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AS MORE AFRICAN AMERICANS recognize the importance of investing, there is good news to report. Over the past five years, the percentage of high-income African Americans (earning more than $50,000 annually) who invest in the stock market is up 30%, and the number of those who have mutual funds or brokerage accounts is up 21%, according to the 2002 Ariel/Schwab Black Investor Survey.

BLACK ENTERPRISE has been working to grow those percentages. At the core of our Black Wealth Initiative, a financial education and empowerment program, are 10 principles for disciplined saving and investing known as the Declaration of Financial Empowerment (DOFE). BE developed the Financial Fitness Contest in January 2000 to help readers, like you, fully embrace these principles.

Since its inception, we have identified 31 individuals and families in need of financial advice. We provided them with an initial one-hour consultation with a financial planner or investment consultant, and $2,000 to apply toward debts or to contribute to an investment account. Here we share the financial journeys of five of our recent winners, to see just how far they have come and how much they have left to accomplish.

JANUARY WINNERS: TINA AND PATRICK ALEXANDER SAN ANTONIO, TEXAS

January 2001 Financial Fitness winners Tina and Patrick Alexander were burdened with debt, which included $13,000 left on an SBA-guaranteed loan they received for a Computer-Tots franchise which failed after three years. Following the advice of Certified Financial Planner and President of the AFP Group in Houston, Cheryl Creuzot, the couple paid off the loan--which was at the highest interest rate, 10.5%--by doubling their $570 monthly payment and applying the $2,000 contest winnings toward the debt.

The couple has embraced DOFE principle No. 5: To engage in sound budget, credit, and tax management practices. They sliced their credit card balances in half, to about $2,200, and reduced a $9,000 personal loan Patrick took out for courses toward becoming a certified Microsoft engineer; it's now around $4,500. The couple also bought a new car assuming a $470 monthly car note.

The Alexander children, 11-year-old De'Jaune and 19-year-old Dmetrius, have also gained financial knowledge. De'Jaune has earmarked a portion of her allowance and cash gifts for a savings account, while Dmetrius rebuffs the courtship of several credit card companies. "He has been bombarded with offers by credit card companies," says Tina. Dmetrius did take out a $5,000 student loan for college, however. He also received scholarships to attend St. Mary's University in San Antonio, where he is studying industrial engineering.

One slight setback is that Tina--a former reservations clerk for Southwest Airlines while also working as an assistant auditor for the Texas State Senate--now has one job instead of two, reducing her annual gross income from $42,085 to $31,000. She still has about $1,000 sitting in a 401(k) retirement plan from her job with the state senate, and $2,047 worth of employee stock from Southwest Airlines. She rolled over $5,900 from Southwest Airlines' profit-sharing plan into a traditional IRA gaining 3.6% interest. She also has another $1,292 in a 457 salary-deferral plan with the Texas State Senate. "I am looking into different ways to invest the money that is still at my old jobs," says Tina, who is now a fiscal officer for the city of San Antonio.

Minus the extra income, the Alexanders have changed their spending habits by not eating out as much and having their son live at home instead of on the college campus. They have also developed a budget to pay bills and secure more money to invest for retirement They still have the challenge of building up their cash reserves and starting an education fund for De'Jaune.

FEBRUARY WINNER: JOYAH PUGH NEW YORK, NEW YORK

Since winning the contest last winter, Joyah Pugh, a 25-year-old dancer and administrative assistant in municipal research with the U.S. Trust Co. of New York has kept in step with her finances. She used $1,000--half her winnings--to pay off one of her student loans. (She still has about $14,000 in student loan debt.) She then used the $50 per month she was putting toward that loan to supplement her savings, which now total more than $5,000, in accordance with the advice of Shuron A. Morton, a personal financial advisor with American Express Financial Advisors in New York

Pugh invested the other half of her winnings in an S&P 500 Index Fund. "I thought the index fund was a good first investment for someone who didn't know a lot about investing and was new to the market," says Morton. Pugh has since transferred her money into the Muhlenkamp Fund (MUHLX), a mid-cap value fund.

Pugh has been studying and following the market. Despite recent downturns she realizes that, because of her age, time is on her side. "I can watch my investments as they grow, and learn along with them," says Pugh, who altered the investment mix in her 401(k), which is valued at around $7,200, to include the Excelsior Blended Equity Fund (UMEQX); the Excelsior NY Intermediate Fund (UMNYX), a high-yield fund; and the Excelsior Value & Restructuring Fund (UMBIX), a growth fund. "I decided on a blended fund because I didn't know which small- or large-cap stocks I wanted to own; this way I get a different mesh of stocks in one bundle. As far as the high-yield fund, I liked the portfolio manager's style." She now contributes 10% of her salary, which increased from $30,000 to $36,000, to her 401(k).

Pugh follows DOFE principle No. 9: To maximize my earning power through a commitment to career development, technological literacy, and professional excellence. She intends to build a career in finance. With the hope of entering a top M.B.A. program come fall 2003 or 2004, Pugh has been researching and applying for various grants, scholarships, and fellowships.

In the meantime she faithfully sets aside money for savings and investments. Each month, $200 is automatically deducted from her checking account and added to her index fund. Sometimes as much as $325 gets deducted, depending on whether she gets paid for any dance gigs. Right now she is doing consulting mostly on a volunteer basis, which may not help boost her coffers but it does fulfill her soul.

AUGUST WINNER: DARYLL GRIFFIN WASHINGTON, D.C.

Events of Sept. 11 followed by an economic downturn and an unstable stock market made many investors jittery. August winner Daryll Griffin was no exception. Griffin and his twin sister, D'Angela, initially planned to invest the family's inheritance of $70,000 in the stock market, but have since become more risk averse, leaving the money in a money market account earning about 1.5% interest. Griffin's personal investment goals are now leaning more toward security and capital preservation rather than capital appreciation.

Griffin adheres to DOFE principle No. 2: To be a proactive and informed investor. Receiving a modest $1,000 salary raise, Griffin decided to increase his regular contributions to his 403(b) retirement plan at work--from 12% to 15% of his pretax annual salary of $50,500. He also reallocated his assets adding a bond fund and a money market fund to his existing mix of small-cap, large-cap, mid-cap, and international mutual funds. Another major change is Griffin reallocating 50% of the money applied to his 403(b) into fixed-income vehicles.

"By the end of this year I want to move about 25% of the money [in the 403(b)] into the bond fund," says the 34-year-old staff associate for the U.S. Conference of Mayors in Washington, D.C. "The remaining 25% will go into my mutual funds." Before June, Griffin's 403(b) account was valued at $47,000, but it has since dropped to $44,000.

Given that the savvy investor had done such a great job at structuring long-term and intermediate investments, Pierre Dunagan, president of the Dunagan Group, a financial advisory firm in Chicago, suggested that he focus on short-term instruments. Griffin, who describes the market as "freefall," has set aside $12,000 (or six month's worth of living expenses) by continuing to make regular, monthly contributions of $160 to his money market account. He also used his $2,000 tax refund, plus another $2,000 in repaid debt, to beef up his emergency funds.