9A
STRICTLY BUSINESS/ The Charlotte Post
Thursday, May 8, 1997
Get your credit house in order
Continued from page 8A
able to you is to identify credit
cards or lines of credit that you
don't use and notify those credi
tors that you wish to close the
accounts. Be sure to ask the
creditor to indicate on your
accoimt liiat it was “closed at the
dustomer's request:” This nota
tion makes it clear that the
decount was not closed hy the
creditor for “adverse” reasons.
You should allow 60 to 90 days
for creditors to close your
accounts and notify the credit
deporting agencies of the
qccoimts' closing.
Get financial records in order
Once you apply for a mortgage,
you'll need to submit a great
deal of paperwork. You can get a
head start by beginning to pull
together what you can. Precisely
what you need will vary by
lender, but you can be certain
that your lender will want to
verify your employment infor
mation to ascertain whether
your income is not only suffi
cient, but also if it is stable
enough to meet monthly mort
gage payments. To pave the way
for a timely response to your
lender's request for employment
verification, you may want to
alert your human resources or
payroll department in advance
to elicit their cooperation in com
pleting and returning the infor
mation promptly.
Some of the other items you
may be asked to produce
include: the names, addresses,
and phone numbers of previous
employers; IRS W-2 forms; your
last two paycheck stubs; copies
of your bank statements;
account numbers and balance
information for each of your
credit cards and any outstand
ing loans; and copies of your tax
returns finm the last two years.
The latter item is particularly
important if you are self-
employed. You also may be
required to provide verification
of other income, such as Social
Security benefits, interest and
dividends, rental income, and
aUmony that you want the bank
to consider in qualifying for the
loan.
Taking these steps to get your
self in financial shape may help
improve the chances that your
mortgage loan will be approved.
Ability Transportation
Continued from page 8A
this month, making a regular
van $75 a day, compared to
$85. The luxury van is $94
during the special, $117 per
day regularly. The first 100
miles each day is free and
then each mile is 25 cents per
mile.
Hanna is a South Carolina
native who moved to New
Jersey when he was young.
He went in the military,
where he was injured and
lived in Richmond, Va., for 14
years before moving to
Charlotte last year.
“I was trying to get back
close to home,” Hanna said.
“That’s my reason for landing
here in Charlotte. There is a
lot going on here. I wanted to
start something on my own.
The obvious thing for me was
to attempt to help people.”
You can reach Ability
Transportation Services by
calling 588-4800, 580-0099 or
578-2526.
REITs can be sound investment
Continued from page 8A
too much debt, and a portfolio
with either too much or too little
diversification.
High yields can seem attrac
tive, but the higher the yield, the
less capital is going back into
redevelopment and acquisitions.
Lower yields mean greater room
for growth. Find out what man
agement’s stake is in the REIT,
and look at management’s track
record, too. You’ll &id both kinds
of information in the prospectus.
One more note; watch for
demographic and economic
trends such as vacancy rates,
affordability of home ownership
and new apartment construc
tion. REITs can be a sweet deal
for you if you choose wisely.
Specialty REITs
REITs can specialize in several
different areas. The wide range
of types can make choosing one
difficult. Some focus on geo
graphic regions. Others buy only
certain types of real estate such
as apartments or office build
ings.
One REIT is known for strate
gically timed buying and seUing,
that is purchasing buildings in
an economically depressed area
and selling when the area
rebounds. Another REIT
employs the sound demographi-
cally-based tactic of buying pri
marily nursing homes or retire
ment facilities, precisely the
properties that will be in high
demand as the population ages.
If you are interested in diversifi
cation or simply don’t want to
spend your time choosing a
REIT, look for a mutual fund
that specializes in them. REITs
can be a good income-oriented
investment option.
Recycling troubled cars
Ever wonder what happens to
those lemons, used cars that are
returned by their owners
because of chronic problems that
are mifixable? Unfortunately,
many of them wind up back on
the auction block, or worse, at
dealers, where you could get
stuck with them.
If you want to find out a car's
history before you buy it, your
dealer can do that by contacting
one of several services that pro
vide data on every car registered
in the U.S. States vary as to
their lemon laws. In some, there
are no restrictions on reselling a
lemon; in others, dealers must
inform potential buyers of the
car’s unsavory past.
Ford recently began identify
ing the lemons it buys back.
Cars repurchased by Ford carry
a warning label on the doorjamb
to alert potential buyers that the
previous owner was “unsatis
fied” with the car.
Overbooking
Overbooking is not illegal.
Airlines do it to make up for no-
shows. But they can't brrmp you
without compensating you in
some way. The airline must first
ask for volunteers to give up
their seats in exchange for book
ing on the next available flight
plus either a cash payment or a
free flight in the fiiture. If the
flight is stUl overbooked, the air
line starts bumping, beginning
with the last passenger to check
in.
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Black women can go entrepreneurial
By Pierre A. Clark
NATIONAL NEWSPAPER
PUBLISHERS ASSOCIATION
African American women
are you ready to take the self-
employment plunge? If so,
you’ll become part of a grow
ing army of female entrepre
neurs.
Some surveys estimate that
by the year 2000, half of
American businesses will be
owned by women. The latest
Census Bureau statistics say
that women are starting busi
nesses at a faster rate than
any other population segment.
What’s motivating this burst
of entrepreneurial activity?
It’s clear most women starting
businesses are driven by the
classic entrepreneurial moti
vations: Desire to earn a high
income and maximize the
profit from a unique set of
skills, to control one’s destiny
and to achieve freedom and
variety.
African American women,
you have traditionally started
businesses at a lower rate
than any other ethnic group,
but we’re happy to'say that
trend seems to be reversing
itself. A quick review of publi
cations for African American
women indicates that more of
them are publishing articles
about entrepreneurship. I
believe there has never been a
better time for you to take the
entrepreneurial plunge. There
are some special self-employ
ment opportunities you can
tap as African-American
females. Here are some of the
major ones:
Special start-up loan/grant
programs. The Small Business
Administration, Department
of Commerce and most state
economic development agen
cies have developed special
programs to encourage
African American women to
start businesses. These pro
grams combine loan pools,
seminars, workshops, and
technical assistance special
ists. Through your participa
tion, you can develop a busi
ness plan, identify potential
clients, and qualify for a start
up grant (up to $5,000) or
loan.
^OUCH, INC
A Motivational Training
Consultant Service
-providing workshops for:
• home* school • workplace* church
* community
Senior Consultant, Glenda Horton Manning
New . 6316 Montieth Drive • 561-3731 or 596^6036
Getting Started.
Social Security’s challenges
Continued from page 8A
let’s take a good look at how it
works, what its current status is
and what challenges he ahead.
Examining the facts may actual
ly inspire some confidence in a
system that has been very suc
cessful, by anyone’s standards.
Contrary to what you may
have been led to believe. Social
Security is quite healthy and
should remain so for many
years. In fact, in 1996, Social
Security received $60 billion
more in tax revenue than it paid
out to beneficiaries. 'These extra
dollars are held in the Social
Security trust fund and are
referred to as “surplus” funds.
Current law mandates that-
these surplus funds be invested
in U.S. Treasury bonds within
the trust fund. With these facts
in hand, it’s clear that the cur
rent status, of Social Security is
good.
So, if there is enough to pay
current beneficiaries, and a
large surplus is tucked safely
away in treasury bonds, why all
the fuss about Social Security?
The concern begins when we
look toward the future health of
the fund. In order to rmderstand
why the future could bring prob
lems, we need to look first at the
past.
Social Security was signed into
law as part of the New Deal' fol-'
lowing the Great Depression.
This 1935 law called for Social
Security to pay full retirement
benefits to eligible beneficiaries
at age 65; yet, the average life
expectancy at that time was less
than 62 years. Initially, most
people didn’t live long enough to
receive Social Security.
Today, most people live an
average of 76 years, yet the eligi
ble age for drawing full benefits
is still 65. This means that
Social Security is now paying
retirees for 10 to 15 years, and
the system was simply not
designed to pay for this long.
The original purpose of Social
Security was to provide a social
safety net that would keep the
neediest of the retired and dis
abled above the poverty level. It
was, and is, a pay-as-you-go sys
tem. Contributions fi'om taxes
on current workers are immedi
ately given to retirees. When the
system started, about 45 work
ers paid taxes for eveiy retiree
receiving benefits. Today, people
live longer and have fewer chil
dren. The result is a current
ratio of just 3 .2 workers for
every retiree. By 2030, when the
last of the baby boomers retire,
it will likely be 2-to-l.
To understand the impact
these ratios have on the system’s
strength take a look at the num
bers. In 1995, about $2,600 was
paid into the system by every
worker (including the employer’s
matching payment). The aver
age payout to each Social
Security recipient was $7,944.
With the current 3.2-to-l ratio, a
surplus of funds is still created.
However, if the expected ratio of
two workers for every retiree
becomes a reality, it is clear that
the current system will not be
able to sustain its future obliga
tions.
If Social Seciuity is a pay-as-
you-go system, why do we have
a surplus in the trust fund? In
1983, Congress realized that
Social Security would face big
problems in the future since
birth rates had declined and
retirees were living longer. 11101
same year. Congress passed
laws that increased tax revenues
into Social Security by raising
payroll taxes and income taxes
paid on Social Security benefits.
These laws Contributed to the
surplus collections, which are
designed to provide a cushion for
a system that is expected to be
underfunded within 15 years.
If you’re wondering whether
the fund’s surplus can pick up
the slack, the answer is yes. In
2012, when experts estimate
payouts win exceed tax revenues
to the fund for the first time, the
trustees of the fund will start
withdrawing interest and princi
pal to make up for the revenue
shortfall. This will allow Social
Security to continue to meet its
obligations - for a time. In 2030,
it is estimated that aU surplus
dollars will be depleted, and pro
jected tax revenue for that year
win cover only 75 percent of the
fund’s expected obligations. This
is why experts say the fund will
be “bankrupt” in 2030.
AU of the recent discussions in
the news about Social Security
deal with the expected problems
in 2030. In our next article, we
wUl discuss some of the proposed
solutions.
OMAR DILLARD is an invest
ment counselor at Edward Jones
investments in Charlotte.
Getting a good start each'morning is
important. Now imagine getting that start
in your own home with an affordable
mortgage loan from First Citizens Bank,
There has never been a better time to
apply for a mortgage under our Shelter
Source program or the
Fannie Mae Community
Home Buyers program.
First Citizens Bank
reduced the interest rate
on qualifying loans by one-
quarter percent below the
standard rate until June 30,
1997 on both programs.
Connie Burrough (704) 338-3807
Also until June 30, First Citizens is
pajdng for the appraisal on a Shelter
Source loan and discounting the appraisal
and credit report fees for the Fannie Mae
loan. Both programs allow low down
payment options and flexible qualification
requirements.
Call and make an
appointment with mortgage
specialist Connie.Burrough to
learn all th'6 details abml
these programs.^^^5
And get a
good start on ^Rrst
owning Citizens
your own home.
xSi
EQUAL HOUSING LENDER