1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Kwame and Laticia Adeyemi At the age of 36, Kwame Adeyemi recently finished his cardiology fellowship program and finally, after years of intense and expensive training, became licensed to practice medicine as a heart surgeon. With that came an overnight increase in his income from $62,000 to $475,000 a year. Kwame is admittedly not used to his new financial standing. How successful his life was turning out still feels unreal to him, a son of immigrants from Ghana and Nigeria. As with most young doctors, his professional training dominated his life for years, leaving him little time or energy to take stock of where he was and where he was going, financially. He readily admits that he does not know much about how to manage his money. 20 21 22 23 24 Kwame's wife Laticia is a blessing in his life. Ever since they met at a medical conference 3 years ago and fell in love, she always grounded him and gave him a clear sense of direction. At 31 years old, Laticia has an exciting and demanding career of her own. She is a molecular biologist with Pfizer, a pharmaceutical company, making $113,500 a year. They are in a loving and committed relationship and look at all their finances as joint money. 25 26 27 28 29 30 31 Family Planning Recently, Laticia felt an increasing desire to start a family. After some discussion and contemplation, the Adeyemis decided to try to conceive, although neither of them is clear on what having a child would mean for them financially, and what level of disruption their careers might see. 32 33 34 A week ago, Laticia found out she was pregnant. With their busy careers, and now with a child on the way, Kwame and Laticia realized they needed financial advice. They came to your financial planning practice for help sorting out where they stand financially, where they should be going, and how to get there. 35 36 Liquid Assets Kwame has $5,000 in his checking and $67,200 in a bank money market account yielding 0.5% per year. Laticia has $4,300 in her checking account. Home and Mortgage Laticia came into the relationship owning a co-op apartment, where they both currently live. They love it. There's enough space, even after the baby arrives. In about 7 years, when it's time for their future kid to go to school, they think they might want to move to a quieter neighborhood, perhaps even out to the suburbs. They'll worry about that when the time comes. The market price of the apartment is estimated at $882,000. Laticia initially borrowed $650,000 to buy it; she currently owes $393,000 on the mortgage. It's a 30-year fixed rate mortgage; the monthly payment (principal and interest) is $2,973. Laticia does not remember what the interest rate is, but they both agree they want to pay off that mortgage as soon as they can, feeling that owning real estate outright is the surest way to financial security. Kwame and Laticia have been diligent trying to pay more than they have to, and they plan to keep doing that. Their monthly apartment maintenance is $700. Real estate taxes and homeowner's insurance premiums are $800 a month altogether.

create cash flow and balance sheet

1 Kwame and Laticia Adeyemi 2 At the age of 36, Kwame Adeyemi recently finished his cardiology fellowship program and finally, after years of 3 intense and expensive training, became licensed to practice medicine as a heart surgeon. With that came an 4 overnight increase in his income from $62,000 to $475,000 a year. Kwame is admittedly not used to his new 5 financial standing. How successful his life was turning out still feels unreal to him, a son of immigrants from 6 Ghana and Nigeria. As with most young doctors, his professional training dominated his life for years, leaving 7 him little time or energy to take stock of where he was and where he was going, financially. He readily admits 8 that he does not know much about how to manage his money. 9 Kwame's wife Laticia is a blessing in his life. Ever since they met at a medical conference 3 years ago and fell in 10 love, she always grounded him and gave him a clear sense of direction. At 31 years old, Laticia has an exciting 11 and demanding career of her own. She is a molecular biologist with Pfizer, a pharmaceuticalcompany, making 12$113,500 a year. They are in a loving and committed relationship and look at all their finances as joint money. 13 Family Planning 14 Recently, Laticia felt an increasing desire to start a family. After some discussion and contemplation, the 15 Adeyemis decided to try to conceive, although neither of them is clear on what having a child would mean for 16 them financially, and what level of disruption their careers might see. 17 A week ago, Laticia found out she was pregnant. Wtet their busy careers, and now with a child on the way, 18 Kwame and Laticia realized they needed financial advice. They came to your financial planning practice for help 19 sorting out where they stand financially, where they should be going, and how to get there. 20 Liquid Assets 21 Kwame has $5,000 in his checking and $67,200 in 22 a bank money market account yielding 0.5% per 23 year, Laticia has $4,300 in her checking account. 24 Home and Mortgage 25 Laticia came into the relationship owning a co-op 26 apartment, where they both currently live. They love it. There's enough space, even after the baby arrives. In 27 about 7 years, when it's time for their future kid to go to school, they think they might want to move to a 28 quieter neighborhood, perhaps even out to the suburbs. Theyll worry about that when the time comes. 29 The market price of the apartment is estimated at $882,000. Laticia initially borrowed $650,000 to buy it; she 30 currently owes $393,000 on the mortgage, It's a 30-year fixed rate mortgage; the monthly payment (principal 31 and interest) is $2,973. 32 Laticia does not remember what the interest rate is, but they both agree they want to pay off that mortgage as 33 soon as they can, feeling that owning real estate outright is the surest way to financlal security. Kwame and 34 Laticia have been diligent trying to pay more than they have to, and they plan to keep doing that. 35 Their monthly apartment maintenance is $700. Real estate taxes and homeowner's insurance premiums are 365800 a month altogether. 37 Income taxes 38 Being high earners, the Adeyemis' taxes are also high. Their federal income taxes are estimated at $130,000 a 39 year, and the New York's income tax total is expected to be $46,000 a year. 40 Other expenses 41 Laticia and Kwame barely buy any groceries, maybe $200 worth a month. They mostly eat out, and typically 42 spend anywhere from $650 to $1,000 a month. Their utility bills are $300 on average. Clothing expenses are 43$250, transportation is $480, entertainment is $00, and other miscellaneous expenses are $1,000 a month. 44 Despite their busy schedules, they try to go on one annual vacation together, typically spending $4,000 in total. 45 Student Loans 46 Kwame just consolidated his student loans at 6.25% interest rate for 10 years. His monthly payment is $3,009. 47 Laticia's current student loan balance is $63,000. Her monthly payment is $1,008, and the interest rate is 3.9%. 48 Employee Benefits 49 Kwame works at South Brooklyn Health (formerly Coney island Hospital), part of NYC Health + Hospitals 50 Corporation. Like most large employers, it offers its employees subsidized health insurance coverage. Kwame's 51 share of premiums to cover his family is $400 a month. He also signed up for disability income insurance through 52 work, where his premium is $294 per weekly paycheck. 53. Investments and Retirement Planning 54 NYC Health + Hospitals employees can participate in the New York City Deferred Compensation Plan (NYC DCP). 55 The plan has both a 401(k) and a 457 components, both of which Kwame can max out every year, if he wanted 56 to. Kwame heard from colleagues that the 457 plan is better (he does not know why), so he set up his 57 contributions recently to max it out every year. His current balance in the plan is $13,000, and he has been 58 contributing to the Traditional option only. He also has a Poth IRA he established prior to his current 59 employment, where the current balance is $37,000. 60 Laticia has been contributing $4,000 a year to her Pfizer's Roth 401(k) account lately, and has accumulated 61$52,000 in it. Pfizer provides a generous dollar-for-dollar match of employee contributions up to 4.5% of their 62 compensation, This matching contribution goes into the Traditional type of account; her current balance there is 63$14,400. 64 Kwame and Laticia are somewhat more conservative investors than most others their age. They understand they 65 need significant equity exposure in order to achieve a better long-term return, but they get nervous when their 66 investments go down in value. 67. The Adeyemis plan to retire and start receiving their Social Security benefits at the same time, when Kwame is 6867 and Laticia is 62 years old. Their monthly Social Security retirement benefits at those ages in today's dollars 69 are estimated to be $3,200 for Kwame and $2,000 for Laticia. They think their retirement expenses in today's 70 dollars will be 70W of their total cash outflows now. Other than Social Security, they will rely on their retirement 71 accounts in order to meet their retirement expenses. They want to assume they will die in the same year, when 72 Kwame is 95 and taticla is 90 years old