Does the idea of investing make your eyes automatically spin like a slot machine except you get #@?*! instead of the jackpot fruits? Don’t freak out yet. Baltimore local, Ann Fenwick, CEO of Mosaic Assets Partners — single mom, and investment planner for 30 years — chatted with CP to get our readers psyched about planning a financially rich life.
Like many of us Ann Fenwick did not start off with the keen understanding of finance she has now. Life has a way of pushing us through windows after doors are closed (read: slammed). OK, sometimes we go kicking and screaming; other times we get a sledge hammer and create that window ourselves. Eventually, we get to a new and better place. When Ann’s girls where two and four, divorce came knocking with no alimony and minimal child support. She saw only one thing to do: go to college and get her degree in Finance Services.
Ann was hired at Cigna in 1986 to do Fee Based Financial Planning for corporations. Five years later she was picked up by Mutual of New York and created their investment division in Baltimore. Life moves fast when you’re good. After ten years with Mutual, she wanted out of the man’s world to create her own financial services company. Her target audience? Women. Ann created ‘Women at the Helm’ a seminar to help women understand finances, budgets, and investments.
“Thirty years is progress but I still find that women don’t know their own strength and intelligence. I am still committed to that process. You have to be an advocate and I try to do that for clients,” said Ann.
What’s the payoff for learning how to go from scrimping and saving to serious investing? For Ann, it was replacing the memory of not being able to pay for Christmas presents or school lunches with the memory of paying for her daughters’ private schools, colleges, and weddings.
Here are five tips to get you started on your way to investing success.
family finances: five tips to start investing
Tips from Ann Fenwick
Learn the Language of Investing
Start with reading. The Wall Street Journal and Barron’s are great research tools. At first it might be above your head but the more you do it the more comfortable you will become. I also watch CNBC Squawk Box in the morning.
Play w/ Fake Money
Create a mock portfolio with stock, listen and read. There are plenty of places online that allow you to have hypothetical portfolios so you can get your feet wet as you learn.
I find women love to research. They probably are more qualified to make decisions because they do the research but to pull the trigger they are tentative. They are afraid to make a mistake. I would say start slow, a little at a time, maybe with Exchange Traded Funds (ETFs) or Mutual Funds because they are already diversified. I personally like individual stocks because they can give you some good returns; however, if you pick the wrong one it can be very painful and they are not very diversified
Know the Ins & Outs
There can be divorce after a long marriage or even an unexpected death. It is easy to lose control of the budget. You must always have to have a good handle on the budget, how much you are spending, where it is going—prioritize.
There are a lot of free online tools to help you with this but it is basic. [Take] your net income after taxes and hopefully after your 401 contributions in one column and expenses in another. If you find your income is greater than your expenses that is a bonanza — but usually people find there isn’t a surplus because they have forgotten an annual expense or are spending daily without tracking. You can’t assume your life will be very rich unless you take the steps to ensure that happens. Every penny counts.
Set a Clear Goals
I would say 10% annually of your income. Look at your budget and see if there are places that you can cut every month that adds up to 5-10% ($5,000-10,000) a year that you can put away and invest. If you do it every month a little at a time and then adjust a little more and a little more, you will adapt to it. It is human nature. You might feel the pinch the first month but then you will adjust
If you start early this thing called compounding with investing is phenomenal. You have to have a goal and be focused on those goals. It is possible to earn more in dividends than in income. [The discipline] gives you so much freedom.
Later down the road people get too old and won’t be able to have the jobs that help you make the money to invest. Social security and Medicare are under the microscope because they have gotten so expensive for our government to maintain. The little that you get from that will not fund your retirement
Pay Yourself First
(Yes, your read that correctly.)
You always have to pay yourself first because you never know what the future is going to bring. When I say pay yourself first that is put away a little bit whether it is 5 to 10% if that is all you can afford. If you are going to go get Starbucks that can get very expensive, if you are always eating out for lunch, pack a lunch save the dollars and invest them. If you keep in mind that this is for you and your future it will make a difference.