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Making It In San Diego: Financial advice to help create wealth

A balanced portfolio should cover the short term and the long term.
Posted at 6:36 PM, Apr 27, 2022
and last updated 2022-04-27 21:59:33-04

(KGTV) — Whether it's a trip to the grocery store, filling up our gas tank, or buying just about anything right now, we’ve all been hit by inflation.

Our dollars are not going as far these days, and as a result, thoughts on accumulating wealth may need to be refocused.

As part of our Making It In San Diego series, we talk with a certified financial planner who says now is an important time to consider mutual funds.

A mutual fund is a company that pools money from many investors and invests the money in securities such as stocks and bonds. Investors buy shares in mutual funds. Each share represents an investor’s part ownership in the fund, and the income it generates.

But before we dive into this topic, some advice if you're a woman. You should really see this. It could make a big difference in your life.

Why? Because women statistically live longer than men.

Nationally recognized Financial Expert Ginita Wall, who's based in San Diego, has spent decades educating women about money and how to become financially independent.

Wall recommends mutual funds. Mutual funds have professional fund managers buy the stocks for you. Investors don’t directly own the stock in the companies the fund purchases, but they do share equally in the profits or losses of the fund’s total holdings — hence the “mutual” in mutual funds.

In this economy, Wall says we need to have a balanced portfolio of savings, stocks, and bonds. She suggests using one of the lower-cost funds such as Vanguard, Fidelity, or Schwab.

“So, you have money that's invested for long term in the stock market, and money you're going to need in the next couple of years, you keep closer, because you don't want to pull it out of the stock market at a bad time,” said Wall.

Wall says the amount you put into stocks versus bonds will change the closer you are to retirement. A bond is a loan to a company or government that pays investors a fixed rate of return over a specific time frame. If the stock markets plummet, bonds can help cushion the blow.

The key is a “balanced fund”, and the manager of the fund is doing the re-balancing.

“Mutual funds are amazing. Take as little as $25 dollars, some $100, then you can be adding to that. So if you add bit by bit over time, that's really the most important way to grow your money," said Wall.

The take-away here is "adding to it."

“People who save 100 dollars once and just leave it there are not going to get you very far. It's the adding to it month after month, year after year, over time that really creates wealth," said Wall.

Wall says if you save and invest $5 a day starting when you’re 22 years old, you’ll be a millionaire by 65.

More information can be found at planforwealth.com.