Salem business Journal
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Programming is in the Air
that “person” is missing and no one else knows how to proceed. If you believe in your organization and want it to continue past your involvement, make sure you have a foundation that will last. Even the best board can’t function if you don’t have rules, data and money.
Actually, I have to admit, I don’t really like to play Jenga. The fun of the game is supposed to be when the blocks fall down and everyone screams “Jenga!” It took a lot of work to set up that tower in the first place, I like it when it’s tall and sturdy and inevitably, I have to clean up the blocks.
Mary Louise VanNatta, CAE has received her Certified Association Executive designation from the American Society of Association Executives. She is CEO of VanNatta Public Relations, Inc., a PR, association management and public policy consulting firm in Salem, founded in 1967. She can be found at www.vannattapr.com.
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Live From the Elsinore:
Stephen Martin, Executive Director
Autumn is here and we know what that means (besides the constant raking of falling leaves). As the weather brings us indoors for entertainment, we are able to enjoy a classic film shown on the big screen at the Wednesday Evening Film Series, live entertainment whether it be a concert presented by the Salem Pops Orchestra,
Concert Band, the Community
Concert Association, or the Salem Ballet Association. You can choose the Crystal Apple Awards, presented by the Salem Area Chamber of Commerce, which recognizes outstanding community educators. All of these events come to the Elsinore this month.
But autumn is also the time when a Theatre does its programming for next season. Yes, programming takes place now for next year
and beyond. National Booking Conferences are attended in order to evaluate shows, routing schedules are finalized by the first of the year and financial negotiations are completed with the performers. It is not uncommon to have shows scheduled two years or more in advance (of course you won’t know they are scheduled until prior to each season).
Scheduling performances is both an art and a skill. Research is done on each show to see how ticket sales have been in the past in other markets, what type of ticket price is acceptable for that artist. Budgets are developed for each performance that have to take into account the artist fees, printing costs, advertising fees, catering requests, technical equipment required and stage labor required to present the performance.
It is more cost effective to schedule an artist to perform in Salem when you do what is called “block booking” (to schedule three or more performances within the region.) That way the artist is able to amortize their transportation costs to arrive in the Northwest.
If you have a specific performance or artist that you think the community would be interested in seeing or hearing perform, now is the time to let us know. Feel free to contact myself and or the Theatre to give us your input on what you would like to see at the Elsinore Theatre (or in future years). As always …. See you at the Theatre.
themselves, “How will I make my mortgage payment if my investments decline? Do I have reserve funds or a secure income?”
Tax deductions to Offset 401k Withdrawals
Most successful retirees have the bulk of their assets in their home equity and IRA/ 401Ks. As they start withdrawing funds from their IRA/401Ks, they are hit with a significant annual tax bill. When they could use the mortgage interest deduction the most, they no longer have it. As part of long-term planning, someone might want to have a mortgage going into retirement to help offset the annual IRA/401K tax bill and enhance their overall financial goals. For many, the mortgage interest deductions offset taxes due on retirement withdrawals, giving the net effect of tax-free withdrawals from their retirement account.
401k Vacation Condo Many successful people dream of retiring and buying a second home. With $1 million or more saved in their IRA/401Ks, they decide to purchase the vacation home where they will spend their winters. What a surprise when they discover that to pay cash for a $350,000 condo they need to withdraw nearly $500,000 from their IRA/ 401Ks. What if instead they had purchased the condo 15 years earlier, when it cost
$175,000, by using the equity in their home? Today their net worth would be $175,000 higher due to the condo’s appreciation, and they would have the mortgage interest deduction to help offset their IRA/401K withdrawals. In addition, they would have enjoyed the lifestyle benefits of owning their vacation condo 15 years sooner than they
had planned. Making Friend
Under tax law, you can deduct up to $1 million of mortgage interest subject to income restrictions. You can also deduct an additional $100,000 from home equity loan interest. To take advantage of these deductions, make sure to secure a large mortgage when you buy. Under tax law, mortgage interest is deductible only for $100,000 over acquisition indebtedness (the mortgage balance when home is purchased). Home improvements are the only exception. For example, if you sell your home for $400,000 and buy a new home for $400,000 with the cash from the sale, you will lose the tax break and liquidity. But worse, if you later decide to take out a home equity loan, only the first $100,000 will be tax-deductible. Instead, secure a $360,000 mortgage (90%) when you buy the home and the entire amount is deductible.
Where to Safely invest home equity As we know, home equity is serious money. We are separating it from the home to conserve
it, not to consume it. Therefore, home equity is best invested in safe, conservative investment vehicles. Many financial planners prefer the following tax-favored products for investing home equity:
REAL ESTATE INVESTMENT TRUSTS
529 SAVINGS PLAN
Case Study: Management
One couple lived in a $550,000 home in Bellevue, Washington. They owed $360,000 on a 30-year fixed mortgage at 5.875% with a monthly payment of $2,130. They had $190,000 built up in home equity. After understanding the benefits of properly managing their home equity, they decided to separate $155,800 of their equity to invest in a side account. By using an interest- only ARM, they were able to increase their mortgage balance to separate this chunk of equity while decreasing their monthly
mortgage payment to $1,656, a monthly cash-flow savings of $474 per month. They conservatively invested the $155,800 lump sum and the $474 per month savings. If we assume a 6% rate of return, their investment account will grow to $520,196 in 15 years. At the end of 15 years, they will have enough cash in their investment account to pay off their mortgage completely if they want to— 15 years earlier than with their original 30- year mortgage. However, they plan to keep
the mortgage well into retirement so they can maintain the tax-deduction benefits and keep the money in the investment account where it’s more liquid and safe—and will continue to grow.
Case Study: Cash-Flow Management Many homeowners without a large equity balance have benefited by simply moving to a more strategic mortgage that allows them to pay less to their mortgage company each month. A second couple in Redmond, Washington, followed traditional thinking when they bought their $400,000 home. They put 20% down and obtained a $320,000 30-year fixed-rate mortgage at 6.00% with a payment of $1,919 per month. However, once they understood the benefits of integrating their mortgage
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“Attention getters: How to pitch your story”
How do you get an editor’s attention? A panel of Oregon’s leading editors will let you in on those secrets—and more. You'll hear from Rob Smith, Editor, Portland Business Journal; Bill Hutfilz, Managing Editor, Portland Monthly Magazine; and Alyse Vordermark, Assistant Editor, Brainstorm NW.
Sponsored by Craig Walker, FlashNews Wednesday, November 1st from 11:30 a.m. to 1:00 p.m. at the Salem Area Chamber of Commerce, 1110 Commercial St. NE
Reserve your seat NOW Program and lunch: $12 / PRSA members Program and lunch: $15 / nonmembers Program only or student price: $8 503-588-2800 oregoncapitalprsa.org