Money Masters: Barbara Friedberg

This week’s Money Master is Barbara Friedberg. We’re excited to host Barbara on our blog for three reasons. First, Barbara has been a great supporter of The Debt Free Guys. Not only has she been a public supporter, but she’s been a behind-the-scenes confidant, as well. Second, Barbara is smart. Anyone who wants to improve their personal financial situation, no matter how they define that, can benefit from Barbara’s education and experience. Heck, even though we think we’re smart, we still learn from Barbara. Finally, Barbara just published a new book,Invest and Beat the Pros-Create and Manage a Successful Investment Portfolio. We had the chance to read it. We found it enjoyable and informative. Investing doesn’t have to be hard and Barbara proves that in this book. Whether you’re new or old to investing, you can learn something from Barbara’s latest book.

Learn more about Barbara below . . .

1. What’s your story?

I’ve had a long career as an investor and portfolio manager. I’ve seen first hand the benefits of an early start to investing. Investments I made in diversified stock mutual funds decades ago have grown 5-6 fold.

Armed with real world investing experience, professional experience as a portfolio manager, and a commitment to helping others, I created Barbara Friedberg Personal Finance.com. My growing money and investing community, readers, and partners are validating the need for trustworthy investing and money help.
2. What’s your point of view, as a personal finance blogger?

It’s crucial to create smart money habits. Small smart money habits practiced regularly show that almost anyone can build wealth. I’m in the “education” business. Every day I wake up with the goal of helping others learn to investthe “right way”. That means following the strategies which have been shown to outperform the professional money managers most of the time.

I’m not only a blogger, but an author, podcaster (Young and Oldish Money on itunes) and educator. I’m approachable and genuine in my desire to teach others the smart money and investing strategies that work.

Start diverting part of your income and earnings now into a diversified, low cost, index mutual fund and continue throughout your life. You’ll be amazed at how a few dollars, invested regularly can turn into hundreds of thousands of dollars (and more). Consistency trumps “luck” every day.

Finally, here’s an excerpt from Invest and Beat the Pros-Create and Manage a Successful Investment Portfolio to show why it’s important to start investing as soon as possible.

“Juan’s Investing Story

Here’s the proof for this investing approach.

When you implement these simple steps you will create an investment portfolio which beats the professionals and leads to a large sum of money for your future. Take a look at Juan and Jenna’s stories to motivate you to start investing today.

At age 25, Juan started contributing $350 per month into his retirement account. He automatically transferred the money from his paycheck into the account. He decided to invest 25 percent in a bond index fund and 75 percent into an all world stock index fund. Assume 7 percent average annual investment returns.

Juan’s employer kicked in an additional $175 per month, for a total monthly retirement fund contribution of $525. Each year, Juan invested $6,300 for retirement; $4,200 payroll deduction along with the employer’s $2,100 matching contribution.

After setting up the transfer and choosing the funds, he didn’t think much about it.

After a small input into savings for emergencies and short-term goals, Juan spent the rest of his paycheck, knowing his financial future was secure.

Over 40 years, when Juan reached the age of 65, his $168,000 investment plus the employer’s $84,000 (total contribution of $252,000) grew to over $1,386,065.

Juan never increased his retirement contributions!

Imagine if Juan had increased his contributions as his income grew. With compounding returns, your original investment makes money on top of money.

Look at the retirement contributions in a different way.

Juan invests $4,200 each year. That’s 10 percent of a $42,000 income. Yet, $4,200 per year is only 7 percent of a $60,000 salary. As Juan’s salary increases, he can contribute a smaller percent of his income and still reach over a million dollars by retirement, or, as his salary increases, he can choose to increase his retirement contributions.

The key to building a large nest egg for the future is to start investing younger, to give your money more time to compound.”

Barbara Friedberg bio:

Barbara Friedberg, MBA, MS is a veteran portfolio manager, expert investor, and former university finance instructor. She is editor/author of Personal Finance; An Encyclopedia of Modern Money Management, two additional money books and publisher of Barbara Friedberg Personal Finance.com. Friedberg’s work has been featured in U.S. News and  World Report, Investopedia, Yahoo!Finance and countless other sites. Her Young and Oldish Money Podcast can be found on itunes. Follow her on Twitter and Google+.

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