Cliarlotte ^0£(t
THURSDAY, JANUARY 25, 1996
CHARLES ROSS
Your
Personal
Finance
Zero coupon bonds are
investments that are bought
at a discount from face-value.
When they mature, you get
the full value. For example,
you might purchase a $1,000
face-value bond for $500.
Zeros tend to yield slightly
higher than regular coupon-
attached bonds, and they are
also extremely volatile. This
means that fluctuations in
interest rates can create
major gains and losses. A 1
percent rise in interest rates
can mean a 10 percent loss in
the current value of your
zeros, but you will still get the
full face-value if you hold the
bond until maturity.
Municipal zeros are issued
by state and local govern
ments, and some corporations
issue zero-coupon bonds. Ask
your investment advisor about
current selections.
Tax considerations
The best way to take advan
tage of the compounding inter
est in zero coupon bonds is to
hold them until maturity. But
be aware that, although you
might be willing to postpone
receiving the interest until the
zeros mature, the IRS is not
so patient. Taxes are due as
interest accrues, and corpo
rate zeros are fully taxable.
You will escape state and local
taxes on treasury zeros, and
often on municipal zeros.
Another important tsix mat
ter to remember is that the
tax basis of zeros increases as
interest accrues. You should
get information from your bro
ker or the bond issuer each
year showing how much inter
est accrued, and add that to
your basis.
The investment decision
For people with a well-
defined long-term goal, such
as sending a child to college,
zero-coupon bonds can be a
great option with a set return
and fixed maturity date. Zeros
are also good for IRAs because
with an IRA you don't pay
taxes on the interest a zero
accrues. They also appeal to
investors who dislike tinker
ing with their portfolios. Zeros
can run on autopilot until
maturity.
Zeros can offer the possibili
ty of dramatic gains, too. If
interest rates decline, the
value of your zeros shoots up,
and selling before maturity
could prove very profitable.
However, don't forget that the
risk of loss is just as great.
Treasury zeros are a high-
quality investment that can
be easy to sell in an emer
gency. Municipal zeros would
be the next best choice.
Getting the lowest airfare
The battle of the airlines is
no longer among the large car
riers. Smaller, regional carri
ers are also flexing their mus
cle. Knowing the right ques
tions to ask in planning your
flight could help you get off
See COUPONS page 7A
STRICTLY BUSINESS
Zero coupon
bonds a plus
Heaven for
little angels
PHOTO/JAMES BROWN
Connie Green leads youngsters through the new Angels Christian Day Care Center on Glenwood
Drive during an open house last week. The center is one of the largest owned by African
Americans in Charlotte and can accommodate up to 200 children. It has a separate building for
toddlers and infants.
"The Lord gave us a vision. We put it on paper and had it drawn up and
my husband built it from the ground up. The only expereience he had
was working with his grandfather, a carpenter, when he was a little
boy."
—Connie Green, owner Angels daycare
Daycare owners
celebrate growth
By John Minter
THE CHARLOTTE POST
I t all started when
Connie Green decided
she didn’t like the day
care centers she visited
looking for a place for
her son.
Besides, what she really
wanted to do was stay home
with her children.
Roger Green, her husband,
was supportive.
Eleven years later, the
Greens run one of the largest
day care centers owned by
African Americans in
Charlotte.
They held open house at
their Angels Christian Day
Care last week. The facility at
3801 Glenwood Drive occupies
three buildings on three acres.
“I had looked all over
Charlotte and I wasn’t satis
fied with the day care,” Green
said. “I asked my husband to
start a day care in our home.”
Before long she had to move
to a separate location on
Ashley Drive.
“I started with five children,
then to 15. Then I was
Money management
The ABCs of
investment clubs
Amanda S. Danchi,
SPECIAL TO THE POST
A1 is a retired plumber.
Barbara is a young widow
with three children. Carol and
Dave are a professional cou
ple. Once a month, they get
together with 10 others in the
local library meeting room.
After some small talk, each
person places a check for $50
on the table. A bigh stakes
card game? Not a chance. In
this game, the members don't
play against one another—
they're members of an invest
ment club and they win and
lose as a group. An invest
ment club is a group of
friends, neighbors, relatives,
business associates or others
who pool their time, talent
and money to research and
invest in stocks, according to
the North Carolina
Association of CPAs. The
National Association of
Investors Corporation esti
mates that there are now
more than 32,000 investment
clubs in America, about half of
which belong to this umbrella
organization of investment
clubs. Altogether, NAIC
investment club members
have invested more than $1.2
billion.
How do investment clubs
work?
Typically, investment clubs
have 10 to 15 members who
meet monthly to invest a mod
est sum of money, perhaps
$20 or $50, in the club's port
folio. For most investment
club members, gaining invest
ment savvy is as important as
earning money. That's why in
successful investment clubs,
each member is responsible
for contributing knowledge
and research to the team
effort. Most clubs assign each
member to study a specific
stock. Writing for annual
reports, studying investment
publications and tracking a
stock's past performance are
some of the tasks members
are expected to perform. Club
members also monitor the per
formance of the club's current
holdings. Some clubs invite
guest speakers, sucb as local
brokers or analysts, to speak
at their meetings.
Who decides what to buy
and when to sell?
Some clubs determine
whether to buy or sell a stock
by majority rule, but most use
a weighted voting system so
that long-term members with
more money at stake have
more votes. The most success
ful clubs take long-term buy-
and-hold approaches to invest
ing, which CPAs say is the
wisest strategy for the aver
age investor.
How much do I have to
contribute?
According to NAIC, the aver
age monthly investment is
about $37. New clubs general
ly start with small monthly
investments—about $20—so
members don't incur much
licensed for 25, then 40. When
we got to the maximum we
sold that location and moved
to the Freedom Village shop
ping center. We were licensed
for 120. We stayed there six
years in leased space.
“From there, we saved our
money and built our own little
heaven on earth for little chil
dren.”
On the new campus, the
main building is 10,000 sq.
feet. There’s a special infants
and toddlers building and an
after school care building. The
campus can accommodate as
many as 200 children.
The Greens used to own cen
ters in three separate loca
tions. Those have now been
consolidated into the
Glenwood Drive campus,
where they have operated
since mid-December.
The Greens are Apostolic
Pentacostal ministers, associ
ates at their church - Calvary
Christian Church on
Kilbourne Avenue. They use
the A Beka religious-based
curriculum for ages 3-5 at
their center.
“Most of the Christian
schools use it,” Connie Green
said. “It is a Christian curricu
lum, but is also includes secu-
See CHILDCARE page 8A
risk while they are learning
the investment ropes. As
members' investment know-
bow increases, clubs can raise
the monthly ante.
Who pays the taxes?
A majority of the clubs cur
rently operating are, for tax
purposes, partnerships.
Generally speaking, the club
files a partnership return on
which it reports the tax conse
quences of its transactions for
the year as well as the shares
of each member. As an invest
ment club member, you pay
tax on your share of divi
dends, interest, capital gain
and other income earned by
tbe club, as if you earned the
income. For example, you
See CLUBS page 7A
Resolve to update your resume regularly
'You may have joined the
gym, but you just didn t get
around to working out. Or,
you gave up smoking - for
about a week. Maybe you
resolved to stop procrastinat
ing - at some later date.
Whatever the case may be,
most of us have a history of
making and breaking re.solu-
tions.
If your past resolution.»
haven't been successful, per
haps a new approach is in
order. What about your
resume? When was the last
time you pulled it out, took a
look at It. or better yut, iipilat-
od It? SVhy not .-.tart olf Lh«
new year by upd.ating your
resume.
In today's downsizing, ru-
.structuring, re-engineering
world, it just makes good
sen.se to be pro-active and
explore your employment
option.s. Regardless of the
busine.ss climate, you may
miss out on an exciting new
challenge, becau.sc- you're not
ready when opportunity
knocks.
"Many of our clients cunie in
saying, ‘1 haven't needed a
resume since college.’ " .says
, Barbara Katz, co-owner of
ResumoAinerica in Charlotte.
"But, some catalyst - whether
it’s recent corporate changes
or a decision to change career
directions - prompts the need
for H resume."
How often should you update
your rii.sume? "It's a good idea
to make changes as they
occur.' explains Katz. "When
you add a position to your
employment history, be sure
to reflect the achievements
that led up to this new job nr
new job title. So often,
resumiss focus on job responsi
bilities. We focus on achieve-
ment-onented resumes for
greater results."
individual.-? have, wnitt-n
themselves. Bhe describes this
as the understated resume "
.Many job seekei.s are eoii-
eeriied that they will appear
Other areas of the resume to
review ineludc the basic infor-
maiitiri like address and Ude-
phone number. Have these
changed? If your resume was
prepared when you graduated to be bragging, .so they often
from ctjllf-ge, are you carrying downgrade their result.and
old information that is no .irhievcraenr-i. The result is an
longer needed? You don’t want ordinary and uninteresting
to sound like a student if you job candidate, and the calls Ui
in your career field come in for interviews are few
and far between
Another important area to I'm not
consider. Does your resume
represent you well? Are you
giving yourself credit for your
accomphshmenf.-i? Kaiz s.iys
this IS often the bigge.st proli-
lem she »ee.s in re.sunu-.v that
you
boast or inflatr- your informa
tion " explains Katz. The
number one rule in re.'.umi;
writing is 'loll the truth.'
See RESUME page 6A
BUSINESS TO BUSINESS