Why Investing Early Pays Off In The Long Run

How to Keep a Good Financial Start Going

Jhanay Harris' house is in financial order (Photo by Lonnie C. Major)

Another thing at the top of her to-do list is buying a condo. With the Nets moving from New Jersey to Brooklyn, New York, Harris is not sure if she will look for a new place in New York City or stay where she is. Ideally, she would like to buy a condo within the next 18 to 24 months. Her dream locale would be Brooklyn or lower Manhattan. But with a budget of $50,000 or so, she knows it will be a challenge.

The Advice
While Harris has good financial instincts, she needs direction. Dawn Brown, a senior financial adviser with Altfest Personal Wealth Management in New York City, and black enterprise came up with a plan to lead her to the next level.

– Learn more about investing. “When I asked Jhanay why she hadn’t participated in her company’s 401(k), she said she had heard about the stock market and was afraid to invest because the stocks might go down to zero but was interested in government bonds because the money would be there in 10 years,” Brown says.

What got Brown’s attention though, was Harris’ interest in mutual funds. “She didn’t seem to get that mutual funds are in the market. There can be mutual funds with stocks, bonds, or a combination of the two,” Brown says. She was also surprised when Harris told her that she wouldn’t want a stock like Apple because she was afraid she might lose her money. “Apple had just recently hit a new high,” says Brown, who took all this as a clue that Harris needed more information about investing basics. She proceeded to give her an investing 101 mini-session, preaching the merits of diversity, asset allocation, and the difference between large, medium, and small-cap stocks.

“I reminded her that at 24 she won’t be using the money she would invest for 40 years or more. That’s a long time to ride out any market gyrations and to recover from losses. When you buy continuously when the market is down you’re buying at much lower prices so that’s a great benefit,” Brown says. Harris’ homework was to find out more about her company’s 401(k). Harris’ company holds an annual meeting to go over 401(k) plans and other benefits, but those meetings don’t offer personalized advice.

Continued on next page