I recently read a fantastic book edited by financial industry veterans Brian Portnoy and Joshua Brown. The book was How I Invest My Money: Financial experts reveal how they save, spend, and invest and it compiled stories from some of the brightest minds in the financial services industry. The release was highly anticipated in the financial planning community (great marketing effort on their part) and I expected a highly technical read. I was very, very wrong! The stories were deeply personal and expressed their why behind investing rather than the technical details of their individual portfolios. I highly recommend the book and it prompted me to share my story, so here it is…

Why do I invest?

I invest because I grew up in a lower middle class family. As a child, I never heard of the stock market but I often heard the anticipation of when the next paycheck was coming. I’m investing to change that for the future generations in my family. This includes my siblings, nieces/nephews, and future children. I want them to see what is possible to achieve through proper financial literacy. I want my future children to have a healthy relationship with money and understand how to use it as a tool to create an intentional life. That’s how I see investing. It is a tool to help me build an intentional life that will leave a lasting impact for generations to come.

Before I dive into how I’ve invested my accounts, I should preface with the fact that I also carry debt. The only way to attend college in my family was to find a way to pay for it. Luckily, I earned scholarships, financial aid grants, but I still came up short. By no design at all, I chose a rather inexpensive state school in New York for my undergraduate degree and was able to get out with both arms and legs. I also went on to acquire a Master’s Degree in Personal Financial Planning which was a step backward for an eventual two steps forward. Thankfully my student loan balance is manageable and not even close to six figures. I could pay my student loans off sooner, but I probably won’t.

Also, my mother was our health insurance provider and when she passed away I had to get my own health insurance at age 20. A couple knee surgeries later and I struggled with medical debt for a while in my early 20’s but thankfully I conquered that in the past few years. We don’t carry a mortgage as my fiancé and I are intentional about renting until we know where we want to settle for the long term (how long can one handle these Northeast winters and cost of living??). I also have a car loan (gasp!) which I didn’t want to do, but life is messy and doesn’t always go according to plan. It’s the ability to alter your plan when life doesn’t go according to a textbook that makes a huge difference.

Now the good stuff!! Ok, it’s actually incredibly boring…

How I invest

I was fortunate enough to be auto enrolled into the company Roth 401(k) for my first “real” job after college and I contributed the minimum amount to get the company match. I literally had no clue what a 401(k) was at this time and I couldn’t even tell you what it was invested in for the first couple of years. It wasn’t until I took an interest in personal finance and went back to school to learn more that I reallocated in low-cost index funds with an 80-90% stock allocation. I wasn’t making much at that job but through consistent contributions and market growth, I had a decent amount of money built up and rolled it into an IRA when I left. Currently, I have a rollover IRA and a Roth IRA with all of my retirement savings. Once I’m profitable in the business, I will begin using a SEP IRA to reduce taxes but most of my “investment” will be in building the business for the next 5-10 years. 

Currently, I’m sitting on a lot of cash as a runway for the business. Normally, I wouldn’t be this conservative but as I build the business I want to have access to funds that won’t be exposed to volatility. We’re also in the process of saving for a wedding in the summer of 2022 (Thanks COVID…).

Moral of the story: Life is messy and doesn’t always go according to the financial planning textbooks. I’ve learned some lessons the hard way and got lucky in other situations. Money is highly personable and that’s where an objective financial planner can help you prioritize your goals and keep you on the right path. My goals are not your goals. Your goals are not the same as your neighbor whose day trading meme stocks. Be intentional about why you invest.

Disclaimer: This blog shouldn’t be considered advice, or recommendations. If you have questions pertaining to your individual situation you should consult your financial advisor.