(MONEY Magazine) – MY FAVORITE MUFFIN IS A CUTE cafe in Princeton, N.J. where Jeff and Toby Litt used to take their three daughters for weekend treats. But as the couple grew restless in their careers -- she as a speech therapist and he as a junior high & school dean -- they developed a grander vision. In 1989 they bought the right to franchise My Favorite Muffin in Broward County and Boca Raton, Fla. That July the Litts headed south "scared as anything," Toby recalls. Now there are about 50 My Favorite Muffin shops nationwide. The Litts own three in Broward County, and so far have netted about $500,000 -- most of it used to expand the business. However, Jeff and Toby, 46 and 44, respectively, don't plan to depend on muffins forever. They want to bulk up their tiny $10,000 investment portfolio to around $300,000 so that they can retire in their mid-fifties at the latest. They plan to earmark about $60,000 to educate Barri, 8, and Tracy, 16. (The Litts' oldest daughter, Jamie, 18, attends Florida State on a $2,500-a-year National Merit Scholarship; Barri will study at a state school under Florida's prepaid-tuition plan, which guarantees future entry at today's prices if you pay now.) The rest will supplement pensions from their former jobs -- he will get $30,000 a year at age 55; she will get $13,000. For starters, the couple expect to invest $10,000 this year and boost future payments by 20% annually. To reach their goal, the Litts will have to sustain a yeasty 10% annual gain for the next 10 years. Sponsor Software, therefore, recommends that they place more than half their money in foreign-stock funds, one third in small-stock funds, and the rest in blue chips. While this combustible combination departs from the income-oriented allocations usually suggested for pre-retirees, a stodgy portfolio would almost certainly leave them far short of their goal. By contrast, Sponsor Software's mix gives the Litts a three-in-four chance of building their retirement kitty to $300,000 by the time Toby reaches 55, and the odds are fifty-fifty that the portfolio will earn 13.5% a year and exceed $380,000. Besides, with their thriving muffinopoly, the Litts can afford to take risks. They estimate they could sell their business in 10 years for a tasty $750,000 to $1,000,000. -- M.T.S.

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