Chicago Sun-Times

Formany entreprene­urs, saving comes last

Millennial­s working to rearrange their financial priorities and catch up

- Tanisha A. Sykes

Laura Mignott is ecstatic that her New York- based company DFlash is once again on pace to surpass the milliondol­lar revenue mark this year.

Mignott, an entreprene­ur in her mid- 30s with roots in Jamaica, has run a boutique branding agency that tells the story of both start- ups and establishe­d brands such as Samsung and Chevy.

Now that the business is on solid footing, Mignott is playing catch- up on her retirement savings.

Most Americans are falling short of the savings needed to retire comfortabl­y. Millennial­s such as Mignott are no exception. According to a 2016 study by GoBanking Rates that looked at how Americans’ savings differ by life stage, 42% of Millennial­s indicated they have no retirement savings.

“I wanted to build up the business, so I basically dumped most of my savings, $ 40,000, into DFlash as we kicked off,” she says.

This CEO considers herself an accidental entreprene­ur. “I was working a full- time job, then there was the crash of ’ 08, and I got laid off,” she says. “There was a lot of economic uncertaint­y, and I went through a couple of different jobs.”

Eventually, she cashed out her 401( k) and used part of that savings to help start DFlash with a former business partner. “When you run a business, the idea of saving is so far out of your mind because you’re constantly trying to figure out how to budget,” she says. “Having that emergency savings account helped foster and grow the business.”

Now, she’s turning her attention toward retirement.

“I’ve had some conversati­ons with a financial planner whom I’m about to officially hire,” she says. So far, Mignott has set up a Roth IRA and a 401( k) but also has her sights on investing in some start- ups.

The socially- conscious Millennial says: “I don’t want to invest in the new hot toy. It has to make sense for what I want to be involved in, as opposed to a random idea that sounds awesome.”

There’s also the $ 50,000 in student loan debt hanging over her head. Her plan? “Let’s put it this way: I don’t want to be 40 and still paying off my student loans,” she says.

If her company can afford to pay her a larger salary in the near future, she projects that she will pay off a good chunk of the debt in a few years.

For Millennial­s still on the fence about saving for the future, Mignott says use the many online tools available to learn about different types of investment­s. Then set it and forget it.

For Millennial­s sucha s Mignott who think they are late to the retirement-saving party, he offers this advice:

Take advantage of peak- earning years. If you’re freaking out because you didn’t start investing when you were 21, rest assured. “If you are 30, 40 or

even 45, you still have 20- 25 years before you’re looking at retirement,” Robertson says.

Increase your emergency savings. Typically, advisers recommend saving three to six months of expenses in an emergency fund. But if your portfolio is too heavily concentrat­ed in one area, Robertson recommends saving at least 12 months of expenses to hedge against major losses. Having that cushion gives you time to figure out what you want to do next.

Automatica­lly increase 401( k) contributi­ons. A lot of companies offer a feature where your contributi­on can be automatica­lly increased by a certain percentage each year. Increase your investment by 1% to 2% each year until you reach the maximum annual contributi­on.

Manage debt differentl­y. “If we assume a conservati­ve 5% return on the stock market and you have subsidized student loans that are 31⁄ 2% or 4%, your money will be better off invested in the market,” Robertson says. “However, if you have a private loan at 8% interest or a credit loan with a 20% interest rate, then they would be the priority because that will be a better return on that money.”

 ?? RICK GORE ?? Russell Robertson
RICK GORE Russell Robertson
 ?? CAROLINE SINNO ?? Laura Mignott
CAROLINE SINNO Laura Mignott

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