Laying a sound fiscal foundation must be the goal in your 30s

in their own education while saving for their children’s. April, who holds a master’s degree, is taking additional courses so that she can qualify for the highest pay scale in the Lenox, California, school system. Elgin decided in his 20s, while holding down a service job at the local transit authority, that there was a better future for him in owning his own business. As a result, he spent four months in barber school and another two years as a barber’s apprentice, all while holding down his full-time job. “There were some 20-hour days,” he says, “but it has paid off.”

After receiving his barber’s license, Elgin bought a business from a retiring barber for $22,000-paying cash, of course. Now he owns a prospering barbershop where he employs another barber. “I’ve found my niche,” he says. “I’d do what I do now even if I didn’t get paid, but I’ve doubled my income since becoming a barber.”

Together, he and April save more than 30% of their $100,000-plus income while contributing upwards of 10% of their income to their church. “We don’t go without, but we don’t have an extravagant lifestyle either,” Elgin says. The Mosbys have invested their retirement plans heavily in stock funds, building up a $300,000 portfolio. Although they work with a financial planner, Elgin investigates mutual funds closely before buying into them. Some of the mutual stock funds held by the Mosbys include Washington Mutual Investors Fund (Nasdaq: AWSHX), a classic large-cap value fund with holdings in banks, financial services and retail and consumer products companies; Janus Mercury Fund (Nasdaq: JAMRX), which invests in large-cap growth stocks in technology and media; the Legg Mason Value Trust (Nasdaq: LMVTX), which holds a blend of large-cap growth and value stocks with the likes of America Online and Dell Computer (Nasdaq: Dell) in its portfolio; and the Robertson Stephens Emerging Growth Fund (Nasdaq: RSEGX), which focuses on small-cap stocks.

In addition to their stock fund holdings, they own investment properties. “When we met, we both owned town homes,” says April. “Now, we hold them as rental properties.” Also, Elgin is hoping to acquire the building where his shop is located. “I could expand my barbershop, lease space to other commercial tenants and rent the upstairs units as apartments,” he says.

When you’re in your 30s, a sound financial plan with the discipline to stick to it, can equal long-term success.

Couple, husband 36, wife 34 o live in Oak Point, Texas
o husband is an executive, wife a home-based accountant o combined income in excess of $100,000 o have 401(k) portfolio mainly of stocks, some bonds and cash of about $200,000

An asset allocation model should be developed. The $200,000 should be used to expand 401(k) holdings, manage risk and improve diversification. It could
be allocated between seven companies in three different industries. Here are some ideas to consider
if apporpriate: America Online, Intel, Pfizer, Bristol Myers Squibb, Crestline Capital.
Source: Mark spradley, Legg Mason Wood Walker

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