have about $7,000 in cash, enough to allow them to begin shopping for that first piece of investment real estate.
FINANCE COLLEGE ON THE BACK END
“You can fund a college education, not a retirement,” says Hinson. He strongly discourages the couple from taking money from their retirement savings. In addition to seeking out grants and scholarships, he offers this approach, “Agree to fund student loan payments for the first two years after college. This would help their son during his most critical financial window and provide four additional years for them to accumulate the money to fund the debt,” says Hinson. The couple’s oldest son plans to attend South Carolina State at an estimated cost of $50,000 over four years. The monthly student loan payment after the 2.5-year grace period would be approximately $500 per month, quite doable, given the Whittingtons’ new cash position.
DEVELOP A CORPORATE INCOME ENHANCEMENT STRATEGY
Simply put, the Whittingtons need more income to live the life they want. Hinson suspects they are undervaluing their skills in the marketplace. They need to manage their careers more aggressively and commit to achieving a household income of $200,000 by age 50. An increase of $80,000 in eight years between the two of them shouldn’t be unrealistic, given their experience and education says Hinson. That’s not to say, however, that it will be easy. They must focus on identifying promotion opportunities within their companies, seek more education if that’s what is needed to move forward, as well as
increase their networking activities and work on developing stronger relationships with key managers.
Hinson’s advice about refinancing is a bit hard for Dwayne to swallow because he and Mina are so close to paying off the mortgage, but he understands the potential benefits.
“There’s the possibility that we might lose our jobs. If we had our mortgage paid off, we’d have a roof over our head at least. We could still buy investment property; it might just be at a slower pace. I’m not sure I’m comfortable leveraging the house,” says Dwayne.
Hinson is optimistic about the couple’s future and would like them to invest in themselves by continuing the financial planning process. “They need to finish what we started-to get the quality professional information and advice that will help ensure that they achieve financial freedom.”
Dwayne credits Hinson for getting him and Mina on the same page. They were doing things separately, which is why they were somewhat surprised at their total outstanding debt. They have done a new combined budget with no big gaps, says Dwayne. “We’re refining our five-year plan. We now know where we want to go and have a map to get us there.”
Winner No. 43 Hermennia & Dwayne Whittington