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Michelle Rider remembers, as a child, eating scrambled eggs for dinner at the end of the month. Her father was a cook in the Navy; her mother was a special education teacher. Once they were paid, everything was fine for about two weeks. But by the end of the month, her parents were struggling to feed Rider and her three younger siblings.
Now, at age 40, Rider says, "It's very uncomfortable for me not to have money in the bank -- just in case." She adds, "My bank account has never been empty, and I've been working since I was 13 in some kind of job."
Her childhood memories shaped her career choice. Even though she "loved fashion, drawing, wearing outfits" when she was young, she recalls reading somewhere that only about 3% of people who pursue fashion design make much money. So she decided to abandon her dream of a career in fashion.
"It was taking a chance, and I didn't have a chance to take because I didn't have anyone to fall back on," says Rider, who's now in charge of consumer marketing strategy for a medical-device maker
.
"My motivation has been about, 'I don't want to be poor.'"
She's so frugal that her friends sometimes tease her. For a single mother with an 8-year-old son, those instincts have put her in solid financial shape. But they've also made her skittish about investing. And her impulse to avoid risk has crimped the returns on her savings.
Rider, who earns about $125,000 a year, puts in the maximum contributions to her 401(k) retirement plan, most of which is invested conservatively in large U.S. company stock funds, and also socks $200 a month into a college tuition fund for her son, Myles.
She has $346,266 in savings and investments (about 32% in cash, 52% in stocks and 16% in bonds). About half her savings and investments are in tax-deferred retirement accounts. She also owns a duplex that she rents out -- and that just covers the mortgage -- and a townhouse in Oakland, where she lives.
Her financial goals are pretty simple: "I love working, so I don't need to retire by the time I'm 50. But when I do retire, I don't want to have to change my life. I still want to be able to shop."
The second goal is for her son: "I'd like for him to not grow up the way I did. I'd like him to pick his career for what he loves to do. ... He loves animals, and he also plays the guitar. Maybe in college he could major in music, if he wants to. I could never have done that. I want him to feel he can take some chances."
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