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From green to greenbacks.

Amateur learns the ropes to invest like the pros

It wasn't long ago that Debra Mangrum of South Holland, Illinois, found herself a widow at age 32 and the single mother of an 18-month-old daughter, Dominique. Before her husband's untimely death in a drowning accident in August 1993, Mangrum had no investments to speak off she assumed retirement was too far away to start planning in her 30s.

"I never gave it a second thought," admits Mangrum, now 39, and a registered nurse in the cardiac catheterization lab at Trinity Hospital in Chicago. But, when her husband passed away, she realized the importance of planning ahead for herself and her daughter's future.

Green to investing, Mangrum sought the advice of Gwendolyn Kirkland Brown, a senior vice president at American Investment Services in Matteson, Illinois. Mangrum had received $100,000 in insurance benefits. Brown encourages individuals who receive lump sums of cash to first create a budget and then decide how much they want to allocate to expenses vs. savings and investments.

She recommended that Magnum purchase a tax-deferred variable annuity from Hartford Advisors because of its balanced growth--the foundation of her retirement program. She opened the account with $5,000 and today--without any additional contributions--it has grown to $13,935.

Brown also suggested Mangrum start contributing to her 401(k) plan at work. Right now, she allocates 5% per paycheck to her 401(k) account, which is worth a little more than $5,300. In addition, she has a traditional IRA from a previous job, valued at around $11,572.

Mangrum's exposure to the stock market began with such blue-chip companies as Walgreen (NYSE: WAG), Intel (Nasdaq: INTC), Coca-Cola (NYSE: KO), Walt Disney (NYSE: DIS), Motorola (NYSE: MOT), and Abbott Laboratories (NYSE: ABT). She invests through dividend reinvestment plans (DRIPs). Today, her stock portfolio is worth $56,000.

Her retirement account holds the AIM Aggressive Growth Fund (AGAAX), valued at $14,000. Mangrum, who has since remarried (her second husband, Steve, 38, is a purchasing manager for the Holiday Inn hotel chain), opened custodial accounts to finance college educations for her daughter, now 8, and her stepdaughter, Trinea, 18, who is a high school senior.

Dominique's portfolio holds the AIM Value Fund (AVLFX), worth $9,400, and Trinea's holds the MFS Total Return Fund (MSFRX), valued at $14,928. Mangrum cashed in her stepson, William's, MFS Total Return Fund when he went off to college last fall. She also has purchased tax-free Illinois college savings bonds and certificates of deposit worth $21,000.

Moving forward, Mangrum plans to spend less and save more. She recently paid off a $6,500 balance on one of her two credit cards. And when her investment club recently dissolved after rive years, she used her $4,700 share (of the group's total portfolio) to buy 50 shares of Microsoft (Nasdaq: MSFT).
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Article Details
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Title Annotation:planning for retirement.
Author:Albano, Christine
Publication:Black Enterprise
Article Type:Brief Article
Geographic Code:1USA
Date:Feb 1, 2001
Words:477
Previous Article:Risky climb.
Next Article:Buying stocks directly.
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