that what may mean success to you may not mean success to others, and vice versa–and this is completely fine. Success implies diversity of thoughts, habits, behaviors, values, and attitudes.

“If you make it your discipline to do a little bit of growing every day, in just a few years you will be amazed by your transformation.” John C. Maxwell

References:

  1. https://www.johnmaxwell.com/blog/what-i-believe-about-success/
  2. https://www.linkedin.com/pulse/seven-steps-success-john-c-maxwell-ivette-k-caballero

* John C. Maxwell is an International Leadership Expert, Speaker, #1 New York Times bestselling author, coach, and speaker who has sold more than 26 million books in fifty languages. As the founder of The John Maxwell Company, The John Maxwell Team, EQUIP, and the John Maxwell Leadership Foundation, he has trained more than 6 million leaders. Dr. Maxwell speaks each year to Fortune 500 companies, presidents of nations, and many of the world’s top business leaders. For more information about him visit JohnMaxwell.com.

Albert Einstein Best Quotes

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“We cannot solve our problems with the same thinking we used when we created them.” Albert Einstein

Albert Einstein, a German-born physicist, has been widely regarded as one of the greatest minds and physicists of all time. In December 1932, he emigrated to the United States, renouncing his German citizenship after Adolf Hitler rose to power in Germany.

In 1921, he was awarded the Nobel Prize in Physics for his contributions to theoretical physics and discovery of the photoelectric effect.

Einstein was best known for developing the theory of relativity and the mass-energy equivalence formula E = mc2, often dubbed “the world’s most famous equation”.

During his life, he made many sayings about science, education, religion and life that continue to resonate today:

“If you can’t explain it simply, you don’t understand it well enough.”

“Logic will get you from A to Z, imagination will get you everywhere.”

“Try not to become a man of success but rather try to become a man of value.”

“It’s not that I’m so smart, it’s just that I stay with problems longer.”

“We can’t solve problems by using the same kind of thinking we used when we created them.”

“Coincidence is God’s way of remaining anonymous.”

“A person who never made a mistake never tried anything new.”

“Life is like riding a bicycle. To keep your balance, you must keep moving.”

“It is the supreme art of the teacher to awaken joy in creative expression and knowledge.”

Einstein’s words have inspired generations around the world to live life fully, and in a more positive, self aware and rewarding manner.

References:

  1. https://www.msn.com/en-in/news/world/remembering-albert-einstein-inspirational-quotes-of-the-nobel-laureate-on-143rd-birth-anniversary/ar-AAV19qr
  2. https://en.wikipedia.org/wiki/Albert_Einstein