Home » Archive

Articles in the 401(k) Category

401(k), Headline, Investing, Personal Finance »

Automate Your Wealth Building

You generate and build wealth by taking the money you don’t spend and allocating it towards investments that will either increase in value or cash flow.  Either way, your investments give you a return.  That return can be then reinvested and the cycle continues building more and more wealth.  This is the power of compounding interest.  You can grow your money big time if you embrace this philosophy now, early in your life.
In order to force yourself into embracing this philosophy, you can automate many of the steps.  Most people, …

401(k), Headline, Retirement »

[28 Jun 2010 | Comments Off on Will Traditional Retirement Exist When Today’s 20-Somethings Are Older? | ]
Will Traditional Retirement Exist When Today’s 20-Somethings Are Older?

Retirement today is based upon working during the majority of your life, saving a little bit each year, and accumulating enough funds to live on by the typical retirement age (mid 60-ish), and then retiring from a career.  The baby boomers are struggling mightily to make this a reality for them today, although a harsh recession, a stock market crash, and a housing market where many folks’ equity has evaporated has made this reality difficult to achieve.  But, what about us?  Will this type of traditional retirement be possible for …

401(k), Investing, Lifestyle »

[25 May 2010 | Comments Off on Do Stock Prices Keep You Up At Night? | ]

It’s sad how many Americans are dependent upon a high stock market, praying each night that the markets don’t tank because the ramifications would be enormous for you.  Today’s market is crazy.  It’s volatile, unpredictable, and possibly even manipulated.  The winners over the last decade have been the financial planners and Wall St while Americans stash away every dime they have into stocks hoping for outsized gains, while the “experts” rake in fees and win no matter what the market does.
While investing in stocks is a great idea, I completely …

401(k) »

I know multiple people personally who have had their 401(k) matching cut in the last couple months.  For each of them, it is a fairly large blow to their income/savings.  Cutting 5% matching on a 401(k) is a 5% decrease in compensation.  The question becomes, should you continue to contribute to your 401(k) without the matching?  Well, that depends.
Depending on your discipline levels, you may or may not want to keep putting money in your 401(k).  If you tend to spend all of your paycheck, then yes, you probably should …

401(k), Retirement »

When it comes to saving and investing, 401(k) participation is as good as it gets for most 20-somethings.  401(k)s are great vehicles and should definitely be embraced, but the question remains: is participation in these plans all that you should worry about at this point in your life?
Looking At Some Numbers
Let’s assume that an individual is contributing 6% of their salary into their 401(k).  The following numbers would apply:

A salary of $40,000 would result in $2,400 annual contributions ($200 / month)
A salary of $50,000 would result in $3,000 annual contributions …

401(k), Investing »

A ponzi scheme as defined by Wikipedia is:
A Ponzi scheme is a fraudulent investment operation that pays returns to separate investors from their own money or money paid by subsequent investors, rather than from any actual profit earned.
While the above definition does not distinguish new investors from old investors, this is an important and common characteristic of Ponzi schemes; namely, old investors are paid with money from new investors.  So, how does this apply to the actual stock market?
In a recent article on Yahoo, Robert Kiyosaki talks about how the …

401(k), China, Inflation, Investing, Retirement »

Many of my readers participate in their employers’ 401(k) plans.  In fact, for many, the 401(k) is the only way they touch investing.
First, the 401(k) is a great vehicle to take part in, especially for the company match.  I strongly encourage it.  With that said, are there ways to supplement your 401(k) plan with regards to your complete investment picture?  Are there ways you should diversify from your 401(k)?  Yes and yes.
Supplemental Investments
Most 401(k) plans are heavily tied to the direction of the U.S. economy.  If you read my investing …