Recipe for success.

Special ingredients make the dough rise for California couple

David Evans realized his dream of running his own business in 1998. He had worked his way up to senior-level status and accumulated a handsome 401(k) retirement account, but given the downsizing of corporate America, he decided it was time for a career change. At age 39, he gave up the financial security he had as a home furnishings buyer at Robinson's May, a division of the May Department Stores Co., where he worked for 22 years.

Evans became the owner and operator of HoneyBaby's Teacakes by Mr. David, initially filling orders for the round southern cookie-like treats--which originated from slaves 200 years ago--from his home in Pasadena, California. Evans' grandmother, who was known to her family as Honeybaby, passed the recipe down to him. At 41, he now owns two of the establishments in Pasadena's Old Town section.

Evans has turned a family recipe into a thriving local business that is helping him rebuild his retirement portfolio for him and his wife, Karen, 41, as well as college funds for their two children, Jessica, 12, and David II, 10. Evans liquidated a portion of his former 401(k) account to supplement his new endeavor, which was financially frustrating in the first year It cost him an estimated $10,000 in seed money, and only returned $1,200 after overhead.

He turned to Arnetta Tolley, an investment representative at the Pasedena office of Edward Jones Investments, a financial services firm based in St. Louis, to help properly invest the remaining 401(k) proceeds. His wife, too, had a 401(k) to roll over from a former job as a director in the Pasadena Unified School District.

Tolley recommended that the couple maximize growth and build a balanced portfolio with less emphasis on income investments. As a result, 43% of their assets are in growth investments such as Home Depot (NYSE: HD) and the Putnam investor's fund (PINVX).

The Evans allocate 25% to growth and income products, which includes shares of May Co. (NYSE: MAY), as well as the Putnam Growth and Income fund (PGRWX). The couple also designates 14% to money market funds. Certificates of deposit with three to five-year maturities account for 12% of the couple's portfolio, while 6% makes up their aggressive growth exposure to stocks such as Voda-Fone Air Touch (NYSE: VOD), a worldwide wireless communications firm.

Starting in March, Evans began to dollar-cost average to rebuild his retirement account. For Evans, this systematic monthly investing plan is facilitated through an individual retirement account (IRA) for self-employed persons known as a SEP-IRA.

Meanwhile, for the couple's two minor children, Tolley suggests they set up educational IRAs with a $500 investment per child per year, the maximum contribution allowed. The money is invested in a growth mutual fund and grows tax free for the next six to eight years.

Within the next five years, Evans hopes to have 100 HoneyBaby's Teacakes' outlets. "I want to make the business solid and stable," he said. "I want to expand our business from not only doing counter and fresh-baked goods, but I also want to be in the supermarkets right on the shelf next to Betty Crocker."