What’s the first thing that comes to mind when you hear these names: Mike Tyson, Johnny Unitas or Lawrence Taylor? Or how about Evander Holyfield, Latrell Sprewell or Warren Sapp?

If you said that they are famous athletes of past generations, you would be right. If you said a few of them are Hall of Fame athletes in their respective sports, you would also be right. However, in light of what you are about to learn, the correct answer would be, they are all athletes who have filed for bankruptcy at some point in their lives. With that being said, the first question we 9-to-5-ers ask ourselves is, how is it possible that a person with all this fame and fortune can speed through his money as quickly as he gets up and down the court, throws a punch or runs the bases? Well, in the case of the athletes noted above, the reasons can be too numerous to mention.

In the meantime, let’s consider a few facts:

• 78% of former NFL players go bankrupt or are under financial stress by the time they have been retired for two years.
• Within five years of retirement, 60% of former NBA players are broke.
• Scottie Pippen, an NBA seven-time All-Star and Hall of Famer, made $120MM at one point in his career, only to retire $9MM in debt.
• Mike Tyson made over $400MM in his prime only to lose it all in a nasty divorce, a Federal rape charge, felony drug possession and several DUI’s, among other not-so-memorable times.

Now, let’s take a step back and explore why these athletes, who often earn millions of dollars in salary and signing bonuses, get to the point of “losing it all” (or in some cases, most of it). Truth is, there can be many reasons, and they can intertwine.

Let’s explore a few possibilities below:

• Athletes often come from less-than-fortunate financial backgrounds and have no experience in handling the “big” money that is thrown their way at such a young age, nor do they take the time to educate themselves on becoming financially savvy. Additionally, they don’t understand the concept of investing their money for retirement.
• Athletes make the mistake of thinking their careers will last forever, hence being employed longer. According to the NFL Players Association, the average career of an NFL player lasts only 3.3 years due in part to injury, retirement or getting cut.
• Living lavish lifestyles. Pro athletes’ fortunes may dwindle down quickly because of expensive houses, cars, jewelry etc. High priced wardrobes, gambling, hanging out in night clubs and drugs can be contributing factors as well.
• Athletes have also been linked to making bad investment decisions. Athletes may be lured into putting their money into tangible investment opportunities such as inventions, nightclubs, car dealerships and the like. These same athletes are considered financial prey to disreputable people who see them as easy targets.
• In some cases, athletes will hire the wrong people as financial advisors to manage their money. Typically they will compound the problem by trusting that same person way too much.

So what lessons can we learn through the misfortunes and actions of the pro-athlete? For starters, it’s a fact that most athletes will not earn the same amount of money in post retirement as they do during their playing days. Hence, their highest earning period is often very short. However, no matter how much money we make or how old we are, we all need to save for retirement, emergencies and times in life when our income of tomorrow isn’t as much as it is today. In short, save money during the prosperous times to be ready for the lean times.

Also, before you hire a money manager or advisor, ask some basic questions and do your research. Is the person certified by a national accrediting organization or firm? Have there been complaints or lawsuits filed against him or her? Do they come with strong references? Most importantly, trust your gut. If they seem “shady”, they probably are.

Don’t invest your money blindly. Avoid risky investments or what may appear to be a risky investment. Remember, investing isn’t the same thing as gambling. You don’t want to be too risky with your money, and there is absolutely no such thing as a “can’t miss” investment.

It’s certainly okay to be loyal and generous to your family and friends. Besides, where would any of us be without them? However, it should not cost you your own personal long-term financial security. Don’t carry more than you can bear. Take care of yourself first and your immediate family second. After that, be careful, and use your judgment before you extend your financial security among others.

(Sources: Sports Illustrated, Kidzworld)

Coming from a large family, vacation budgeting is something I learned young. Vacationing is about spending time with the people we appreciate, not about blowing all your cash in just a few short days. There’s no reason to break the bank over your summer vacation. If you’re traveling with people you enjoy, there’s a cost saver right there. A lot of your entertainment will simply involve playing games, laughing, and unwinding with good company…that’s all FREE! For example, instead of going to an amusement/water park for the day or going out on the town for the night, make up your own activities.

Here are a couple ideas to get your started:

Olympic Games

Set up teams before the trip to give everyone time to prepare with team names, uniforms, strategies, etc. There are plenty of games that can include everyone in a large group (relay-style events, timed puzzles, team sports). Be creative and prepared with a master score board (a big piece of poster board works well) and all of the props you will need.

Murder Mystery Night

Playing a murder mystery game is a great form of free entertainment. You can find guides online that are good for groups of various ages and sizes. Check out http://www.host-party.com/Home/Default.

And a few more things to think about…

1) Set a realistic budget and don’t go over it!

2) If you’re traveling with a group, share a room or house. It’s generally cheaper to get one big house that shares common space but has enough bedrooms for everyone. This way, you can afford a nice house for less money; just make sure you have your own personal space to escape to if necessary (like when you’ve had enough of crazy Aunt Susie for the day)!

3) Eat in! Bring as many non-perishable food items that you can pack, and then hit the grocery store when you arrive at your destination. If you are traveling with a group, take turns cooking, and have each person cook their “specialty” so you’ll get a unique, delicious meal each night. If there is a nice restaurant that you just HAVE to check out, go for lunch instead of dinner. Lunch will be less expensive, but you still get to experience the restaurant.

4) Look for coupons, either in an Entertainment book or online. Try doing Google searches and see what comes up for your destination. Following that same train of thought, if you’re staying in a hotel, ask for promotions and/or a room upgrade!

5) If you are flying somewhere, travel during low season and book early. This could save you hundreds of dollars.

Last but not least, don’t be uptight about your money while you’re on vacation. Stick to your plan, but enjoy yourself! It’s a VACATION!

History was made today with the roughly $16 billion dollar IPO of Facebook (FB).

Is it another Apple? Microsoft? Google? Absolutely…..

So, should I buy it today?

I think only the gutsiest of individuals should buy it today, just because there is so much hype in the stock that it may well skyrocket initially and then trend down over the coming weeks.  I may be very well wrong (I frequently am). However brilliant Zuckerberg is, he is now at the helm of a publicly traded company; he is going to face shareholders and analysts who will question and criticize his decisions. They can be a tough bunch. Zuckerberg is no longer operating in a black box.

A safer bet would be to buy either a mutual fund, which focuses on social networking, or a broader based technology fund that in all likelihood will buy it. Mutual funds offer the diversification that can absorb more efficiently erratic stock price swings than holding a stock outright.

Remember Enron? MCI Communications? Woe betide to the poor individual who held these stocks outright; their personal wealth would have been more protected if they had held these shares indirectly in a mutual fund.

Don’t get me wrong…if anyone can chart the future and shape it, I believe it is Mark Zuckerberg and FB; I just think he will need some time first.

There’s a lot of information – and misinformation – circulating about credit scores. Your credit score is important because a low score can cost you a lot of money in terms of higher interest rates or even prevent you from getting credit for things you need, like a new car. So it’s good to protect your credit rating, but make sure you do it the right way. Sometimes you can inadvertently hurt your score even when you’re trying to do the right thing.

How educated about maintaining a good credit score are you? Here are five myths about your credit score unveiled:

1) True or False? Open as many accounts as you can early on.

False. New accounts lower your average account age which could lower your overall score.

2) True or False? Close old, unused credit card accounts.

False. A card that you’ve held for years is better for your score than a new card. Just don’t use the old cards, and gradually close them out over time.

3) True or False? Don’t sign up for too many retail incentive cards.

True. Your score is affected by the number of times credit card companies request your credit report because it may look like you’re desperate for credit.

4) True or False? Don’t open too many credit card accounts.

True. Opening a lot of credit card accounts probably won’t raise your score. Your best bet is a mix between secured loans, like home and car loans, and unsecured loans, like credit cards.

5) True or False? Don’t check your credit score too often.

False. While allowing banks or other lenders to check your score often can have a negative impact on your score, checking your own credit score yourself has no impact on your score – so check it as often as you’d like.

If someone asked, “How much money do you have in your account?” would you know the answer – down to the penny?  Do you rely on an ATM receipt for your latest balance information or your monthly statement for transaction history?

In this era of technological advances, you can access account information from your phone, electronic tablet or computer.  The problem?  Hackers can as well.  By simply opening an e-mail, you can inadvertently download an insidious virus which could enable a criminal to see all of your confidential information.  While banks are putting more security features in place to protect your accounts and related information, YOU still remain the first line of defense.

You should know what’s going on with your bank account better than anyone.  Only you know where you’ve been and where you’ve spent your money.  Take five minutes each day to verify your transactions and balances.  By doing this every day you could potentially mitigate damages caused by either theft or the manipulation of your accounts.

It’s your money!  Make it your business to know where it is at all times!!!!!

Have you ever bitten off more than you could chew or found yourself asking the question, “How did I get myself into this?” In today’s housing market, thousands of homeowners are asking themselves this very question.

Let’s back track a few years to 2006 – a time when young people applying for mortgages were getting approved for three to four times the amount of what they could actually afford.  But hey…spend it if you got it, right? Wrong.

I can guarantee you that the vast majority of the homeowners who are either a) facing foreclosure or b) have already had their home foreclosed upon are saying to themselves, “If I only knew then, what I know now.”  What if I told you that they technically could have “known then what they know now”?  Sound outrageous?  Not really.

Before you roll your eyes or click away, hear me out.  I promise it’s really not that crazy of an idea.  In fact, it’s actually just a dash of common sense seasoned with a little bit of planning (there’s a novel idea).  For the past three to four years, I’ve been “looking” to buying my first house in Canton.  Like many 28-year-olds, I would be a first time home buyer as this would be my first go-round as a homeowner, and more importantly, my very first monthly mortgage.  I’ve gone through the motions of getting pre-qualified for a loan, and with the help of my real estate agent and lender, I have a pretty good idea of how much house I can afford (keywords “pretty good idea”).  But wouldn’t it be nice to test drive my mortgage payment before I drive it off the lot?

Ladies and gentlemen, I present to you the imaginary mortgage…kind of.

So how does it work? Let’s discuss…

Do the Math

Talk with your lender to see how much you can afford. Once you find the mortgage payment amount that you think you are comfortable with, work out the numbers to figure out the amount that your mortgage payment would be if you actually went through with a purchase. Don’t forget to factor in property taxes, insurance, interest rates and other monthly mortgage-related payments such as mortgage insurance and homeowner association fees (it may also make sense to kick in a few extra bucks for maintenance and home improvement projects for we all know if it can break, it will).

What is a mortgage? For Example, here is the a high level look at a 200K monthly mortgage budget for a rowhome in Canton. (These are not exact numbers and don’t reflect actual mortgage rates)

Purchase Price: $200,000 

Mortgage: $930.00
Home Owners Insurance: $60.00
Mortgage Insurance Premium: $185.00 (if applicable)
Taxes: $300.00
Total Mortgage Payment: $1475.00

Utilities: $250.00
Cable & Internet: $120.00
Maintenance & Home Improvement Fund: $100.00
Total: $470.00

Total Imaginary Mortgage Payment: $1945.00

“Pay” Your Mortgage Payment

That’s right, actually start paying your hypothetical/imaginary mortgage. Set up an account at your local bank and start depositing your mortgage payment amount into that account on a monthly basis.  (If you are currently renting, pay the amount that your mortgage payment exceeds your rental payment.)

Don’t Cheat

Pay your mortgage and forget about it. Though you technically have access to your “mortgage” funds, that doesn’t mean you should touch it. You wouldn’t be able to use that money if you had a real mortgage, so you shouldn’t think – or more importantly, act – otherwise in this scenario.

Put Yourself to the Test

Really challenge yourself to stick to your new budget and make your mortgage payments on time. If you find that you just can’t survive without tapping into your imaginary mortgage or that you’re making “late mortgage payments” on a normal basis, chances are that you’ve probably bitten off more than you can chew. Sign up for a personal financial management tool to help you find out where your money is actually going. You might find that you could afford to cut back on your trips to Starbucks and save a buck or two.  On the other hand, if you can easily go about your normal everyday life without being drastically impacted by the dent in your wallet, you’ve now not only proven to yourself that you can handle the mortgage payment, but you’ve also gotten used to living within your “new” means and saved up a nice chunk of change to use as a down payment.

That’s it!  Pretty simple, huh?  Nothing but a little bit of planning, discipline and budgeting – the same factors that you’ll need when you finally take the plunge and buy your first home (or second home for that matter). Only now, you’ll sign those papers with the confidence and comfort of knowing that you can easily afford your new home.

Whether you plan to plant a tree in honor of Arbor Day or not, we thought it might be useful to remind you of some easy ways you can help save trees and reduce the amount of paper clutter in all of our lives.

Here a few simple things you can do to save a tree:

Use Online Banking

Online banking is a great paperless solution to managing your bank accounts – all you need is a computer with internet access (such the one you’re using right now to read this article).

Pay Bills Using Electronic Bill Payments

Once enrolled in online banking, you can initiate payments using the bill payment service.  Using an electronic bill payment service is simple, and it reduces your need to order checks, not to mention the envelopes and stamps you save.

Transfer Money between Banks Using External Account Transfers

Using external account transfers, also known as account to account transfers, you can move money electronically between accounts at various financial institutions.

Sign Up for eStatements

eStatements are delivered electronically to your online banking mailbox.  Not only do eStatements save trees, they also save you the time and trouble of filing your paper statements.  With eStatements, 18 months of statements are automatically saved electronically for retention purposes, so you don’t have to worry about keeping track of all your old statements.

Use Mobile Banking

With Mobile Banking you can see your account balances and transfer money between accounts on the go.  There’s no need to haul around a laptop, simply use your internet enabled phone to quickly access your bank.

In honor of the great White Oak (The official Maryland State Tree…but you knew that, right?), be sure to take advantage of ways to manage your finances without using unnecessary paper.

Last week, in honor of Financial Literacy Month, 1st Mariner Bank had the pleasure of hosting a group of seventh grade students from the Empowerment Academy in Baltimore City who are currently participating in Operation HOPE’s Banking on Our Future (BOOF) program.

Guy Stafford welcomes the students to 1st Mariner.

BOOF’s purpose is to teach people at a young age how to make educated and responsible financial decisions to promote dignity, hope, and economic self-sufficiency in low-wealth communities.  BOOF courses are offered to schools and communities free of charge and are led by HOPE Corps volunteers who have undergone comprehensive training in financial literacy and teaching techniques.  The program has reached over 700 schools and community-based organizations in the U.S., South Africa, and Haiti.

The Empowerment Academy’s BOOF program is run by our own Guy Stafford, SVP, CRA Officer and Community Lending Manager.

Chris Plude explains what it takes to be a teller.

The visiting students were welcomed by Guy Stafford along with Mark Keidel, President,  and Dennis Finnegan, EVP, Retail Banking.  The students then split up into groups and were escorted around to different departments of the bank.

Students were brought to the teller training room, where they were “trained” to become tellers.  They even got to “process” basic transactions.  Once they were finished training, students were given a tour of our Canton branch.

The eCommerce team explained to the students how 1st Mariner Bank uses social media, and the

Erica Barry and Wade Barnes discuss social media.

students discussed smart ways and not-so-smart ways to use their Facebook and Twitter accounts.

The students also discussed and were given advice on many firsts that would be coming up, such as how to prepare for their first job interview, things to consider when purchasing their first car, and tips on saving money for college.

The 1st Mariner presenters and volunteers were very impressed by the students’ eagerness to learn about banking and making smart financial decisions, and we can’t wait until their next visit!

For more photos from the Empowerment Academy visit, see our Facebook page.

Anirban Basu, Chairman & CEO of Sage Policy Group, Inc.

Job creation has picked up in Maryland. After stumbling for much of the previous summer, recent months have been very positive from a job growth perspective.  The working hypothesis is that this represents economic multiplier effects related to base realignment activities at Fort George G. Meade in Anne Arundel County and at Aberdeen Proving Ground in Harford County.

Between February 2011 and February 2012, employment in the Free State increased 1.9 percent or by 47,000 jobs according to establishment survey data provided by the Bureau of Labor Statistics.  That ranks the state seventh in the nation with respect to year-over-year percentage job growth, a significant improvement from a particular period last year when Maryland ranked dead last (May 2010 v. May 2011).  Leading growth sectors include construction (+5.0%), education and health services (+4.2%), professional and business services (+3.1%) and leisure and hospitality (+2.9%).  Base realignment has helped to support job growth in a number of key business segments, including professional services and construction.

Maryland’s January 2012 unemployment rate represented the lowest rate in three years.  The state’s jobless rate dropped to 6.5 percent in January, almost 2 full percentage points below the national average of 8.3 percent for that month (now 8.2 percent; March 2012).

Other sources of information are similarly sanguine.  A recent Maryland Survey of Business Activity conducted by the Federal Reserve Bank of Richmond indicates that business activity increased at a solid pace in March with the general business activity index jumping to 26 from 8 – the highest reading since April 2011.  Roughly 50 percent of respondents in the March survey expect business conditions and sales revenue to improve over the next six months.

Despite the emergence of optimism, headwinds remain.  As of this writing, U.S. equity markets are in retreat and long-term interest rates are falling, an indication of ongoing concern regarding the economic outlook.  The consensus forecast is for roughly 2 percent growth in America in 2012, with the implication being that the economic recovery remains fragile.

Anirban Basu is Chairman & CEO of Sage Policy Group, Inc., an economic and policy consulting firm in Baltimore, Maryland. Mr. Basu is one of the Mid-Atlantic region’s most recognizable economists, in part because of his consulting work on behalf of numerous clients, including prominent developers, bankers, brokerage houses, energy suppliers and law firms. On behalf of government agencies and non-profit organizations, Mr. Basu has written several high-profile economic development strategies, including co-authoring Baltimore City’s economic growth strategy. His opinions do not necessarily reflect the opinions and beliefs of 1st Mariner Bank.

There’s something about spring that is refreshing.  Maybe it’s the air blowing through the open windows, the smell of fresh cut grass, or the colorful flower buds popping out of garden beds. There’s also something refreshing about a clean house! As you do your spring cleaning, keep these three categories in mind:

1) Organize It

Whether you’re going through the shoes in your closet (boots in the back, flip flops up front please), or sorting through old papers, now is a good time to organize it! Take those papers that you’ve let pile up on your kitchen counter, pull out things that you know you want to hang onto (i.e. important files from the year), and take them to the file cabinet or desk drawer and label it.

2) Toss It

Some things just need to get tossed. Those winter boots that have holes in them won’t do you any good – toss it! Old mail containing no personal information that you’ve held onto for whatever reason (expired coupons, outdated catalogs or magazines), just toss it!

3) Shred It

This one doesn’t apply to shoes, but it is very important and often overlooked for papers.  While going through your papers that you don’t need, separate anything that has any personal information on it (name, address, account number, etc.) and shred it! It is important to protect your identity.

Don’t own a paper shredder? We got you covered. 1st Mariner will have a Shred-It truck at the Cockeysville and Dundalk branches on Saturday, April 14th, from 9:00 a.m. to 1:00 p.m.  Just bring any unwanted documents, and we’ll do the rest.

Happy spring cleaning!