a diversified portfolio,” says McGee, who tailored an asset allocation structure for Williams’ portfolio of 10% cash, 10% fixed income, and 80% growth mutual funds, which included the Smith Barney Appreciation (SHAPX) and the Evergreen Asset Allocation (EAAFX) funds.
McGee had Williams establish a Roth IRA, to which he and his wife contribute $3,000 each, annually. McGee also wanted Williams to establish a SEP IRA because it “works the same way a 401(k) does and it’s a solid way to put away money for retirement without paying a lot of taxes.” Williams says he will establish a SEP IRA in 2005 because he likes “the fact that it allows me to shelter a lot more money than the Roth IRA.”
McGee counseled Williams on starting a 529 college savings plan once the baby arrives, increasing the family’s insurance coverage, and drawing up a detailed estate plan. “I really feel happy now because I’m focused less on showing people what I have, and more on investing for the future,” says Williams. “I have more of an investment mindset rather than a consumer mindset.”