Ragtd « D8 i RRR MIS ARE ARE @W’ 4 - - ww \ 4 ba NEO on -w - Ms NE Ca A SR Na QE ES a St — pL a ay La Car : or SRE 3 > Ft - e © 4 i (Y) Q Y Are you worrying too When it comes to your personal finances, which are you more like: the Alfred E. Neuman (What, me worry?) type, or the neurotic Scrooge McDuck? To find out whether you're worrying too much, too little or just the right amount, take this quiz. circle the letter on the left which corresponds with your feeling. 1.1 check my stocks and mutual funds in the financial pages... a. every day 20 b. every week 10 c. only once a year or so 5 2.I'll be able to afford a comfortable retirement because ... a. I'm saving to the max right now. 10 b. I'm counting on a relative to leave me a pile. 5 c. Fat chance! I'm going to end up working till I drop. 20 3. When I get my bank statement a. I throw it in the wastebasket. ~~ 5 b. I go crazy if it doesn’t match my checkbook balance. 20 c. I give it a once-over to make sure I know roughly how much is in my account. 10 4.If I get laid off a. I'll get through the following three months on the money in my emergency fund. 10 b. I bet I'll find another, similar job quite fast. 5 c. I'll be a wreck. 20 5.1 clip cents-off newspaper coupons a. every day 20 b. only when I see one for a product I like 10 Cc. never 5 6. If I buy something I have to stretch to pay for a. I can’t sleep for weeks thinking I overpaid. 20 b. I'm pleased that I got my money's worth. 10 c. I just put it on plastic and forget about it. 5 ; 7. When I get cash from a cash machine a. I don't bother to get a record slip. 5 b. I always enter the withdrawal in my checkbook. 10 ) Preparation ~ Federal, State & Local Income i 3 @R @ ~New Clients ONLY) oo AM Accounting Services | Ann Marie Fowler C PA. March 3, 1999 much about money? c. I always get a queasy feeling that I'm taking out money too often, even when I'm not.20 HOW TO SCORE YOURSELF a Add up the numbers to the right of the response you made to each question. if you didn’t answer an item, give yourself a “10.” The total score will be a good indicator of your “Worry Index.” 1- If your score is 35 to 45, get real! You need to worry a little more. You may not be accomplishing what you could achieve - due to inattention to financial matters. 2. If your score is 50 to 70, you've got a fine grasp of your personal financial situation. You are taking an interest as well as taking many of the steps which will assure success. 3. If your score is 75 or above, get a life! You're worrying way too much. Perhaps you should delegate more of these responsibilities to professionals - and let them worry for you! You need to have a financial plan and let it be working for you. AVOID THE PARALYSIS OF WORRY Some persons acquire a sense of helplessness about their financial circumstances. Perhaps it is worry about debt, concern over ever rising inflation, career limitations and hazards or maybe prior financial problems. It may be simply a lack of comprehension about financial and tax issues which grow more complex each year. Worry will not help conquer these issues. The guidance of a financial professional, steady attention to a financial plan and a slow diet of financial reading will produce the desired results. Plus time, of course ..... Thanks to George Appel, a certified financial planner who lives at Harveys Lake, for this lighthearted look at our financial perceptions. Editor's Note: Unless otherwise noted, articles in this section were provided by the advertisers, not by The Dallas Post. and Help Is Here!| Accounting Services Ann Marie Fowler C.RA. Reasonable Rates 13 Years Experience Free Pick Up & Delivery Year Round Consultations Personal Tax Preparation & Planning ax Fully Computerized Tax Preparation (570) 675-1557 « Fax: (570) 674-7831 @ The Dallas Post March 3, 1999 A glossary of basic personal finance terms Annuity: A form of contract sold by life insurance compa- nies that guarantees a fixed or variable payment to the buyer at some future time, usually retirement. A Fixed Annuity pays out in regular (fixed) in- stallments varying only with the payout method elected. A Variable Annuity pays out an amount that varies with the value of the account. Asset: Anything owned that is convertible into cash. Usu- ally divided into two broad classes: 1) Real assets/property; house, car, computer, etc., 2) Financial assets/money; cash, bank account, mutual funds, etc.. Bond: (debt security) A ne- gotiable, long-term debt instru- ment that carries certain obli- gations (including the payment. of interest and repayment of principal) on the part of the issuer. Common issuers are the Federal government (Trea- suries), State and Local gov- ernments (Municipals) and Businesses (Corporates). Bond, Discounted: Also called Zero-Coupon bonds, no periodic interest payments. In- stead, the bond is sold at some price below (discounted) its face value and returns full face value at maturity. Because of the IRS's treatment, this type bond is best used in tax deferred accounts such as IRA's. Budget: An estimate of in- come and expenses for a speci- fied period. Capital Wealth: net worth in money and/or property. Any form of wealth employed or ca- pable of being employed in the production of more wealth. A subset of Assets. . Dividend: Distribution of earnings to shareholders, the amount is decided by the company’s board of directors and is usually paid quarterly. Dividends must be declared as income in the year they-are received. Dollar Cost Averaging: A method of purchasing assets by investing a fixed amount of dollars at set intervals (such as $100 per month). This method automatically buys more shares when the prices are down and overall is a very good way to invest. Most Mutual Fund com- panies offer this service, though, they may call it some- thing different. Earnings: Corporate profit remaining after paying taxes and bondholder interest. 401(k) Plan: An employer sponsored, tax deferred, retire- ment plan which uses pre-tax contributions from an employ- ees regular compensation to invest for that employee in a A Cl A SN DPCM ly AT A le MU ES Lm mY ma oo number of possible financial instruments. Many companies that offer these plans will MATCH a portion or all of the employees contributions with cash or securities; this is, in essence, free money fully added to the employees account usu- ally after some set period of time (vesting). 403(b) Plan A tax deferred retirement plan very much like the 401(k) [above], with the main differ- ence being that the employer is a non-profit organization (school, church, etc.). Futures: Bonehead Alert - these securities are often specu-. lative. Currently, they're out- side the scope of this Web site. Futures Option: Also known as an Option on a Futures Con- tract. Bonehead Alert - just like Futures and Options sepa- rately, these are taboo for nonexperts. Gambling: To risk money or property on something involv- ing chance or random out- comes. Basiéally the riskiest thing you can do with your money, hope you have fun. Inflation: A sustained rise in the prices of goods and/or services. Two common mea- sures of the Inflation Rate are: the Consumer Price Index and the Producer Price Index. Investment: The use of capi- tal to create more money. Usu- ally includes the idea that safety of principal is important. IRA: Individual Retirement Account A personal, tax de- ferred, retirement account that an em- ployed person can set up with a deposit lim- ited to S2000 peryear (84000 for a couple when both-work, or $2250 for a couple when one works and the other's income is $250 or less). With- drawals from IRA's prior to age 59 and a half are generally subject toa 10% pen- alty tax. Important Money Market Fund: A type of Mu- tual Fund that in- vests in commercial paper, banker's ac- ceptances, repur- chase agreements, government securi- ties, certificates of deposit, and other highly liquid and safe securities that pay money market rates of interest. Though these funds are not federally insured, like a bank account, there hasn't been a complete failure to date (there have been two failures, but, the share- holders were reimbursed in the first case and the second is still pending). A Money Market Mu- tual Fund is not the same as a Money Market Deposit Account (MMDA's) that you get through a bank. . Mutual Fund: A pooled in- vestment vehicle whose securi- ties are managed for a fee (annual management fee) by a professional invest- ment advisor. Mutual Funds exist that invest in most investment alterna- tives available (Stocks, Bonds, etc.). No-Load (Mutual Funds) Some Mutual Funds charge ad- ditional fees (commis- sions) to: buy, sell, hold for short periods, etc. A true No- Load Fund charges no additional fees, other than the an- nual management fee (which all Funds charge). Options: Bonehead Alert - these securities are often speculative. Cur- rently, they're outside the scope of this Web site. Principal: Face aniount of a debt security (Bond or Mortgage) on which interest is owed or earned. Investment Prin- cipal: basic amount in- vested, exclusive of earn- ings. Speculation: Signifies a much higher degree of risk than investment, though often having better “odds”.than gambling. ~ Stock: (Equity) Shares of stock represent a fraction of ownership in a corporation. As a partial owner the stockholder is entitled to a partial share of earnings and dividends after taxes. Zero-Coupon Bond: For defi- nition see Bond, Discounted. Copyright ©1998, Michael C. Carli, All Rights Reserved. Send Suggestions, Questions, and Comments to: Bonehead Finance@compuserve.com. AMERICAN EXPRESS FINANCIAL ADVISORS Insurance and annuities are provided by IDS Life Insurance Company, an American Express company. Victor E. Matthews Sr., MBA Personal Financial Advisor Registered Representative - Bus. (570) 696-4637 ® Fax (570) 696-3267 American Express Financial Advisors Inc. 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