28 KIPLINGER’S PERSONAL FINANCE^ 05/2019She attributes much of her success
to her focus on developing long-term
relationships with her clients, helping
them with everything from making
large charitable gifts to paying for a
child’s stem-cell treatment. Too often,
she says, financial-planning firms are
more interested in generating new
business—and assets under manage-
ment—than working with the clients
they already have.The decade-long bull market in stocks has helped increase the number of millionaire
households in the U.S. to nearly 7.7 million, or about 6.2% of total U.S. households. That
means they hold $1 million or more in investable assets, excluding the value of real es-
tate, employer-sponsored retirement plans and business partnerships.
No doubt some of those millionaires hit the jackpot in a hot stock or two. But too
many investors over the years have learned that you can easily go bust investing in what
you think is the “next big thing.” A more reliable way to amass an investing fortune is to
follow a few tried-and-true rules for building a healthy portfolio. Among them:Start early. Time and compounding interest are an investor’s best friends. Assuming
an 8% annualized return on his or her portfolio, a 20-year-old could amass $1 million by
age 67 by investing a little over $2,000 a year. A 40-year-old earning the same return
could invest $10,000 a year and still wouldn’t crack a million by retirement age.Cut costs. You can’t control how your investments will perform, but you can control
what you pay for them. Over the course of decades, paying a fraction of a percentage
point more in fees can chisel thousands from the value you end up with. Assess your
portfolio and jettison expensive mutual funds in favor of cheaper options. VA NG UA R D
TOTAL STOCK MARKET ETF (VTI, $145), a member of the Kiplinger ETF 20, the list of our
favorite exchange-traded funds, tracks the performance of the entire U.S. stock market
and charges just 0.04% of assets.Diversify. Don’t put all your (nest) eggs in one basket. Spreading your assets among dif-
ferent types of investments increases your portfolio’s chances of withstanding sharp
drops in one corner of the market or another. Owning a mix of stocks, bonds and cash
may cause your portfolio to lag when stocks are going gangbusters, but you’ll hold up
better when stocks slide. When Standard & Poor’s 500-stock index plummeted 37% in
2008, the average balanced mutual fund with 50% to 70% of assets in stocks and the
rest in bonds and cash surrendered only 27.5%. A good choice is VA NG UA R D WE L L I NG T O N
(VWELX). A member of the Kiplinger 25, it’s among our favorite actively managed funds.Focus on dividends. Those quarterly payouts count. From 1930 through the end of 2017,
reinvested dividends contributed 42%, on average, to the total return of the S&P 500.
To boost your exposure to dividend-paying stocks, consider Kiplinger ETF 20 member
SCHWAB U.S. DIVIDEND EQUITY (S CH D, $52), which yields 3.1%. RYAN ERMEYHow to Invest the Right Way
YOUR PORTFOLIOMyers has also had to learn how
to turn challenges into opportunities.
Financial planning has long been a
male-dominated business, and Myers
sometimes had a hard time getting
people to take her seriously when she
launched her firm. But she also found
that many women are more comfort-
able working with a female planner.
“More women are making the finan-
cial decisions in the household,” shesays. “They want someone who under-
stands them and how they think.”Giving back. In 2017, Myers launched
SageVestKids, a free financial-literacy
site for children ages 3 to 18. Her goal
is to help the next generation learn
good money management skills. “We
have a financial crisis of people not be-
ing prepared for retirement,” she says.
The growth of Myers’s business has
allowed her to fulfill some of her life-
long goals. As a single mother, she
was able to adopt two children—her
daughter, age 4, and her son, who is
19 months old. She has provided finan-
cial assistance to her extended family.
Plus, she had the resources to recover
from a financial hit that would have
bankrupted many families. In 2015,
she and her newly adopted daughter
had to move out of their home in
Northern Virginia after mold in the
basement ceiling made them seriously
ill. After paying thousands of dollars
for mold removal—which wasn’t cov-
ered by insurance—she sold the house
and bought a home closer to her office.
Her advice to aspiring business
owners? You’ll probably be married
to your job, so make sure you have
the time to make the commitment.
Have enough financial resources to
get through the tough times, along
with a Plan B in case your business
plan doesn’t work out.The Supersavers
T
im and Amy Rutherford of Parker,
Colo., have long been good savers.
Tim, 52, who spent his career in tele-
communications equipment sales,
started maxing out his 401(k) with his
first job out of college and invested in
taxable accounts as well. Amy, 50, who
worked in sales for media companies,
regularly socked away her commis-
sions, which some years amounted to
half her base salary or more.
The Rutherfords, who married in
2008, say they always spent less than
they earned—typically $200,000 aMONEY COVER STORY