Moving Toward Financial Freedom

doing well with her recovery, but the ordeal was stressful for both Hawkins and his mother, whom Hawkins says had to bear the brunt of the situation. “I pitch in as much as I can. I’ve called her doctors while I’m on the road,” he recalls.

The experience, as well as the turmoil in the stock market, taught him how sometimes there is little control over life. “I’ve learned that it takes time to build your foundation because there are all sorts of distractions,” says Hawkins, who is a little frustrated with the market. “My investments are losing money, so I haven’t made much progress, but I’m not as much in the red as some people. I just have to ride out the ebbs and flows.”

The Advice: Discuss critical issues with parents. Seek full disclosure from parents so that they can work together to ensure that everyone’s interests are protected. Explore a living trust with healthcare provisions. Designate who will take care of parents. Talk to future wife about the financial support of parents.
The Action: During the last several months Hawkins and his parents, whom he still helps out financially, have talked candidly about their future. They saw what happened when a family member died—because she didn’t put anything in writing, her money was distributed in a way that probably would not have pleased her, says Hawkins. He and his parents have vowed to learn from her mistakes. They will meet soon with an estate lawyer to talk about a will, how to protect their assets, the parameters for gifting, and other such issues. The conversations were not difficult to have at all says Hawkins, who also talked about his financial commitment to his family with his future wife, who is supportive.

The Advice: Don’t let history repeat itself. Get even more aggressive about saving and investing. Use the $2,000 contest winnings to open a Roth IRA and invest in exchange-traded funds. Put $500 a month into two no-load value funds.
The Action: The market spooked Hawkins. Consequently, he reallocated some of his investments, making them less aggressive. Instead of investing his contest winnings, he ran for the safety of a money market account with an interest rate of 3.72%. He will park it there until the end of this year and consider investing when the market is a little less volatile.

The Advice: Consider becoming a landlord. Hawkins should consider renting out his townhouse as a way to generate additional income.
The Action: Hawkins became a landlord even earlier than he had expected.

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