All in the family.

Sharing the wealth--and the money know-how

During his teen years on the exciting isles of Trinidad and Tobago, Vito Lara, Ph.D., 61, knew that he would not follow his brothers into a singing career. "I didn't have the voice for it," he admits jovially. While his family became successful on the entertainment circuit--Lord Lara and the Lara Brothers are famous calypsonians--Vito stolidly followed his heart into finance.

After meeting his wife, Celestine, 57, at a party in his homeland when he was 25 and she 21, they soon wed. "She hasn't been able to get rid of me since," he declares. The couple emigrated to the U.S. in 1963. Between 1967 and 1969, Lara earned his bachelor's and master's degrees (and in 1985, his doctorate) from Howard University, Washington, D.C., while Celestine became a registered nurse.

From 1967 to 1973, Vito worked at The World Bank in Washington, D.C. in the economics department. After which, he moved to Trinidad, where he worked for the Industrial Development Corp. and later the Ministry of Finance. Later, he took a job as a professor of economics and finance at the University at the District of Columbia, Washington, D.C., and began to practice what he preached, contributing the maximum 10% to his 401(k), 15% of which was matched by the college. When his wife began to put away $50 monthly, Vito was encouraged to stash $150 a month in mutual funds and annuities. By 1980, though their credit-card debt had ballooned to about $20,000, the Laras used their savings to buy a home in Hyattsville, Maryland.

As their investment portfolio grew, so did the Lards financial vision: why should it stop with them? In 1991, their daughters Deborah, 30, and Amanda, 32, joined an investment club, putting away $200 and $300, respectively, per month.

In 1993, Vito became the first recipient of a General Mills' Professorship at Columbia University, but in 1996, after 17 years with the UDC, he was laid off. Undaunted, he assessed his net worth. Landing on his feet by hosting investment seminars, Vito withdrew $100,000 from his 401(k) in 1997, putting $50,000 into a TIAA-CREFF health insurance policy. With Celestine now working as the clinical director at HMI Home Care, the Laras bought a second house in Glendale, Maryland, with the remainder of his 401(k) money and profits from his investments. He rented out the first house and the couple moved to Glendale.

But the apple didn't fall far from the tree. Daughters Deborah and Amanda used the profits from their investments to buy their own homes, Deborah in 1996 and Amanda in 1998.

Now an investing instructor at Bowie State University, Bowie, Maryland, Vito is toying with the idea of playing the stock market with about 25% of his investment allocation each month. "I'm thinking of continuing with my mutual funds, but I want to take on a little risk with stocks and see how that turns out," he says. By incorporating a stock exercise in his classes, for which students have an imaginary sum of $100,000 to invest, Lara is learning along with them.

Family Snapshot: Vito & Celestine Lara

               Household Income

Combined salary:                  $129,500

                 Investments

Portfolio:                          80,000
Life Insurance (combined):         200,000

              Debt/Liabilities

Mortgages (both houses):        $39,000/yr
Credit cards:                        3,800
Business expenses:                5,400/yr

Expert Advice

FINANCIAL EXPERT. Michael A. Jackson Sr., president, Bear & Bull Financial, Silver Spring, Maryland.

His Strategy: The Laras should maintain their reliance on mutual funds, but increase the investment amount by 15% to 20%, thereby increasing their returns over the long haul.

Jackson's Recommendations:

* Revisit asset allocation model. Shift allocation to 70% to 75% in growth stock mutual funds; 15% to 20% in biotech stocks; and 10% in an emergency savings account or money market mutual fund. In addition, Jackson believes it's crucial that all investors set up an emergency account of six to 12 months' income. Lara should immediately put aside three months' worth of salary, then over time, stash away 12 months of salary strictly for this purpose.

* Set up a money market mutual fund. Jackson advises that it's best for Lara to maintain liquidity in a tax-exempt money market mutual fund for expenses over $100. This, coupled with the emergency fund, will also serve to diversify the Lara's holdings.

* Consider biotechnology stocks. The Laras should consider allocating a small portion of their portfolio to biotechs such as Genentech, MedImmune and Cytogen, which are positioned to do well in 2000. This would add a dash of aggressive growth to their investment mix. --C.L.B.