Market research says we have higher average incomes than straights. Yet one of our most common complaints is that we have nothing to show for it. Welcome to what is often our Achilles heel: cash & spending, debt & credit, savings & investment. While we may be totally immersed in gay & lesbian culture, our key weakness, what which often holds us back from the advantages that can come from being lesbian or gay, lies in our money connection to society at large.

Our problems in these related areas may come from those same factors, unique to us, that can be used to build higher paying careers, lower our taxes, and make us entrepreneurs. [Footnote previous issues of Victory!] Our problems in this area are real, the solutions equally concrete:

• Some of us compensate for discrimination by building expensive fortresses, filled with furniture & things.
• Some of us try to pass for straight by literally buying into America's consumer society, seeking acceptance by buying society's status symbols.
• Some of us get carried away with the freedoms of our lifestyle losing some of society's financial wisdoms in the process; we become so involved in our present pleasures we have no thought for the future.
• Some of us are so focused on our youth that life becomes one giant revolving credit card.
• Some of us aren't used to the higher incomes that come from crossing social boundaries.

Spending: Our Achilles Heel

The average American is potentially a millionaire; most of the middle class has several million dollars running through their fingers in a lifetime. Yet statistics show that the average straight American has but a few weeks or months of salary in the bank. Why need this not be our fate?

First, market research reveals that our incomes are well above average because we equip ourselves with better skills to survive, because we're more mobile, because we've learned to live with risk and because we simply don't invest in children and nonworking spouses. We not only earn more; potentially we can keep more.

Barely 5% of the men and 10% of the women in our community have children. Children require cash in the six figures - each. That cash drain usually occurs when people can ill afford it - in the early exploring years or in the middle career building years. Straight couples often don't see the light of day financially until their 50s, when their investments in their children finally walk away.

Spending, the dominant activity of heterosexual families with 2&1/2 children, has become the American game. Beware of getting sucked into its siren call. We are bombarded with millions of messages - the sum of which is that life in America is all about spending. It is if you're married with children. It doesn't have to be.

Worse, some of us seek compensating comfort in things. Merchants don't discriminate against cash. Some of us buy into society's status symbols, a self-defeating tactic common to many minorities. Acquiring the trappings of straightness, we weigh down our fairy natures with furniture, chotchkas & clothing. Already invisible, we pass for straight with our credit cards. We can end up living in very expensive closets with confined consciousness and impoverished inner lives.

Coming out cashwise can mean chucking consumerism, creating a much more advantaged life, making the most of our uniquely cash rich balances by investing our resources in ourselves, in our future, and in money making skills & ventures that will add, not deduct, from our lives.

By simply dropping out of the consumer dance during one critical decade, the 30s, we not only get to keep more of that million dollars spent in our lifetime, we get to multiply it through growth producing assets and tax-reducing deductions - to the time when we will need the money, when it's no longer discretionary but necessary.

Yes, the trick is to cut spending early, not in our elder years. Think it through. What does money buy? comfort, access, prestige, time, freedom. Yet when we're young we want adventure not comfort, we have ample access through our brashness and attractiveness, we can scoff at prestige for we've seen the hollowness of discrimination, we have all our time ahead of us, and we're free to choose among many paths. So when young, savor these natural riches and compound your cash. When older, use that money to get comfort, access, prestige, freedom - and husband your time - since time becomes our true wealth as we grow older.

Debt: Straight Sorcerer's Apprentice

Straights spend because they spawn spending machines. They're always cash short and have to become masters at balancing credit & debt. For people in cash short positions, debt can be useful, a kind of forced savings, and the only way to buy a house, a car, or a bunch of furniture.

But debt, especially consumer credit, is negative investment at high rates. It prompts buying more than what's needed. It hobbles the future.

Beware of falling into Boys in the Band stereotypical spending, filling that hole inside with expensive sweaters, showing them we're just as good. We're not just as good; we're better positioned financially if we will but mobilize simple mechanisms, like savings, towards wealth.

Stifle that impulse to spend. Cut expenses, especially early in life. Increase an already large disposable income even more.

If you need help, it's available. Debtor's Anonymous. No fee credit counseling. Excellent books. Spending is learned; it can be unlearned. BHA, Bankcard Holders of America, has excellent materials on no-fee cards & rehabilitating credit. They even have a service that will optimize paying off cards & loans. I can often save my fee for one year by simply toting up interest charges and match them against available cash. Paying off debt comes first.

The key to the 90s is high credit but no debt. We're in an era of great, unpredictable ups & downs. That kind of situation demands the flexibility of extensive credit. And we're in a perfect position to capitalize on that. In fact we can be so cash rich we can forget to build strong credit. Steadily increase card limits on no-fee cards; line up bank lines of credit; and take advantage of home equity arrangements - just don't use them.

Above all, apart from mortgages, which have tax advantages, don't use debt to invest; the kind of a return you'd have to make to first pay finance charges - and then earn a high return over and above inflation is unrealistic, period.

Investing:Riding the Road of Risk to High Returns

Cash & credit by themselves aren't assets. Here's a scenario for their best use. Deploy that cash first by investing in yourself - in experience, exposure, skills, tools. Buy your future, assets that will multiply tax free. Apply those resources as the security you'll need in striking out on your own. Then you can spend the fruits of that labor on the comforts, access, prestige, time, freedom you'll need in later years. Finally, endow something you believe in. Now that's a life well spent!

The first straight trap with investments is the short-term focus of straight families under the financial gun. Our time frames aren't dictated to provide college educations, to provide large residences to raise children, or to provide massive legally mandated financial settlements if we break up. Therefore, we have no need to be caught up in the frenzy of pursuing short term gains - which can often result only in churning broker's fees.

Go instead for the long term. With our longer time frames we can rely on compounding not gambling. We can weather the business cycles. If we don't, we're heterosexuals, financially, with no children to show for it.

Save discretionary income

And take advantage of the fact that you can start early. Spend early cash on assets that will grow and produce. Straights can't; we can. This is the primary secret to gay & lesbian wealth. Savings is where it all starts. I can nearly always produce 10% to save, tithing to our future selves. Investing $600 a month for 15 years at the historical equity average growth of 10% a year produces $250,000; saving $700 a month produces over $290,000.

If we start saving early, we can take more risk and get more growth. If we wait to play catchup later on in life, we won't want to risk so much then. And we also won't be able to wait out multiyear market swings as coolly as we could when we're in our earlier years.

Compounding is the key ingredient. Especially tax deferred compounding. Shelter these assets tax-free to get full compounding; we're cash rich compared to straight marrieds and can reap extra returns here. This is where the real magic happens in fortune making, not in hot tips and insider information. Simply saving more makes millionaires effortlessly, with less risk - and with the absolute certainty we only find in compounding tables.

Pursue tax deferred savings instead of simply high rates of return. We already have too much income for present needs. It's far better for us to shelter income which then is taxed only at retirement - enabling compounding to work its best effects untaxed. It's far better yet when employers match our funds, usually 50 cents on the dollar.

Get tailored advice

Beware of conventional advice - it caters to the straight predicament. The consumer financial press is written for their needs, their families. This is why mainstream advice is so misleading, so irrelevant to OUR needs. This is why that advice focuses so desperately on the short-term and hot tips.

Read the financial press with a jaundiced eye - at an angle. They always assume their readers have 2&1/2 children. These magazines are already oriented towards their investment advertisers. As a result they de-emphasize the non-financial vehicles that we can afford to explore, investments that often grow best and give more satisfaction in the process of holding them.

Recognize as a result that you'll need to educate yourself. Simply following straight advice will handicap you. Read either of Peter Lynch's books which say "discover what your special knowledge & insight are." The best solution is to start a gay & lesbian investment club. It's been done, years ago, in Ohio. New York started its club in 1993. This may also be the best way to do socially responsible investing, betting that those companies that take us on as full partners, as employees and as consumers, will be better performing in the market. Such clubs are good places to make friendships among like-minded people. There's plenty of help available. Contact me if you want to start one.

Beware of brokers if they can't clearly indicate they understand you as a gay man or as a lesbian. If gay or lesbian brokers can't do this, they may be trading on your trust of them as gays or lesbians at a moment when you should be highly skeptical and demanding. Remember: different commissions are paid for different products; guess which ones get pushed the most? Brokers may also be biased towards financial instruments only since that's what straight families look toward, lottery like, to get out of their predicament. I refuse to advise on specific stocks & funds because it is a full time job and because I could not give objective financial advice if I were receiving commissions. It may be better to use discount brokers and gather your own, more tailored advice.

In any case, individuals with less than six figures have no business playing the equities, stock market, attempting to pick stocks or time the market. At that level it's a rich man's game. If you've 4-5 figures to invest, study low-load mutual funds especially if there's much chance of your moving them in five years or less. If you're learning the ropes, this chance is high. Only then consider the high commission loaded funds which do often have higher returns (and sometimes do flop terribly, especially brokerage house funds) - if you can stay the long term.

Long-term can mean lower risk, higher return

Gays & lesbians may be better off in longer term, non-financial instruments: real estate, collectibles and investing in entrepreneurial skills & tools. Our time may be better spent making money and placing it in addition to financially investing it.

Real estate too offers the long-term returns, an income producing asset full of deductions, one that suits our profile well. This is especially true for rental properties.

Without children, it is natural to invest in artifacts. I encourage clients with well defined interests and knowledge to enjoy watching their assets appreciate, to enjoy possessing them. Remember Dolly Levi: money is like manure - it makes the green things grow. And a cash register is a little lumpy to bed down with at night - even if it rings....

Time-our ultimate wealth?

Above all, since our basic wealth comes from what we produce, seek ways to invest in yourself, in your skills, experience & contacts. Travel, take time off. Pursue therapy. Invest time & take a risk in an area you know well. Go to the convention the company won't pay for, run up a tab at the business bookstore, hang out on the phone calling authors of books (or columnists) directly, take courses not for credit, moonlight, try a new job part time, put money into a business. These may be our best investments.

Start looking at your time as one of the most limited, valuable resources you have to place. Write articles in your field. Conduct original research. Test your ideas. Network, connect, reach out, travel. Give yourself a varied experience. Living abroad used to be considered the cap of a fine education. Change careers. Take advantage of the fact that we truly have no fixed, traditional obligations to follow any one track, to make conventional sense of our lives. But like sexual prowess this freedom needs exercise. It's a case of use it or lose it.

In my fourth career, four well placed articles made me a national expert on health care cost containment in the 70s and brought me $1,000,000 in venture capital. My ten years in Europe, giving me a confidence and zest for life no job here could give. Going back to school every fifth year enabled me to change careers when I changed or opportunity knocked. My best investment decisions were cashing in the glamour jobs for real work, paying myself the returns of never being bored with my work. Why am I telling you this? Because I believe being gay helped me take these risks, avoid those traditional paths, and opened up new worlds. This is what being out at the workplace means to me: being open to life's endless wealth of opportunity. Otherwise not just money but time will slip through our fingers.

And consider investing in our relationships. What is true wealth to us but our relationships? If biological, nuclear and corporate families don't suit or support us, let's create complex families of choice. Authors like Huxley inveighed for decades against traditional pressure cooker families. We have the chance to reinvent what a wonder an extended tribal family can truly be like in today's increasingly chaotic world.

Like any smart company, invest in people, starting with yourself. Then expand that investment with your friends. Then invest in our community to protect our rights and multiply our opportunities. And do all this by living the principles of a prosperous life I've tried to describe here. That investment is perhaps the one that will pay off the best.