[StBernard] News You Can Use - 11/5/05

[Westley Annis]

November 5, 2005

 

Good Morning.

 

And I do mean good morning.  Today looks like it's going to be a beautiful
day.  My professional recommendation is that you go outside and do something
fun.  Take a walk around your neighborhood, or wherever it is you are
living.  Be sure to thank God that you are where you are to enjoy the day.

 

Personally, I'm going to a Cochon d' lait hosted by some very good friends
of ours.  The Gary Taylors have hosting annual Cochons for the past 20 years
or so and were determined not to let a little event like Katrina break up
their tradition.  So they've assembled all of the necessary people and we
are all going to meet today and pass a very good time. I suspect there'll be
tons of laughing, even more eating, and a fair amount of crying. But
overall, it's going to be a great day.

 


Yellow Ribbons


 

Deborah Keller has come up with what I think is a wonderful idea.  Her idea
is to have every household, business, or organization that is determined to
move back to St. Bernard parish tie a yellow ribbon on their house or
business location.  It seems one of the big questions in everybody's mind
concerns who's coming back.  Seeing those yellow ribbons would answer those
questions.  More importantly, it'll show a sense of unity, pride and
fortitude.  

 

It's tough to communicate with one another now.  We've all been scattered.
However, even though you may not see your neighbors while you're working on
your house, seeing that yellow ribbon on their property will let you know
that even though they may not be there at the precise time you are, they are
genuinely with you.

 

I think it's a great idea.  Thanks Deborah

 

 


Interest Free Money


 

Brian Arceneaux, a very intelligent, handsome, hard working and prolific
(he's got almost as many children as I have) banker friend of mine called me
this week to tell me about the state's interest free loan program, sponsored
by the Louisiana Facilities Authority (LPFA).  http://www.lpfa.com
<http://www.lpfa.com/> 

 

As I appreciate it, the LPFA is attempting to address the need for
businesses to borrow money NOW (in the form of a Bridge Loan), as opposed to
waiting to hear from the SBA any monies they may be willing to lend you.
The LPFA program is fairly simple to understand.  You apply for a bridge
loan through any of a number of banks participating in the program.  There's
a list of these banks on the website I gave above.

 

The loans are for 6 months and come with a 4% interest rate.  So long as you
promise to re-establish your business in the parish within which you were
formerly operating or an adjacent area (also affected by Katrina or  Rita),
the LPFA agrees to pick up your interest cost.   The end result is that you
don't pay any interest on the loan.  

 

The minimum loan amount is $5,000, the maximum loan amount is $25,000.

 

The idea is to give you some funds to tide you over until more permanent
financing can be secured.  

 

You need to move fast on this one.  The LPFA's original plan was to lend up
to $10 million.  According to Brian, as of last week, they had already
allocate $8.5 million, so the money's moving fast.

 

The details of the program are spelled out in an Adobe file that can be
found here:
http://www.lpfa.com/dynaweb/1001221/docs/exhibit_a_-_program_description.pdf

 

I don't know if the LPFA will consider increasing the size of this program,
but it sounds like this is the kind of shot in the arm stuff the small
business community of Louisiana can really use to revitalize our economy.

 

 


Insurance Matters


 

I don't know how the other carriers are handling it, but State Farm
reimburses you 48.5 cents per mile (per car) for the miles you drove to
evacuate under the Prohibited Use clause in their contract.  Many (including
myself) thought we were only entitled to the actual cost of gas for this
trip.  A discussion with my adjuster revealed they will reimburse you on a
"per mile" rate, which results in a significant difference.  Significant,
that is, unless you drive a car that gets about 5 miles to the gallon.

 

This 48.5 cents per mile is also the figure to use if you are receiving
benefits under the  Additional Living Expenses clause in your contract.  

 

State Farm, and I believe many of the other carriers,  is also allowing
benefits for the value of food in your refrigerators and freezers under
their homeowner's policies.  I believe (but am not sure) this is due to
their determination that the electricity was out prior to the arrival of the
flood waters.

 

If you have met with your adjuster and did not receive any allowance for the
food in your refrigerators and freezers, contact them and get these items
added on the list.  My adjuster said he realizes that we people in South
Louisiana keep a lot of food in our freezer and are particularly fond of
seafood and other high value items.

 


 


FDIC Insurance       


 

A "News You Can Use" reader has asked me to spell out how FDIC insurance
works.  Given that many of us will be handling big insurance checks at least
temporarily until we can get rebuilt or relocated, I thought this was a
great question.  

 

FDIC is the moniker for the Federal Deposit Insurance Corporation.   This is
a corporation that insures accounts at banks and other type of deposit
institutions.  Most people are aware their accounts are insured up to
$100,000.  But what about the situation where a person has more than one
account at a bank?  What is the coverage when a person has a joint account
and an individual account?

 

A visit to the FDIC's website yields the following.

 

The $100,000 limit is applicable to per person, per account type.  The FDIC
considers that there are 4 account types, single, joint, trust, and
retirement. Today I'll focus on how FDIC insurance for single and joint
accounts operates.  We'll ignore a discussion of the trust and retirement
accounts for now.

 

Many people believe that each person is covered up to a maximum of $100,000
per bank. This is incorrect.  It's possible for one person to have up to
$400,000 of protection per bank, $100,000 for each of the 4 account types.

 

Without going through all the myriads of options, suffice it to say that if
you are married and have a single account (or a group of single accounts),
the total amount of coverage on these single accounts when added together is
$100,000.  

 

If you have a joint account, FDIC assumes you have a 50% interest in that
joint account.  The coverage on your portion of your joint account, or the
total amount of all of your joint accounts is $100,000.

 

Assuming your spouse also has a 50% interest in the joint accounts, he or
she is insured as well for up to $100,000 for their portion of the joint
accounts.  

 

You can see that joint accounts have a total of $200,000 of FDIC protection.

 

Finally, if your spouse has an individual account or several individual
accounts, their coverage is $100,000 for the total of these individual
accounts.

 

You can see that by properly titling your accounts, you and a spouse (or
other joint account holder) can have up to $400,000 of FDIC protection at
one bank.

 

If this it all too complicated for you, the FDIC has an online calculator to
help you determine how much of your deposits are insured.  Go to this
website and start completing the form: http://www2.fdic.gov/edie/index.asp  

 

It's quick and easy and should answer just about any question that you may
have.

 


Finally, a small commercial


 

Are you wondering what to do when you receive your check in settlement of
your insurance policies?   

 

For many, these checks will total over $100,000.  These funds need to be
placed somewhere safe, so they are available to you when you need them to
rebuild your house, or purchase another property. Do not be tempted to have
someone "put these funds to work for you in the market."

 

Many of you know that professionally, I am a Certified Financial Planner
professional.  If you would like to receive information on a federally
insured savings account paying very attractive rates on money held until it
will be used to rebuild, please give me a call or reply to this e mail.
This account has no fees or minimums and is insured by the FDIC.  I'd be
happy to tell you about it and give you the details.

 

That's all for now.  Go out and take that walk today.

 

I hope to see you soon.

 

 

DISCLAIMER:  This e mail is intended to help those of us who have been
impacted by Hurricane Katrina.  It may contain information that is somewhat
legal  in nature or affect your taxes.

 

References to legal or tax considerations are intended only to alert you in
a general way of those considerations which may effect you.  We do not
engage in the practice of law.   All legal considerations must be referred
to and passed upon by your attorney.  All tax considerations should be
reviewed by your tax preparer.

 

Paul V. Perez
Certified Financial Planner
 
Financial Network Investment Corporation, Member SIPC
7642 Old Hammond Highway
Baton Rouge, LA  70809
(504) 494 3144
(225) 248 6635
(225) 208 1885 (fax)