[quote=spdrun]That’s money you can’t touch tax-free till you’re 65. Whereas property gives tax-advantaged income virtually immediately. (Barring drastic tax changes.)[/quote]
Wrongo… Actually, if you wanted to you could touch it and borrow against it, and pay yourself 4%, up to some of the plan’s conditions. I did just that to bridge all cash property purchase before I could cash out refinance. Now, some financial planners say thats a bad idea because if you borrow all against it, you’re not really putting your money to work for you, so most plans try to limit want can be borrowed. The thing about tax deferred (and in the case of Roth tax exempt), gains compound without taking a tax hit… So if you really wanted to go in and out of a funds, there would be no tax consequences.
Even if you didn’t contribute to a 401k, but tucked $18k into normal index fund account, it would have almost the same results..There is a slight tax hit from capital gains/dividends…But index funds don’t usually churn that much each year wrto cap gains and dividends, so there’s not as much of a tax hit each year (as opposed to actively managed funds).
I’m not disagreeing with the tax advantages of real estate investments, when that option is there. But waiting indefinitely for that one shot hit, well like I said, you are giving (gave?) up a huge opportunity, simply because it seems you just wanted to be right while you wanted the majority of others to be wrong…whether you want to admit it or not.
You aren’t going to really do that much better banking on a one shot hit relative to others who’s been doing the old slow drip/invest/planning thing all along…Rabbits that take power naps in between work always lose to tortoises that’s been working slowly, and more consistently for a lot longer. Everyone knows that.
