Here's To Five Years Of DOFE - Page 2 of 4

Here’s To Five Years Of DOFE

of her income toward a 401(k) plan and her company matches up to 5%. She also researched college savings plans by reading magazine articles on the subject, speaking with her human resources department, and calling North Carolina’s National College Savings Program office. She now contributes $50 a month to an aggressive portfolio since her son is 16 years away from needing the money.

“I’m in the planning process to buy a home in 2007,” explains Denkins, who is currently paying down her debt. “If all goes well, I can be debt-free by next year. Then I would like to save 25% of my salary toward a down payment.”

BE conducts approximately 12 Wealth Building Seminars a year for professional organizations such as Alpha Kappa Alpha Sorority, Blacks in Government, and the Magic Johnson Foundation. David Johns, 22, is a Magic Johnson scholar who has attended the seminar two years in a row. What has stuck with him the most is DOFE principle No. 2: to save and invest 10% to 15% of my after-tax income. “I’ve always tried to pay myself first, but what I got out of the first year I went to the Wealth Building Seminar was to have direct deposit,” explains Johns, who made a small income modeling while in high school. “If you plan to write yourself a check, something else will always happen or come up,” says the 2004 Columbia College graduate who now works as a kindergarten teacher in New York City.

Johns managed to win scholarships that covered just about all of his undergraduate studies, including books and flights between Los Angeles and New York. “One year I took out a loan for $5,000. But because I’m a teacher, I’m applying to have that loan forgiven by the government,” he explains. With only $5,000 in student loan debt and nearly $5,000 in savings, Johns sets aside money for emergencies — but more so for play. “I take 20% of my income and put it into a savings account and then I set a goal reward. I want to go to Malaysia this summer, so I know that 30% of what I pay myself will go toward Malaysia,” he says.

Johns is not a typical debt-laden twentysomething. Because of his association with groups like the Magic Johnson Foundation, Jack and Jill, and the Links, Johns had learned that debt was a dangerous road and that you should always prepare for retirement. So, practicing DOFE principle No. 3: to commit to a program of retirement planning and investing came rather naturally to him. Johns contributes to his employer’s TIAA-CREF retirement plan, although he doesn’t plan to retire until 40 years from now. “I’m young. I can afford not to have $200 dollars more in my pocket right now. I chose a highly aggressive account because I’m young and I can take the risk now,” he explains.

Also adhering to DOFE principle No. 3 is Rahim Mahdi, who has worked as an engineer technician for the Department of Veterans Affairs in