loan and scholarship opportunities that are only available to those in the military. Prior to leaving for Iraq, Davis should work with his wife to build a file of information that outlines all the available education funding options through the military so she has the information at her fingertips. His daughters should borrow the maximum amount available to fund their education and their parents should agree to fund three to four years of principal and interest payments on the debt for the girls.
“This way, the couple will have an additional four years to build assets while the girls are in college,” says Hinson. If they save $1,100 a month over the next 10 years and achieve a net 8% return on that money, they will have enough to cover 100% of in-state education for one child, says Hinson.
Strive to earn more stripes before retirement. Based on a conservative analysis of retirement income, if Davis retires as a lieutenant colonel, his annual retirement income will be approximately $57,000, or approximately 67% of his current base income. This compares favorably to retiring as a major, where his expected retirement income is 59% of his current base income. To achieve this senior-level rank, Davis needs to develop a plan composed of relationship development/management and work performance.
“Frank should determine who the key two or three people are that will impact his confirmation as lieutenant colonel. He should assess his relationships with them and work to enhance those relationships, look at the performance and credentials of those confirmed as lieutenant colonel, and figure out what he needs to do to compete,” suggests Hinson.
Plan for future business now. It will take time to prepare for the launch of Davis’ security company. He should begin to study business with a focus on understanding how other companies in his industry became
successful. He should study the Pentagon procurement system and minority programs such as 8A and begin crafting a business plan.
“The Davises will do well because Frank is a disciplined man,” says Hinson. “His military training and discipline will propel them forward and help them reach their goals.”
Financial Snapshot: Frank & Priscilla Davis
|
HOUSEHOLD INCOME |
|
| Gross Income | $84,000 |
|
ASSETS |
|
| Market value of home | $175,000 |
| Checking account | 1,200 |
| Savings account | 5,200 |
| ShareBuilder account | 550 |
| Mutual funds | 8,200 |
| Mutual funds for children | 3,200 |
| Savings account for children | 700 |
| Education IRA | 1,700 |
| IRA (Priscilla) | 2,800 |
| IRA (Frank) | 2,717 |
| 1997 Mitsubishi 3000 GT* | 10,000 |
| 1998 Chevy Tahoe* | 12,000 |
| 2004 Jeep Grand Cherokee* | 33,000 |
| Total | $256,267 |
|
LIABILITIES |
|
| Mortgage | $168,500 |
| 98 Chevy Tahoe | 10,100 |
| 2004 Jeep Grand Cherokee | 20,900 |
| Frank’s personal loan | 30,000 |
| Credit cards | 20,000 |
| Total | $249,500 |
| NET WORTH | $6,767 |
*According to Kelley Blue Book.