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Sowing Seeds For Financial Freedom

FOLLOW-THROUGH: Stewart ended up using the $2,000 contest winnings for emergency expenses, including putting money back into her property and getting a new motor for her car. However, she has been putting $100 each month into a savings account, which has $1,800 compared to $200 a year ago.

THE ADVICE: Enroll in her company’s short-term and long-term disability program.
THE FOLLOW-THROUGH: Stewart’s weight and other health issues have been roadblocks in her ability to obtain disability insurance. But she is striving to change that situation through an exercise and diet regimen, including working with a personal trainer. She is also looking into other insurance options.

THE ADVICE: Draft and execute a will, revocable living trust, and durable power of attorney for healthcare.
THE FOLLOW-THROUGH: Stewart hasn’t made progress in this area but plans to do so early next year.

THE ADVICE: Postpone investing in any new areas.
THE FOLLOW-THROUGH: Stewart still gets I Bonds on a regular basis. She has continued to invest in and increase contributions to her 401(k) plan, now valued around $20,000 versus a little more than $7,000.

THE ADVICE: Find a part-time job in real estate.
THE FOLLOW-THROUGH: Stewart has gained a lot of firsthand knowledge and experience about being a landlord but found that she didn’t have the time to engage in real estate. She has opted instead to pursue art con
sulting, an endeavor in which she has prior experience.

January 2006 Winner Tyrone Springs
A young real estate mogul in the making, Tyrone Springs is making the most of his rental properties. He still owns seven: three in Tulsa and four in Philadelphia. Financial adviser Kathy Williams recommended he sell at least one of the Philadelphia properties to increase his emergency cache. But Springs is determined not to unload any of his properties for another five years. Since winning the contest, he has worked with an accountant to improve his recordkeeping and gain more tax benefits. He has mapped out a financial plan for when he turns 30.

The 24-year-old professional has experienced a major life change since January. He recently relocated from Tulsa, Oklahoma, to Baltimore for a better job opportunity. Previously, he worked as a document specialist with Bank of America, earning $34,000 a year with an additional $17,340 annually in rental income. He now works for a major insurance carrier, making a better salary and bringing in more than $19,000 in real estate income.

Even though he has received a boost in income, Springs must contend with an increase in his monthly expenses, including car insurance, gas, heat, and electricity. He also no longer owns his primary residence, paying about $1,000 a month in rent. “I went from having a four-bedroom house to living in a two-bedroom apartment. My standard of living has definitely changed, but I think for the better,” he says.

“I went from having a four-bedroom house to living in a two-bedroom apartment. My standard of living has definitely changed, but I think for the better.” — Tyrone Springs

THE ADVICE: Take action. Springs either has to raise rents or decrease operating