On The Road To Financial Fitness

By Carolyn M. Brown

As more African Americans recognize the importance of investing, there is good news to report. Over the past five years, the percentage of high-income AfricanAmericans (earning more than $50,000 annually) who invest in the stock market is up 30%, and the number of those who have mutual funds or brokerage accounts is up 21%, according to the 2002 Ariel/Schwab Black Investor Survey.

BLACK ENTERPRISE has been working to grow those percentages. At the core of our Black Wealth Initiative, a financial education and empowerment program, are 10 principles for disciplined saving and investing known as the Declaration of Financial Empowerment (DOFE). BE developed the Financial Fitness Contest in January 2000 to help readers, like you, fully embrace these principles.

Since its inception, we have identified 31 individuals and families in need of financial advice. We provided them with an initial one-hour consultation with a financial planner or investment consultant, and $2,000 to apply toward debts or to contribute to an investment account. Here we share the financial journeys of five of our recent winners, to see just how far they have come and how much they have left to accomplish.

JANUARY WINNERS:
TINA AND PATRICK ALEXANDERSAN ANTONIO, TEXAS
January 2001 Financial Fitness winners Tina and Patrick Alexander were burdened with debt, which included $13,000 left on an SBA-guaranteed loan they received for a ComputerTots franchise which failed after three years. Following the advice of Certified Financial Planner and President of the AFP Group in Houston, Cheryl Creuzot, the couple paid off the loan–which was at the highest interest rate, 10.5%–by doubling their $570 monthly payment and applying the $2,000 contest winnings toward the debt.

The couple has embraced DOFE principle No. 5: To engage in sound budget, credit, and tax management practices. They sliced their credit card balances in half, to about $2,200, and reduced a $9,000 personal loan Patrick took out for courses toward becoming a certified Microsoft engineer; it’s now around $4,500. The couple also bought a new car assuming a $470 monthly car note.

The Alexander children, 11-year-old De’Jaune and 19-year-old Dmetrius, have also gained financial knowledge. De’Jaune has earmarked a portion of her allowance and cash gifts for a savings account, while Dmetrius rebuffs the courtship of several credit card companies. “He has been bombarded with offers by credit card companies,” says Tina. Dmetrius did take out a $5,000 student loan for college, however. He also received scholarships to attend St. Mary’s University in San Antonio, where he is studying industrial engineering.

One slight setback is that Tina–a former reservations clerk for Southwest Airlines while also working as an assistant auditor for the Texas State Senate–now has one job instead of two, reducing her annual gross income from $42,085 to $31,000. She still has about $1,000 sitting in a 401(k) retirement plan from her job with the state senate, and $2,047 worth of employee stock from Southwest Airlines. She rolled over $5,900 from Southwest Airlines’ profit-sharing plan into a traditional IRA gaining 3.6% interest. She also has another $1,292 in a 457 salary-deferral

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