A Life Makeover

Leslie Henderson has Hollywood on her mind. At 41, she’s a 20-year veteran looking forward to retiring from the Houston Police Department within the next 10 years. Single and free-spirited, she is counting down the time until she can fulfill her true passion — screenwriting.

In the meantime, Henderson knows there is a lot of financial preparation to be done. She earns $70,000 as a police officer working in the Houston bike patrol administration and training unit. At the end of last year, her pension was valued at more than $64,000. She also earns at least $6,000 a year from a part-time job riding a bike patrol in inner-city neighborhoods. “I use that money to travel to Los Angeles for screenwriting workshops,” she says.

Two years ago, Henderson won $13,000 in a contest by writing a powerful testimony about the benefits of BC Powder, a pain reliever from GlaxoSmithKline. She enters writing contests to generate income as she moves toward retirement.

That $13,000 went toward the downpayment for her $184,000, four-bedroom home in League City, Texas. She also tapped $22,000 from a stock portfolio and a $5,000 closing costs bonus from her real estate agent to put up about $40,000 for the house. While she is happy to have her home, she says she’s settled, but not set.

Henderson has good financial habits. She places $800 a month into her savings account, totaling nearly $41,000, and contributes $200 monthly to her deferred compensation plan, valued at $42,000. She has also paid off her 2002 Chrysler Sebring. Henderson has little debt other than $1,500 in credit card balances.

“I’m frugal,” Henderson says proudly. “I’m not into designer this or that. I use coupons; friends call me cheap.” One hurdle she’ll have to climb to reach her goals is her skittish attitude toward investing. In 2000, she put $25,000 into a mutual fund brokerage account, which sank to about $5,000, then rose to $22,000 by the time she liquidated the fund last year. “I was disenchanted with the market. It was one reason I decided to buy a home, which is a good investment.”

Henderson is optimistic. “I got bad advice from a financial adviser in the past,” she explains, but now admits, “I need an investing strategy.”

The Advice
To give Henderson direction, we paired her with Jocelyn Wright, a certified financial planner with Wealth Development Strategies in Houston.

Wright says Henderson is “an excellent example of someone who lives within, but also below, her means.” Wright applauds Henderson for having more than six months of salary in her savings and about $50,000 in equity in her home. She says Henderson is in good shape but is capable of quite more.

Expand investments. Currently, all of Henderson’s investments are with her employer. “I want to see her begin to accumulate assets in outside accounts,” Wright says. Since Henderson has more than six months of emergency funds in a savings account earning 2%, Wright says she should invest the $6,000 surplus in growth mutual funds that will give her an opportunity to