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Kyla Acie seeks to get a jump on investing early in her career. She knows doing so will put her in the best position to reap a lifetime of benefits, including the ability to finance her retirement and her daughter’s college education. Although her intentions are good, Acie doesn’t have an investment strategy or a set of specific goals in mind.
“I want to better understand how to save and invest out of my income,” says the 29-year-old. In the past, she has sort of winged it. “I always paid my bills. I put aside money here and there; at one time I was saving $600 a month. I have the ability to save a lot because I don’t spend a lot. But I wasn’t following a regimented budget.”
Investing for long-term goals is important to Acie. Many African Americans, regardless of age or income level, put off retirement planning and lag behind white investors in accumulating assets, according to the 2010 Ariel Black Investor Survey. The median amount black investors contribute to their retirement plans is $230 per month, compared to $337 a month contributed by white investors. As a result, the median assets in their retirement plans are about half the amount of white investors: $56,000 compared with $106,000.
Acie has a 403(b) plan but has blindly guessed at where to invest. “I never knew enough about investing to know where to put my allocations.”
She admits she lacks knowledge about how to diversify her savings among various funds to get the greatest return. Acie has $19,000 combined in retirement accounts from three previous employers, $12,000 in a CD, and $3,000 in checking and savings accounts.
One factor weighing heavily on Acie’s personal finances is her recent divorce. She and her 6-year-old daughter, Sydney, are still adjusting to life on one income. At one point, Acie took on a part-time job to make ends meet. But the Charlotte, North Carolina, mom says she feels blessed. “One door after another has been opened for me.” One of those doors led to a new job at Wake Forest University, where she now works as an assistant director of the Charlotte MBA programs, which pays $45,000 gross annually. (She planned to start a retirement account there in December.)
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