Prescription for prosperity: a financial planner assesses the goals of an African American family - and offers advice on achieving them

Black Enterprise, Jan, 1996 by Juliette Fairley

In terms of retirement, there is some bad news. Remember, the Moores want to retire at 50 years of age. But Warden says that that goal isn't realistic because the Moores are just now starting to save money. "I think they need to be more practical, and in this case that means to slow down," he says.

Warden suggests that Leslie increase her retirement contributions from 8% to 10%, which would allow the couple to have more money later and more fun for retirement.

The Moores have some investments, including Double E Savings Bonds. Warden thinks the Moores would do better to reinvest that money in a more aggressive fund that has a higher rate of return. "Bonds are very conservative. Where there's no risk there's no reward," he says. "They are young and they have plenty of time to weather the market's ups and downs. Currently, 50% [of their investments] is in fixed income and 50% is in equities. Because of their age, I recommend 80% in equities and 20% in fixed income or conservative accounts."

The Moores currently have variable life insurance policies worth $100,000 each. But that's not enough, according to Warden. He suggests that they get a term rider on each policy for an additional $150,000 for a total of $250,000 each. "That way, in case one of them dies, the remaining spouse would have enough money to pay off the house and cars, and money to pay for their child's education," Warden says.

Warden adds that Lawrence needs a supplemental disability insurance policy. The current plan offered by his employer covers only 60% of his salary if he becomes disabled. Lawrence is currently paying $16 a month, and for just $4 more he could increase the coverage to 85% of his salary.

The Moores' financial goals are attainable, but the couple must do some ardent planning to achieve them. Warden says their financial situation is similar to many other young couples who are just starting a family. "They can avoid the pitfalls by keeping expenses down and putting away dollars monthly," he says. "The key to making it is focusing on long-term objectives, such as retirement and college education."

RELATED ARTICLE: THE MOORES' GAME PLAN FOR PROSPERITY

1. Pay off all credit card

debt. 2. Refinance home to lower

interest rate. 3. Use computer software to

track monthly expenses. 4. Refinance cars to lower

interest rates. 5. Take on no more consumer

debt. 6. Increase the amount of

pretax 401(k)

contributions. 7. Invest more aggressively. 8. Increase the face value

of life insurance. 9. Increase disability benefit

to 80% of current

income. 10. Apply for Georgia

homestead exemption to

reduce property taxes.