A Sometime Saver Gets a Stock Boost
Some guys have some of the luck. L.J. Carusone, for instance.
When Carusone, 31, talked to fee-only financial planner Howard Rothwell of Overland Park, Kan., a year and a half ago, he was beginning to appreciate the importance of financial security.
He had recently lost the last of several relatively well-paying but unreliable jobs in TV. He was establishing himself in a $35,000-a-year job as a Web page designer, thinking about buying a home and wondering how best to manage an $85,000 portfolio of stocks and mutual funds, much of it given to him and invested for him by his family when he was younger. He was adding to an IRA every year but otherwise making no aggressive effort to increase his capital. He would save some, then give in to his wanderlust.
And now? “I just got back from Mexico,” said Carusone, who’s still renting inexpensively in Venice. “I went to San Francisco not too long ago,” he said. Now a friend is tempting him with an invitation to Hawaii. “You know, that’s my biggest downfall--I love to travel.”
Rothwell told Carusone that saving would be the key to security, urging him to put the $2,000 maximum into an IRA every year and save at least $225 a month toward the down payment on a house.
Carusone now makes sure that $2,000 goes into IRA savings every year, but otherwise he’s gone about things in his own way.
He’s not saving for a down payment, for example. Then again, he doesn’t have to. That’s because something Rothwell predicted came true.
At the time of their talk, Carusone’s biggest investment was Evergreen Bancorp shares. Rothwell advised him to hang on to it, saying the banking industry was undergoing a rapid consolidation and that the upstate New York-based regional institution could become an acquisition target.
And in July, Banknorth Group, a New England regional bank, agreed to acquire it in a $291-million stock deal.
The news sent Evergreen shares soaring and doubled the value of Carusone’s holding to about $55,000. Carusone says Banknorth looks like a good company and that he’ll probably keep the stock.
However, he’s also held on to his investment in Royce Pennsylvania Mutual, against Rothwell’s advice, saying the small-cap fund, in which he has about $10,000 invested, has been doing better recently.
He’s hesitated to diversify his IRA contributions by putting $1,000 a year into world-stock fund Mutual Discovery, as Rothwell recommended, saying the market’s gyrations aren’t making him eager to jump in. So $1,000 is parked in a money market fund as he decides what to do.
Carusone has added to his stock portfolio too, taking small positions in a handful of stocks, mostly energy companies, with mixed results.
He would still like to buy a house, but as his portfolio’s value was rising, so were prices in the Venice area, where he’d like to buy. “I’m gonna wait till I have more money,” he says.
It’s possible some of that may come through new professional opportunities in ‘99, either at his current job or as a consultant in other areas.
“I’m definitely not a one-industry guy,” he said. “I like to think I can do anything. And so far it’s been my experience. I enjoy that more, trying something new. I have to stir things up. Otherwise I get bored.”
