On her own again.

Divorced single mother sticks with her long-term savings goals

Camille Harris, 32, started investing when she was a reserved 27-year-old college student majoring in speech pathology at Queens College. Moving to Connecticut in the late 1980s, she earned her master's degree from Southern Connecticut State University, then got married. All the time the value of her investment portfolio was growing.

"I only keep one month's mortgage in my savings account at Hudson United," says Harris, satisfied that her fiscal prudence enabled her to launch a home-based business, Creative Communication Consultants, a year ago. No one can argue with her winning strategy either, given the remarkable resilience she has shown. In July 1998, she divorced her husband while their son, Malkolm, was still an infant. Though now earning considerably less than the $65,000 she earned prior to her pregnancy, she has no regrets that she took a $25,000 cut in salary in order to focus on motherhood. "My philosophy in life is that once I put my son first, everything works out right in the end," says Harris, who grossed $5,200 in revenue in 1998 from Creative Communications Consultant, which she started with a modest $25 investment.

Striding confidently toward a brighter future, Harris eagerly awaits March 2000, when her husband will forfeit all rights to the $189,000 home they now own jointly. Since she works for a school system, it puts no matching funds toward the $60 she religiously contributes to her 403(b) retirement plan. She makes up for that by paying scrupulous attention to her heavily aggressive investment portfolio, which includes stocks in blue chips such as Yahoo! (Nasdaq: YHOO), Intel (Nasdaq: INTC) and Oracle (Nasdaq: ORCL). Harris flirted briefly with government bonds early in her investment career, cashing in the $3,000 worth of bonds that her grandmother bought for her when she was four years old. "After college, I wanted to take a trip to Europe, so I cashed in the bonds to finance the trip," she says.

Not only does Harris pay close attention to her investment portfolio, she is constantly seeking opportunities to build young Malkolm's nest egg. Harris used the money she got from family and friends for the baby's christening to start an aggressive investment portfolio for him with shares in AIM Value Fund. Since then, the portfolio has earned $600 on the $500 with which it was launched. Also, Malkolm's savings account never exceeds $100 because Harris keeps transferring the extra funds to his investment portfolio. "I only allow him to have a savings account so that he can learn to respect the value of money," Harris explains. In retrospect, when Harris' husband gave her a divorce, she smartly kept to the theme of newness and started her new firm, which has enabled her to start a brand-new fulfilling life.

Expert Advice

FINANCIAL EXPERT: Norman Forrester, Financial Consultant, Merrill Lynch, New Haven, Connecticut.

His Strategy: Harris should maintain her current investment approach but diversify her portfolio while expanding to prepare for unexpected catastrophes.

Forrester's Recommendations:

* Diversify her portfolio. She should continue to add to her portfolio, especially investing in stocks that offer growth potential, such as Pfizer, Cisco, Citigroup and Microsoft. Since Harris is in her prime working years, the stocks will give good returns for her over time.

* Structure the business properly. The government thinks of a home-based business as a full-time job. Harris should take 15% of her company's earnings and put them into a SEP IRA account. This will allow her to make legitimate deductions against the business and reduce her business tax liability. She should also set up an interest-bearing checking account and keep that separately for the company.

* Prepare for the unexpected. Harris should prepare for unseen events. Generally, it's recommended that individuals set aside three to six months' salary in a money market account in case of an emergency. It takes about six months for disability to kick in if Harris is injured on the job. Also, as a single mother, she should immediately set up a will and make arrangements for a legal guardian for her son.

Financial Snapshot:

Household Income

Salary:                                        42,500
Alimony/child support:                          1,500
Business Income:                                5,200/yr.
                         Investments
Self:                                          21,100
Malkolm:                                        1,100
                         Savings
Self:                                          1,500
Malkolm:                                         100
                         Household Expenses
Mortgage:                                      1,566/mo.
Other:                                           700
                         Debt/Liabilities
Credit Cards:                                  2,400
Business Expenses:                               400/yr.