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Mikia Potter has a lofty goal — to retire at age 45. The 26-year-old also wants to eventually leave the world of corporate America and open her own business. Potter holds a bachelor’s degree in electrical engineering from Florida A & M University and is working on her master’s at Emory University in Atlanta. She is two years away from completing an M.B.A. and is wisely using her company’s education benefits to pay for her professional degree. “I wanted to enhance and acquire business skills since I hope to run a [Subway] franchise one day,” says Potter, an engineer with an aeronautics corporation.
Potter currently makes $63,000 a year. She also has a second income — the $3,876 she earns per year from real estate holdings. “I own a one-family home in Pensacola, Florida. It belonged to my grandparents,” says Potter, who took out a $40,000 home loan to buy the property.
Not common for single black women her age, Potter owns a second piece of real estate — her primary residence in Mableton, Georgia. She owes $114,000 on the home that she purchased in April 2003. “Since I am in such a high taxable-income level, I needed the tax benefit, plus I wanted to build equity,” explains Potter. She moved from Woodbridge, Virginia, to the Atlanta metro area because the real estate was cheaper.
The young professional has also made significant investments in her retirement account. She has a 401(k) portfolio valued at $25,000, in which she’s placing a solid 12% of her income, or $7,560 a year, and is investing that money in mid-cap mutual funds. In addition, she has about $10,000 combined in savings and checking accounts. Her revolving debt is minimal — a $3,250 credit card balance. And the car note on her 2000 Honda Civic is paid off.
While she is still relatively new to the labor market, Potter possesses a strong work ethic and a high level of focus. She understands the four ways wealth is created in America: private business ownership, real estate, capital markets investing, and achieving a senior level position in a substantial corporation. “I want to get to a point where I have multiple streams of income and where I don’t have to work a 9 to 5 job, so that I can live off of cash flow from the assets I acquire,” she says. “That is my ultimate goal.”
Potter has achieved a net worth of almost $60,000, which is excellent for a person her age, says David Hinson, principal of Wealth Management Network Inc. in New York (www.wmnllc.com). He adds that the largest risk she faces at this time is losing focus. “She is on track to achieve her goals, but far too often, when young professionals achieve a small measure of success early, they begin to loose discipline in executing their wealth-creation plan.”
To help her execute a wealth strategy, BLACK ENTERPRISE teamed Potter with Hinson, who says it is well within Potter’s power to achieve financial independence by the age of 45. The following are