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WALL STREET, CALIFORNIA | MONEY MAKE-OVER: Southern
Californians Learning How to Succeed in Personal Finances

Carefully Choosing Their Financial Steps

November 16, 1999|JERRY CROWE | TIMES STAFF WRITER

Gordon Lewis describes himself and his wife, Claudia, as "sort of Hollywood expatriates."

Fed up with the entertainment business, they ditched potentially lucrative careers in the mid-'90s--Gordon as a sitcom writer, Claudia as an executive in script development at a production company--to start over in technology.

"Disillusioned doesn't even capture it," Gordon, whose writing credits include work on "Family Matters," "Amen" and "In Living Color," said of their feelings toward Hollywood. "We moved into an area where we felt our talents would be better recognized, where there was less subjectivity and favoritism involved."

Claudia wanted out because of the time commitment.

"In order to be at all successful," she said, "you have to make a lot of lifestyle changes that I wasn't willing to make. I wasn't willing to work 20 hours a day. . . .

"I knew that family was going to be a priority, and I wasn't willing to eat, sleep and breathe my job."

The career changes have turned out well for the couple, considering Claudia works only part time as she pursues a graduate degree in business at UCLA. Together, the couple earn about $100,000 a year--more than they made in Hollywood.

Gordon, 46, is an instructional writer for a maker of CD-ROM-based training programs for Fortune 500 companies, and Claudia, 32, is a computer consultant at UCLA.

The Lewises bought a house in Leimart Park last year and started a family. Their daughter, Nia, will be 1 this month, and they plan to have another child in the next year or so.

They're concerned, though, about the cost of living in Los Angeles.

"It's very expensive here, and we don't feel we need to be here to realize our dreams," said Gordon, mentioning the Research Triangle area of North Carolina as a possible future home for the family. "We'll probably move when Claudia graduates [in 2001], depending on what jobs she might pursue or be offered. We like the idea of being able to get more home and more land and a better quality of life."

Their current non-mortgage debts are few--about $10,000 altogether, most of that a home equity loan. One of their two cars is owned outright and the other one will be in less than a year. But they have not saved much for retirement and will have to start paying off graduate-school loans of about $50,000 after Claudia graduates.

"When I decided to have a baby at the same time I was going to business school," she said, "I knew that meant we were going to have a couple of lean years, but it's literally an investment in the future."

She believes she needed to pursue an MBA to advance her career.

"I was going from one company to the next and finding that all I was learning about was that particular company," said Claudia, who already left the entertainment business before returning to school. "I wasn't learning to be a leader or a manager.

"And, in computers, a lot of companies are failing, so I was getting all this experience seeing what's wrong and I wasn't really getting any learning about how to do things right."

Upon graduating, she expects to earn upward of $90,000 a year as a consultant in education technology, which would increase the family's annual income to about $150,000.

When they ponder how to invest their money, however, the Lewises don't know where to start.

"I've read some of the financial guides," Gordon said, "but it's sort of hard to figure out among the different options which is best. There are so many different options, and they all seem like good ideas, but what's best for us?"

Scott A. Leonard, a fee-only financial planner based in El Segundo, reviewed the Lewises' finances for The Times, looking for answers.

The couple have neglected some insurance and contingency issues regarding their daughter, he said, but have avoided excessive debt. He suggested that, with a little research, they should be able to manage their own portfolio, especially as they are starting out.

Other than their house and cars, the Lewises' assets are few. They have about $10,000 in checking accounts, Claudia has about $5,800 in a 401(k) account from a previous job and Gordon has about $750 in an individual retirement account. Gordon also has about $12,000 in a Writers Guild of America account that will pay him a small pension when he retires.

Leonard said Gordon's first step should be to make retirement saving a top priority through his company's 401(k) plan.

"You need to start saving aggressively," Leonard said. "You need to get into the habit of saving. You have very little in the way of retirement savings, especially for your age." When Claudia is working full time, as much of the additional income as possible should be directed into savings.

Even before they start saving, however, the couple should invest in life insurance and a will or trust, the planner said, to protect each other and their daughter.

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