On The Road To Financial Fitness

By Carolyn M. Brown

plan with the Texas State Senate. “I am looking into different ways to invest the money that is still at my old jobs,” says Tina, who is now a fiscal officer for the city of San Antonio.

Minus the extra income, the Alexanders have changed their spending habits by not eating out as much and having their son live at home instead of on the college campus. They have also developed a budget to pay bills and secure more money to invest for retirement. They still have the challenge of building up their cash reserves and starting an education fund for De’Jaune.

Since winning the contest last winter, Joyah Pugh, a 25-year-old dancer and administrative assistant in municipal research with the U.S. Trust Co. of New York has kept in step with her finances. She used $1,000–half her winnings–to pay off one of her student loans. (She still has about $14,000 in student loan debt.) She then used the $50 per month she was putting toward that loan to supplement her savings, which now total more than $5,000, in accordance with the advice of Shuron A. Morton, a personal financial advisor with American Express Financial Advisors in New York.

Pugh invested the other half of her winnings in an S&P 500 Index Fund. “I thought the index fund was a good first investment for someone who didn’t know a lot about investing and was new to the market,” says Morton. Pugh has since transferred her money into the Muhlenkamp Fund (MUHLX), a mid-cap value fund.

Pugh has been studying and following the market. Despite recent downturns she realizes that, because of her age, time is on her side. “I can watch my investments as they grow, and learn along with them,” says Pugh, who altered the investment mix in her 401(k), which is valued at around $7,200, to include the Excelsior Blended Equity Fund (UMEQX); the Excelsior NY Intermediate Fund (UMNYX), a high-yield fund; and the Excelsior Value & Restructuring Fund (UMBIX), a growth fund. “I decided on a blended fund because I didn’t know which small- or large-cap stocks I wanted to own; this way I get a different mesh of stocks in one bundle. As far as the high-yield fund, I liked the portfolio manager’s style.” She now contributes 10% of her salary, which increased from $30,000 to $36,000, to her 401(k).

Pugh follows DOFE principle No. 9: To maximize my earning power through a commitment to career development, technological literacy, and professional excellence. She intends to build a career in finance. With the hope of entering a top M.B.A. program come fall 2003 or 2004, Pugh has been researching and applying for various grants, scholarships, and fellowships.

In the meantime she faithfully sets aside money for savings and investments. Each month, $200 is automatically deducted from her checking account and added to her index fund. Sometimes as much as $325 gets deducted, depending on whether she gets paid for any dance gigs. Right now she is

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