Ibrahim Jackson, 30, and his wife, Natasha, 30, purchased a house in Baldwin, New York, about three years ago. At the time, they had $12,000 to $15,000 in debt, and Natasha was transitioning from being a full-time employee to a part-time one. Both Ibrahim and Natasha work in the field of accounting, and they admit they never saw the need to consult with a financial adviser. But the couple decided to employ the help of AXA adviser Chris Jones who worked in the same building as Natasha and whom she had met several years earlier.
“We started looking at our expenses and felt it was good to get an outside opinion,” Natasha says. Ibrahim adds, “Our goals were to get an idea of where we were financially and where we’d like to be. We also had entrepreneurial dreams and felt that Chris would help us expedite them.”
The Jacksons bought their house in 2003 for $360,000 and it’s currently valued at $450,000. They own a couple of late-model Nissans — Natasha has a 2003 Sentra and Ibrahim has a 2005 Murano — and they devote a lot of time and energy to solidifying their business, IND Transport, a freight and logistics company. At this point in their lives, they had begun to grapple with the reality of having very little saved for retirement and no life insurance, and their family was growing. “Financial planning is a lifelong process and I tried to show the Jacksons how to incorporate it into their lives,” Jones says.
The first thing Jones had the Jacksons do is take out a variable life insurance policy. A variable life insurance policy has wealth accumulation and protection features. “I also included a term insurance to diversify the policies somewhat, and also give them the added protection,” says Jones, who used an asset allocation model of 5% cash, 20% international stocks, 30% large caps, 25% small caps and midcaps, and 20% bonds to round out the Jacksons’ investment portfolio.
Jones then had Ibrahim and Natasha complete a risk tolerance questionnaire. The results showed them to be moderately aggressive investors. “Their goals included paying down debt and saving. Over the past year, they have successfully paid off the majority of their debt, and because they have never [saved regularly,] I instilled it in their minds to save aggressively [and build up] three to six months of expenses — roughly $15,000. Estate planning has been discussed and will be put in place in the future,” says Jones.
Jones advised the Jacksons to set up a 529(b) plan for their 8-year-old son, Darion, and to contribute $50 a month to it, then increase that amount to $100 a month in the near future. Ibrahim’s mother also opened a 529 plan for Darion, to further invest in his college education.
Ibrahim diversified his retirement portfolio on Jones’ advice. As a result, his 401(k) grew from $8,000 to $23,000. As a part-time worker, Natasha plans to open an IRA since she won’t have a 401(k).
A year after actually implementing the financial