LOS ANGELES – Basketball star turned businessman Earvin “Magic” Johnson said it took him almost five years to realize he was spending more than he earned as an NBA player with a $400,000 annual salary.
“Once I understood what I need versus what I want, my bank account started to reflect that,” said Johnson, who shared his own economic story Saturday at the kickoff of a national program to educate black professionals about their personal finances.
“Know Your Money,” a 12-week course designed to help 21- to 35-year-olds examine their attitudes toward spending, budgets and long-term investment strategies, was the first major initiative to emerge from the 92nd annual conference of the National Urban League.
The conference, which has brought 10,000 delegates and visitors to Los Angeles, marked the national civil rights group’s first return to the city since 1996 — when it pulled out to protest former Gov. Pete Wilson’s support for anti-affirmative action legislation.
Relations between politicians and the league’s leadership, however, has remained shaky in the aftermath of the videotaped beating of a 14-year-old black teenager by a white police officer in Inglewood this month and Los Angeles Mayor James K. Hahn’s refusal this year to support former Police Chief Bernard Parks’ bid for a second term.
Urban League President Hugh Price put the spotlight Saturday on economic self-sufficiency, noting that recent turbulence in the country’s financial markets made the personal finance course the league plans to launch this fall particularly timely.
“This looms more important today than it ever has been,” Price said.
His observation was backed by numbers. According to the league’s recently released State of Black America 2001 report, 60 percent of blacks said economic opportunity should be the primary focus of black organizations. Sixty-seven percent also said they would like to open their own businesses.
Alishia Brown, a 28-year-old account executive attending the conference, said she hopes the $30 finance classes — due to begin in Los Angeles, Houston, Chicago, Atlanta and Washington, D.C., in September — can help her trim personal debt.
“Now I am at the point where I am trying to change my situation,” said Brown, who graduated from college with a degree in psychology and $30,000 in credit card and student loan debt.
Although she has been in the work force for five years and putting aside 20 percent of each paycheck into a 401K savings account, Brown said she is afraid she won’t be able close the gap on her debt, which has grown to $45,000 because of interest.
“Any program available, I am interested in,” she said.
Keith Arnold, a 39-year-old flood maintenance worker, said his long term goals include buying a home and starting a business. Arnold, however, said he doesn’t expect to sign up for the finance class.
“To take on another task is just not feasible at this time,” said Arnold, who applied for bankruptcy four years ago.
Johnson, who has carved a $500 million empire of movie theaters, restaurants, shopping centers and a bank by taking brands such as Starbucks to the inner city, said he can teach by his example.
In his own case, Johnson said he spent $400,000 in lavish expenses for years, even though his take home pay was closer to $250,000 after taxes. He advised conference attendees to keep track of their spending and set annual saving goals.
“This is our problem, we just live check to check,” Johnson said.