Never Too Soon To Save

Megan J. Stewart is unlike many of her associates who have a closet overflowing with designer shoes. “I’m not the type of person who has to have the best, the latest,” says the senior account executive at a Chicago communications agency. Instead, Stewart is trying to outfit her investment portfolio for an early retirement. “I can’t fathom working 20 to 40 years at the same job like our parents did, especially if it’s doing something I’m not passionate about.” The 25-year-old professional hopes to scale back from the 9-to-5 grind in the next 10 years or so.

That determination drives Stewart to follow Declaration of Financial Empowerment principle No. 2: to save and invest 10% to 15% of my after-tax income. In fact, she’s taken it a step further. Since landing a job 18 months ago, the University of Illinois at Urbana-Champaign graduate has socked away a little more than 30% of her salary each month. She’s accumulated $15,000 in a savings account and participates in her profit sharing plan at work, where she typically contributes 10% of her salary.

Being a smart spender is what enables Stewart to save 30% or more of her monthly income. “I am a bargain shopper, a deals queen. It hurts my feelings to pay full price,” she says. She’s driven her ’92 Buick Regal since high school. Though it has 110,000 miles, she nurses it and hopes to drive it another 12 to 18 months. When it comes to her love for travel, the first stop is for airline tickets and for four-star hotels.

While she’s careful about spending, Stewart has the luxury of living at home with mom and splitting the tab for expenses. Sure, she could afford to live alone on her $40,000 salary, but she prefers to squirrel away money. Besides, she and her mom get along great. “By keeping expenses low and saving a high percentage of income, it is very possible to amass a considerable amount of money,” says Stewart.

She is currently house hunting, though, for an investment property. For Stewart, who is a licensed real estate agent, the housing market is familiar terrain. She’s looking to purchase a fixer-upper — a single-family home or three-unit apartment building — that she can get at a good price and resell later at a profit. Her goal is to have a balanced portfolio of stocks, bonds, and real estate properties.

Though her salary isn’t “a lot, it’s what you do with what you make,” says Stewart, who also volunteers as co-producer of Mo’ Talks, a cable television talk show. Her fixed monthly expenses are around $600. Stewart escaped college relatively debt free since she had scholarships and $18-an-hour internships. She currently pays about $65 a month on her student loan debt — a total of $4,700. Her only other debt is a $700 credit card balance.

Admittedly, it’s not easy to be a disciplined twenty-something. “We are a generation that wants it all now. When we graduate we expect a good job, a big salary,