In the Black: Live Faithfully, Prosper Financially: The Ultimate 9-Step Plan for Financial Fitness

336 Pages·2009·1.3 MB·English

by  Aaron W. Smith

IN THE BLACK
LIVE FAITHFULLY,
PROSPER FINANCIALLY
The Ultimate 9–Step Plan
for Financial Fitness
AARON W. SMITH
with Brenda Lane Richardson

Contents
ACKNOWLEDGMENTS vi
INTRODUCTION: How Reading This Book Can Change
Your Financial Future 1
Step 1: Figure Out What You Really Want
CHAPTER 1: Defi ning Your Values 17
CHAPTER 2: Getting Your Goals Straight 28
Step 2: Envision Your Financial Future
CHAPTER 3: Facing Reality and Exploring Your Dreams 45
CHAPTER 4: Creating the Financial Plan
That’s Right for You 53
Step 3: Work Your Money
CHAPTER 5: Paying Yourself First 67
CHAPTER 6: Getting a Handle on Your Spending 84
Step 4: Quit Strumming the Money Blues
CHAPTER 7: Paying Down Debt 97
CHAPTER 8: Maximizing Your Cash 109
CHAPTER 9: Pinpointing the Amount You Need to
Retire 118
Step 5: Put the Pieces Together
CHAPTER 10: Knowing When to Take Social Security 137
CHAPTER 11: Choosing Traditional or Roth IRAs 152
CHAPTER 12: Recognizing an Annuity for What It Is 163
Step 6: View Home Owne rship as a Viable Option
CHAPTER 13: Understanding Our Passion for Real Estate 181
CHAPTER 14: Knowing Whether to Rent or Buy,
Stay or Downsize or Relocate 195
Step 7: Don’t Just Play the Market, Understand It
CHAPTER 15: Making Wall Street Work for You 217
Step 8: Protect Your Assets
CHAPTER 16: Selecting Insurance That Fits Your Needs 235
CHAPTER 17: Keeping Income Flowing for the Rest of
Your Life 251
CHAPTER 18: Choosing a Financial Professional 279
iv • CONTENTS
Step 9: Enjoy the Richness of Your Life
CHAPTER 19: Leaving a Legacy 291
CHAPTER 20: Reinventing Your Life 301
APPENDIX: Worksheets for Tracking Your
Expenses 307
Notes 315
About the Authors
Credits
Cover
Copyright
About the Publisher
CONTENTS • v
Ack now ledg ments
From Aaron Smith:
I want to thank Patricia, my wife, for her commitment to our fi nan-
cial business, to this book, and even more so, to me and our family.
Her commitment to God has shaped who she is as a wife, friend,
and mother. She is a wonderful asset to my life, to our children, and
to this work, and I thank God for her.
I have learned also from our children, Jasmine K. Smith and
Aaron Justin Smith, that our time together is far more valuable than
anything that can be found in a bank. That has made me a stronger
fi nancial adviser.
As always, I am grateful to my parents, Johnnie E. Smith and
Louise A. Smith. They provided a strong church foundation and
were always there for our family. They supported us in every way,
including our academic and athletic involvements, both of which
have gotten me where I am today.
My pastor, the Reverend Andrew Mosley, Sr., encouraged me to
think broadly by teaching me that there are two sides to any argu-
ment and helped me to look beyond self-i mposed boundaries.
I am enormously grateful for the work of my coauthor, Brenda
Lane Richardson, who exemplifi es the change fi nancial literacy can
bring to our lives, and to Ron King, Jr., for reading our manuscript
and sharing his fi nancial expertise. Our agent, Regina Brooks of
Serendipity Literary Agency, has impressed me with her wide array
of professional relationships and skill sets and helped us fi nd the
right publisher. Editors Christina Morgan and Dawn Davis provided
much- appreciated advice.
Thanks also to Tena Krouse, owne r of Y Not Now, in Rich-
mond, Virginia, who developed our website Intheblackretirement
.com. Attorney Melanie Lee offered advice on legacy and estate
planning, and CPA Jim Holland was kind enough to answer some of
my inquiries. Finally, I want to thank my tailor, George Clayton.
From Brenda Lane Richardson:
Thank you, God, for providing me with an opportunity to ex-
perience true freedom through fi nancial planning. Thanks also to
my immediate family: the Reverend Dr. W. Mark Richardson and
our children, H. P. Worthington, Carolyn, and Mark jun ior.
I am grateful to Aaron and Pat Smith for their top-n otch profes-
sionalism.
My hearty thanks to Mary Beth Franklin of Kiplinger’s Personal
Finance for endorsing this book, to Denise Williams, for her unerr-
ing editor’s eye, and to Regina Brooks, agent extraordinaire. Thanks
also to Christina Morgan and Dawn Davis of HarperCollins.
Valerie Coleman Morris supported this project from its incep-
tion and graciously shared her story. Glinda Bridgforth generously
recommended me to Aaron Smith as a coauthor for this work, and
E. Percil Stanford, Ph.D., chief diversity offi cer of AARP, offered
much-n eeded encouragement at the book’s inception. Gerald Har-
ris, the found er of Harris Planning and Strategy Consulting in San
vii • AC KNOW LEDG MENTS
Francisco, real estate broker Nancy Lehrkind of the Grubb Com-
pany in Piedmont, California, and the Reverend Dr. Mark A. Cros-
ton, Sr., of the East End Baptist Church in Suffolk, Virginia, shared
their seasoned expertise. Finally, thank you, Shirley Tarlton, for
your warm greetings, and Sonja Tucker, an A. W. Smith fi nancial
adviser, for taking my last-minute questions.
ACK NOW LEDG MENTS • viii
Introduction
How Reading This Book
Can Change Your Financial Future
Early one morning, Dr. Evelyn Greene entered my offi ce in
Richmond, Virginia. The sturdily built, m ahogany- toned
woman of s ixty- one wore a c lose-c ropped salt- and- pepper
natural and an elegant red suit. A church deacon had phoned the
night before urging me to see Dr. Greene on an emergency basis to
discuss the loss of her retirement savings fund.
I’ve helped clients with any number of money issues. In recent
years my practice has increasingly focused on retirement planning.
With an estimated 9 million black baby boomers preparing to
leave the workforce, many are panicking about not having enough
money to live on for the rest of their lives. Thanks be to God, the
message is starting to get around that it’s not too late to prepare for
retirement.
That’s probably true for you, too. If you’ve delayed retirement
planning because you think you won’t have enough money to last
the rest of your life, In the Black can help. You’ll learn to handle