Heal Thy Finances

When her marriage ended, Camille Graham continued to pursue one of her biggest dreams — to become a doctor. Achieving her goal, however, would require perseverance and sacrifice.
Graham got married in 1994 after her third year at Harvard Medical School, where she was pursuing a medical degree and a master’s in public health in healthcare management. Within three years she was divorced and immediately began worrying about her mounting student loan debt. With the loss of the $120,000 salary her ex-husband used to bring in, Graham’s financial outlook seemed bleak. “After grants and scholarships, I ended up taking out $80,000 to finance the M.D. and M.P.H. combined,” she says.

Graham moved into an $800 a month, two-bedroom apartment in Detroit. She was earning $37,000 a year during her residency, which helped pay for food, utilities, and other expenses that added up to a little more than $1,000 per month. Once she completed her residency, the native Jamaican moved to Texas to take a job as a physician associate at Allergy Ear Nose and Throat Clinic of Northeast Texas, earning a salary of more than $200,000. Three years later, she made partner and her salary doubled.

The financial worries Graham had after her divorce are typical for women who rely on their husbands to handle the family finances. Graham realized she had to improve her own money management skills in order to keep her life on track. First, she finished school, which enabled her to significantly increase her salary. Then once her earnings grew, she took the next important step — getting help from a financial adviser.

In 2004, Graham was attending a sports and business networking event and met Jesse Abercrombie, a Dallas-based financial adviser with Edward Jones Investments. “When I met with Camille, her primary goals were wealth accumulation, paying down student loans, estate planning, and making sure that her investments were creditor-protected,” says Abercrombie. “Her investments were scattered in different accounts, so the first focus was to consolidate her assets so she could lower the fees associated with the $200,000 in variable annuities that she had at the time. Also, she had $23,000 in a 403(b) from her hospital job that we discussed rolling over into an IRA.”

Abercrombie says professions in medicine and law are magnets for lawsuits, so ensuring that Graham’s assets were creditor-protected was a top priority. “As a doctor, she runs the risk of being sued, so most of her portfolio is comprised of variable annuities, which protect her in case of litigation,” says Abercrombie.

After working with Abercrombie for a year, Graham’s initial investment of $300,000 earned a 9% return. Abercrombie used an asset allocation model of 30% dividend-paying stocks and mutual funds, 47% growth stocks, 7% aggressive growth, 14% income-generating investments such as bonds ($47,000 of which is invested in JP Morgan tax-free bonds that generate tax-free funds at retirement), and 2% cash. Graham allocates $2,000 per month to her variable annuities, which Abercrombie says “will yield $6.2 million at retirement if she retires at age 65.”

Abercrombie also