Engineering a solid future: Alton Moss and Catherine Charles are learning that a blueprint for financial success starts with common goals and full disclosure. (Family Finances).TWENTY-THREE-YEAR-OLD ALTON MOSS JR. IS ON THE right path to building financial wealth, Even though the 2000 grad from North Carolina North Carolina, state in the SE United States. It is bordered by the Atlantic Ocean (E), South Carolina and Georgia (S), Tennessee (W), and Virginia (N). Facts and Figures
Area, 52,586 sq mi (136,198 sq km). Pop. A&T State University is new to the workforce, he has funded a cash reserve, started to invest in his company's 401(k) plan, established a Roth IRA Roth IRA
An individual retirement plan that bears many similarities to the Traditional IRA. Contributions are never deductible, and qualified distributions are tax-free. A qualified distribution is one that is taken at least five years after the taxpayer established his/her first , and purchased his first home. Over the last year he has also managed to reduce $9,000 in credit card debt Credit card debt is an example of unsecured consumer debt, accessed through ISO 7810 plastic credit cards.
Debt results when a client of a credit card company purchases an item or service through the card system. by $3,500.
The Iowa City, Iowa Iowa City is a city in Johnson County, Iowa, United States. It is the principal city of the Iowa City, Iowa Metropolitan Statistical Area which encompasses Johnson and Washington counties. , resident is an engineer looking to move up within the major consumer products company where he works, "I am currently taking graduate courses at the University of Iowa Not to be confused with Iowa State University.
The first faculty offered instruction at the University in March 1855 to students in the Old Mechanics Building, situated where Seashore Hall is now. In September 1855, the student body numbered 124, of which, 41 were women. . I hope to change careers and make more money within the first year of getting my M.B.A.," says Moss. By getting an advanced degree and shifting gears to work in the marketing department, Moss anticipates boosting his salary from $63,000 to about $73,000.
An ambitious investor, Moss is striving to achieve financial independence so that he can enjoy an early retirement at age 47. Since he is a new investor, his assets are still blossoming--about $2,275 in his 401(k), $2,500 in a Both IRA Ira, in the Bible
Ira (ī`rə), in the Bible.
1 Chief officer of David.
3 Two of David's guard.
IRA. , $1,500 in a money market fund. and a few shares of Wal-Mart (NYSE NYSE
See: New York Stock Exchange : WMT (Windows Media Technologies) See Windows Media. ) worth $300. He also has about $8,000 saved in a checking account. Thinking toward the future. Moss is not only concerned about getting a better grip on his own financial affairs but also those of his live-in girlfriend, Catherine Charles, 27, who had accumulated roughly $15,000 in debt. "She has devised a plan for paying back those debts, but I want to make sure she understands the value of money [and controlled spending]," he explains.
Charles is Charles I, duke of Lower Lorraine
Charles I, 953–992?, duke of Lower Lorraine (977–91); younger son of King Louis IV of France. He claimed the French throne when his nephew, Louis V of France, died (987) without issue, but he was set aside in a former teacher who is pursuing a master's degree master's degree
An academic degree conferred by a college or university upon those who complete at least one year of prescribed study beyond the bachelor's degree.
Noun 1. in school counseling at the University of Iowa. She works at the university as a class supervisor and has been fortunate enough to quality for grants and other financial aid to pay for her degree. She also receives a stipend sti·pend
A fixed and regular payment, such as a salary for services rendered or an allowance.
[Middle English stipendie, from Old French, from Latin st from which she pays about $600 a month toward eliminating her debt as she and Moss prepare for marriage. Charles, who admits she didn't feel the need to discuss her debt with Moss, says she has trimmed it to $6,000. "We are both supposed to graduate in the spring of next year, and at that point, my debt should be eliminated and his should be lower as well, which is something I think should happen before you get into a marriage."
In addition to the $5,500 left to pay on Moss' credit card, he only has $5,500 in equity on a $106,000 two-bedroom condo. He originally paid $1,102 monthly on his mortgage but recently refinanced the loan from an interest rate of 9.25% to 6.63%. He has $9,000 left on his car loan and $5,000 in student loans, which are deferred while he attends graduate school. Luckily, his employer will pay 100% of the cost of his M.B.A. at $1,100 per class,
But Moss understands that there may be weightier debts to be paid if he and Charles many. "I'm very aware that [unresolved Not completed; not finished; not linked together. See resolve. ] financial situations in a relationship can destroy a marriage," he says, (See archived story "The Wedding Bell ... Greens?" at blackenterprise.com.)
To help Moss stay on track and construct a financial plan that will help him meet his investment goals. BLACK ENTERPRISE had him consult with Mark A. Mitchell, a registered financial representative with AXA AXA Anguilla, Anguilla (Airport Code)
AXA Alpha Chi Alpha
AXA Animal Crossing Ahead (online forum community/guide to the game Animal Crossing)
AXA Auxiliary Artery Advisors in San Juan Capistrano, California San Juan Capistrano is a city in southern Orange County, California, USA, located approximately 23 miles southeast of Downtown Santa Ana. The current OMB metropolitan designation for San Juan Capistrano and the Orange County Area is “Santa Ana-Anaheim-Irvine, CA. . The following are Mitchell's recommendations:
* COMMIT TO THE SAME GOALS.
At first glance it appears that Moss and Charles have philosophical differences regarding finances. They both must be willing to commit to the same quality of life and have a coordinated approach to managing their money. This means analyzing and categorizing their expenditures, determining which are necessary and which are discretionary. They must make smarter purchases, taking into account what they buy and how they pay for it. They must limit purchases with store credit cards that charge up to 24% interest. If Moss remains the major financial contributor in the relationship, he may end up paying off her debt as well as his own, which will hinder hin·der 1
v. hin·dered, hin·der·ing, hin·ders
1. To be or get in the way of.
2. To obstruct or delay the progress of.
v.intr. his ability to accumulate wealth. He has defined his financial goals and the time horizon by which he wants to achieve them (retirement at age 47), she should do the same.
* START CONTRIBUTING AGAIN TO HIS 401(K).
Moss started out contributions the maximum allowed--about $875 a month--to his 401(k). But after a couple of months, he stopped to focus on saving money for his condo. Now that he owns the condo, he needs to begin a systematic plan for investing and stick with it if he ever hopes to achieve his early retirement goals. Mitchell advises that he maximize his qualified retirement plan by contributing the limit allowed again, which will also lower his tax bill.
* INVEST IN GROWTH MUTUAL FUNDS.
It is important that Moss have the right asset mix and the right categories when it comes to his investments. A general recommendation, based on his age, would be to establish a well-managed portfolio of blue chip growth-oriented stocks outside of his 401(k). To that end, the $2,000 in contest winnings should be placed in Moss' Roth IRA. Mitchell says the objective is to provide capital appreciation, so it's not a bad thing if two or more of the five funds he currently holds in his Roth have similar fund objectives. But, because of the various market cycles, he must make sure his is best protected by having a diversified portfolio or varied asset mix including aggressive growth and fixed-income investments.
* USE HOME EQUITY LINE TO PAY OFF DEBT.
Moss can relax a bit because his student loan was deferred when he went back to school. His other major debt is the $9,000 car loan on his 1996 Honda Accord The examples and perspective in this article or section may not represent a worldwide view of the subject.
Please [ improve this article] or discuss the issue on the talk page. at a rate of 9.25% along with the $5,500 in credit card debt at 15.5% interest. Since he refinanced his $106,000 mortgage at 6.63% interest, his monthly payment dropped from $1,102 to $850, (The total of the new mortgage is $110,000.) He should use the additional savings to continue paying off his debts.
Mitchell says Moss should also apply for a home equity line of credit (even though he only has about $5,000 of equity in the condo). He should then transfer his nondeductible non·de·duct·i·ble
Not deductible, especially for income-tax purposes.
Adj. 1. nondeductible - not allowable as a deduction
deductible - acceptable as a deduction (especially as a tax deduction) credit card and car loan debt to the line of credit that is tax deductible That which may be taken away or subtracted. In taxation, an item that may be subtracted from gross income or adjusted gross income in determining taxable income (e.g., interest expenses, charitable contributions, certain taxes). . He can write off the interest paid on the home equity loan.) Also. assuming that he is in good credit standing, he should shop around to find a low-interest rate credit card. He may be able to get a rate as low as 6% (compared to 15.5%). This would make his debt less expensive as well as allow him to pay it off faster.
Financial Snapshot: Alton Moss HOUSEHOLD INCOME Total $63,000 ASSETS Checking $8,000 Money Market 1,500 Stock 300 Roth IRA 2,500 401(k) 2,275 Home (appraised market value) 110,000 Total $124,575 LIABILITIES Credit Card $5,500 Student Loan 5,000 Car Loan 9,000 Mortgage 106,000 Total $125,500 Net Worth -$925