Tài liệu Money _ The 8 habits of winning investors 13 pptx

They purchased a small secondhand trailer for ‘$11,500- FEMA bought for $90,000," adds Mark with a grim laugh—and parked itin their host's driveway Leaving the kids behind, the couple

Trang 1

body “Wherever you went here, there

was always aconnection,” says Billie “Irs

going tobe hard to leave that.”

Family has played a big role in

shaping the Pellissiers’ lives

Mark and Billie first met in a restaurant

in 1988, but their families already knew

cach other Her dad was amechanic, and

Mark's ran the Radiator Shop, a longtime

ture in the “You look familiar,” she

said to him “Areyou Todd or Mark?” she

asked, thinking of his brother “I know

whol am, hereplied.“Ithoughthe was

asmart ass,” she says Apparently nota

problem They married 18 months later

They had a lot going for them Billie did drafting for a company that renovated

oil refineries, while Mark managed the

East New Orleans branch of the shop

With the help of b rents,

he'dalready built atwo-family house where the couple settled As their own family expanded, they moved into Mark's grandmother's place after she left fora nursing home By 1999 the couple had saved enough to buy athree- bedroom 1930s bungalow to

which they later added an

apartment for Billie's mom By that time Billie had earned a nursing degree from Louisiana State University and worked in intensive-care units atarea hospitals

Even when Katrina was a distant swirl over Florida, “itwas clear we had

tw evacuate,” says Billie, The authori ties were ghoulishly warning those

who stayed behind to write their Social Secur numbers on th arms Mark

didn’t want to go The previous year, the family had spent nine grueling hours in their car fleeing Hurricane Ivan, which

tumed east and fizzled out But when it became obvious that Katrina was draw-

inga bead on the city, the family packed

enough clothes fora few days and drove

to a friend’s house in San Antonio, They soon learned that Katrina had pro-

foundly changed their lives “We Googled

our house,” says Billi

t0 our bedroom window." The business wasunder six feet of water “They were tellingus thatit wouldbe two months before we could go back,” says Mark

‘Not wanting to overstay their wel- come, they headed to Atlanta, where they moved in with Billie’ brother They purchased a small secondhand trailer for

‘$11,500-

FEMA bought for $90,000," adds Mark with a grim laugh—and parked itin their host's driveway

Leaving the kids behind, the couple

returned to New Orleans about a month

after the storm, Entering the city was

an eerie experience—“like going from color TV toblack and white,” says Billie

“Everything was brown orgray There

were no sounds, no birds And it smelled like death.” Small wonder Some 700 peo-

ple in New Orleans alone had perished Every place they owned—their rental property, the business, theirhome—was

amess, They donned hazmat suits,

shrimp boots and respirators to try to salvage some of their belongings But floodwaters, which had sat steaming for three weeks in the 95°F heat, had

left everything covered in mold and

rhe water was up

‘not too different from the ones

MONEY MAGAZINE@35|1972-2007 September 117

Trang 2

tuy

muddy gunk “When we saw the house,

itwas overwhelming, but I was proud of

myselfI didn't cry.” says Billie She did

weep, though, when they saw homes and

landmarks that she and Mark had grown

up with gone forever,

Itwas all too much to take They

returned to Atlanta, figuring they would

have to stay for a while Impulsively, they

boughta 4,000-square-foot house in sub-

urban Woodstock They had almost no

funds or income, buton the strength of

their credit score they landed a 30-year

mortgage with a 7.25% interest rate that

would cover 100% of the $225,000 price

Atthe losing however, they realized the

low rate applied to only 80% of the loan

‘Therestwas asecond mortgage at 11

Nomoney was coming in beyond

relief checks from FEMA, atotal of about

$4,400 So Billie expedited approval of,

her Geongia nursing license and began

taking shifts in Adanta hospitals Each

‘week Mark commuted 430 miles to New

Orleans to work on the business and

tackle insurance claims With no place

he took the trailerand parked

itin frontof the shop, where he found

computers and his massive wood desk

piled in a jumble, soaked and moldy All

the equipment was a loss, and, he says,

he and his employees “had to shovel our

way in.” The cleanup took two months

Dealing with Travelers, his home

insurer, wasa much more frustrating

chore Mark spoke to 23 different adjust-

ers, explaining the full story from scratch

each time In January 2006, Travelers

senta check for $12,000 A more substan-

tial check for $200,000 took another 18

months to arrive (A Travelers spokes-

man said thatthe unprecedented nature

of Katrina led the insurer to use more

than one adjuster in New Orleansbut

thatit rarely used more than three.) The

only mercy shown them—a three-month

moratorium on their New Orleans house

payments from Country wide—turned

out tobe less than compassionate

(though it was typical of the payment

118 September MONEY MAGAZINE@35|1972:206)

FINAL DAYS Jared, eft, and Jason lobbied to return to

‘New Orleans—at least for awhile By coming home, Jared says, we got to say ‘Bye.’ From

‘now on, though, the family wll be doing the traditional Loulstana shrimp boll in Georgla

relief offered to Katrina homeowners)

At the end of three months, the lender ted on getting three months’ payment in a lump sum

Jason, their oldest, meanwhile lobbied

to retum to New Orleans, to Benjamin Franklin, the elite public high school

he had attended pre-Katrina, and his friends, The kids had already lost all their stuff, and the couple felt that denying them familiar surroundings would com- pound the injustice So at Easter 2006, leaving their new house empty, the five Pellissiers returned to New Orleans and once again squished into the trailer

A Georgia church group that came

down to help gutted their rental home

In contrast to the government, “churches and ordinary people have been won- erful?’ says Billie After finishing the renovation, the Pellissiers moved into one unitand rented out the other for

$1,400 a month They also used some of their insurance paymentsto wipe out the 11.25% second mortgage on their Atlanta house and an $8,000 credit-card balance

Rebuilding their Lakeview house wasn't an option they'd consider, however, because the neighborhood is below sealevel So they had the house demol- ished and sold the lot, netting $91,000

‘They thought of rebuilding elsewhe in

New Orleans, butafter searching through the Louisiana Almanac, they couldn't find any affordable neighborhoods above sea level The federal government is encour- aging homeowners tobuild on cement pilings, but as Mark and Billie point out, the vista of uneven up-and-down houses isjust plain ugly Relocating to a suburb

on thenorth side of Lake Pontchartrain,

as many New Orleanians have, wasn't the

answer either; Jason and Jared would no

longer fulfill the residence requirement necessary to attend Benjamin Franklin

‘The Pellissiershad hoped that New Orleans would be springing back to life

when they returned aftera six-month absence But they haven't seen much

progress The city has regained the dubi- ous honor of murder capital ofthe US

Mostschools are still dreadful And citi-

Trang 3

Collateral Damage

Katrina also laid waste to the market for homeowners insurance

‘mong the many obstacles homeowners In New

‘Orleans face as they rebulld Is the challenge of finding affordable homeowners Insurance—by some estimates, premiums have doubled since the storm But even people who live nowhere near the Gulf Coast are facing new ground rules for getting

coverage as Insurers cut back In dozens of areas they con-

sider vulnerable to natural disasters, especially In coastal

regions If you live In one of those places, you may have a

tough time finding homeowners Insurance at a price you can

handle Here's why, and what you can do about It

|THE PULLBACK

The Insurance Industry Is bet-

Ing that Katrina was no fluke

The main reason: climate

hange Catastrophe model-

Ing firm RMS of Newark, Calf

rojects that annual Insur-

nce payouts due to Gulf and

ast Coast hurricanes over

he next five years will be 259%

10 40% higher than average

In response, major Insurers,

Including Allstate, State Farm

nd Natlonwide, are paring

ack by refusing to write

lew coverage, not renewing

licles, boosting deduct-

bles and narrowing coverage

(excluding storm damage,

ay) Meanwhile, premiums

‘ave doubled or tripled over

hover Kathleen Blanco Signed legislation giving insurers financial Incentives cowrlte more policies in the tate and also requiring them (0 offer discounts to home- ners who reduce thelr tential storm damage

Florida has taken a more adical approach with reforms hat let Insurers cut costs

by buying backup Insurance

t discounted rates from a tate fund and pass along the vings However, though pre- ums were projected to drop

yy 24% On average, Inital rate filings have come in for about alf that amount “I would call hat we've done a Band-Aid,”

ays Robert Milligan, Florida's

he past few years insurance consumer advocate

These changes have mainly it’s far cry from a long-term

been along the Gulf Coast nswer to getting a viable

ind eastern seaboard But In

\ay, Allstate sald It would no

longer offer new homeowners

ollcles In what the company

teferred t0 as "castastrophe-

one” Callfornla, where

-verything from earthquakes

(0 wildfires wreaks havoc

|THE BAND-AID

'overnment officlals are

earchlng for ways to make

meowners Insurance more

ffordable In July, Loulstana

insurance Industry in the state

f Florida.”

HAT YOU CAN DO {Given all this, you have to be smart shopper To do that:

+> Think like an insurer You n't force an Insurer to take /ou on But In general the less lamage your home |s likely (0 sustain, the greater the hance a company will Insure

t So consider installing features such as storm shut-

ers, wind-resistant shingles _ essentlally a state-run com-

r hurricane roof straps, fry tna takes on higher

hich may even qualify you _fisks Or combine coverage for discounts This year South Ÿrom two sources—say, buy a

arolina began offering tax homeowners pollcy that cov- edits of up to $1,000 for rs fire, theft and such from a aking ahome more storm- private Insurer and go to your

roof For tips on protecting fetes Insurer for wind or

our property, go to the hurricane coverage To learn institute for Business and bout local options, contact Home Safety site at Ibhs.org your state Insurance depart-

}pBe persistent Even if ent (find It at nalc.org)

ou turn your house Into a Plug gaps Homeowners fortress, you may still have jolicles exclude both floods

rouble finding coverage jand earthquakes You can

ut alittle digging canhelp _get flood Insurance through Smaller Insurers sometimes Ms federal government's

‘ome Into high-risk areas to National Flood Insurance herry-pick—that Is, Insure

jomes with the least poten- lal for damage Independent Insurance agents—those who ork with a varlety of insur- fS—should be able to tell you

f any new Insurers are writing ollcles where you live

Ifyou can't find a private llcy or If I’s prohibitively expensive, check out your tate’s “residual” Insurer,

rogram To find out your risk

pf flooding and get premium stlmates, go to floodsmart

mm To assess the probability

fan earthquake near you,

‘heck out Natural Hazards

ee usgs.gov If you live In

alifornla, find coverage Info

t earthquakeauthorltycom therwise, check with your

state Insurance department

WALTER UPDEGRAVE

Trang 4

RAISEDHOPES

Houses in the family's old

neighborhood of Lakeview are

being rebuilt well off the ground

‘The Pellissiers’ 2006 income looks grand, but

‘most ofit comes from insurance checks for damage totheirNew

BOTTOM

LINE secs"

tincome

Insurance payments $359,220

Mark’ssalary 57000

Billie salary 27083

Other damage payments 19468

Insurance living allowance 19415

Withdrawal from savings 1720

Rental income 3,600

Tovat

oureo

Montgige payoff(NewrOrleans) $251,

Renovations and repairs

Mortgage payoff (Georgia)

Food, groceries

Moragage payments

Demolition (Lakeview)

Vehicleexpenses

Utilities

Day care tuition

Medical and dental expenses

Entertainment, ifs

Property taxes

Homeowners insurance

Income taxes

Student-loan payments

Clothing, furniture

bà dat

Rental property cone g

Vehicles, trailer, time share 27,500

Biles 010)

Mark’sinvestmentaccount 20,000

rorat

Mangage(Geonjahoue) —_ $184000

verat

Tuer WORTH $348,436

120 September ONEY MAGAZINE@35|1972:2007

zens have little faith that elected officials

are competent to liftthe city outof the

‘muck “Louisiana is famous for corrupt politicians; says Mark “We've lived with

it fora long time, but now we've had it”

Atlanta beckons with a house they

own, good schools and ample work for Billie “Everything pointsto Atlanta;

says “Everything but Mark's business.”

For his part, Mark sayshe is willing to keep commuting, but business has been sobad thathe’s had to lay offall but swo employees He estimates that only 18%

of his customers are back If he leaves the Radiator Shop behind, he'd like to get something out of his 23-year invest-

‘ment But it’s not clear how valuable the shop is Mark's father still owns most

of the land and buildings, while Mark’s holdings include a $20,000 plot ofland, the equipment, about $75,000 in cash from insurance payments and $20,000 in investments, His future in Atlanta is any- thing but clear He has thought ofbuying

a franchise or startinganew business, buthe’s hanging back, unsure whether

he wants the responsibility or stress “It's going tobe hard starting over” he says

The Advice

‘To help Mark and Billie decide how to

make a new start, MONEY consulted Deborah Butler, acareer coach and assis- tantprofessorat the Robinson School of Business at Georgia State University in

Atlanta, and Diane Decharles, a finan-

cial planner with the Pinnacle Asset Management Group in Shreveport, who counsels Katrina families

lB WALK AWAY FROM THE BUSINESS

Without much in the way of profits,

Mark's Radiator Shop won't attract buy- ers, says Decharles but he can liquidate the equipment and, because the company isan $ corporation, collect the $75,000

insurance settlement “You probably feel

guilty about the business because it’s been in the family for so long But it's not your fault thatthings aren't going well; it’s Katrina’ fault” she says,

1 GO SLOW Mark’s instinct notto rush into things is the right one, says Butler Plunging into a new business in a strange city right away is risky Instead, he should take an interim job in automotive services until he can figure out whether

he can support himselfin that field—or if it'sreally whathe wants to do

‘To help him activate his network of contactsand focus onwhat he wants both short and long term, Butler recom- mendsthat he trya new self-assessment technique developed atthe Unive

of Michigan called the reflected best- selfexercise First, Mark would e-mail between 10 and 30 people, including

colleagues, vendors, relatives and friends,

and ask each for stories about situations

SO LONG TO FAMILIAR FACES

‘Atthe family's church, ahaven from the trlals that struck with Katrina, Billesaysgood-bye

to good friends Tarin and Tylan Blanst

Trang 5

inwhich he added value Doing that will

helphim recognize his strengths and

use them to figure out what kind of work

‘would suithim—andemployers—best For

Tiêu đề	Tài liệu Money _ The 8 habits of winning investors 13 pptx
Trường học	Louisiana State University
Thể loại	Bài báo

Định dạng
Số trang	10
Dung lượng	2,02 MB