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THURSDAY, JUNE 18, 1998
STRICTLY BUSINESS
Clothes make men and business
By Vincent Woody
. FOR THE CHARLOTTE POST
GASTONIA - In Vincent
Brooks’ family, business is the
foundation that makes success
possible.
Brooks, owner and operator of
Vincenzo’s, an upscale men’s
clothing store in Gastonia, has
heen exposed to business since
childhood. Through the genera
tions, entrepreneurship has been
handed down as an asset to be
nurtured.
“My grandfather was the first
licensed plumber in this area,” he
said. “He owned his own plumb-
Figuring
out your
401(k)
CHARLES ROSS
Your
Personal
Finance
ing business. My father owned a
community store.”
It was the commimity store that
honed Brooks’ business sense. He
remembers working there as a
child.
“I worked with my father as a
little boy,” he said. “Before I
opened my business he said
‘Make sure your finances are
together and you planned it out.
Make sme you have a good prod
uct.”
Brooks credits his father,
Glendell, as a role model in a fam
ily of achievers.
“My father gave me incentives
to be the best I could be,” he said.
‘He always told me to have a pos
itive attitude about myself.”
Glendell Brooks was also a for
mer mayor of Gastonia and
prominent figure in the communi
ty. The yoimger Brooks polished
his speaking ability as a youth
minister in his chiirch.
“I first started in 1978,” he said.
“In the ‘80s, I started noticing
children were drawn to us. I start
ed teaching them and from there
I was appointed youth pastor.”
Brooks, who also works at Duke
Power, took several ministiy and
religion courses while he was at
Anderson Junior College.
Brooks started Vincenzo’s when
he saw the lack of upscale men’s
clothing stores in the area.
Although prices generally run
higher than regular suits. Brooks
adds that the product is worth it.
“My range is from $299 to $599,”
he said. “I have found in owning
this business men like to dress,
too.”
\dncenzo’s carries a variety of
Italian suits as well as shoes,
shirts, belts, and neckwear.
“Seeing the customer happy is a
big thing,” Brooks said. ‘T love the
satisfaction my product gives the
customer. I believe in having a
good relationship with our cus-
See VINCENZO’S on page 9A
PHOTOA/INOENT WOODY
Vincent Brooks, owner of Vincenzo’s in Gastonia, is a third-genera
tion entrepreneur.
Successful investment pros are
the people you should imitate
when figuring out how to man
age your 401(k). And the pros
agree: 90 percent of successful
investing has to do with asset
allocation.
Asset allocation refers to the
way you divide your money
among the investment options in
your 401(k), like stocks or bonds.
A major research study found
that investment mix accounted
for more than 90 percent of the
variation in total return among
the investors surveyed.
Most surprising was what did
n’t seem to make much differ
ence. When the investors bought
or sold, and whether they chose
stocks or bonds that did better or
worse than the pack, had little
impact on the overall success of
their portfolios.
Allocation above selection
If you bought Intel stock sever
al years ago, (Intel is a computer
chip maker), you’ve more than
tripled your money by now. So
how could picking a big winner
Kke that not be more important
than asset allocation? Simple.
Research shows that it is more
important that you know to
invest in stock in general over
investing in any one particular
stock.
But you can’t always make
those brilhant calls in advance.
In the long run, even the pros
generally earn a httle less for
their shareholders than the mar
ket’s overall performance. So,
unless your money manager is
psychic, use asset allocation to
strengthen your portfoho. The
key is to divide your money
between stock funds and bond
funds in the right balance for
your financial needs and goals
and your own investment per
sonality.
Take your own measure
When you’re deciding on asset
allocation for yom 401K, the very
first person you need to consult is
you. Only you can assess how
much risk you can tolerate, how
soon you might need the money,
and how likely it is that some
thing covdd rmexpectedly put a
snag in your financial plans.
The longer you plan to keep
your money in the 401(k) plan,
the more of it you can afford to
put at risk in stock funds. But if
an emergency should rise it could
mean having to withdraw money
at the bottom of a sour market.
So look at your overall financial
situation. Is your job seciue? Do
you have other emergency
resources? Is your retirement
more than a decade away? If you
answer no to any of these ques
tions, then take less risk in your
401K
See 401 (k) on page 9A
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Variable annuities protects families and individuals
OMAR DILLARD
A recent study by The Gallup
Organization cites safety as one of
the main reasons people buy
annuities.
Safety, in this case, can refer to
the comfort of knowing yom heirs
will receive at least your original
investment. Combine this with
the abilify to defer taxes until you
withdraw your money and the
opportunity to participate in the
markets for potentially higher
returns. What you have is an
effective long-term savings vehi
cle which can also provide you a
source of retirement income.
A level of protection not
found in other investments
A variable annuity is a collection
of professionally managed portfo
lios with a built-in insurance com
ponent—often called the death
benefit—provided by the claims-
paying ability of the issuing insur
ance company.
Should market conditions cause
your original investment to
decline and you die, your heirs are
protected against any loss of prin
cipal. Typically, with a standard
death benefit, your heirs would
receive the greater of the original
investment, less any with
drawals, the contract value or a
predetermined enhanced value.
Lock in asset growth with
enhanced death benefits
Variable annuities offer the abil
ity to select different levels of pro
tection for your family or benefi
ciaries. In addition to a standard
death benefit, today’s annuities
usually have at least one
enhanced death benefit. Here are
two of the most common:
• The “Step-Up” or “Ratchet”:
Provides that the minimum bene
fit be reset either annually or on a
specified contract anniversary,
most commonly five to seven
years.
The death benefit will be the
greater of the original invest
ment, the account value on the
stated anniversary or the contract
value.
• The “Rising Floor” concept:
Guarantees a certain minimum
rate of increase for each year the
contract is in force. With this
option, the death benefit will be
the greater of the original invest
ment, the “rising floor” value or
the contract value.
Lock in retirement beneffts
Annuities grow tax-deferred
during their accumulation
phase—which means that your
investment wfil compound, year
after year, free from current
income taxes. Contrast this with
taxable dividends and interest
payments, which remain fully
taxable as ordinary income each
year. Clearly annuities retain
See ANNUITIES on page 9A
Money
Management
Electronic
filing tips
for business
By Amanda Danchi
SPECIAL TO THE POST
If your business is among the
more than 1 million targeted by
the IRS as fikely to be subject to
the Electronic Filing Tax
Payment System, chances are
you have a number of questions
regarding this new payment
process.
Tb help you prepare, the N.C.
Association of CPAs provides
answers to the following fre
quently asked questions about
EFTPS.
What is the electronic
filing tax payment system?
ETPS is a system for initiating
and paying federal taxes elec
tronically. The system was
designed in response to legisla
tion enacted by Congress requir
ing the Internal Revenue Service
to transform the Federal Tax
Deposit paper coupon system to a
more efficient electronic system.
Businesses should note that the
Electronic Filing Tax Payment
System is for any federal tax pay
ments it has nothing to do with
filing tax returns.
Who is required to
pay taxes electronically?
All employers who paid more
than $50,000 in feder^ taxes in
1995 are required to make elec
tronic tax payments for all
deposits beginning July 1, 1997.
The $50,000 total includes all
withheld income, FICA, Social
Secmity Medicare and railroad
retirement taxes you pay. Once a
business meets the employment-
tax threshold and is required to
use the electronic system, all
future deposits must be made
electronically.
If your payroll taxes do not
meet the $50,000 threshold, par
ticipation in the ETPS system is
voluntary.
What if I missed the deadline
for making payments?
If, based on your 1995 employ
ment tax deposits, you are
required to make your tax pay
ments electronically by July 1,
1997, you should start doing so
immediately.
However, in response to pres
sure from small businesses for
more time to understand and
implement the new electronic
system, the IRS extended to Jan.
1, 1999 the date on which it will
begin imposing a 10-percent
penalty for noncomphance.
Do I need a sophisticated
computer system to comply?
No. You may make the transfer
through a personal computer
using banking software, but you
are not required to do so.
If you prefer, you can make your
payment by phone, either using a
touch-tone phone and following
the instructions or conferring
See ELECTRONIC on page 9A