Long-Term Investing to Create the Future You Deserve

In today’s unpredictable environment, far too many of us operate in survival mode, suffering from myopia when it comes to planning for our financial future. Sadly, I’ve found an overwhelming number of African Americans have made fear-fueled, short-term investment decisions that will clearly wreck their long-term wealth-building prospects.

In my Executive Memo column in the January 2009 issue of Black Enterprise magazine–written during the height of the worst economic crisis in a generation–I urged investors not to panic over market volatility, stressing that pulling dollars out of investments would convert paper losses into painful capital losses. In the case of 401(k)s and other tax-deferred retirement vehicles, those under the age of 59½ face severe penalties and tax liabilities. In evaluating market performance over the past year, such premature action has proven to be quite foolhardy. The stock market crash of 2008 extended to the first two months of 2009 before equities made a complete about-face. Between mid-March 2009 and Jan. 19, the Dow Jones industrial average posted a chart-busting 64% advance. And leading mutual fund research firm Morningstar reported that the average U.S. stock fund returned about 33% in 2009. So individuals who either tried to time the market or let anxiety force them to make an early exit missed out on prime investment opportunities.

Those who have decided to either deplete their retirement funds or not invest at all for the long haul–especially workers in their late 40s and 50s–may wind up working the remainder of their lives or at the very least significantly scaling back their vision of option-filled golden years.

Disciplined, long-term investing is vital for wealth accumulation, period. Even though I believe it’s never too late to get serious about growing assets, those in the best position to take advantage of this approach are members of the BE Next generation–entrepreneurs, executives, and professionals between the ages of 21 and 35. For one, time is on their side. Also, it has become an imperative for them to embrace sound practices in an ever-evolving financial environment that requires more self—determination in handling money matters. It is extremely likely that they will be the first generation in 75 years that will be unable to count on Social Security as an income supplement when they reach retirement age.

With mortgages, college loans, and other obligations, many young professionals believe they don’t have sufficient resources to start investing. For one, they should make contributions to their employer-sponsored 401(k) and 403(b) plans. Outside of

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