Financial Fitness Contest

Winner #8 Brenda Wilkinson

Brenda Wilkinson is unlike most people in their early 30s who are indebted from their college days and early working years because they accumulated thousands of dollars on their credit cards and spent more than they brought home in their paychecks. Indeed, the 34-year-old Wilkinson has no credit card debt, no student loans to pay off, and more than $95,000 saved up in a 401(k) plan. “I have been participating in my 401(k) since I graduated [from Cornell University about 13 years ago] and started working at my first job,” says the human resources manager for FINOVA Capital Corp. in Chicago. She contributes a percentage of her $98,000 salary and bonus to max out her 401(k), which her company matches dollar-for-dollar.

In addition, she has a total of $30,000 invested in a Roth IRA, mutual funds, bonds, and annuities. She recently started investing in individual stocks via dividend reinvestment plans (DRIPs). She holds shares in four stocks spanning four different core industries: Merck, Home Depot, AT&T, and FINOVA.

Wilkinson’s only liabilities are the $166,000 mortgage on her two-year-old town house and a $39,000 mortgage on a New York co-op she purchased in 1988. Over the next four years, she plans to upgrade to a larger domicile — a single-family home with enough space to accommodate a library and exercise room.

The savvy young investor is a testament to the proverb: “Train up a child in the way you would have him to go, and when he is old, he will not depart from it.” Wilkinson recalls, “There are three things that my parents ingrained in me when I was growing up, which I have tried to maintain in my adult life: one, aggressively save a percentage out of every paycheck; two, not carry debt on credit cards; and three, to own my own home.”

Indeed, Wilkinson started saving her allowances, cash gifts from relatives, and her first paycheck at age 15. She hasn’t strayed from the path, although she did have $5,000 in credit card debt a year ago, but she paid the balance off with this year’s bonus money and tax refund.

Wilkinson says that she sees the people in her circle struggling more than she does financially. “I am probably a little more aggressive in terms of saving and investing since I am in a higher income.” She says her primary goal is “to make sure I maintain the proper asset allocation throughout my working years.”

The Advice
Wilkinson has done a great job of eliminating debt and saving to reach her goals. The biggest improvement she needs to make is to increase her equity investments, which includes adding a technology stock to her portfolio, says financial advisor Pierre Dunagan, managing partner with Dunagan Robinson & Isbell Financial Services in Chicago. “The overweighting in stocks is appropriate for someone her age.” black enterprise had Dunagan meet with Wilkinson to help her readjust her portfolio mix. The following are his recommendations:

  • Transfer assets from her fixed annuity. She needs to take the $8,500 that’s in her Amex
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