The American way

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By George Mannes, Money Magazine senior writer

When Charlotte Craig was only a year old, she had an operation to remove one of her kidneys. Her doctor advised her parents to treat their daughter gingerly. "Don't put her in any contact sports," he told her dad Jim and her mom Charlotte, both now 51.

But if young Charlotte was supposed to be a ballerina, she didn't get the message. Her father took taekwondo classes. Her two older brothers - Randy, now 32, and Logan, 20 - did too. And by the time she was three years old, Charlotte was begging to study taekwondo as well.

While her father and brothers practiced their moves at their teacher's studio, Charlotte play-acted her own taekwondo lessons with the other toddlers hanging around in the waiting area. "She'd line them up and teach them," says her mother.

So when Charlotte turned five, her parents gave her a rubber pad to wear over her remaining kidney and enrolled her in taekwondo lessons. By six she was competing in local tournaments where she sparred fiercely with other girls, even if they outweighed her by 20 pounds. "She'd kick them and she'd fall down," Jim says. "Charley had no fear."

Initially the expenses were manageable. Lessons ran $65 a month, the tournaments were within easy driving distance, and the entry fees were low. The costs turned up a notch in 2000, when Charlotte, then nine and dominating her age group, started traveling out of state for the annual national Junior Olympic tournament. (She won a bronze medal in her debut.)

Once the family added up the plane fare for Charlotte and her parents, the hotel, food and other incidentals, each tournament easily cost $2,000. Plus, Jim had to take off a couple of days from work, which meant $500 subtracted from the $75,000 he earned annually installing heating and air-conditioning systems.

Still, the family had enough savings in 2001 for a down payment on a $95,000 five-acre parcel of land in the hills of Temecula, where they planned someday to build their dream home.

The following year they sold their house in nearby Riverside, as well as a second place they owned and rented out, and used the proceeds, along with a $374,000 construction loan, to build a five-bedroom, single-story home Jim designed himself. (The family lived in temporary quarters on the site until the house was completed in 2004.)

But the financial strain of taekwondo was taking its toll. Charlotte turned 14 in 2005, making her old enough to compete for a spot on the U.S. junior and senior national teams. She won gold at the necessary tournaments, earning a spot on both teams.

But the wins were costly: The Craigs took Charlotte to six tournaments that year, spending a total of $12,000 on everything from air fare to admission tickets for Mom and Dad. Jim missed three weeks of work, in effect costing them another $4,500. They found themselves constantly running short. Mom Charlotte borrowed $1,500 from their eldest son, Randy, when their bank account ran low.

Still, neither parent ever considered asking Charlotte to quit. "As long as she wanted to compete, I would find a way to support her," Jim says. "You don't want to say, 'I can't afford this.' "

Footing the bill

So the Craigs made a tough decision: Less than a year after moving into their dream home, they sold it, for just over $1 million. Pressured by the buyers to move quickly, the Craigs snapped up the first empty house they could afford, putting half of the $500,000 they made on a $535,000 tract home in Murrieta.

The sale eased the strain and even left the Craigs with enough cash for another real estate venture. Buoyed by his experience building his dream home, Jim wanted to construct another palatial house, this time with the intention of selling it for a hefty profit in what was then a still sizzling housing market.

Armed with $120,000 in working capital, he acquired another property nearby and took out a $1.4 million construction loan to build a 5,000-square-foot extravaganza that he hoped to sell for $2.2 million.

A major turning point in Charlotte's athletic career - and the Craigs' finances - came early last year when Charlotte was promoted from an alternate on the senior national team to a full-fledged member.

Travel expenses for the Craigs dropped as Charlotte cut back on tournaments in the U.S. to focus on international events and as USA Taekwondo, the sport's governing body in this country, picked up the tab for her air fare, food and lodging for international tournaments. Plus, Charlotte started receiving a stipend for expenses from the U.S. Olympic Committee (which, like USA Taekwondo, is privately funded).

True, it's not entirely a free ride the way it is in China for Luo Wei. The Craigs still have to foot the bill for Charlotte's $1,500 annual membership in the studio of her coach, Jimmy Kim, and they spend $110 weekly on gas to drive her there four days a week (the studio is in Laguna Niguel, a 130-mile round trip).

And new expenses have popped up: $200 a month for a health-club membership, $3,100 a year for home schooling (Charlotte withdrew from the local high school in her sophomore year because she was missing too many days) and $200 a week for room and board when Charlotte trains with the entire Olympic team in Sugar Land, Texas.

The payoff was priceless: Down by two points in the second round of her match at the U.S. Olympic trials in Des Moines this past April, Charlotte came back with a series of swift kicks, winning the match 4 to 2. That made her ticket to Beijing official. "It's one of the happiest moments of my life so far," she said quietly the night she won her slot. "I'm an Olympic athlete."

Like Luo Wei, Charlotte is eager to keep competing, with an eye on not just the 2012 Olympics but the Games in 2016 and 2020 as well. But her excitement about the Olympics hasn't stopped her planning for her future beyond taekwondo.

After she graduates from high school next year, she'd like to attend a community college for two years (to save money), then transfer to a four-year institution. Eventually she'd like to coach and, perhaps, open her own studio. Or maybe teach elementary school. Or become a sports nutritionist. (Okay, so at 17 she's not sure yet.)

The Craigs, however, haven't saved any money for college. And that's a real concern since they don't expect any financial windfalls from Charlotte's status as an Olympian. Their view: It's not as if taekwondo athletes earn the kind of fame or major endorsements that, say, elite gymnasts might if they win a gold medal.

No, the Craigs figure they'll be pretty much on their own in securing their financial future - and Charlotte's. And that has them worried, particularly since the sharp decline in California's real estate market raises questions about how much money they can count on from the house they're building. Already 18 months behind schedule and now due to be completed this month, Jim thinks he can sell the property for $1.8 million, down from his initial estimate of $2 million or more.

But if he can't make a quick deal, he's in trouble: Once the house is finished, his interest-only construction loan (which costs him about $2,200 a month) converts to a 30-year mortgage, which could prompt payments to balloon to $9,000 a month.

That would seriously threaten Jim's plans to retire in four years when he turns 55. While he will be helped in that goal by a strong union pension and a health plan that provides low-deductible coverage for life, he knows that won't be enough.

And all those years of footing the bill for taekwondo took a toll on the Craigs' ability to save for other goals: Jim's 401(k), for example, is now worth only $144,000. "We were using all our money for Charlotte," he says.

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