- The frugal 25-year-old carrier of Imani has increased her net worth to $200,000 through investments.
- She automatically transfers 60% of her salary to her brokerage account.
- Porter is also automating 15% of its salary into an employee stock purchase plan.
After paying off $25,000 in student loans, 25-year-old Imani Porter started thinking about how to build wealth. “I’m a very frugal person overall, so I just started hoarding all my money in savings and not really investing,” Porter told Insider.
First, Porter started following her
net value
. “It’s like your own personal dashboard,” she says, adding that tracking her net worth keeps her from incurring other major debts.
Once she realized savings alone wouldn’t help her build wealth as quickly as she imagined, she looked to her peers in the fintech industry for solutions. Porter said: “I work with a lot of very smart people in finance who were like, ‘No, you have to invest your money. That’s how you’re gonna get rich. “”
According to records seen by Insider, Porter’s net worth is now $200,000. To make it as simple as possible, Porter automates its investments in three simple ways.
1. Employee share plan
An employee stock ownership plan (ESPP) allows employees to buy stock in their company at a reduced rate, usually up to 15% below market value. For example, if you are a 3M employee with a 10% ESPP discount, you can buy stock at $129.78 per share instead of the current market price of $144.21. If the value of the stock increases to $150 or $200, you will see a significant increase in your net worth, even though you bought stocks at a discount.
Porter tells Insider that she chose to automatically deduct 15% of her salary to buy stock in her company.
2. Retirement accounts
According to records seen by Insider, Porter contributes to a 401(k) and a Roth IRA that take full advantage of his corporate match. A 401(k) is an employer-sponsored retirement account where employees can contribute pre-tax income and let it grow over time in the market.
A Roth IRA is an account you can fund with after-tax earnings, allowing the money to grow tax-free without additional tax on withdrawal. Porter’s retirement accounts are worth a combined $78,000.
Additionally, Porter contributes to a Health Savings Account (HSA) through his paycheck, a triple tax benefit account that can be used for health-related expenses, such as over-the-counter drugs and medications. menstrual products.
3. Brokerage account
After Porter’s retirement, ESPP and HSA dues, his take-home pay is around $4,000 a month. Of that $4,000, Porter automatically transfers 60% directly to his brokerage account. Combined with his company’s stock through ESPP, Porter’s investment accounts are worth $76,000, or about 38% of his entire portfolio.
Although this technique helped Porter build her net worth quickly, she first built a strong foundation in cash savings. Her rent, car payment and living expenses come to about $1,000 a month thanks to a budget that she meticulously manages. She adds: “Of course I have my six months of living expenses in an emergency fund and I’m always looking for ways to supplement my income.”
