Boost Your Net Worth
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Black women are some of the hardest- working women on the planet. Yet our lifelong earnings often don’t reflect that. In fact, a 2013 study by the University of Wisconsin School of Medicine and Public Health shows that Black women between the ages of 51 and 61 have a median net worth of $33,349, compared with White women of the same age who had amassed $182,897. Why such a huge gap? Some of us work in occupations that don’t pay six-figure salaries. Many of us are saddled with student loans. Still others are struggling to get out of credit card debt.

One way we can improve our financial standing is to better leverage the money that we have by putting it to work for us. From 1928 to 2013, the average return on stocks in the Standard & Poor’s (S&P) 500—a list of 500 large companies in the stock market—was 11.5 percent. Compare that with the 1 percent you may get on money stashed in a savings account (if you’re lucky), and you can see how investing can help you get ahead. But fear is keeping many of us away from the stock market. “There are many professional Black women who are at the top of their fields but feel embarrassed by their lack of knowledge about investing,” says ShirleyAnn M. Robertson, a financial professional with Prudential Financial in Schaumburg, Illinois. A lack of disposable income also keeps many Black women out of the stock market, according to a 2014 report by the National Coalition on Black Civic Participation.

But it doesn’t have to be that way. You don’t need to have more. You can simply begin where you are and learn how to invest with the money you’ve got right now. Take our quiz to determine your Investing Quotient (IQ). Then, follow our plan to get into the investment game no matter where on the financial spectrum you may fall.

What Your Score Means
If you scored eight points or less, it means that an extreme financial makeover is in order. More than likely you have accumulated a lot of consumer debt, or you’re carrying some other financial burdens like college loans or perhaps you’ve had periods of unemployment. If you fit any of these situations, start by getting a handle on how much you owe. The less debt you have, the more money you’ll have to invest. Empower yourself by taking the following steps:

1. Get serious about paying down your debt. If you carry a credit card balance, the interest you’re paying probably wipes out any investment profits. Eliminating an interest payment is like earning a return because you have less expense.

2. Start on a retirement plan. Begin investing with your employee- sponsored retirement plan if you have one or an Individual Retirement Account (IRA) if you don’t. Both of these types of accounts allow
you to stash as little as $50 to $100 away each month while getting a tax deduction for it. You’ll also get used to saving for the long term.

Mini Money Makeover

If you scored in this category, you have the financial basics covered. You’re saving, and know how to live within your means. However, now you want to start earning a higher return on your money. First, you need a general understanding of investing. A stock represents ownership in a company. As an investor, you get to share in the profits, but if the company’s business goes south, you may lose money. Bonds are nothing more than loans. You loan your money to a company or some other entity and they promise to pay you back with interest. Bonds are less risky than stocks because you’re guaranteed a certain return on your investment. Now that you know the nuts and bolts, increase your financial standing with these strategies:

1. Open a brokerage account. Just as you need a checking account for banking, you need a brokerage account for investing. At online brokerages such as Sharebuilder (share, Scottrade ( or E*Trade (, you’ll typically pay between $6.95 and $9.99 to buy and sell stocks. Some require you to have some cash to get started. For example, Scottrade requires a minimum of $500 to invest. However, Sharebuilder and TD Ameritrade ( have no minimum charges.

2. Take a group approach. Get a group of forward-thinking girlfriends together and start an investment club. If you only have a little money to invest, it will go much further since you’ll be pooling your funds together. You’ll also learn from each other as you research companies for the group to invest in. To get started, visit the National Association of Investors Corporation’s (NAIC) site at

Fiscal Touch-Up
Go ahead and strut your stuff! You have really gained your financial footing and have the investment basics covered. At this point, your objective is to create a well-rounded investment portfolio.

1. Invest in a mutual fund. A mutual fund is a collection of stocks and bonds that is managed by a professional. When you invest in a mutual fund, you’re investing in multiple companies so your fortune isn’t tied to the financial health of just one. The best thing about mutual funds is they provide instant diversification. “Investors are fortunate today to have easy access to low-cost, diversified investments through mutual funds,” says Karin Risi, principal and head
 of Vanguard Retail Advice Services Group. One particular type of mutual fund to look into is a stock index, a grouping of stocks that track how a particular segment of the market is doing. For example, the S&P 500 is 
an index that consists of 500 large, well-known companies such as Apple and American Express. When you invest in an index, your money will be invested in hundreds of companies whose share prices won’t go up and down at the same time, which reduces your risk.

2. Channel your inner Warren Buffett. Learn how to research individual stocks. Try the Nasdaq Dozen research approach, at, which shows you how to assess a stock based on 12 criteria— such as the company’s revenue, analyst recommendations and earnings forecasts—to determine if you should buy, sell or hold the shares.

Financial Maintenace
It’s taken a while and you’ve had to have your wits about you. You understood the difference between wealth and income and made some smart money moves that have put you on the path to financial security. Now you have to make sure that all this effort results in a retirement plan that provides the income you will need to maintain your lifestyle and protect what you have built.

1. Try an annuity. An annuity is 
a contract issued by an insurance company that invests your money and pays a fixed or variable rate of return, payable monthly and calculated based on your life expectancy, or payable in a lump sum. One of the benefits of this type of investment is it creates a predictable income stream that you can use to support yourself in retirement. It is critical that you do your homework and investigate the financial stability of the insurance company. Log on to to learn more about these types of investments.

2. Guard your wealth. Make sure your legal documents are updated and in order, suggests Lazetta Braxton, a financial planner based in Baltimore. “Protecting and sharing your wealth includes having a will or living trust, powers of attorney [financial and medical], and advanced directives,” Braxton says. If you don’t have a financial adviser, ask close friends and colleagues for referrals. Go to to review a financial adviser’s background and work history.

This article was originally published in the October issue of ESSENCE magazine, on newsstands now.