Sacrifice now, benefit later.

Aaron and Vonda Green, both physicians, stash away their money to secure their future

Drs. Aaron and Vonda Green believe in approaching life with measured, stealthy steps. They met as medical students at Howard University in 1985. In April 1991, the Milford, Delaware, couple married and promptly began to plan for the future while agreeing on one basic strategy: embarking on a life of sacrifice in order to reap long-term benefits. The recipients of numerous scholarships while at Howard, Aaron, 42, graduated with $50,000 in student loans, while Vonda, 36, had a mere $32,000--unusually low sums for students who majored in medicine.

"When we first got married, my main concern was to pay off the student loans and provide for the family," says Aaron, who specializes in internal medicine; Vonda concentrates on family practice.

The strategy worked so well that now Aaron does not have any credit card debt and Vonda owes only $1,000. As soon as their two children--Gabrielle, six, and Aaron Charles, two--arrived, the Greens began to contribute to an education fund. They now contribute $500 a month to Fidelity Advisor Growth Fund for Gabrielle and $800 a month to Citizens Trust Fund for Aaron Charles.

The medical director of occupational health at Bay Health Medical Center in Dover, Delaware, Aaron contributes the maximum $10,000 to his 401(k) retirement package each year.

Though they pay $800 a month in rent, the Greens own a townhouse in Baltimore and a condominium in southeastern Washington, D.C., for which they pay a combined $1,023 in mortgage and maintenance per month. Now that the Greens are closer to being what they consider financially stable, they plan to start building their own home within a few months, Aaron says.

Although Vonda used to work full-time, she now works about three days per week at the Christiana VNA Wellness Center, providing wellness service to high schools. She contracts her services to the Wellness Center through Aaron Green MDPC, a medical consulting firm she manages that Aaron launched in 1994 with only $300 in capital. Within a year of Vonda coming on board in 1997, the business earned $26,000 in revenues.

Meanwhile, Aaron, in addition to his main job, is in the process of completing a one-year residency in occupational health at the University of Pennsylvania. He is also continuing some courses over the Internet with the Medical College of Wisconsin in Milwaukee he began a year and a half ago. By July 2000, however, when he completes his residency, he'll be able to exhale.

Family Snapshot:

Aaron and Vonda Green

Combined gross income:       $244,540(*)
Business expenses:       $2,000/annually
Household and
day-care expenses:          $1,620/month

Debts/liabilities:              $105,000
Investment portfolio:           $500,000
Net worth:                      $500,000

(*) Includes salaries, revenue from outside business and rental income

Expert Advice

FINANCIAL EXPERT: Gregory J. Kight CFP, Merrill Lynch, Greenbelt, Maryland

His strategy: Maintain current investment approach while concentrating on additional coverage to generate a healthier survivor package. Now that the Greens are financially closer to where they anticipated being at this stage of their lives, the couple's goal should be to establish a strong educational base so that they can send their kids to college. The $1,300 that they invest in growth funds is a good way to go.

Kight's Recommendations:

* Plan for retirement: The Greens are projecting that they will retire at age 55 with an income of $75,000, and based on their current investment path, they are poised to do so. Because of the changed income structure, however, it's best that they revisit the issue and aim for $125,000 instead. To reach this new goal, Kight recommends that they invest in a more diversified portfolio of mutual funds with an allocation of 70% equities, 20% fixed income and 5% cash. This will augment the $54,000 that they currently invest per year.

* Increase survivor income and refine estate planning: To reach their goal of $60,000 in accrued survivor income, Aaron needs additional coverage of at least $500,000. Kight suggests a 30-year level term insurance plan. He also believes that Aaron should consider an irrevocable life insurance trust and update his will and trust.

--C.L.B3