2017 Financial Supplement by The Washington Informer

THE WASHINGTON INFORMER FINANCIAL LITERACY SUPPLEMENT 2017

PROTECTING YOUR FINANCES

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Knowing Your Credit Profile is Important to Financial Literacy Cerita Battles SVP head of Retail Diverse Segments, Wells Fargo Home Mortgage

Financial literacy is critical to consumers’ ability to manage money and reach their financial goals. Wells Fargo is pleased to sponsor this special section provided by the Washington Informer on this important topic. Understanding your personal credit profile is an important component to financial literacy. Not only is your credit profile used by lenders to determine if you are eligible for financing like a mortgage loan, this information also is often accessed by potential employers, landlords, cell phone providers and insurance companies. Knowing your credit profile, including your credit score, can help inform you if you may be ready to be approved for a loan or how much you need to improve your score to be eligible for financing. And as it relates to this year’s financial literacy theme – protecting your finances – the information in your profile also will point out if there are any mistakes that need to be corrected. Making sure that your credit profile is accurate, ensures that lenders have correct information when determining loan approval. According to research by Wells Fargo, there is a gap between African Americans and the general population when it comes to knowledge about credit and credit profiles. For example, in Wells Fargo’s 2016 How America Views Homeownership survey, 18 percent of African Americans vs just 9 percent of the general population said they are “not sure” what credit score range is considered good. In the same survey, 35 percent According to research of African Americans vs 28 percent of the general population answered by Wells Fargo, there “not sure” when asked the minimum is a gap between credit score range needed to qualify for a mortgage. The gap is not big African Americans in terms of knowing credit score, and the general though. For example, 20 percent of African Americans answered “not population when it sure” when asked what their credit comes to knowledge score range is vs 16 percent of the about credit and general population. The good news is there are nucredit profiles. merous resources to assist with credit knowledge. To know where you stand in terms of your credit profile, consumers are entitled to a free copy of their credit report from each of the three credit bureaus once a year at www.annualcreditreport.com. To help improve your financial literacy as it relates to your credit profile, you can visit the Wells Fargo Smarter CreditTM center at www.wellsfargo.com/smarter_credit. The site has great information on establishing, improving and rebuilding credit. FL www.washingtoninformer.com / THE WASHINGTON INFORMER FINANCIAL LITERACY SUPPLEMENT – 2017

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Financially Strong: Tips to help the next generation succeed at money management independence. During those college years, some will 21547 learn money management skills for 5.65x10 the first time. Others may take 4C what they already know to the next level or conversely, experience financial hardship after making poor budgeting decisions. It also doesn’t help that rising college costs have made it more difficult for students to pay tuition, school supplies, rent, utilities, groceries and other expenses without the aid of student loans. There are four steps that today’s adults can take to help increase a child’s likelihood of becoming proficient in financial management:

By Sylvia Jones Wells Fargo Education Financial Services Market Relationship Manager It is only a matter of time until today’s children will transition into adolescence and adulthood. As this transition happens, parents, mentors and family members should take advantage of every opportunity to help the next generation of adults develop the important money management skills. Knowing how to manage money early-on can pave the way for future success by applying good spending habits, saving and investing for the future, and donating to charity. According to the American Psychological Association, 36 percent of Americans say they are uncomfortable talking about money, and 18 percent say money is a taboo subject within their family. Yet, the sooner parents and family members can have an open dialogue on how to establish good financial habits the better. Whether it’s a conversation about what to do with birthday money, how to invest a monthly allowance or best practices for managing a paycheck, good money skills may help reduce financial stress and the amount of future debt carried by adults. When an adolescent heads off to college, it may be their first time experiencing financial

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Helping them prepare for financial success

1. PROVIDE RESOURCES OR OPPORTUNITIES FOR CHILDREN TO EARN MONEY. An allowance for completing weekly chores or working parttime at a local small business can help a young person learn the value of money. 2. CREATE A BUDGET. Breaking down expenses not only shows where money is spent, but also how it’s wasted. 3. INTRODUCE THE 50/20/30 RULE OF THUMB. Apply half of all money earned into fixed costs (i.e. gym member, entertainment subscriptions, another type of monthly expense), 20 percent into financial goals (i.e. college, new car, self-reward), and 30 percent into flexible spending (i.e. food, shopping, entertainment, day-to-day expenses). 4. BUILD CREDIT. Learn how to build and maintain good credit and understand how credit can influence or limit future financial opportunities. For more tips and resources visit Wells Fargo’s Get College Ready website, an interactive online platform that features advice and guidance articles, calculators, and videos, which are designed to help students and parents financially prepare for college and beyond. We can all take part in the effort to help ensure that future generations learn the set skills to make informed financial decisions and become financially successful. FL

It’s never too soon to teach the importance of saving, and to show our commitment, Wells Fargo has developed a free, financial education program to make learning about saving easy. Hands on Banking® helps take learning to the next level. To find out more, stop by and talk with a banker today, or visit handsonbanking.org.

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Using Credit As A Tool To Achieve Your Financial Dreams

By Beverly Anderson Wells Fargo EVP – Head of Cards and Retail Services As a kid growing up in Paducah, Ky., my siblings and I would sometimes make the three-block walk down the street to the neighborhood store. Once there, we’d fan out to get the eggs, milk, cheese, bologna and whatever else my dad wanted us to pick up. Once we checked everything off the list, we’d take our groceries to the front counter, where the owner would tally everything up and write the total down in his ledger on the page

reserved for our family. On payday, mom and dad would settle up. It was an early lesson about credit that taught me credit basics that are still true today. First off, it taught me about the importance of credit. Credit, when used responsibly, can help you reach your life goals, whether it’s the short-term goal of paying for groceries or the long-term need to finance a college education. Watching my mom and dad and the way they were able to provide for our family through responsible use of credit made a huge impact on me. Second, it taught me about the importance of building good credit. My mom and dad were always careful to make payments on time and that allowed them to use credit for bigger and bigger purchases as I grew older. Their diligence in managing their money and paying their bills on time paved the way for achieving other financial dreams and goals. Finally, it taught me the importance of setting limits in using credit. Early on, my family needed credit from time to time to make it to payday, but mom and dad always settled up when payday came. They did not overextend themselves or use credit to

pay for things our family didn’t need. It’s important for credit to be part of an overall financial plan, not a tool that permits you to make impulse buys or unnecessary purchases. I believe credit can be a hugely valuable tool for many of us. Across America, we rely on credit to help us achieve financial dreams. Who could pay for a college education or buy that first house without access to credit? If you are thinking about using credit, I encourage you to learn more about using it responsibly. Visit our Smarter Credit Center https://www.wellsfargo.com/ goals-credit/smarter-credit/ to get some good tips about establishing credit, discover how to improve or rebuild your credit and ways to put your credit to work for you. Our family started with groceries, but we built from there. The family car. Our home. My college education. Our family’s responsible use of credit helped me get where I am today, and it made me passionate about the role I can help play in providing others with access to credit. It made me passionate about helping create a path that allows others to achieve their financial dreams. FL

Four Things Veterans and Service Members Need to Know When Buying a Home By Darnell Glover, Private Mortgage Banker (Military Certified), Wells Fargo Home Mortgage If you’re a veteran, reservist or active duty service member, you have earned the opportunity to become a homeowner. It’s important to know that there are special benefits you may be eligible for when buying a home. Here are the top four things you should know about buying a home as a service member or veteran. 1. There are special financial education resources designed for military personnel and veterans. Take advantage of these free online resources so you can be a savvier home shopper. For example, Wells Fargo’s Hands

on Banking for Military, which offers courses on topics like banking basics and smart spending, also contains a comprehensive guide on homebuying.

3. A large portion of qualified buyers aren’t taking advantage of the low-to-no-down-payment mortgage options available through VA loans. Indeed, more than 21 million veterans and service members live in the U.S., but over the past five years, a mere 6 percent of them bought a home using a VA home loan, according to the Department of Veterans Affairs. This may be due to the common myth that active duty service members, National Guard members and reservists are not eligible for VA loans (in fact, they may be eligible). Many also are unaware that unmarried, surviving spouses of veterans who died as a result of service or service-related causes are also eligible.

2. Before assuming you won’t qualify for a loan, talk to a lender. Be sure to tell the lender that you have served or are currently serving in the military. They can inform you about the options available to you, such as a VA (U.S. Department of Veterans Affairs) loan. A VA loan is a home loan guaranteed by the federal government, designed to help those who have served in the military obtain homeownership. They can sometimes be obtained with zero down payment. Gifts or grants can be used to help cover down payment and closing costs, subject 4. Individual banks, not the to program requirements, and no Department of Veterans Affairs, mortgage insurance is required.

offer VA loans, allowing you to work with a lender who understands your needs and makes you feel comfortable. A specialized team member who understands unique military needs, such as a Wells Fargo Military Lending Specialist, can help you make the most of the home loan benefits you’ve earned. Developing a relationship with this lender is also a good idea, as you may later choose to refinance through the VA Interest Rate Reduction Refinance Loan (IRRRL) program. To learn more, visit wellsfargo. com/military. If homeownership seems daunting, remember that taking advantage of VA benefits can make it more financially and logistically viable. FL

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It’s our honor to serve you — every step of the way

You’ve served our country — and Wells Fargo is committed to serving you. Our goal is to enable long lasting, sustainable homeownership, provide financial education, and support veterans and service members with career transition. We’re here for you

You can count on us to understand your needs and answer any questions you may have about the programs and options available to you. 4926 Wisconsin Ave. N.W. Washington, D.C. 20016 202-895-5150 www.wfhm.com/dc-washingtondcbranch-washington

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Don’t Let A Student Loan Default Ruin Your Financial Life By Charlene Crowell While it is generally accepted that higher education is an essential credential in the 21st Century, it is equally true that it comes at a higher cost than ever before. Today, more than 43 million Americans together owe $1.4 trillion in student loan debt. Even worse, a record 8.5 million consumers have defaulted on federal student loans, the least costly student loan product that also offers the most flexible terms. According to the federal Department of Education (DOE), default rates at some institutions are so high that they are now atrisk of losing access to federal student aid. Of the 10 institutions identified, as at-risk for this aid, seven are for-profit schools. High default rates are usually one of two measurements: either 30 percent or more defaults over three consecutive years or a default rate of 40 percent over the last year. At these levels, DOE could impose sanctions. Howev-

er a series of 2017 Departmental actions suggest a more favorable view of for-profit institutions than in the previous administration. As a result, it would be prudent for all student loan borrowers to seize control of setting their financial houses in order. Defaulting on a major loan – like student ones – can bring rippling and deteriorating effects. From declining credit profiles to the ability to land a job, or the higher cost of new credit, it is in the best interest of consumers to find out as much as possible on their loan and its repayment. Just as with mortgages, student loan servicers can and do frequently change. And it is not always a certainty that as files and accounts were transferred that loan records were complete or up-to-date. But if borrowers take the time to make a list of their own personal records and payments, resolving loan issues with servicers could lead to a focused and fact-based discussion.

Federal student borrowers have a right to a repayment plan based on their income. No matter the circumstances, consumers can request their monthly loan payments be reviewed against their income. Affordable payment options are available even to student borrowers who have either missed payments or lost a job. Even if servicer discussions prove unproductive in resolving loan issues, consumers still have state and federal government offices that can assist. The Consumer Financial Protection Bureau (CFPB) has an online complaint form specifically for student loans. According to CFPB, 97 percent of consumers receive timely replies after filing a complaint. Copies of payments, correspondence and other related loan documents should be attached when filing a complaint. Consumers must also identify whether the complaint involves a federal or private student loan. CFPB’s toll-free number (855) 411-2372) is staffed Monday

through Friday from 8:00am to 8:00pm Eastern time. More information on student loans is

also available at: https://www.consumer finance.gov/consumer-tools/student-loans/. Consumers can also contact their state Attorney General (AG) for complaint assistance. As with CFPB, most state AGs have online access to file complaints. In the metro area, consumers may contact the respective AG offices for assistance: District of Columbia: https:// oag.dc.gov/service/submit-consumer-complaint Maryland: http://www.marylandattorneygeneral.gov/Pages/ CPD/default.aspx Virginia: https://www.oag. state.va.us/consumer-protection/ index.php/file-a-complaint “If you’re struggling to repay, lost your job, there are solutions -- call your servicer,” noted Whitney Barkley-Denney, a student loan expert and Policy Counsel with the Center for Responsible Lending. “There are solutions.” “At the same time, the Department of Education should do more to ensure that borrowers are well informed and paying under the best plan available to them,” concluded Barkley. FL Charlene Crowell is the communications deputy director at the Center for Responsible Lending. She can be reached at charlene. crowell@responsiblelending.org.

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Beware: Safeguard Your Credit Cards

By Brenda C. Siler WI Contributing Writer

The recent Equifax breach has made consumers more cautious about monitoring their personal information and their credit. Whether it is unauthorized access to personal information or the misuse of credit information, individuals should beware of several scams that can affect them and their credit cards. Here are a few and how they work: SCAM PHONE CALLS. A scam artist may call you to say you owe money to clear up an invoice. The scam caller may ask for a credit card to resolve the issue. Don’t do it. Hang up and call your credit card company to tell them what just happened to you. There are also phone scams where scammers offer to reduce your credit card debt. Be clever and ask the caller for a callback number. The caller will often either hang up. But if they give you a callback phone number, give that information to your credit card company.

SKIMMERS. Scam artists can walk next to you and use a device that grabs your credit card number through your wallet or purse. Scam artists also can place a skimmer device on ATM machines or other selfserve units like gas pumps and vending machines that grab your credit card number. With today’s technology, your “skimmed” credit card number can quickly be transmitted by Bluetooth to a scammer’s partner some distance away. Once you see unusual activity on your credit card, immediately contact your credit card provider. More than likely, your credit card company will contact you first, because your credit card number will be used immediately showing a lot of activity once it has been skimmed. You can avoid having your credit card information captured by someone walking by or bumping into you, by keeping your credit cards in a protective RFID card sleeve, wallet, or purse. CREDIT CARD FRAUD

DEPARTMENT SCAM. Individuals may receive an official sounding call from someone who claims to be from the fraud department of your credit card provider. The caller will tell you that your credit card has been breached. They will even offer you a callback phone number if you have questions. You will be asked to verify your credit card information including the credit card security code. Credit card companies will never call you and ask that you verify your credit card number or security code. Hang up immediately, then call your credit card provider to inform them that you may have been contacted by a scam artist.

Ensure the safety of online purchases by adding anti-spam and anti-malware software to your computer or laptop. If you feel you have been a victim of a scam with your credit cards or through other means, contact your local police. To stay on top of scams and cons, visit the Federal Trade Commission web-

site (www.ftc.gov) where you can: • Receive the most up-to-date information about the Equifax breach • File a fraud complaint • Sign up for fraud alerts in your area Sources: Moneycrashers.com, Bankrate.com, FTC.gov. FL

Whether it is unauthorized access to personal

information or the misuse of credit information,

HACKING OF ONLINE PURCHASES. Some online sites have a low security set up which makes a website more susceptible to vicious malware. Malware is a type of software that damages or infiltrates a computer or network. This type of software grabs your credit card information for use in making unauthorized purchases.

individuals should beware of several scams that can affect them and their credit cards.

Sal Khan Founder, Khan Academy

Learning better ways to manage your money doesn’t have to cost a thing

The more you understand how your money works, the more confident you’ll feel about your financial decisions. That’s why we created Better Money Habits® in partnership with Khan Academy—an independent, nonprofit organization with the mission of providing a free, world-class education for anyone anywhere. Better Money Habits is a one-of-a-kind online approach to financial education that’s customizable and answers tough financial questions in practical ways. Get the financial know-how you need at BetterMoneyHabits.com

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Worried about your future? Get the tools you need. In today’s economic climate, you know you can’t count on Social Security alone to have the retirement you want. After decades of hard work, you want financial independence and security to enjoy your future. AARP is working to help you plan with free, unbiased information so that you can make smart

facebook.com/AARPDC @AARPDC

financial decisions. For more information, visit aarp.org/retirement To request a speaker on Financial Freedom, email DCAARP@aarp.org

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Five Tips to Get Started on Your Retirement Savings But if it’s hard now to make ends meet and save, think of how hard it will be to live on just Social Security, which may replace 40 percent of your income when you retire. You’re going to need more than that — some experts say at least 80 percent — so it’s a good time to come up with ways to sock money away. Here are five tips to get you started.

By Joseph Williams, Sr. AARP DC State President We all have reasonable excuses for not saving for retirement. The big one is thinking we don’t have enough money to put aside.

1. GET A HANDLE ON CREDIT CARD DEBT. Are you carrying credit card debt? Call the companies and see if they’ll lower the interest rate you’re paying. That way, more of your payment will go toward what you actually spent and not toward interest. If you have debt on several cards, target the smallest balance first. You’ll feel great when it’s paid off, and it may give you the boost you need to go after the others. 2. LOOK FOR WAYS TO CUT SPENDING. If you’re spending more each

month than you’re taking in, you can turn it around. Pack your lunch to save money. Avoid buying things you want but don’t need (especially if it means using a credit card). Cut utility costs by turning off lights when leaving a room, installing a programmable thermostat, and weatherproofing doors and windows. If you stop for coffee or tea several times a week, try making it at home. You can save hundreds or even thousands of dollars with these simple changes. 3. PUT MONEY AWAY FOR AN EMERGENCY FUND. When something unexpected happens, it’s important to have savings to help you get through it. Work on building up savings that will cover three to six months of expenses. Remember all those credit card payments you no longer have? Start saving that money toward your emergency fund by opening an account with a local bank or credit union.

4. SIGN UP FOR A RETIREMENT SAVINGS PLAN. Does your employer offer a 401(k) plan? It may go by another name, like a 403(b) or Thrift Savings Plan. It’s the best way to save for retirement. You save a percentage of your income, and often the employer will match some of your contributions. If you get a raise, give your savings a raise, too. If your employer doesn’t offer a plan, consider opening an IRA at your local bank or credit union. It’s kind of like a 401(k) plan, but without the employer match (and you can’t save as much in it). You’ll need an upfront deposit, usually lower at credit unions, and you can set up automatic contributions. Once you have your emergency fund set up, start funding your IRA. A step along the way is coming up with a retirement savings goal. Visit AARP’s retirement calculator (www.aarp.org/retirementcalc) to help come up with your personal goal.

You’d make a great volunteer. Thousands of low- to moderate-income DC residents, especially those 60 and older, need help preparing their taxes. Volunteer for AARP Foundation Tax-Aide and make sure they get all the deductions and credits they deserve. To learn about this volunteer opportunity, visit www.aarpfoundation.org/taxaide or call 1-888-OUR-AARP (1-888-687-2277). AARP Foundation Tax-Aide is offered in conjunction with the IRS.

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5. HELP FAMILY WHEN YOU CAN, BUT DON’T RISK YOUR RETIREMENT SECURITY TO DO IT. These days, many kids leave the nest, only to find they can’t make ends meet and return home. If this happens in your family, and you can welcome your child back, that’s great. But make sure he or she contributes financially. A part-time job while looking for a full-time job can be the ticket to your adult child helping with higher grocery and utility bills. We may think we don’t have enough money to save for retirement. But chances are each of us can find some way to save. When retirement rolls around, you’ll be glad you did. AARP is working to help you plan with free, unbiased information so you can make smart financial decisions. For more information, visit www.aarp.org/ retirement. To request a speaker on financial security, email DCAARP@aarp.org. FL

DISB Protecting Your Financial Interests Financial decision making is part of everyday life. It can be as simple as buying a pack of gum to as complex as an investment program. Having the District’s Department of Insurance, Securities and Banking (DISB) as your local, financial services regulator and consumer advocate to protect what you hold dear is important. We make certain that you are being treated fairly from financial services providers operating in the District of Columbia. DISB offers programs, financial education resources, tips and other consumer services to help residents understand the products and services available from financial service providers to make more informed decisions. Get answers to your financial concerns – DISB can help connect you to the right resources for:

• Financial fitness • Spotting scams, reporting financial fraud and resolving consumer complaints • Accessing capital for small businesses • Preventing financial abuse of senior citizens and vulnerable adults • Building wealth, inheritance planning and debt management • Reverse mortgages • Homeowners and renters insurance 810 First Street, NE | Washington, DC 20002 (202) 727-8000 | disb.dc.gov | @DCDISB

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Make the Pledge to Protect Your Finances

Lucy Drafton-Lowery Public Affairs Specialist D.C. Department of Insurance, Securities and Banking

Did you know that older residents are the most common targets of financial scams? Dishonest advisers prey on the elderly as they believe older residents tend to have more assets in savings and pensions accounts as they prepare for retirement. But don’t let them fool you or your loved ones. Many make their moves through unsolicited phone calls and emails that are pushy and demand payment right away. While brokers, investment advisers, and their firms are required by District law to be licensed or registered, unlicensed advisers often pose as legitimate, licensed professionals. Oftentimes, by the time a scam is exposed, it’s usually too late and the victim’s assets are depleted. For example, the daughter of an elderly woman submitted a complaint to the Department that after her father’s death, her mother, who lives in Pennsylvania, invested $400,000 with a company based in the District of Columbia that was not licensed. The mother attended a financial seminar in Las Vegas when she met the unlicensed financial adviser and was offered high guaranteed returns and a fixed-term investment. When the elderly woman wanted to withdraw the balance in her account of $400,000, the unlicensed financial adviser said he would have to find other investors before she could be paid. After a month of requests for a full withdrawal, he only sent her $10,000. The mother was holding out hope that the adviser would eventually return the money. The daughter, on the other hand, believed it was a type of pyramid scheme — and it probably was. A pyramid scheme is an investment fraud where investors recruit more investors, with returns being given to early investors using money contributed by later ones. The daughter also is concerned that the unlicensed adviser is preying on other victims, since he had an active website and speaking engagements. (The website is no longer active.) Here are five red flags to look out for in a financial adviser. 1. Promises of High Returns with Little or No Risk. The promise of a high rate of return, with little or no risk, is a classic warning sign of investment fraud. Every

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investment carries some degree of risk, and the potential for greater returns generally comes with greater risk. Avoid putting money into “can’t miss” investment opportunities or those promising “guaranteed returns.” Remember – if it sounds too good to be true, it probably is. 2. Unregistered Persons. Always check whether the person offering to sell you an investment is registered and licensed, even if you know him or her personally. Unregistered/unlicensed persons who sell securities perpetrate many of the securities frauds that target older investors. Researching the background of the individuals and firms selling you investments, including their registration/license status and disciplinary history, is free: • Contact the DISB at 202727-8000 or via the website at disb.dc.gov. • Search the Security and Exchange Commission’s Investment Adviser Public Disclosure (IAPD) online database at www.adviserinfo.sec.gov. • Search the Financial Industry Regulatory Authority (FINRA)’s BrokerCheck online database at brokercheck.finra.org.

3. Red Flags in the Financial Professional’s Background. Even if an investment professional is in good standing with his or her regulators, you should be aware of potential red flags in the professional’s background. DISB, SEC, and FINRA records can be used to identify red flags for potential problems, including: (1) employment at firms that have been expelled from the securities industry; (2) personal bankruptcy; (3) termination; (4) being subject to internal review by an employer; (5) a high number of customer complaints; (6) failed industry qualification examinations; (7) federal tax liens; and (8) repeatedly moving firms. 4. Pressure to Buy Quickly. No reputable investment professional should push you to make an immediate decision about an investment, or tell you that you’ve got to “act now.” If someone pressures you to decide on an investment without giving you ample time to do your research, walk away.

to attend one, commit to yourself before the seminar that you won’t purchase anything or open an account while at the seminar. Even if the free meal does not come with a high-pressured sales pitch, you should expect the “hard sell” in subsequent contacts from the person selling the investment. Before you invest or pay for any investment advice, make sure your

brokers, investment advisers, and investment adviser representatives have not had disciplinary problems or been in trouble with regulators or other investors. You also should check to see whether they are registered or licensed. The information is easy to get, and one phone call or web search may save you money. The District of Columbia’s Department of Insurance, Securities

and Banking regulates the city’s financial-services businesses. It has two missions: to effectively and fairly regulate financial services to protect the people of the District; and to attract and retain financial-services businesses. For more information, 202-727-8000 or visit disb.dc.gov. Source: U.S. Securities and Exchange Commission FL

District of Columbia Student Loan Borrower’s Bill of Rights Student loan borrowers in the District of Columbia deserve a loan repayment process built on fairness, professionalism and transparency. This Bill of Rights sets out the basic principles and protections that borrowers can rely on as they work to reduce their student debt. Beyond that, student loan servicers in the District are expected to uphold these key tenets with respect to all student loan borrowers and each student loan they service. Every District student loan borrower has the right to: • Transparent Pricing and Terms • Receive Non-Abusive Products • Fair and Responsible Underwriting • Fair Collection Processes • Quality Customer Service To view the Bill of Rights in its entirety, file a complaint with the Department of Insurance, Securities and Banking (DISB) or contact the District’s Student Loan Ombudsman, visit disb.dc.gov.

5. Free Meals. Be wary of “free lunch” seminars. The ultimate goal of free meal investment seminars is typically to lure new clients and to sell investment products, not to educate the public. If you decide

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Financial Circumstances Have People Over Fifty Working Longer

But Many Languish in the Harsh Reality of Age Discrimination By D. Kevin McNeir WI Editor Today’s life expectancy rate for U.S. citizens stands at 76.5 and 81.2 years for men and women, respectively, according to recent data provided by the world’s leader of medical research, Imperial College London. But before we celebrate, it’s important to note that these levels are among the lowest of the world’s richest countries – a list of “lows” that includes places like Croatia and Mexico. Why? Because, among other factors, America lacks universal health insurance and has the highest child, maternal, homicide and body-mass index rates of any high-income country. What’s more, many Americans 50 years of age or more have discovered that living longer often re-

quires them to work longer in order to keep up with their financial obligations and personal desires. That’s what one D.C. resident, Elizabeth White, a former COO for a midsize non-profit organization, once-celebrated entrepreneur and a graduate of Harvard Business School with an MBA, learned while struggling on the edge of a financial precipice for years despite outward appearances. White, now in her 60s, chronicles the pain she experienced as her flourishing career and upper-middle class lifestyle came to a grinding halt in her self-published book, “Fifty-Five, Unemployed and Faking Normal” and says that while she “pretended” that things were going great, in truth she feared the future – and soon discovered that she had a lot of company. “There’s a lot of pressure to act like you’re doing well, that’s why I

describe my personal reflections as an act of ‘faking normal,’” she said while speaking to this writer and others during a weeklong conference sponsored by the World Congress of Gerontology and Geriatrics in San Francisco last July. White admits that the townhouse she purchased years ago now has a rental rate that she couldn’t begin to afford today. Nor can she afford to pay the fee for private parking. Meanwhile, and in terms of how she reached her unexpected financial crisis, she says that after making her mark as one of only a handful of Black women employed by the World Bank, she took a huge piece of her retirement savings to fund her own business promoting African-inspired products – a venture that had tremendous potential but which eventually failed. “We were doing well but I could

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see that we were not going to be able to grow the business into a national chain as we were already struggling with volume,” she said. “One day I just closed my stores.” For a while, White survived due to consistent consulting work. Then, as the 2008 economic crash occurred, she went from close to $200,000 a year to zero. “The jobs of the past weren’t there anymore,” she said. “And I found it harder to get hired than I did years earlier – probably due to age discrimination. It didn’t matter how great I may have looked. I learned that early being in one’s 50s was no longer considered ‘young’ in the workplace. I realized I was in trouble.” Recent data from several social research organizations indicate that from the ages of 45 to 55, wages decline by 9 percent or more – declining by an additional 9 percent for those between 55 and 65. And believe it now, most experts say age discrimination starts at around 35 with women bearing the brunt much sooner and more intensely than men. “Maybe it was too many bottled waters and too many visits to Starbucks,” White says with a laugh. “I was embarrassed to admit to my friends what was going on in my life. But it was those same friends who helped me make it. I realized I had to come to terms with my new reality and deal with life on new terms.” In her book, she provides over 100 online resources and offers

ways to deal with the emotions she faced after landing in financial ruin. “We’re in the midst of a massive paradigm shift,” she writes in her book’s conclusion. “Much of what we know has been turned on its head. We’re going to make mistakes. Learn from them. Forgive yourself. Focus on what is working. Throw the rest away.” This article was written as part of the Journalists in Aging Fellows Program organized by The Gerontological Society of America and New America Media. FL

“The jobs of the past weren’t there anymore. And I found it harder to get hired than I did years earlier – probably due to age discrimination. It didn’t matter how great I may have looked. I learned that early being in one’s 50s was no longer considered ‘young’ in the workplace. I realized I was in trouble.” ELIZABETH WHITE, A FORMER COO

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Sometimes You Have to Go Through A Financial Surgery

Theresa Royal Brown Author, Entrepreneur, Event Producer Extraordinaire In life we can experience many life challenges. Loss of a loved one, loss of a job and loss of our health are things that can happen to any of us. When traumatic things happen, we sometimes have to go through a financial surgery to overhaul our finances and get us back on track. Sometimes that financial surgery includes bankruptcy. Bankruptcy is not a dirty word. I don’t immediately recommend it unless it is a last resort. However, sometimes it is necessary. Contrary to popular belief, not everyone who has ever filed for bankruptcy in their lives has mishandled their money or run their credit cards up to the limit. This is simply not true. Everyone’s situation is different and it can happen to anyone. There are lots of bankruptcy myths out there and I wanted to set the record straight that it isn’t the worst thing in the world to do. You won’t lose everything you own and you can bounce back. As a business owner who had to file years ago, I am here to tell you that filing was the best thing for me at that time. Even though it was something I didn’t want to do, it was the best thing for me and my business at the time. In life, we have to do what is best for us to propel us to the next level. In this month of October, make sure you assess your financial situation carefully and do what is necessary to get your financial life in order. FL Theresa wears many hats as the head of her own event planning organization, networking organization, speaker, author of several books including, Not Built To Break - Becoming Resilient Through Life Challenges” and “Top Level Connections - Tips To Become A Master Networker”. She is also married to her partner in life and business, and the man she adores, Charles L. Brown, Jr.

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Credit union or bank: What’s right for you? (BPT) - The banking and credit union worlds are as much the same as they are different. Both are eager to earn your business and to provide you with loans, mortgages, savings and checking accounts. With that said, there are some significant differences between the two financial institutions. In today’s world, with cutthroat competition for your money, it’s worth understanding the advantages of both, and perhaps making a switch to one or the other to put yourself in a better financial position. Credit union and banks: The differences The primary difference between a credit union and a bank is that a credit union is a notfor-profit cooperative, meaning it’s owned by its members or customers. Profits made by credit unions are returned back to members in the form of reduced fees, higher savings rates and lower loan rates. A bank, on the other hand, is for-profit, owned by shareholders and focused on its stock value. Joining a credit union is fairly simple, and membership is inexpensive - typically a one-time fee of between $5 and $25. Depending on where you live, many credit unions serve a geographic area, such as a state or metropolitan area, and are open to anyone who lives in that area. Some credit unions are employer-sponsored,

so that anyone (including family members) who works for that organization can join. There is no membership fee to “join” a bank. All you need to provide is some money to open a checking or savings account, a government-issued ID card, and some personal information (address, Social Security number, etc.). CREDIT UNION ADVANTAGES Credit unions, by and large, are able to provide better rates to their members. Unlike a for-profit bank, credit unions return their “profits” to members in the form of lower rates on loans, higher interest on deposits and more personalized services. Other advantages of a credit union are that they tend to have lower fees on checks, withdrawals and electronic transactions, and many offer checking accounts with no minimum balance and without a monthly service charge. Finally, because credit unions are smaller and have a focus on member service, they may be more flexible when it comes to working with someone with financial challenges. BANK ADVANTAGES Banks, because of their size and scale, tend to offer more financial products than credit unions. For example, a credit union may have two or three different types

of checking and savings accounts, whereas a bank may have dozens to choose from. Depending on where you live, banks will most likely have more locations for convenient access and more advanced online and mobile banking capabilities. Because of their geographic reach and wider range of offerings, a large bank could be a better fit for someone who wants specialized financial products (annuities, trusts) and needs access to nationwide locations. CREDIT UNIONS CATCHING UP Depending on where you live, you may have numerous options for selecting a credit union. Some credit unions may have only one location and offer basic financial services like auto loans, checking and savings accounts. Other credit unions may have a large footprint in a market or state and offer the breadth of services you’d find in a bank. Most offer free, nationwide ATM access, and since many credit unions belong to cooperatives, members can access accounts across the country through other credit union branches. Bellco, for example, offers a full range of financial products and services, including mortgages, auto loans and checking accounts. Today, Bellco has more than 300,000 members who benefit from the advantages of a credit union, including low-

er interest rates on loans, higher yields on savings and access to thousands of ATMs nationwide. CHOOSING A BANK OR CREDIT UNION Depending on where you live - urban vs. suburban vs. rural your banking and credit union options will vary considerably. If you are in an area that offers both, there are several features to weigh and consider: Services: Compare the basic banking services and access to specialized financial products, including advanced online services and mobile banking. Rates and incentives: Look at the current rates, fees, and incentives - as well as overall benefits to being a customer or a member

of the bank or credit union. Are there good reasons for joining one over the other? Location: Evaluate options to access your accounts, whether it’s branch locations or ATMs or mobile banking services, and decide whether a national footprint is a requirement for your banking. Finally, it’s important to note that both banks and credit unions insure your money up to $250,000 per person, across a group of accounts (checking, savings, and CDs would be considered one group). The Federal Deposit Insurance Corporation (FDIC) insures banks, and credit unions are backed by the National Credit Union Administration (NCUA). FL

Are You Carrying the Right Credit Card for Your Financial Goals?

(StatePoint) If you’ve ever been confused by how to find the right credit card, you’re not alone. A recent national survey found that consumers are overwhelmed by the many credit card offers they receive, and find the process of selecting the right card difficult to navigate. The survey, conducted by Experian, also found that more than half (54 percent)

of surveyed respondents are not satisfied with their cards. “Consumers surveyed hold an average of three credit cards, which shows it’s been challenging to find a card that meets their needs,” says Ian Cohen, general manager at Experian Consumer Services. Unfortunately, there can be a bit of anxiety around getting a new card. With 40 percent of respondents admitting they’ve been denied a credit card in the past, many consumers sur-

veyed say they wish they would receive only solicitations with pre-qualified offers. There is also optimism. Sixty-four percent of consumers agree that there is a perfect credit card out there for them. If you are in the market for a new credit card, identify what card feature is most important to you, such as a low annual percentage rate (APR) or no annual fee. Also, check your credit score because that can help you understand what cards you may qualify for, since a credit score could be one of the factors lenders use to extend lines of credit. Luckily, free resources exist which can aid your search. For example, Experian offers an online tool that uses consumers’

own credit and financial data to match them with tailored credit card options. To see a selection of credit cards based on your preferences and credit data, visit experian.com. You should be careful though when applying for new credit cards – opening up several new cards in a short timespan may lower your credit score, hurting your chances for additional credit in the future when you may really need it for a big expense such as a car loan. If you have credit card debt and are struggling to pay it off, don’t despair. You can start tackling it today with a few steps: • Figure out how much you owe by making a list of all of your credit card balances and

loans, along with minimum monthly payments and APR for each. • Assess the best approach, whether it is paying off the card with the highest APR first or making payments on all cards with the goal of applying any extra money available to pay the lowest balance first. • Consider applying for a balance transfer card with no or low APR for a set period of time to transfer the debt. Whether your goals for having a credit card are building creditworthiness or having a cushion for emergencies, there is likely a card out there that’s right for you. Consider using new tools to help you find it. FL

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Guide to Raising Financially Responsible Children By Stacy M. Brown WI Senior Writer Financial literary should begin in the home. And it should start when a child is in their infancy. However, that’s seldom been the case – particularly in minority homes where experts say teaching young ones the principles of budgeting early could go a long way in securing a strong financial future. “I think it is very important for students to learn the basics of personal finance at a young age. This can begin in preschool with the basics of counting pennies, nickels and quarters,” said Lamont Black, an assistant professor of Finance in the Driehaus College of Business at DePaul University in Chicago. “By second or third grade, children should be learning about jobs and income so that they can appreciate why their parents work. This is also a good time to learn about the importance of saving for something the child hopes to purchase,” said Black, who also serves as academic director for the Center for Financial Services and who formerly served as an economist at the Federal Reserve Board of Governors in Northwest, D.C. “Alongside these skills, teaching the values of frugality and generosity will help guide children’s money decisions for many years to come,” he said. In her 2013 book, “Do I Look Like an ATM?: Parents’ Guide to Raising Responsible African-American Children,” author Sabrina Lamb notes that while some school districts and corporations encourage the notion of financial education for young people, many do little beyond cre-

Sabrina Lamb’s book, “Do I Look Like an ATM?,” encourages Black parents to teach children about budgeting. Photo courtesy Amazon.com

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ating financial teaching materials. “Empowering our children through financial education begins at home with parents because beliefs about money are formed in the home,” Lamb said. “As generational wealth slips through our fingers, it is no longer advisable for either parents or children to remain ignorant of these issues, particularly when a parent is confronted with them daily,” she said. The Center for American Progress surveyed African Americans and Latinos and found that African-American respondents were most receptive to education and counseling provided to consumers. Fifty-six percent of African Americans described personal debt levels as a serious problem at the beginning of the survey. When asked again at the end of the poll, 70 percent of African-Americans described debt as a serious problem. Further, Black respondents were much less likely to see household debt as a middle-class-only issue. Only 54 percent said that debt is an issue that faces middle-class families as well as low-income households, compared to 79 percent of all respondents. Thirty-nine percent of African-American respondents thought the economy was most responsible for the debt problem, compared to only 24 percent of all respondents. “First, and foremost, parents should teach their children the value of money and how it will affect their present and future,” Lamb said. “Parents should consider giving allowances to their children, along with lessons on earning and managing their own bank accounts. Parents should also allow their children to have part-time jobs or receive payment for certain household chores so they can develop and maintain a working and entrepreneurial spirit,” she said. Further, Lamb suggests that parents should always have their children observe their online bank transactions and, from time to time, accompany them to the bank. While there, children should be shown how to make deposits and withdrawals and be taught about the functions of bank employees in ways they can understand. “These hands-on field trips will get children invested in how money flows beyond their parents’ wallets. This process will also familiarize children with finance

and mathematics so that later in life numbers and computation do not intimidate them,” said Lamb, an NAACP Image Award nominee who has authored other books including “A Kettle of Vultures” and “Celebrity Elect.” Parents should teach their chil-

dren to become financially literate and they can do so by enrolling them in programs like Youth Investment Club, Camp Millionaire, the WorldofMoney.org, Youth Financial Education Institute, or others across the country, Lamb says.

“Parents, acting as role models, need to show their children how they manage money in a positive way so that finances become part of the family culture and a natural and healthy part of children’s psyches,” Lamb said. FL

FIVE TIPS

to Assist with Getting a Small Business Bank Loan 1. Develop and maintain an ongoing business relationship with your banker. Relationships count in the banking world. To effectively serve you, bankers need to understand your goals, anticipated financial needs and current financial situation. 2. Understand the difference between loans and equity. Loans need to be repaid over a defined time period. Equity investments are permanent funds that serve as “shock absorbers” so businesses can weather good times and bad. Banks are in business to make loans. Equity funds should come from the business owners. 3. Be able to explain your company’s “value proposition.” Why should customers do business with you? How will you compete effectively in your chosen target market segments? 4. Have a business plan that covers best, most likely, and worst case scenarios. Developing alternative business plans shows your banker that you understand both the risks and opportunities of operating in your industry. Since your banker deals with many small businesses, he or she may have helpful ideas to help you survive and thrive in today’s challenging economy. 5. Develop at least two ways to repay the loan. Bankers look for both a primary and secondary source of loan repayment. United Bank offers a number of small business loan products to fit many borrowers’ needs. Give our small business lender a call to learn more about our loan offerings. John Gusciora Commercial Banker 703.584.3468 John.Gusciora@bankwithunited.com

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Don’t Become a Victim of Deceptive Advertising By D. Kevin McNeir WI Editor

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the bottom line on your bottom line.

Great businesses run on know-how and insight. PNC will work with you to customize solutions that fit the shape of your particular business, whether it’s streamlining processes, expanding services, managing payments and more. Once you can see precisely what’s coming in and what’s going out of your checking account, you can plan what’s ahead for your business. And truly run things.

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Whether we realize it or not, we have all been enticed to respond to advertisements that, while they appear to be legitimate, are nothing more than scams with deceptive, fraudulent information. But according to several attorneys with the Federal Trade Commission [FTC], Alvaro Puig, Carolyn Hann and Patricia Poss, as well as D.C. Attorney General Karl A. Racine, there are several recognizable signs that indicate potentially deceptive advertising. While not an inclusive list, many false ads focus on health and weight loss products, credit repair services, jobs and income and immigration. “Whenever ads promise quick fixes, guarantee cost savings or emphasize the need to act immediately, consumers should beware,” Hann said. “Any claim to remove negative information from your credit report should raise a red flag, if for no other reason than it’s both impossible to do and it’s illegal. Extended warranties, like for an automobile, are rarely worth the paper on which they’re printed. Consumers should read such documents and offers with great care before signing on the dotted line.” “And if you’re offered instant credit or guaranteed a loan, with words that say something like ‘no one is denied,’ you should beware of these ‘opportunities’ as well. Consumers will not only probably lose their money but will not get what they were promised,” Hann added. One longtime activist and reporter for The Carolinian (serving North Carolina’s Black community in the Triangle area) says she’s seen deceptive ads becoming more prevalent particularly for weight loss programs. “There’s no one size fits all nor can you eat whatever you want and still lose weight,” she said. “And most weight loss programs have an exercise component included. And when you have to pay a lot of money up front, you can bet it’s just a scam,” said Octavia Rainey, a Raleigh-based longtime activist and writer for The Carolinian who admits she’s faced weight challenges, making her a prime candidate for such scams. Senior citizens, the attorneys say, tend to be among those most at risk for falling victim to deceptive advertising, with ads promising dietary supplements that will counter the impact of dementia or Alzheimer’s disease. But there are others, like bogus envelope stuffing scams that say you can work from home and get reimbursed for your services which they say are fraudulent schemes.

As for immigration services, promises for easily-accessible green cards or quick-fashion work status legalization are other means of deceiving consumers. Several signs that often indicate fraudulent advertisement include: a guarantee that you will make specific income; a no-risk promise on an investment; a promise that you can begin earning income immediately; and internet businesses, vending machines and display racks that guarantee tremendous financial opportunities but which more often do little more than rob consumers of their hard-earned savings. Hann says the FTC has been successful in recovering and returning money to consumers who have submitted complaints (www.ftc.gov or 877-FTC-HELP) at an average of $3 million/year. Information submitted to the FTC becomes part of a secure data base and is also submitted to law enforcement agencies across the country. Racine and his staff in D.C., remain hard at work on behalf of District residents with positive results including one joint lawsuit, filed along with 39 other states, that achieved success in a $102 million consumer protection settlement with Pittsburgh-based Education Management Corporation [EDMC] – a for-profit college operator. The settlement resolved allegations that EDMC made unlawful misrepresentations in advertising its educational offerings to prospective students. “People should be able to take a business at its word. But whenever we discover that a company has unlawfully deceived consumers, we will bring actions against them,” Racine said. Besides filing complaints, either with the FTC or the D.C. Office of the Attorney General, people can help reduce the effectiveness of fraudulent businesses by sharing their stories with others – keeping up their radar so that they’re more aware that deals which sound “too good to believe” tend to be just that – unbelievable. “We can all be victims of scams. That’s why we have short articles posted on our website with tips intended to help adults recognize scams. For senior citizens in particular who have a lot of life experience and are smart people, helping them to recognize fraudulent advertisements, like sweepstakes, prize and grandparent’s scams, can be very empowering,” Hann and her associates said. Participants in this article representing the FTC were part of a recent teleconference sponsored by New America Media. In addition, this article was written as part of the Journalists in Aging Fellows Program organized by The Gerontological Society of America and New America Media. WI

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Life Insurance: The Real Wealth Gap Closer

By Steven LaBroi Chief Strategist, The LaBroi Insurance Group, LLC

Life insurance is one of the most misunderstood tools often utilized as a wealth-building vehicle in our lives today. Due to the connotation of the term, most people think of life insurance as death insurance. Life insurance, as opposed to auto, homeowners and health insurance, is not mandated by the government. Yet, it is the only tool with an IRS tax code that continues to significantly impact wealth for all cultures in the U.S. The concept of insurance can be traced back to Roman society, but since insurance concepts were first established in the U.S. in the late 1800s, generations of Americans have been able to use life insurance as a risk management and wealth building tool in situations that include the sudden loss of a family member and the protection of assets in the case of income loss. The history of life insurance for African Americans started around 1898 with North Carolina Mutual Life Insurance Company – one of the first Black-owned insurance companies in the U.S. and currently the largest Black-managed insurance company in the U.S. By the first part of the 20th century, over 20 Black-owned insurance companies had been formed throughout the U.S., providing insurance products during segregated times. As valuable as these companies were to our communities ($1.65 trillion collectively in written policies), most were unable to remain solvent in the midst of evolving integration and the introduction of group life insurance through employers – an option which African-American companies were unable to provide during those early years. To understand life insurance is to define the different types along with strategies and applications that can positively affect our lives (living benefits) and our families such as providing coverage for funerals and generational wealth. Life insurance, just like any other product and service, undergoes regular changes and updates. It’s no longer like the policy your

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grandmother purchased. Permanent life insurance is where it all started and serves as the foundation of life insurance where you save money using a life insurance company and receive various benefits in return including: Compound interest, benefits based on financial markets, cash values, potential dividends, benefits to family, loans, withdrawals, tax-free growth, tax-free use if designed properly and other options based on a company’s products. The types of permanent life insurance policies are whole life, universal life, index universal life and variable life with each providing different benefits. Term life Insurance is just what the title implies – it is protection for a term designed to cover your assets and your family only in the case of loss of life. It is usually very affordable and with its singular strategy only benefits in one specific case unless it has optional riders (provisions) that may add additional benefits. Some benefits can be used prior to loss of life. In most cases, at the end of the term the policy increases in price and some may be converted into permanent insurance by provisions in the policy. Annuities are life insurance policies that carry benefits for saving your money with an insurance company that could provide benefits such as growth of funds, no loss of principal during downturns, family protection and even lifetime income similar to pensions. College planning is a great opportunity for parents or grandparents to save money with a policy where the cash values can be used for education or other related expenses. Currently, cash values are not calculated as assets on the Free Application for Federal Student Aid [FAFSA] application, which could minimize eligible assets in a portfolio. Retirement planning strategies can use permanent policies by using cash values to cover retirement expenses and if set up properly can be used tax-free. This gives individuals greater control and options beyond the use of government-based taxed-deferred accounts. Building a Human Equity Line of Credit™ [HuELOC] creates a source of funds for a lifetime, controlling interest and tax payments to other insti-

tutions as well how one spends their dollars. You are in control of whether you “buy” (borrow) money from institutions or not. The strategy shows you how to accumulate funds in a life policy and build a Human Equity Line of Credit™ that you and the next generation may use. It puts the “why” back into using life insurance as a tool. It is the wealth gap closer for today’s and future generations based on current life insurance and tax laws. Do your research and look at how life insurance can specifically work for you and your family. Kill the stereotypes and establish a legacy of change. The LaBroi Insurance Group, LLC, is an African-American-owned independent life insurance and retirement strategy firm. www.labroiinsurancegroup.com Millennial Banking Concept is a not-for-profit organization that teaches younger people money management strategies. www.millennialbankingconcept.org FL

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Steven LaBroi

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