Let me start by saying I am far from a financial advisor, investment strategist and I'm not a multi millionaire (yet). However, I am a working mother who wants to retire when I feel like it not at the "retirement age."
I spent my late teens and early twenties working in a Buckhead pharmacy. I remember like yesterday many white customers coming in and all they talked about was their investment accounts plummeting. They were referencing the 2008 stock market crash. Some were saying they'd have to delay their retirement, some were thankful they had other investments. I was the only black person working in the pharmacy at that time and I was clueless.
Everyday discussions was about the stock market, my boss told me about the houses her and her husband bought and rented out. I was introduced to a something new. But I never asked questions, I didn't know what questions to ask.
I worked for this company for four years before I learned about a retirement account. Can you believe that? I started dating this guy (who later became my husband) and we discussed our jobs and the benefits they offered. To say the least he taught me about retirement accounts, saving and budgeting.
Fast forward to present day, I've learned more about the stock market, high yield savings accounts, and a variety of retirement accounts. I read a lot of financial books and articles. I talk to people who are great at saving and investing. With all that's going on I'm happy I have not only gained knowledge in these areas but I've also put into action what I'm learning.
So here's how I've diversified my portfolio. For starters my employer offers a 403b retirement plan and will match either 2% or 3%. I don't remember the exact percentage. Whatever it is it's very small but it's better than nothing. I contribute 4% every pay period and I'm 100% invested. Which means if the stock market crashes so does my account but if the stock market thrives my account thrives as well.
Thinking about the people that came into the pharmacy several years ago saying they'd have to delay their retirement because the market crashed, I went to a Chase branch and sat down with an investment banker. (Take advantage of all the benefits your bank offers you as a customer). I wanted to know the difference between a Roth IRA and a Traditional Roth. I read about the terms in a Suze Orman article. I knew a little but I wanted more information from a person in the field. (It's important to not go in blind some advisors will only give you information that will benefit them). My exact words were, "Can you explain the difference between a Roth IRA and a Traditional Roth?" He explained. Then I said, well I want to open a retirement account that won't be affected by the market. Then he explained the two again. That's exactly what I wanted him to do. I asked a few more questions, thanked him and left.
I did a bit more research, went into another Chase branch opened my Roth IRA and the investment banker was a middle aged black guy and couldn't believe I was a young girl coming in to open this type of account and very knowledgeable about it too. He kept asking me how did I know about it. Lol. I didn't think it was that big of a deal. Just so we're clear I opened that account with $25 and gradually increased it.
So now I have a 403b retirement account offered from my employer, secondly I have a Roth IRA funded bi weekly from my paycheck.
Thirdly, I've been investing in the stock market. My main focus is purchasing dividend paying stocks. With most things I pursue I begin with the end in mind. My ultimate goal of purchasing stocks is to be paid dividends monthly or quarterly once I retire. Right now I have the DRIP feature on so that my dividend payout is automatically reinvested in the company. Once I retire I will turn this feature off and payouts will be deposited in my account. Some may ask, how I benefit from this if the stock market is down. In most cases dividends are paid no matter how the market is doing.
In a nutshell, I have two accounts that thrives or not from the stock market and the economy. I have one that's thrives off me and my discipline to fund it. Again I'm not a financial advisor, investment strategist and I'm not a multi millionaire (yet) but I'm doing what works for me, my income and tax bracket.
I hope this has been informative and motivating. Please share how you're preparing for the retirement life.
"He who is not courageous enough to take risks will accomplish nothing in life." Muhammad Ali
Thank you for sharing your experience and the financial information. Your article definitely motivating :)