Empowerment through self-employment: a motivational speaker uses his craft to reach his retirement goals.

Johnnie E. Williams III shattered his right elbow in high school and ended his dreams of playing college basketball. He knew then he'd have to work hard at something else to make a living. "I knew I wouldn't get any offers," says Williams, so he enrolled in a junior college and studied marketing for two and a half years.

While in college, Williams worked in the home medical care industry, servicing the needs of clients who'd been released from hospitals and nursing homes. He worked overtime and did odd jobs, and "by age 21, I was earning $50,000 a year," Williams recalls. Still living at home with his parents and pulling down a great salary, Williams dropped out of college. He thought he had it made, but his spending habits did him in. "I spent my money on nice clothes and trips to several countries," he says, noting that he ended up with a mountain of credit card debt that took years to pay off.

In 1996, Williams founded Positive Shades of Black Inc., a nonprofit organization that encourages high school students to make sound life choices. He quickly caught the attention of the Fannie Mae Foundation and the company awarded him a grant to author the booklet The Five Plays of Mainstream Life. The booklet emphasized being the coach of your own life and was distributed to more than 30,000 high school seniors in Detroit. Despite garnering enormous praise for the project, Williams was unable to capitalize on it financially. His income dropped to about $35,000 per year during his late twenties while he tried to get his nonprofit off the ground and market himself as a motivational speaker.

Now 32, Williams is a successful entrepreneur. Over the last few years, he's averaged about $125,000 annually as a motivational speaker. He and wife Fatimah recently bought a $230,000 home in West Bloomfield, Michigan, and at the time of this writing, they were eagerly awaiting the birth of their firstborn. Earning a good living once again, Williams knew this time, he had to keep himself on track. So in 2003, he met with Smith Barney financial consultant Michael S. McGee, who helped him set up a financial structure that best fit his self-employed status. "I was disorganized and wasn't paying bills in the right order before I sat down with Michael and we did the financial plan," says Williams.

McGee encouraged Williams to establish a financial management account that provided a breakdown of the family's income and expenditures. "For the self-employed, it is an excellent way to track expenses," says McGee. He helped Williams create a plan to reduce debt and begin saving for retirement. "We wanted to grow his money and increase his net worth while paying attention to his risk tolerance," McGee explains.

Williams contributed an initial lump sum of $20,000 to the account and deposited $200 into it monthly. That lump sum has since grown to $50,000 and his monthly contributions are now $500. "We wanted to ensure [that he had] a diversified portfolio," says McGee, who tailored an asset 'allocation structure for Williams' portfolio of 10% cash, 10% fixed income, and 80% growth mutual funds, which included the Smith Barney Appreciation (SHAPX) and the Evergreen Asset Allocation (EAAFX) funds.

McGee had Williams establish a Roth IRA, to which he and his wife contribute $3,000 each, annually. McGee also wanted Williams to establish a SEP IRA because it "works the same way a 401(k) does and it's a solid way to put away money for retirement without paying a lot of taxes." Williams says he will establish a SEP IRA in 2005 because he likes "the fact that it allows me to shelter a lot more money than the Roth IRA."

McGee counseled Williams on starting a 529 college savings plan once the baby arrives, increasing the family's insurance coverage, and drawing up a detailed estate plan. "I really feel happy now because I'm focused less on showing people what I have, and more on investing for the future," says Williams. "I have more of an investment mindset rather than a consumer mindset."