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Daily Capital

Next Moves for This Mom Who Reached $750K Net Worth in 4 Years

As a newly single mother with two young kids, Dr. Lakisha L. Simmons acutely recalls one very raw feeling: fear.

“After putting the children to sleep, I would be alone at night in that big five-bedroom house,” she said of the time shortly after her divorce. “I’d just sit there and think to myself, ‘What am I going to do?’”

Simmons decided — as she had throughout her life — to take action.

She grabbed her laptop and signed up for Personal Capital’s free financial tools. Once she saw the overview of all of her financial accounts in one place, she started slashing expenses — starting with her hefty mortgage. She downsized to an apartment, got comfortable with budgeting, and learned to invest. Within the span of four years, Simmons amassed a $750,000 net worth.

Her message to other single mothers? “All you have to do is take one step forward,” she said. “Just take one step at a time and you will get there.”

Now, Simmons — a first-generation college graduate, associate professor, and author of The Unlikely AchieveHer — is working with Personal Capital as a Financial Hero to share her money story. She stands as the company’s latest advocate for financial wellness.

“I think it’s OK for everybody to make their own rules when it comes to money,” she said. “As a mother, it can be very scary to take risks with money. But I learned that, if I start early, I can successfully save for financial independence and my children’s college education. Personal Capital’s free tools helped me get to where I am today.”

Building Wealth as a Single Mom

This past year has had a striking impact on all populations — not least of whom single mothers.

A recent Personal Capital-Empower Retirement survey revealed that a majority (62%) of single working moms no longer feel confident in their ability to plan for retirement. Conversely, less than half of the general population (40%) lacks confidence in their retirement plans.
For Simmons, gaining confidence in her financial future was propelled by the income from selling her large family home. Although she would’ve been able to sustain the large expense, she knew she wouldn’t get ahead.

“It was important for me to not feel strapped or living paycheck-to-paycheck — not just for the sake of a home,” she said. “I wanted to care for my children, I wanted them to be comfortable, but I didn’t want to do it at the risk of not being able to save for their future or save for my future.”

She’d already built up an emergency fund, which most experts recommend, if possible, maintaining at 3-6 months of living expenses.

With the earnings of about $35,000 on her home sale, Simmons decided to invest.

“For all those years, I’d been working for my money, but now I needed my money to make a return on investment for me,” she said. “It was crunch time — my partner’s gone, I have one income, I have two boys. I have to figure it out.”

Getting on FIRE

She borrowed library books on investing and retirement, and read all she could on financial freedom. It was then that she stumbled across a movement: Financial Independence Retire Early, or FIRE.

She likened the discovery of FIRE to another pivotal life moment.

“It took me back to when I was in high school and I saw a flier for a historically Black college tour. That same lightbulb went off,” she said. “I knew that, oh my goodness, this is going to change the trajectory of my life and my children’s lives.”

The switch was flipped. Simmons learned everything she could about investing in the stock market. she started side hustles, like writing The Unlikely AchieveHer, performing speaking engagements, and delivering goal-setting workshops. She maxed out her retirement accounts, including a 403(b), 457(b), and Roth IRA.

Any time I get any little extra money, I invest it,” Simmons said. “And that is how I was able to reach financial independence so quickly — because I was focused on becoming financially independent.”

While building her own wealth, she found love again. Late last year, she and her partner married. Financially, they’ve opted to keep their finances separate. “We are in a committed relationship, and we support each other, but we have our own financial goals,” she said.

Financial Insights for Single Moms

Single mothers face a particular challenge living off one income. Women consistently earn less than men, and the gap is even wider for most women of color.

Since selling her house in 2017, Simmons has taken big steps toward her goal of financial freedom. Here’s how she defied the odds.

1. “Assess where you are.”

Get clarity on your financial picture — all of your assets and liabilities. Organize it in one spot.

“I always say, ‘Get Personal Capital,’” Simmons said. “It allows you to automatically track everything.”

Gather up all your accounts — your loans, credit cards, checking and savings, retirement savings, brokerage — to see a snapshot of what you truly have.

“I find that so many people just don’t even really know,” Simmons said. “I’ve had women tell me, ‘I’m afraid to see how much debt I really have’ or ‘I’m afraid to know what my picture really looks like.’ It is scary.”

She recalls back to her own financial turning point following her divorce: “I was afraid, too. But I would encourage women, all you have to do is take one step forward.”

2. “Start reducing your expenses.”

To rebuild her budget, she asked herself one important question: What do I really value? Time with her children. Travel. New experiences.

For Simmons, budgeting is not about deprival. Instead, she refers to her own method of money management as her “budget bestie.”

“You really need to be close with that budget — to know everything that’s going out at any given time,” she said. “For me, I do live on way less money than I make, and that’s what’s enabled me to invest so much of my money. But I am truly enjoying my life.”

Read More: Values-Based Spending: How I Budget for What Matters to Me

3. “Invest in your children’s future and your own future.”

As a parent, Simmons believes it’s important to do what feels right for you. “I always say, ‘What helps you sleep at night?’ So, if you know that you want to save for your child’s college expenses, then by all means you should do that.”

But Simmons believes you can do both. In her own life, early retirement is important. Once she builds up her nest egg, she knows she has the practices in place to live off it.

“That doesn’t mean I will never work again, but it means I can focus on these other goals,” she said. “For me, it’s not really competing, it’s just prioritizing.”

Simmons believes in establishing her own financial security so that she can support her kids in their own future goals. Perhaps equally important are the money lessons she passes down.

For instance, when a relative gives significant cash for birthdays or holidays, Simmons stows away 25% of monetary in a UTMA account. UTMA accounts are one vehicle for saving up for large expenses like college but aren’t earmarked only for college expenses. This account type allows her to manage the money until her children come of age.

“When they start working, trust me, they will be helping pay for their own college and investing in their future,” she said. “It’s OK to let your children know that they have responsibility in their financial education.

4. “Focus on financial wellness.”

For Simmons, it’s important to feel financially secure: “I want to be able to take care of my children, take care of myself, and enjoy life. Financial wellness gives me that opportunity.”

Money is a leading cause of stress. One recent survey found that 77% of Americans report feeling anxious about their financial situation. Fatigue, lack of focus, and loss of sleep are only a few struggles when you are under financial strain.

For Simmons, financial wellness means establishing good daily practices to put yourself in a more healthy financial position:

  • Living on a budget that you feel comfortable with
  • Having money saved for emergencies
  • Investing in your future

“Financial wellness is the base,” she said. “The more of that you have, the more you can focus on your health, your wealth, and your happiness.”

All product names, logos, and brands are property of their respective owners. Featured individual is a paid spokesperson and not a client of PCAC and does not make any endorsements or recommendations about securities offerings or investment strategy.

The content contained in this blog post is intended for general informational purposes only and is not meant to constitute legal, tax, accounting or investment advice. You should consult a qualified legal or tax professional regarding your specific situation. Keep in mind that investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money.

Any reference to the advisory services refers to Personal Capital Advisors Corporation, a subsidiary of Personal Capital. Personal Capital Advisors Corporation is an investment adviser registered with the Securities and Exchange Commission (SEC). Registration does not imply a certain level of skill or training nor does it imply endorsement by the SEC.

Alicia Castro is the Managing Editor of Daily Capital.
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