Sure, investing can be intimidating. And if you're averse to what can appear to be an endless stream of formulas, ratios, and financial jargon, now is the time to get over it. It's vital to begin investing as soon as you can to ensure a stable financial future. Women, especially, must invest early because they tend to live longer and therefore require more money to maintain their standard of living after retirement. Some 80% of women will die single whereas approximately 80% of men will die married, according to Women's Institute for a Secure Retirement. A married woman literally cannot afford to rely solely on her husband's earning power or retirement plan to sustain her through her retirement. There are countless resources available to help you learn the fundamentals of investing. With the help of financial planners and investing experts, BLACK ENTERPRISE came up with a list of the top five investing rules for women. START EARLY Megan R. Smith, 26 Megan R. Smith didn't waste time when it came to planning her financial future. With her father's help, Smith, at age 10, began socking away half of her monthly $25 allowance in a savings account. When she was 15, her father helped her purchase her first certificate of deposit and a few bonds. "After purchasing my first CD, I became really excited about money management and I went to my dad and asked him what else I could do. That's when we started talking about mutual funds, investment accounts, and money market accounts.†At the age of 22, when she started working at Starbucks as a marketing assistant in 2005, she received stock options at a considerable employee discount. Smith eagerly took advantage of the opportunity, purchasing more than 200 shares of Starbucks stock. Now 26, she has more than $29,000 in investment savings. "Most people my age don't understand how to invest. But you should start learning about investing money and building wealth now,†she says. Smith left Starbucks in 2006 and has since founded a public relations firm, Brownstone PR, in Philadelphia. Many people in their 20s put off investing, insisting that they'll start when they begin earning more money. Resist that line of thinking. Starting early gives your money time to grow because of compound interest, which is interest earned not only on the original principal but also on previously earned interest. "A lot of women don't put money away in their retirement accounts when they first start working–that's a huge mistake,†says Cheryl Broussard, registered financial adviser and author of the e-book Starting Over: Fast Cash and Getting Back on Financial Track (Cheryl Broussard; $19.99). "When you first begin working, contribute to your retirement plan as soon as you're eligible, even if it's just $50 a month. A small amount can make a huge difference over time.†Don't put off investing until a life change occurs. Regardless of your marital status, now is always a good time to start investing. "For many people, it's life changes such as getting married, having children, etc., that cause them to get serious about their finances,†says Manisha Thakor, a chartered financial analyst and co-author of Get Financially Naked: How to Talk Money with Your Honey (Adams Media; $12.95). "For single people who may not be experiencing those kinds of life-altering events, they need to create their own catalysts to take charge of their money.†–Sheiresa McRae ACTION PLAN --Contribute to your company's retirement plan as soon as you're eligible. Each year that you delay means there will be less money for your future. Talk to your human resources representative and ask how you can get started. --Start small. If you've just started working and you don't earn much, invest what you can. Every little bit counts. --Remain committed to your investment plan. The stock market goes up and down. Don't become disheartened by losses and sell your investments. Keep contributing to your accounts and stay determined to ride out the storms. EDUCATE YOURSELF Tamela Finney, 27 Tamela Finney became interested in real estate investing six years ago as she quietly listened to her male colleagues discuss their investments over lunch. Finney wanted more information, so she borrowed a book from her manager that he'd once mentioned, Buy Low, Rent Smart, Sell High: Real Estate Investing for the Long Run (Kaplan Business; $18.95). A few weeks after reading it, she closed on a two-bedroom house in Macon, Georgia, for $60,000. Not long after, she bought a second two-bedroom house, this time with her father's help, for $50,000. Both homes were owned by elderly people who were eager to sell. Finney, 27, rents out both and brings in a total of $1,075 each month in rental income. Finney's investments aren't limited to real estate. She also invests in securities, such as Ann Taylor, (ANN), Accenture (ACN), and Apple (APPL), knowing that diversifying her investments helps her withstand the market's volatility. "It took about six months for me to get up to speed,†she says. "Now I spend about 10 hours a week monitoring, managing, researching–just staying on top of my investments.†Finney also opened a simulated trading account that she used to hone her securities investing skills during her six months of self-training. She later moved her account to E-Trade. Finney participates in online tutorials, attends live seminars hosted by E-trade, and reads financial news on Websites such as CNNMoney.com and Yahoo Finance. She recommends that novice investors find stocks that fit their interests and lifestyle, and that they learn the intricacies of the sectors and industries in which they choose to invest. "My areas are tech and retail,†says Finney, an Atlanta-based information technology consultant. "I have a tech background–I graduated with a computer science degree.†As for retail: "I love to shop and because I'm out there, I know where consumers shop.†Finney has amassed about $40,000 from her stock investments in the last four years, and she's put away $25,000 from her rental properties over the last six years. Once you start investing, it's important not to lose sight of your financial goals. Whether your investments are earning a lot or a little, stay focused on building wealth for the long term, rather than seeking a quick profit. "The philosophy in this country is to make money and spend it. But we need a new money philosophy: Make money, spend some of it, but also invest it and grow it and start building your wealth,†says Broussard. Thakor agrees, adding that women should educate themselves not only about the ins and outs of investing, but also about the basics of saving and budgeting. Without knowing the fundamentals, it's difficult to move forward with an investing plan. "Know where you're headed. Some people can't answer the question, ‘How much should I target saving?' And the simple answer is 10% to 15%. If you start saving 15% of your gross income from day one of your working years, and you keep that up while you're working and you invest wisely, you will have no problems supporting yourself in retirement.†–Deshundra Jefferson ACTION PLAN --Develop your own financial curriculum that includes a mix of reading, online tutorials, and live seminars, or consider starting a financially focused book club. --Attend seminars and workshops. Take notes. Learn as much as you can. --Open a simulated trading account to develop and test your knowledge at Investopedia or other sites. GET OVER YOUR FEAR Colleen J. Payne-Nabors, 46 Investing is seemingly second nature to Colleen J. Payne-Nabors. When she began working at her first professional job after college, she joined her employer's 401(k) without hesitation. At age 25, Payne-Nabors began purchasing Treasury EE savings bonds. Every two weeks, her bank automatically deducted $50 from her paycheck to purchase the bonds. When she was ready to buy her first home at the age of 32, she cashed in her bonds to make a $12,000 down payment. Now 46, Payne-Nabors is still reaping benefits from investing. In 1998, she founded MCI Diagnostic Center, a diagnostic imaging company in Tulsa, Oklahoma, that she owns with her husband, Donnie. Today, the business is valued at $8 million. Six years ago, the couple started investing in commercial real estate; their holdings now total $6.2 million. Other investments include Payne-Nabors' 401(k), which totals $113,000 and an IRA account that holds $70,000. Finally, Payne-Nabors invests in EE savings bonds for the couple's 13-year-old son, Isam. Payne-Nabors may have been afraid not to invest. "I can't really say there was any fear, because I knew it would be a vehicle for leaving behind a legacy of wealth,†she says. "The benefits outweighed the risk of me not investing.†Unfortunately, according to a survey commissioned by the investment firm Scottrade, the majority of women investors are less confident about their financial skills. Nearly 60% of women describe themselves as being at a beginner level of investing, compared with 35% of men; 56% of men consider themselves to be "intermediate†investors. "There's still a lot of fear because of what's happened with the economy and the stock market, and women are shying away somewhat because they aren't knowledgeable enough about what to do,†says Broussard. Women may feel less savvy about investing, but according to the survey their portfolios perform exactly the same as those of men. One way to get over your fear is to become familiar with the culture of investing. Another part of overcoming fear is dispelling misconceptions about investing, mainly that you need a lot of money to do it. Jacquette M. Timmons, president and CEO of Sterling Investment Management Inc., an investment education and financial coaching firm, reveals that you can accumulate $20,000 by setting aside $2.74 every day for 20 years. "We need to change our language around what we constitute as little or small,†she says. "What we think of as not being enough is actually a lot when you let time and effective compounding take their course.†–Brittany Hutson ACTION PLAN --Determine your risk tolerance. Figure out how comfortable you are with a high-, moderate-, or low-risk collection of investments. --Set financial goals. This will help you determine which investment options are right for you. You should have short- and long-term financial goals. --Join or start an investment club. You can begin building a portfolio while receiving support from club members. DON'T GO IT ALONE Janice Blake, 37 Getting together and sharing investment ideas with friends and family are great ways to get support. Janice Blake, a director of a national public health internship program, owes much of her investing success to the network she established nine years ago. The 37-year-old married mother of two already invested on her own, but she wanted to learn more about financial markets. So Blake started The DIVA!Group, an investment club for women. "I didn't think sister friends and I knew enough about the stock market and what we're supposed to be doing with our money as financially savvy Americans,†says Blake, who lives in Brooklyn, New York. "I needed a way to learn more, and I thought I could do it better with support.†Over the last 12 years, investing with the club and on her own, Blake has created an investment portfolio worth roughly $100,000. Investing with a group lightens the workload and makes researching companies more manageable. "The information is reduced to bite-size pieces,†Blake says. "Learning it by myself might have been overwhelming. Instead of me looking at every stock or company when deciding what stocks to buy, we divide the work. When everyone presents their favorites, I walk away having learned about three companies, instead of taking three months to learn about three companies by myself.†In addition to joining an investment club, novice investors should seek help from professionals. This is especially true if you don't know how to begin or what to invest in and you're planning a long-term investment strategy. "If you want to buy a single investment that represents a small portion of your portfolio, then a program like ShareBuilder is fine. But if you're designing a long-range strategy, you need a professional,†says Vicki Brackens, a senior financial planner with Brackens Financial Solutions Network, an office of MetLife in Syracuse, New York. To seek guidance from an investment adviser or financial planner, contact the Certified Financial Planner Board of Standards (www.cfp.net) or the National Association of Personal Financial Advisors (www.napfa.org) for referrals. Before hiring a financial professional, know what services you need, what services the adviser offers, the cost, and how the adviser gets paid. Also make sure that he or she is properly licensed. It's important to research any financial planner, investment adviser, or broker that you plan to hire. Begin by consulting BrokerCheck (www.sec.gov/answers/crd.htm), a database of the Financial Industry Regulatory Authority, or FINRA, to see whether or not a broker has been subject to any disciplinary actions or investigations. Information about individual investment advisers is available through state securities regulators. Information about investment adviser firms can be found through the Security and Exchange Commission's Investment Adviser Public Disclosure program or through your state's securities regulator. "Women must seek out professional advice in addition to forming a group and teaching themselves about investing. That is essential,†Broussard urges. –Sheiresa McRae ACTION PLAN --To get your feet wet, attend investment workshops and seminars. --Consider joining or starting an investment club. -- If you don't understand something, ask. INVEST FOR YOUR RETIREMENT Kimberlea Rodney, 32 It's admirable that Kimberlea Rodney began investing for retirement at the ripe old age of 22. Fortunately, when she started her job with what was then the New York City Board of Education, all employees were required to invest at least 3% of their income in the employer-sponsored retirement account. After 10 years on the job, Rodney has $24,000 between a tax-sheltered annuity and her Teacher's Retirement System accounts. "I stopped contributing for a few years when I was in forbearance with my student loans, but that was one of the worst things I could have done,†says Rodney, a middle school teacher. She also borrowed $9,000 from the account a few years ago to use as her down payment on a co-op in Brooklyn, New York. Though Rodney needed the cash, she broke one of the cardinal rules of investing. "Once you start putting money in that retirement purse, do not take it out,†declares Deborah Owens, co-author with Brenda Lane Richardson of A Purse of Your Own: An Easy Guide to Financial Security (Fireside; $15). Owens says borrowing from your retirement account should be your last option. She advises taking out a loan or working an extra job instead. "If you are going into that purse, you are living beyond your means,†she warns. Fortunately for Rodney, she's planning to work another 30 years, so she has time to recoup her lost earnings. There are a variety of retirement investment vehicles available of which women can take advantage, whether they're employed full time, running part-time businesses, or not working. "The days of working for the same employer for many years are gone, especially for women,†says Owens. "Even if you have a part-time job selling Mary Kay or Pampered Chef or any of those side businesses, you can contribute to an [Individual Retirement Account] or [simplified employee pension] IRA.†Last year, the SEP IRA contribution limit was $49,000; in 2008, it was $46,000. With the Spousal IRA, nonworking wives can contribute a lesser amount, usually up to $5,000. Also, if you're faced with the choice of paying your children's college education or saving for retirement, choose retirement. You've heard it before but it bears repeating: Your children can get a scholarship, but there are no scholarships for retirees. "With divorce rates being what they are, and with most women outliving most men, women must invest for the long term,†says Brackens. –Sakina P. Spruell ACTION PLAN --Figure out how much money you need for retirement. A single retirement or Social Security account may not be enough to fully support you during your nonworking years, so work with an adviser to determine how much money you'll need, and by when. Calculators like those offered at Bankrate.com (www.bankrate.com) can help. Just click on the tab labeled "Retirement†and go to "Retirement Calculators.†--Contribute set amounts to retirement accounts to achieve your goals. If your employer has a 401(k) or 403(b), contribute as soon as you're eligible, and at least up to the amount your employer matches. If you're self-employed, contribute to a SEP IRA; if you're a nonworking wife, you can contribute to a Spousal IRA. --Consider supplementing your retirement income with a rental property or a small business. This article originally appeared in the March 2010 issue of Black Enterprise magazine. FURTHER READING A Woman's Guide to Money Management