A New Path

Pamela Turner had a decision to make. Last summer, working as a project manager for Computer Horizons Corp. in Mountain Lakes, New Jersey, her contract was about to expire. Rather than seek to re-up or find a position with another company, she thought the time was right to start her own consulting business, PMT Associates L.L.C. As it turns out, Turner’s timing probably couldn’t have been better. Within a year of her departure, the IT consulting firm liquidated its assets and in April withdrew its listing from Nasdaq.

“Relinquishing the security of a regular paycheck, benefits, and other perks in order to strike out on my own was a risk that a lot of people probably wouldn’t have taken,” she says. In addition to PMT Associates, Turner also wanted to spend more time running her personal training business, TurneRound Fitness, which she established in 2005–where, as a certified fitness trainer, Turner works with clients in their homes.

Fortunately, the startup costs for both ventures were minimal, consisting largely of expenses such as registration, insurance, and supplies. Still, as she made the transition to an independent contractor, Turner, 34, quickly realized that implementing a savvy, yet sound investment plan that would maintain her current financial independence and ensure her fiscal future would require some careful consideration.

Always mindful about saving, investing, and having a pristine credit rating, Turner is not a novice when it comes to maximizing her money. Perhaps it was this early commitment to financial responsibility that allowed her to buy her first home at the age of 26. But it wasn’t until after she decided to leave behind a six-figure salary and exit the corporate labyrinth that she fully committed to establishing a sound retirement plan.

Turner met with Keith Latimer, a financial adviser at Merrill Lynch in Princeton, New Jersey, who advised her to establish a clear long-term plan. “This was especially important since I was no longer a salaried employee but an independent contractor,” says Turner.

Fortunately, she already had a good start in building a nest egg–she rolled over roughly $40,000 in her 401(k) into an Individual Retirement Account. She also had about $170,000 in equity in a rental property in Easton, Pennsylvania, and owned her residence, a two-bedroom condo in Woodbridge, New Jersey. Perhaps more importantly, Turner has no dependents and is virtually debt free–except for a small student loan balance of about $1,600 and a car lease payment.

As part of her transition, in February Turner sold her condo for $265,000, and temporarily moved into the three-bedroom rental property she owns in Pennsylvania. It just so happens that the tenants are her retired parents, whose rent covers Turner’s mortgage payments. Turner purchased the home in 1999 for $175,000 and says it is now worth more than $300,000. Rooming with her parents will end this fall when construction on her new $360,000, four-bedroom home in Forks Township, Pennsylvania, is completed.

Turner has been working with Latimer for nearly a year. Initially, he was especially interested in her plan for the