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Show ____TheSalt Lake Tribune BUSINESS Sunday,April 5, 1998 ~ SAVINGS GAME money to be paying down a mort- ‘Umbrellas’ Not Reserved for gage and thinking of investing I will have some suggestions for you, but first let’s compare yoursituation with that of Julie Ann Vera: “T wish I had the will power to implement your many great Wealthy Alone tonio. “I am 23 years old and have been through more jobs than most people twice my age. E Continued from E-1 ideas,” Vera wrote from San An- “When I was 16,I started HUMBERTO CRUZ Some Folks Do Save When They're Young Who says faepeople are not interested in savi Here are two ietlers, one from A 22-year-old man, another from @ 23-year-old woman. Their situa- tions are quite different, but they share a concern abouttheir fina incial future. Let's hear first from James Whitaker of Greenville, S.C.: could have your wages garnished and pay bills while I was in be- payingbills for the month and, frankly, I am scared. At the other In Utah, insurers say common liability claims against property owners involve trampoline injuTies, dog bites and falls on icy walkways. Liability coverage, whetheritis part of a homeowner's or umbrel- job, I always knew I had that money in my investment program. WhenI lost my job, I choosing whereto invest. “T also wanted some specific : ideas on whatinvestment goa! I ‘ should shoot for. I am single, but I am planning to get married in a ; year. I don’t have any debt other than a house I bought a year ago. “T don't know whetherto try to pay off my houseearly (I am applying an extra $200 a month to the principal now), to put the moneyinto a growth mutual fund, to just save my moneyin a conservative mutual fund with the intent of buying another homeas a rental property, or ju: st meeora future. last thing I wantedto asl k tasth the best way to diversify my financial holdings, particularly mutual funds.” advice for you. Relax! You seem compensatory damages such as medical bills and general dam- ages such as pain andsuffering or plan, you can arrange to have a portion of your paycheck deposited directly into a savings or in- physical disfigurement. How mucha family has in assets is an importantpart of deciding whether to purchase an umbrella policy, but so is risk, says Greg Johnson of the Utah Farm vestment account Another optior — something I still do —- is to have the paycheck deposited directly into your checking account, then move so much each month,electronically, Bureau Insurance Co, People who own vacant land, large lots, extensive walkways or steps, and animals that can cause injuries, such as horses or dogs, are likely candidates for umbrella into an investment account. Thatstill doesn’t answer the question, for either of you, as to where to put your money. But that’s a question nobody can answer unti] you ask yourself some Serious questions about your goals, and what you value most. insurance. $360,000 in liability coverage on their homeowners’ policies before they issue umbrellas, said Bob “If you are hit with a libel or slander suit, for example, you're Anderson, division marketing covered under an umbrella but manager with Farmers Insurance Group in Salt Lake City. not by a regular homeowner's pol- iey,” he says. “But people can help offset Johnson says one ofthe biggest muchof the premium increase of misconceptions about lability is that families with few assets ace doing so by raising their deductibles,” Andersonsaid. Anderson said most insurers Another plus with umbrellas is that the insurance companypicks up the tab for the defense in a also require anyone who wants an umbrella policy to have auto and off the hook. Liens can be placed on homes, he says, and wages can be garnished to pay judgments. protection, umbrella policies, de- youstill could he sued and have to pay $1 million,” Johnson says. “You could be paying on it the rest of yourlife.”” homeowner's policies with them, which may qualify policyhoiders for additional discounts Aside from offering greater liability suit, and legal costs do not count toward the maximum payout ofthe policy. Becausethe underlying policies “Even if you don’t have much, ‘The OLDEPremium Plus Money Market Series won the Lipper Analytical Services and IBC Financial Data 1997 awards. These awards were given for Current Yield OQ” the numberonetotal return performanceforthe 12 months ending December 31, 1997, our of 210 and 299 general purpose retail funds respectively. The find was alo rk #1 by both services for the five-year period through December31, 1997 out of 173 and 181 funds respectively. Past performance is no guarantee of future results, In additiontoits top ranking, this money market fund offers: © A highly competitive yield * Daily acess ro your cash * Free checks and checkwrting Effective Yield 65” A minimum initial investment of $25.00 is required. Astandard homeowner’s policy hasliability insurancethat covers most of what an umbrella policy covers, but typical coverage is limited to $100,000 to $300,000. Se Humberto Cruz lives in Coral Springs, Fla. Write him c/o Salt Lake City.......... .... 801 262-6600 1153 E. 3900 South That may not be enough, according to the Western Insurance In- formation Service. Tribune Media Services, 435 N. Michigan Ave., Suite 1400, Chicago, IL 60611. Send e-mail messages to: HCruz5040@aol- The service provides this example: A family without an umbrella policy but $250,000 in liability coverage in a homeowner's policy -com |A Projector For All Reasons! | | | somethings homeowner's policies do not, says Johnson of the Utah Farm Bureau Insurance Co. la policy, is designed to cover Evenif you don’t have a 401(k) “The only problem I haveis pending on the company, cover usually require policyholders to have at least $250,000 to policy with $300,000 in liability says Brock McLeanof Metropolitan Property & Casualty Co. in Midvale. liability-related payouts they must make has climbedin recent years. BSS bear most of the risk, insurers ed. A homeownerwith a $1 million umbrella and a homeowne! surance companies along the Waper year for a $1 million policy. Insurers acknowledge that hugeliability claimsarerelatively rare, but the numberofsix-figure tween jobs. “At my new job I don’t have a 401(k) plan. Even though I'm making $11,000 more a year, I amnot saving oneredcent after Carole Waiker Regional managerfor the Western Insurance Information Service Umbrella policies kick in after the liability portion of a homeowner's orauto policy is exhaust- coverage would have $1.3 million in combined liability protection, inexpensive. Costs quoted by in- “You can get sued for just about anything these days. Umbrellas are designedto offer people peace of mind.” insurance would have picked up the balance. for the rest of yourlife.” An umbrella policyis relatively satch Front average $200 to $300 use most of my savingsto live A: Your big problem, and you recognized it up front, is lack of discipline or will power. The easy selution: Force yourself to save. A: I definitely have a piece of don’t have enough in assets, you job, but unfortunately I had to ty for meto get ahead for the fu- to be in great financial shape, a homeownerat 22 with enough insurance,” she says. “If a judg- was shut down and I had to look cashedit all out. Was that a stupid, irreparable mistake?” ture and for my money to grow tax free. earning potential to consider such ment is made against you, if you out of town for another job. I was pretty traumatic to be downsized at the age of 23. I found another “I am a 22-year-old investor and I am consideringstarting a Roth IRA,” Whitaker wrote. ‘I thoughtit was a great opportuni- and home equity, Horvath says. “We strongly recommend anyone with some assets and strong working part-time at a newspaper. When I was 19, I managed to get a full-time job. In four years I accumulated more than $4,000 in a companyplan. “In October, the newspaper is sued by a pizza delivery person whotripped on the steps and sustained a headinjury that required $750,000 in medical treatment. The homeowner's policy would cover the first $250,000, leaving the family to come up with the other $500,000. If the family had had an umbrella policy, the homeowner's policy would have covered the first $250,000, and the umbrella For Conference Room, Home Theater, or Presentation. | MOLDE America’s Full Service Discount Broker” "Ranked #3 out of232 GeneralPurpose money market fundsforthe 7- day period ending 03/31/98. Source: IBCs Money Fund Repoit,* a service of IBCFinancial Data, Inc. 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