How I became an investor in my 40s

One woman tackles finances, running a business, and raising a family.

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Key takeaways

  • Consider a financial partner who can help you see your entire financial picture, from retirement accounts to life and disability insurance needs.
  • It's easy to get distracted when you are busy. Make to-do lists to help you stay involved with your finances.
  • Set a savings target for specific goals like paying for a college education and retirement.

Nicale Nxumalo grew up in a small south-central Virginia town, surrounded by farmland and tobacco fields. The oldest of 4 children, her earliest memory of money was her parents diligently budgeting to meet the needs of raising children.

"I don't come from money, so I remember my parents doing a budget for groceries, our school fees, our clothes," recalls the 42-year-old. "I learned from an early age that you had to be careful with money. When you go to the grocery store, for instance, you need to have a list of what you are going to get, because we didn’t have any extra money to buy things that we didn’t need."

The results of that upbringing: "I'm frugal, and I try to live below my means," she says. So she understands the saving stuff, but also knew that she needed to become an investor to fulfill her long-term financial goals.

The path to becoming an investor

Nxumalo had steadily built a career for nearly 2 decades, beginning as a software developer. She went on to earn an MBA from the University of Maryland, and then landed a leadership position at a large management and technology consulting firm.

Several years later, she started an information technology consulting business. While she did begin saving for retirement in her 20s through her employer's 401(k) plan, managing her investments was not a high priority. Her primary focus was managing her career and building a viable business. "I was so focused on my firm's financial success that my personal savings for retirement and investing took a back seat," says Nxumalo.

Finally, last year, she began to address her personal balance sheet. She had contributed the maximum amount to her 401(k) while she was at the consulting firm, and then rolled that money over into a traditional IRA when she left. But those retirement funds had been on "autopilot" since she became self-employed.

Turning to a financial partner

As a married mother of 2 children, ages 6 and 8, she needed another set of eyes, someone who was objective, who could help her see her entire financial picture, from retirement accounts to life and disability insurance needs.

"I began to think: What can I do to protect myself if I can’t work for some reason?" she recalls. "I have this business, and I didn’t feel like I had a good handle on everything."

So, she contacted her college roommate from the University of Virginia, who was now a certified financial planner. "I knew I wanted to enlist someone who made me feel comfortable expressing the things I don’t know, and would let me ask all of the questions that I wanted to ask," she says. "The objective was to look at the whole picture. I also wanted to get more involved and active, to learn about what I was investing in and to build an overall long-term financial plan."

The desire to do so was also rooted in her childhood. "My parents always drilled it into me that I should make sure I can take care of myself," she says. "So I've always been very independent, but I needed to refocus my energy and attention to make sure that I was doing the right things with my money and my life."

Staying involved

It's easy to get distracted when you are married, have children, and are juggling work, but money matters are important for today and tomorrow. The reassurance Nxumalo has received from working with an advisor is empowering, she says. "Knowing that I'm doing the right thing for my children's future, and that I will be ok in retirement, is the reward I'm seeking," she says. "And I feel like I am on a good road now to achieve that."

Some tips to stay involved:

Start a monthly to-do list. "It has been a very educational process, to say the least," she says with a laugh. She began by compiling a list of all her accounts, assets, and insurance policies.

It isn't a one-time thing. Of course, it's a challenge for Nxumalo to find enough time for financial planning between the commitments that come with managing her business and family. To help keep her on the path, her advisor gives her action items on a regular basis. "I'm not a person who is going to naturally read about financial topics," Nxumalo says. "It is hard for me to digest financial information, because I'm not as interested in it as perhaps I should be. But my advisor helps me dig down into the details and understand my investments."

Use existing skills. While learning about investing is work for Nxumalo, her advisor has been helping her reframe the way she thinks about the process. She encourages her to apply the same principles that Nxumalo uses when analyzing financial statements in her business. Investing in people and processes in business uses similar skills as investing in stocks, bonds, mutual funds, etc.— having goals, paying attention to details, and tracking your progress are important in both situations.

Set a savings target. Nxumalo used online retirement calculators to run her projections. "It really helped me start to get a picture of what I had and what I might need. So, for example, I'm now saving 12% of my salary, but my goal is 15%." To meet her target, she will gradually bump up her retirement contributions, starting with an increase to 13% next year.

Tip: See if you are contributing enough to your retirement savings. Answer a few key questions to get your Fidelity retirement score.

Nxumalo also established long-term savings goals with specific paybacks in mind: "to pay for the college education of my 2 kids and then my retirement at 62," she says. "And ultimately, my husband and I want to have a home here in the US and one in Swaziland or South Africa."

Accept that you and your spouse may have different approaches to your investments. For Nxumalo, one of the first things she realized is how different she and her husband are in terms of their views about money. "I'm more of a 'put stuff away and let it grow' type of investor," she says. "My husband, on the other hand, checks his and our joint accounts multiple times a week. He also has a small brokerage account where he buys and sells stocks."

Tip: Read Viewpoints on Fidelity.com: 4 financial ways to say "I love you"

Pay off high-interest debt. Refocusing on her investment plan when she hit her 40s, Nxumalo was already on a good path with her thrifty nature. Being thrifty has a lot of advantages beyond just financial freedom, says her advisor. She advises women to think about how downsizing one’s life can free up money to save for retirement and a life without financial anxiety. It gives you financial freedom, especially when you hit retirement age, to live a life rich with choices about what kind of work you do and what kind of experiences you have, from traveling to dining out with friends and spending time with grandkids. Being debt-free is liberating. For many people, this is the ultimate goal.

Tip: Read Viewpoints on Fidelity.com: How to pay off debt—and save too

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