Word on the street: Worry

The economic meltdown has most metro Atlanta residents assessing their own finances. The AJC interviewed people from various walks of life about the state of the economy and their own situations, then asked financial experts what advice they would give those people.

STEPHANIE ARATEA

• Age: 34
• Hometown: Woodstock
• Occupation: Medical spa training manager for a medical software company; she and husband work from home.
• Personal: Married with two daughters, 5 years old and 3 month old.
• Own or rent: Owns a home, not paid off yet.
• How worried are you about the current economic situation?
  “I’m very concerned. It hasn’t affected us yet. We’re trying to be resourceful in case anything happens to one of us. We’re saving more money.”
• What is your biggest personal financial worry? “Gas prices don’t really affect us. We both work from home. Our mortgage is our biggest concern. We have no money in stocks. All of our savings are in a money market account. Five years ago, we did [financial guru] Dave Ramsey’s program so we really started to get where we need to be. We both still have student loans, but that’s about it. None of our money is in the stock market.”
• Who is to blame for the current crisis? “Everyone wants to blame the government. I’m wondering if some people cause everyone else to worry, to cause a panic even though it’s not warranted, to drive prices up.”
• Financial expert’s advice: “My advice would be to invest some of their savings in stocks: in a diverse portfolio of U.S. and international stock mutual funds. The reason for that is I don’t know where the stock market is headed in the near term, but I’m highly confident in 10 years they’ll earn more in the world’s stock markets than they will by remaining in cash. In the stock market over the last 50 years, people have made about 9 percent. I don’t think it will provide more than 9 percent over the next 10 years, it may be more like 6 [percent] or 7 percent, but that is significantly higher than what a money market yields.

  — Andy Berg, CEO of Homrich & Berg, an independent Atlanta-based wealth management firm

JEF BLOCKER

• Age: 41
• Residence: Grant Park
• Personal: Single
• Occupation: Loan officer and bookstore manager
• Own or rent: Homeowner
• How worried are you about the current economic situation?
• “Very. I think the economy affects people here in the States more than any other issue.”
• What is your biggest personal financial worry? “I have two businesses — I’m a loan officer and I have the bookstore. If people think that they don’t have enough money, they tend not to buy houses and they don’t buy books. This past week, I’ve been thinking would I be better off cashing out my 401(k).”
• Who is to blame for the current crisis? “As a society we’ve become very selfish. We’ve done it to ourselves. We need to be interested in doing what’s best for the country as a whole. We’ve been focused on big business and what’s best for big business, but I think we need to look at the small businesses, too.”
• Financial expert advice: “I would hope somebody in his situation would have put some money in a cash reserve or emergency reserve so that when times get tough he would have it to tap into. The last resort would be to pull from the 401(k). What he may want to do is reduce what he’s putting into the 401(k) to improve cash flow. The next thing I’d say for someone in that situation is to carefully go through and identify for himself what he’s spending money on and identify the ‘luxuries’ he’s buying that he could cut back on.”

  — Helga Cuthbert, certified financial planner and head of Decatur-based Cuthbert Financial Guidance

JONG CHOI

• Age: 59
• Residence: Dunwoody
• Occupation: Real estate agent who is helping his sister run her snack shop in downtown Atlanta.
• Personal: Divorced with a 23-year-old daughter in college.
• Own or rent: Rents his home.
• How worried are you about the current economic situation? “Gas prices are the main problem. Because of that, food costs have increased. Most small businesses are suffering because food costs are up. … My daughter tried to get a loan for a used car three months ago. She got turned down.”
• What is your biggest personal financial worry? “My job. Real estate is a tough business right now. A lot of people have already left. That’s why I’m here helping my sister with her business.”
• Financial expert’s advice: “The No. 1 priority is to make sure there’s enough liquid cash. Securities investments and retirement plans should be delayed for now. Keep health insurance in place. He needs to make sure his financial foundation is solid.

  — Doug Roberts, certified financial planner, Ameriprise Financial Dunwoody

JOEL ELLIOTT

• Age: 29
• Hometown: Jonesboro
• Occupation: Property manager at his own firm, EW Capital Management.
• Personal: Married, 1-year-old daughter.
• Own or rent: Owns home, plus other houses.
• How worried are you about the current economic situation? “Very worried because I buy a lot of investment property, and the banks are freezing up. They don’t want to lend except on owner-occupied [homes.] It’s kind of slowing down business.”
• What is your biggest personal financial worry? “My [stock] investments. They are plunging more, the more I put away.”
• Who is to blame for the current crisis? “I think a little bit of everybody. I think we got a little too liberal with the credit policies.”
• Financial expert’s advice: “Elliott, who seems to be an experienced investor in both real estate and stocks, should be concentrating on building his cash reserves to take advantage of bargains once it’s clear those markets have bottomed out. I’m not buying anything today or selling anything today. … I’m not satisfied I know where the bottom is. What this guy needs is some dry powder, meaning cash.”

  — Houston Smith of Smith and Raab, a Decatur accounting and financial planning firm

EARL LEWIS

• Age: 41
• Residence: Stone Mountain
• Occupation: Retail sales at Phipps Plaza in Atlanta.
• Personal: Single, no children.
• Own or rent: Rents a house.
• How worried are you about the current economic situation? “Very worried. When I was driving to work [last week], I needed to get gas. Every gas station I went to in Stone Mountain was out of gas. Finally I got gas here in town. I paid $4.09.”
• What is your biggest personal financial worry? “Gas for the car is a big one. It just seems like prices on everything are skyrocketing. I have a 401(k) that I check once a week. But I just think we have to ride it out for now. I paid off my car [a 2000 Volvo S-70] and I have some credit cards. But nothing that is out of control.”
• Who is to blame for the current crisis? “I can’t say anyone. People are looking for blame, but I can’t say the president. I think it’s because of the weather. The storms are hitting our country everywhere. I really don’t want to say Wall Street, but it is a presidential election year and everybody’s looking at everything.”
• Financial expert’s advice: “Three things: I’d make sure that his 401(k) is properly balanced. Second, I would encourage him to contribute as much as he can to that 401(k), given he has no family responsibilities. Third: It’s a great opportunity for someone who doesn’t own a home to buy a home for a more reasonable price. If he has decent credit and some money to put down, there are still loans to be had. … And mortgage rates are fairly attractive right now.”

  — Andy Berg, CEO of Homrich & Berg, an independent Atlanta-based wealth management firm

RAY RISNER

• Age: 48
• Residence: Hampton
• Occupation: Business owner and construction worker who has spent the last year working on the BB&T tower at Atlantic Station (which is owned by AIG).
• Personal: Married with two children.
• Own or rent: Homeowner
• How worried are you about the current economic situation? “By all means, I’m worried. We’re two floors from finishing this building and we’re not sure we have another job to go to. I’ve been in the construction business 24 years and this is the worst I’ve seen it.”
• What is your biggest personal financial worry? “Keeping my home and my property. My 16-year-old daughter toured UGA [recently]. If things do not get any better, I don’t know if she’ll be able to finish college [when the time comes]. It would break my heart to tell that little girl she may not be able to finish college and she wants to be a forensic scientist.”
• Financial expert’s advice: “Does he have a lot of debt? Debt plays an important part. As a business owner, he’s got to make sure he’s got enough cash reserve to get through slower periods. Because he has kids, he needs to have life insurance. Unfortunately, he’s got to set priorities to maintain his financial foundation. His daughter’s education should not be his primary focus. The focus should be keeping his business going and providing financial protection for his family and business. So maybe the daughter goes to community college and uses the HOPE scholarship and then later transfers to the college of her choice.”

  — Doug Roberts, certified financial planner, Ameriprise Financial Dunwoody

ELIZABETH MORGAN SPIEGEL

• Age: Would not disclose age.
• Residence: Atlanta
• Occupation: Retired. Active in Atlanta’s nonprofit and arts community.
• Personal: Divorced with three grown children.
• Own or rent: Paid off her house.
• How worried are you about the current economic situation? “Of course, everybody’s worried. I’m very mad at myself for not spending my money when I had it and doing more lovely things with it, like taking a nicer cruise.”
• What is your biggest personal financial worry? “That things don’t just keep spiraling downward. I’m hopeful. The markets always come back. … Also, I’m calm because my first husband lost everything, and I once qualified for food stamps. I know I can live. “
• Who is to blame for the current crisis? “There’s too many people flying around on golden parachutes and they think it’s never going to crash. People really do not care about our country, the people who got us into this mess — both governmental and financial.”
• Financial expert’s advice: “She should make sure that her portfolio is diversified among asset classes, such that if this downturn continues, her downside is limited. If someone’s got a lot of money, they must make sure if there is a big downturn, they’ve got enough. If things go well, they’ll get more wealthy. If things go poorly, they’re not going to have to not be a socialite.”

  — Andy Berg, CEO of Homrich & Berg, an independent Atlanta-based wealth management firm