phxsoul.com

Financial Planning - Helping You See the Big Picture

Written by The Financial Guy

Do you picture yourself owning a new home, starting a business, or retiring comfortably? These are a few of the financial goals that may be important to you, and each comes with a price tag attached.

That's where financial planning comes in. Financial planning is a process that can help you reach your goals by evaluating your whole financial picture, then outlining strategies that are tailored to your individual needs and available resources.

Why is financial planning important?

A comprehensive financial plan serves as a framework for organizing the pieces of your financial picture. With a financial plan in place, you'll be better able to focus on your goals and understand what it will take to reach them.

One of the main benefits of having a financial plan is that it can help you balance competing financial priorities. A financial plan will clearly show you how your financial goals are related--for example, how saving for your children's college education might impact your ability to save for retirement. Then you can use the information you've gleaned to decide how to prioritize your goals, implement specific strategies, and choose suitable products or services. Best of all, you'll have the peace of mind that comes from knowing that your financial life is on track.

The financial planning process

Creating and implementing a comprehensive financial plan generally involves working with financial professionals to:

• Develop a clear picture of your current financial situation by reviewing your income, assets, and liabilities, and evaluating your insurance coverage, your investment portfolio, your tax exposure, and your estate plan
• Establish and prioritize financial goals and time frames for achieving these goals
• Implement strategies that address your current financial weaknesses and build on your financial strengths
• Choose specific products and services that are tailored to meet your financial objectives
• Monitor your plan, making adjustments as your goals, time frames, or circumstances change

Some members of the team

The financial planning process can involve a number of professionals.

Financial planners typically play a central role in the process, focusing on your overall financial plan, and often coordinating the activities of other professionals who have expertise in specific areas.
Accountants or tax attorneys provide advice on federal and state tax issues.

Estate planning attorneys help you plan your estate and give advice on transferring and managing your assets before and after your death.

Insurance professionals evaluate insurance needs and recommend appropriate products and strategies.

Investment advisors provide advice about investment options and asset allocation, and can help you plan a strategy to manage your investment portfolio.

The most important member of the team, however, is you. Your needs and objectives drive the team, and once you've carefully considered any recommendations, all decisions lie in your hands.

Why can't I do it myself?

You can, if you have enough time and knowledge, but developing a comprehensive financial plan may require expertise in several areas. A financial professional can give you objective information and help you weigh your alternatives, saving you time and ensuring that all angles of your financial picture are covered.

Staying on track

The financial planning process doesn't end once your initial plan has been created. Your plan should generally be reviewed at least once a year to make sure that it's up-to-date. It's also possible that you'll need to modify your plan due to changes in your personal circumstances or the economy. Here are some of the events that might trigger a review of your financial plan:

• Your goals or time horizons change
• You experience a life-changing event such as marriage, the birth of a child, health problems, or a job loss
• You have a specific or immediate financial planning need (e.g., drafting a will, managing a distribution from a retirement account, paying long-term care expenses)
• Your income or expenses substantially increase or decrease
• Your portfolio hasn't performed as expected
• You're affected by changes to the economy or tax laws

The accompanying pages have been developed by an independent third party. Forefield's content and information is provided for informational and educational purposes only. Neither Forefield Inc. nor Forefield Advisor provides legal, tax, insurance, investment or other advice and should not be relied upon for such purposes. Waddell & Reed does not guarantee their accuracy or completeness, and they should not be relied upon as such. These materials are general in nature and do not address your specific situation. For your specific financial planning and investment needs, please discuss your individual circumstances with your Financial Advisor.

The accompanying pages may include information regarding retirement plans, estate planning, business planning or a variety of other topics that involve tax and legal issues beyond the scope of Waddell & Reed's area of practice and expertise. Such information is intended to explain or illustrate planning topics, options or strategies that you may wish to consider in advance of, or at the time of, seeking the assistance of legal and/or tax advisors in implementing your plans and should not be considered as an authoritative or comprehensive explanation of any of the particular planning topics, options or strategies described. The information in the accompanying pages describes the general aspects of various planning topics, options or strategies but does not necessarily address all the pertinent facts and issues of your personal situation.

Waddell & Reed does not provide tax or legal advice, and nothing in the accompanying pages should be construed as specific tax or legal advice or may be relied on for the purpose of avoiding any federal tax penalties. The selection of appropriate planning options or strategies should be made on an individual basis after consultation with appropriate legal, tax and financial advisors. It is important that you retain the services of legal counsel to plan and implement any legal documents that you may require and that you consult a tax advisor for an explanation of the tax effects of any particular planning options or strategies on your personal financial situation.

Waddell & Reed financial advisors are able to offer insurance products through arrangements with insurance companies. Guarantees provided by insurance products are subject to the claims-paying-ability of the issuing insurance company.

Black Organizations in the Valley Can't Get Ahead Until They Stop Steppin' On Each Others' Toes!

Within the last five years, I've noticed a major up-tick in the number of networking socials, fundraisers, spoken word gatherings and other entertainment events hosted by our local organizations.

If you frequently read your black media such as PhxSoul.com, Arizona Informant, Arizona Black Pages and/or The Write Up, you know that African Americans have PLENTY of options for becoming involved with our community and spending our disposable income!

We live in the fifth-largest municipality in the United States so the Phoenix area can't afford to be a lazy town any longer!

However, we do have one problem and the discussion needs to begin now before it REALLY gets out of hand. 

Here we go ...

How can we encourage our black organizations to work together so they aren't constantly hosting events on the same days and times?

There's no doubt that our groups do a lot of good for our community. They provide scholarships for college students, activities and mentoring for youth, career guidance and business leads for professionals, and opportunities for our people to become leaders. I applaud that.

However, it seems that our organizations are constantly competing with each other for our attention and dollars! They continually host meetings, fundraisers and networking gatherings on the same days and times!

Am I the only one who is noticing this issue? Actually I know I'm not because several people have discussed this topic with me.

I'm having a hard time understanding why these organizations are not willing to communicate with each other more often. Many African Americans who are involved in these groups tend to run in the same circles so it seems like it would be easy for us to avoid stepping on each others' toes!!

Let me break it down ...

I'm going to estimate that 5-10 percent of the Valley's overall population is African American. Moreover, I'm going to guess that less than 25 percent of the black population frequents the networking socials and fundraisers that are held here. That means that our organizations are fighting over a SMALL pool of people for participation and financial support. Why make things harder for ourselves by hosting multiple events on the same day? And do we really believe that it's fair to ask our SMALL pool of "community activists" to shell out their hard-earned dollars every single week? You're draining your SMALL support system!

I can recall many situations in which I was asked to attend at least two or more gatherings in the SAME NIGHT. I'm thankful that people wanted me to be present at their activities, but c'mon REALLY? Being involved with the community became extremely expensive for me! I remember coming home on many nights, looking at my wallet and saying where did ALL of my money go? There's no reason why we should have more than one networking social/fundraiser in the same night - especially when the organizations are trying to attract the same crowd!

I think it's going to be highly irresponsible for our organizations to schedule competing events. A lot of us just don't have the time or the cash for multiple gatherings in the same night. A lot of us just don't have the time or the cash for multiple gatherings in the same week!

PhxSoul.com is suggesting that our black organizations consider the following ideas to avoid butting heads with other:

• Call or e-mail each other before scheduling a date for an event or look at the PhxSoul.com Community Calendar
• Partner with like-minded groups for events so you can draw larger crowds and share the revenue. Some money is better than no money!
• Invite people of other cultures to get involved with you
• Plan unique and original occasions to generate more interest from the community. The networking happy hours and fundraising dinners are getting tired!
• Ask local businesses to donate a portion of their revenue to your group in exchange for your members serving as "employees for a day."

The most ambitious idea ... we can establish a Commission that invites the leaders of all black organizations to meet at least once per month, quarter or every six months. During these meetings, the leaders would reveal their annual event calendar, missions and budgets. If organizations discover that they are hosting gatherings or fundraisers on the same day/time, they can reschedule or join forces. If organizations discover that their missions/purposes are identical, they can merge - especially if their membership numbers are low! This proposed Commission would basically facilitate improved communication among our groups!

Some people have even asked PhxSoul.com to manage this Commission! I'm flattered but I'd need major feedback before I seriously considered that kind of endeavor!

Bottom line, our groups are doing great things for our community but they are going to have to do better when it comes to communication. I fear that if our schedule of events continues to be overcrowded, the survival of all of our groups will be on the line.

What are your thoughts everyone? Do you agree or disagree with this PhxSoul.com column? Let us know by entering your Comments below!

Phoenix Receives $60 Million Federal Grant to Stabilize Neighborhoods Hit Hard by Foreclosures

The city of Phoenix was awarded a grant of $60 million under the Neighborhood Stabilization Program (NSP2), funded through the American Recovery and Reinvestment Act of 2009.

The U.S. Department of Housing and Urban Development awarded a total of $1.93 billion dollars to states, cities and organizations. Phoenix, along with its partners, received the sixth largest grant amount in the competitive process.

“This is a big win for the city of Phoenix,” said Mayor Phil Gordon. “This $60 million will help continue our efforts to stabilize neighborhoods hardest hit by the foreclosure crisis and create more jobs.”

The funds will be administered through the city’s Neighborhood Services Department and used to continue programs created earlier this year using $39.4 million in funds from the Housing and Economic Recovery Act. These programs address abandoned, foreclosed properties through acquisition, rehabilitation, demolition, redevelopment and financial incentives. An estimated 1,700 homes will benefit from these programs.

“The Neighborhood Stabilization Programs benefit all residents of Phoenix by reducing the numbers of abandoned foreclosed homes and helping to stop the decline of home values,” said Interim Deputy City Manager Jerome Miller.

Please visit phoenix.gov for more information.

Advice from Nova Home Loans on Tax Credits, Mortgage Protection, Short-Selling, Refinancing and More

Submitted by Arthur Brison, Nova Home Loans

Attention Arizona, you have options! Whether you’re buying or refinancing a home, there are several options available to you. If you’re a first-time homebuyer or haven’t owned a home in the last three years, you may qualify for the $8,000 tax credit. 

If you have owned and lived in your home for the last five consecutive years out of the past eight years and are buying up you could qualify for a $6500 tax credit. Don’t let the fear of this economy keep you from taking advantage of this opportunity to buy when home prices and interest rates are historically low.

If job stability is your only hesitation, Nova Home Loans provides Safehouse Mortgage Protection Insurance which will assist you in making your payment up to $2,000 in the event of an involuntary job loss for six months. 

In today's economic landscape, many are interested in buying or refinancing a home, but are concerned that their jobs may not be secure. Nova Home Loans has a program that will make the decision easier. The Rainy Day Foundation created a homeowner retention program called HELP (Homeowner Education and Loan Protection) to provide a comprehensive education, counseling and financial protections to homebuyers during these uncertain times.

The SafeHouse Mortgage Protection Plan offers you a job loss insurance benefit that may provide for your mortgage payment to be made for up to 6 months. For more information, email me at arthur.brison@novahomeloans.com or call 602.385.4814.

Who is Eligible?

• Homeowners 18 – 66 years of age
• Must reside in the US
• Cannot be self-employed, contract employee, seasonal worker or Active Military
• Employed full time (minimum of 30 hours/wk) at time of mortgage closing
• What is the Coverage period?
• 24 months from the closing date of the mortgage on purchase transactions
• 12 months from the closing date of the mortgage on refinance transactions

What is the Benefit?

• The lesser of the actual mortgage payment (PITI) or $2000 per month (under the job loss insurance)
• Emergency mortgage grants for which someone is eligible may vary on a case by case. See eligibility guidelines.

What is the Benefit period?

• Up to a maximum of 6 months during each coverage period. See program outline for details.

Is there a waiting period to receive Benefits?

• Yes, 30 days from commencement of unemployment

What is the Vesting period?

• 60 days from closing. If job is lost during the first 60 days, no benefits will be received for that occurrence.

What are the Conditions?

• Unemployment must commence during the coverage period
• Coverage is limited to payments due 30 days after unemployment begins (waiting period)
• Claimant must qualify for state unemployment benefits
• Claims payment cease immediately upon re-employment
• In the event of subsequent unemployment, a new 30 day waiting period applies.

Short-Selling and Short Refinancing Your Home

If you’re upside down in your home, you don’t have to get behind on your mortgage just to get a lower payment or modify your loan. If you have a Fannie Mae or Freddie Mac loan, there is financing available up to 105% Loan-to-Value. You can also request a short refinance which allows the lender to lower the principal to an amount that will allow you to qualify for a new loan at a lower rate. 

If you must short sale, enlist the help of an agent who is very familiar with short sales and has a good track record and relationship with the mortgage companies and mortgage servicing companies. Under President Obama’s new foreclosure-prevention plan borrowers get $1,500 from the government for selling their homes, the mortgage servicing company gets $1,000 for each completed short sale, and the second mortgage holders can get up to $3,000 of the sales proceeds for releasing their liens. The great news ... according to the plan’s guidelines, borrowers who complete a short sale under this program must be fully released from future liability for the debt.

If you’re currently in the process of buying or refinancing and would like a second opinion on your loan scenario, please give me a call at 602.385.4814 or email me at arthur.brison@novahomeloan.com. I’m here to help, visit www.BrisonTeam.com!

The Tax Guy: Laid Off Last Year and Had to Tap into Your IRA or Old 401(k)? There May Be a Silver Lining

The Tax Guy

Withdrawals from Traditional IRAs are taxable, and carry a 10% early withdrawal penalty for individuals, who are under the age of 59.5 years old. The IRS has recently created another withdrawal exception that allows avoidance of the early withdrawal penalty. If you have received unemployment compensation payments for 12 consecutive weeks during the year of withdrawal or the preceding year, then to the extent you utilized the withdrawal funds to pay for health insurance premiums those amounts are penalty free. The funds don’t have to be directly paid from the withdrawal.

For example, a withdrawal of $10K in March from a Traditional IRA would allow for health insurance premiums to be paid out at $600/mo for duration of the year even if they came from other sources. If 9 payments were made @ $600 each; $5,400 of the $10,000 would not be subject to the 10% penalty.

Along with other withdrawal exceptions for first-time home purchases and qualified higher education expenses this can greatly reduce your tax bill this year.

Jermaine A. Southern a.k.a. "The Tax Guy" is a Certified Public Accountant (CPA) living in Phoenix, Arizona. He received his B.A. in Accounting from Morehouse College, and graduated from Arizona State University's W.P. Carey School of Business with a Masters of Taxation. He has been in public practice for more than 10 years along the way working at both international (Deloitte & Touche LLP) and regional (Clifton Gunderson LLP) firms. He is now principal of his own private practice. The Tax Guy's articles do not necessarily reflect the views of PhxSoul.com. Please visit southerncpafirm.com to reach Jermaine for additional questions with regard to this article or other tax assistance.

2010 Arizona Black Expo A Success In Spite of Short Preparation Window

Hundreds of Businesses, Organizations, Performers and Residents Take Advantage of  Opportunity to Network and Socialize

Tremaine Jasper of PhxSoul.com (left) and Michael Kelly of The Leadership Consortium at the 2010 Arizona Black Expo on January 9 at US Airways Center in Phoenix. See the 2010 Arizona Black Expo photo slideshow!

Written by DaVaun Sanders; Photos by Mimi Ahmed Photography

Hundreds turned out for the 2010 Arizona Black Expo on January 9 showing that local residents, Valley business leaders and entrepreneurs are dedicated to continued success within the African American community despite challenging economic times.

Black Expo participants and vendors represented a dynamic cross section of business ventures in the community. Faith and non-profit organizations, Black news outlets, colleges and corporations occupied the Casino Arizona Pavilion at the US Airways Center in downtown Phoenix. Small businesses had a substantial presence in the reserved concourse area. This is significant according to 2010 Black Expo organizer Michael Kelly, president of the Leadership Consortium, which organizes the event.

“The mission of this organization is to provide opportunities for small businesses to cameo their business to corporations and the community,” he says. “We reduced the fees to our booths because of the economy and we hoped these businesses would have a great return on their investment. People are not only becoming aware of their businesses, but patronizing (them) for years to come.”

A variety of speakers brought entertainment and information to the central stage. Several performances highlighted this year's emphasis on youth involvement, such as Nina White's poetry and crump dancing, and the rap duo of Xavier and Black Oracle. The youth were participants in Magellan Behavioral Services youth outreach program, “My Life.” HomeBase Poetry also provided a well-received open mic set, featuring some of the Valley's elite spoken word artists. Later in the afternoon, the South Mountain Step Team drew enthusiastic applause following their performance.

The US Airways Center provided a unique venue to showcase the myriad of businesses and professionals working towards a stronger community in the Valley.

Olivia West is a single mother who recently relocated to the Valley from Atlanta and is currently completing her doctorate in Psychology. The Expo offered a children's area which gave her son opportunity to play while she listened to speakers and interacted with vendors.

“As a mother, I sometimes struggle to find things to do here,” West said. “(The Expo) has been a great opportunity to network and get plugged in.”

The sense of community among the present Phoenix businesses became apparent as the event progressed. Expo participants eagerly signed up to volunteer at the Arizona Black Film Showcase coming in March, college students made connections with Magellan representatives, and residents learned more about the various black media organizations in the Valley.

Author Jwanzaa Kunjufu offered knowledge to the crowd from his plethora of empowering works. Organizations also shared information about the upcoming 2010 Census, health and nutrition, and future events. Giveaways and samples abounded — one of the vendors offered free haircuts to Expo attendees.

Providing these unique interactions are precisely what Black Expo organizers intended, according to David Jones, founder of Positive Image Sports.

“This gives an opportunity for smaller businesses to advertise, market, and promote their products and where they are located,” Jones explained. “The Expo allows (businesses) to get away from the e-mail and text, and get some one-on-one interacting with people who could become customers.”

Verne Smith of National Future Benefits purchased vendor space for the Expo, and believes Black businesses will manage to find success despite current concerns over the economy.

“We work a little harder, but the spirit is still there,” Smith said. “(Our businesses) need more of these kinds of events. We have a responsibility to the community.”

Organizers praised resilient businesses and flexible sponsors for making the 2010 Black Expo a success.

“It was a significant amount of work this year, because of the short window we had,” said Kelly. “With the help of the Phoenix Suns and Mercury, and the assistance of David Jones, we delivered this event in less than 30 days with 10 significant sponsors.”

“It’s a lot of work, sleepless nights; you can imagine — but the fruits of our labor are payment enough for our sweat equity.”

If the bustling concourse and expectant faces at the 2010 Arizona Black Expo are any measure of success, this will be a premier event for greater Phoenix business owners in the new decade and beyond.

Editor’s Note: PhxSoul.com thanks all who visited our booth at the Arizona Black Expo. Many people thanked PhxSoul.com for the service that we provide to the community but we also met a lot of Arizonans who never heard of PhxSoul.com! This lets us know that PhxSoul.com will need to work harder in 2010 to help keep our community informed and engaged!