Newspapers / The Charlotte Post (Charlotte, … / Sept. 12, 1996, edition 1 / Page 6
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charlotte ^o£(t THURSDAY, SEPTEMBER 12, 1996 6A STRICTLY BUSINESS Use your 401(k)to save CHARLES ROSS Your Personal Finance Virtually unknown a decade ago, the 401(k) has spawned nearly $300 billion in savings. The plan is named for the part of the tax code that allows you to set aside untaxed dollars in a special account and encourages employers to match what you contribute. With a 401(k), you are your own investment manager. The plan offers more and better investment choices than it did a few years ago, and more improvements are on the way. You should start your plan early and contribute as much as you can to take advantage of the tax break and the long-term power of compounding. If your compa ny matches even half of what you set aside, then it’s a no- brainer to participate. In the past, others made deci sions on your retirement saving, now you can do it y.oursolf with a40i(k). Don’t be too conservative There are a number of ways to successfully manage your 401(k). Many people unfortu nately place most of their 401 (k) money in a guaranteed investment contract. A GIC, as it is known, is a fixed-interest- rate optior^ that is like a certifi cate of deposit except that it is sold by in’Surance companies rather than banks. Since fixed- rate investments rarely will make you rich, it is not wise to put all your money in GICs. When it comes to your 401(k), go for a mix of stocks and inter est-bearing assets. People who are 10 or more years from retirement should lean as heavi ly toward stocks as they dare. Stocks may be volatile over the short term, but they always out perform interest-paying invest ments over any given 1 5-year period. You can’t time the market As you approach retirement, gradually shift to more conserv ative investments, but don’t leave out stocks altogether. You’ll need the growth they offer to protect you from infla tion after you stop bringing home a paycheck. As a rule of thumb, the per centage of your investments in stocks should equal 100 minus your age. So if your age is 30 you should invest 70 percent of your 401(k) in stocks. Don't try See 401 (K) on page 7A Business study best preparation for work By Herbert L. White THE CHARLOTTE POST Business executives say majoring in business adminis tration best prepares students for the workplace a survey reveals. Forty-eight percent of respon dents, surveyed by Accountemps ranked business administration as the area of study that they’d recommend to students. Computer science was the choice of 18 percent of respondents, made up of 150 business executives from the 1,000 largest U.S. companies. The results differ from a 1990 survey that revealed a three- way tie between liberal arts, business and computer science. Fourteen percent of respondents picked liberal arts as the best training for business, while 11 percent chose accounting. “A business administration degree provides graduates with a solid foundation in business operations and an excellent springboard for a corporate career,” said Max Messmer, chairman of Accountemps. ‘The rapid increase in new business start-ups and expansion of existing operations are making a business education particular ly valuable.” Messmer added that while demand for computer expertise in the workplace is growing, majoring in the discipline has lessened in importance because of rapid technological changes. “As technological advance ments continue their rapid pace, many professionals are gaining A breath of fresh air PHOTOS/PAUL WILLIAMS 111 Elston Hooper is part-owner of Air Doctor, an air duct cleaning and chimney sweep service. Duct cleaner makes breathing lots easier By John Minter THE CHARLOTTE POST Elston Hooper’s sucking air...and disinfecting and purifying it. Hooper is part-owner of the Air Doctor, an air duct clean ing and chimney sweep ser vice. Though only open for busi ness since July, the effort’s going well, Hooper said. And, with some new federal stan dards set to kick in next year, he expects to be even busier. “Lots of people are doing it,” said Hooper, an East Mecklenburg High School graduate. “It is going to be one of the fastest growth industries over the next seven years...with the federal regu lations and people becoming more conscious of air in their homes. The health benefits alone justify doing it.” Doing it costs between $175-$450 for the average home, depending on the size of the house and the number of air vents. Hooper said. The process takes about two hours. Hooper said many of his residential customers are peo ple with allergies or other conditions requiring them to have clean air at home. “There’s something called ‘sick home syndrome,’ Hooper said, where people are fine all day, but when they go home they get headaches, wheezing, cough ing. In the wake of such air borne illnesses as Legionnaire’s disease, govern ment regulators are requiring business to have almost germ-free air. Those regula tions, supervised by the Occupational Health and Safety Administration, will take affect next year, Hooper said. “OSHA and the EPA (Environmental Protection Agency) are going to require that all public facilities main- See AIR on page 7A People on the move • Harry C. Washington has joined the Western Carolina financial services office of Prudential Preferred Financial Services. He will be a special agent. Washington has a bachelor’s degree from Queens College’s McColl School of Business. Prior to joining Prudential, he worked with the Freightliner Corp. • Funso Oluyitan has been appointed director of integrat ed information technology pro cessing at Bennett College. He will manage all aspects of Bennett’s public relations. marketing, distance learning and integrated information and communication programs. • John Elliott has joined the staff of Charlotte- Mecklenburg Fighting Back. Elliott has a bachelor’s degree in political science from Johnson C. Smith University and a master’s in city management from East Tennessee State University. His profression career includes city manager of Benton Harbor, Mich.; assis tant city manager of Delray Beach, Fla., and director of special programs and sports information director at JCSU. this knowledge on the job or through ongoing training,” he said. Liberal arts fell out of favor with business executives, taking a 15-point drop since 1990. The discipline, however, is still important as a vehicle for rounding out an education, Messmer said. See BUSINESS on page 7A Money Management Protect your earnings By Amanda S. Danchi SPECIAL TO THE POST What is your most valuable asset? Your home? Your retire ment plan? Your stock portfolio? The truth is that for most indi viduals, it's their ability to earn . a living. If you’re 35 years old, earn $50,000 a year, and plan to work ,until you’re 65, your future earning power is $1.5 million - and that's without fac- torin.g in raise.s and bonu.sos. According to the North Carolina Association of CPAs, it’s critical that you take steps to protect your earning power, just as you would any other asset. The best way to do so is by obtaining disability insurance which replaces a portion of your income if you are unable to work because of sickness or injury. The first step is to deter mine how much disability insur ance you need. Start by figuring out the amount you would need to pay your bills and expenses if you couldn’t work. Keep in mind that while you won't have work- related expenses such as cloth ing and commuting, you may have increased medical bills and higher household expenses for chores you can’t do yourself. Next, determine how much you may be eligible to receive Irom other sources. Review your employer's sick leave policy and determine whether the compa-. ny has a wage continuation pro gram. If you’re injured on the job, you may be eligible for workers’ compensation. Also, determine if you qualify for Social Security disability pay ments. Then compare the antici pated income with your antici pated expenses. You’ll want to purchase enough disability insurance to close any gap. Disability policies offer various benefit options a^d since the premium cost of the policy depends on the options selected, you’ll want to shop carefully. 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The Charlotte Post (Charlotte, N.C.)
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Sept. 12, 1996, edition 1
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