Making Up For Lost Time
Career change and illness set them back. Now they hope to catch up.
By Megan Johnston

(MONEY Magazine) – Bruce Bauman and Suzan Woodruff LOS ANGELES


To build wealth in a hurry


$150,000 in stocks, funds, annuities; $50,000 in savings


Try more aggressive investing. Dump individual stocks and diversify through mutual funds.

Bruce Bauman and Suzan Woodruff figure they're on the verge of something big. Woodruff, an artist, has been selling an increasing number of paintings on her website and has galleries showing her work in New York City and Los Angeles. Bauman's first novel, And the Word Was, will be published in April.

Getting here wasn't easy. They were living in New York 10 years ago, right after they married, when Bauman decided to leave the advertising world to pursue fiction writing. Over the next five years, Woodruff suffered four miscarriages and developed oral cancer. She needed two operations and was often too ill to work.

When she recovered, they decided to start over in L.A. Now that career and life are better for the fortysomethings, says Woodruff, "the most important thing is to have a plan" for their future.

Where they are now Their $150,000 portfolio was put together in fits and starts. As a boy, Bauman was given AT&T shares and now holds Ma Bell's various offspring. In the early 1980s, he bought Allied Chemical (later Honey-well) on a tip from a friend, as well as two annuities. And he put together a Vanguard IRA in the '90s. The couple's really big investment is their home. Its value has swelled 200% in seven years to $750,000. The couple have $500,000 in home equity and $50,000 in savings.

What they should do Bauman and Woodruff need to be more aggressive in their investing but should dump their individual stocks so they can better diversify, says Laura Tarbox, a financial planner from Newport Beach, Calif. She advises an allocation of 78% stock funds and 22% bond funds. Tarbox recommends unloading annuities in favor of small-cap and international stock funds, which offer more opportunity for growth. About $30,000 of their savings also should go into mutual funds (see the box). Tarbox wants the couple in short-term bond funds, which are less sensitive to rising interest rates than long-term ones.

The rest of their savings ($20,000) should fund an emergency account. The pair brought home about $50,000 last year; their only regular check comes from his part-time job teaching writing.

Finally, to have a nest egg of $500,000 by retirement, they need to put away more than $20,000 a year. That seems like a lot, but as their careers flourish, their incomes could rise sharply. They also plan to sell their home someday and move to a less expensive area. Besides, Bauman says, "I don't know if either of us will ever fully stop working. It's what we love to do."