October 1, 2003
From Real Estate To Retirement Plan
Growing up on Staten Island, New York, Bradley Simmons, 40, nurtured an interest in becoming an English teacher. But when his brother, a successful real estate entrepreneur in Scarsdale, New York, told him about the financial rewards of a career in real estate, he felt it couldn’t hurt to give it a try.
Simmons obtained his broker’s license and, in 1990, opened Bestrow Realty in a brownstone he owns at 138 West 127th Street in Harlem, New York. Between managing a thriving business and caring for his two children, Simmons hosts seminars to educate the African American community about the value of investing in real estate. “I’m concerned that, in New York City, African Americans are not taking advantage of the low interest rates,” he says.
Although he reaped the benefits of investing in property, Simmons soon became uncomfortable having an investment portfolio s comprised solely of real estate holdings. “I wanted to diversify my investments and move out of just real estate,” he says. He’d met AXA financial consultant Angela Bledsoe through a mutual friend two years ago and turned to her for help.
At the time, Simmons had $300,000 in permanent life insurance and his primary goals were to ensure that his children, ages 10 and 6, lived comfortably and had enough money to attend good colleges if something happened to him, and protect his properties. His properties are valued at more than $2 million and his mortgage balance on all of them is more than $750,000. Bledsoe was concerned that Simmons “didn’t have sufficient insurance coverage to achieve his goals. I didn’t want him to fall victim, like so many other African Americans do, and lose his property when he passed away due to poor estate planning.”
Bledsoe’s first move was to increase Simmons’ insurance to a $1 million variable life policy. This would “help him pay off his mortgages and help maintain his children’s lifestyle in the event of his untimely death,” she says. “The policy also allows him to participate in the market while providing tax effectiveness.” Simmons contributes $12,000 to the policy each year, placing some of the money into mutual funds. Bledsoe crafted an asset allocation model of 30% large-caps, 30% mid-caps, 25% bonds, and 15% international stocks. “Based on his moderate, aggressive risk tolerance, I wanted to make sure he was invested in growth as well as value,” Bledsoe says. Simmons is invested in funds such as the Putnam Growth Opportunities fund (POGAX), the AXA Premier Small/Mid-cap Value fund (FOOA14), the Fidelity Advisor Mid-cap fund (FMCDX), and the AXA Premier Core Bond fund (FOOAGQ), which guarantees 5% interest.
Now that Simmons has diversified his portfolio, he is thinking of expanding his investing approach. “I’m pleased with the planning that Ms. Bledsoe has done so far,” he says. “She sat down and identified my needs and is helping me realize all my goals.”
With the recent death of the attorney who handled the estate planning portion of Simmons’ portfolio, he is beginning to consolidate all of his investments