401k advice

[(former)FormerSanDiegan]

P.S.S. –

What do well-to-do or rich people own that makes or keeps them that way ?

[(former)FormerSanDiegan]

P.S.S. –

What do well-to-do or rich people own that makes or keeps them that way ?

[drunkle]

“What do well-to-do or rich people own that makes or keeps them that way ?”

factories. that make… miniture factories.

i hear what you and everyone else are saying about net worth and tax benefits and yes i am uncertain about the stability of the markets.

i’m not suggesting that you blow your excess cash on power boats and concert tickets. but i do think that investing in more immediate and powerful vehicles/businesses such as real estate, entreprenurial endeavors, inventions, whathaveyou are more direct means of building wealth. the risks are obviously higher, but you control your own destiny, for better or worse. and allowing someone else, whether a fund manager or the institutional investors what manipulates the underlying assets of your fund, to have such control or influence over your life…

like this:
http://www.ft.com/cms/s/1/76e9a1f2-9ed9-11dc-b4e4-0000779fd2ac.html

if a state run fund with all it’s regulations and conservancy cannot be trusted…

like flu and others that have amassed sizable retirement portfolios… if they had invested that money in real estate during the late 90’s instead of their 401, how would things be different for them today? without even bothering with price appreciation and just focusing on slum lord income…

all in all, i may be looking for a get rich quick bullet. or i may be gaining greater awareness of wealth and wealth creation. either way, i’m looking to be more proactive about it rather than simply relying on funds, pyramids, the best intentions of government, federal reserve and stock brokers…

[drunkle]

“What do well-to-do or rich people own that makes or keeps them that way ?”

factories. that make… miniture factories.

i hear what you and everyone else are saying about net worth and tax benefits and yes i am uncertain about the stability of the markets.

i’m not suggesting that you blow your excess cash on power boats and concert tickets. but i do think that investing in more immediate and powerful vehicles/businesses such as real estate, entreprenurial endeavors, inventions, whathaveyou are more direct means of building wealth. the risks are obviously higher, but you control your own destiny, for better or worse. and allowing someone else, whether a fund manager or the institutional investors what manipulates the underlying assets of your fund, to have such control or influence over your life…

like this:
http://www.ft.com/cms/s/1/76e9a1f2-9ed9-11dc-b4e4-0000779fd2ac.html

if a state run fund with all it’s regulations and conservancy cannot be trusted…

like flu and others that have amassed sizable retirement portfolios… if they had invested that money in real estate during the late 90’s instead of their 401, how would things be different for them today? without even bothering with price appreciation and just focusing on slum lord income…

all in all, i may be looking for a get rich quick bullet. or i may be gaining greater awareness of wealth and wealth creation. either way, i’m looking to be more proactive about it rather than simply relying on funds, pyramids, the best intentions of government, federal reserve and stock brokers…

[drunkle]

“What do well-to-do or rich people own that makes or keeps them that way ?”

factories. that make… miniture factories.

i hear what you and everyone else are saying about net worth and tax benefits and yes i am uncertain about the stability of the markets.

i’m not suggesting that you blow your excess cash on power boats and concert tickets. but i do think that investing in more immediate and powerful vehicles/businesses such as real estate, entreprenurial endeavors, inventions, whathaveyou are more direct means of building wealth. the risks are obviously higher, but you control your own destiny, for better or worse. and allowing someone else, whether a fund manager or the institutional investors what manipulates the underlying assets of your fund, to have such control or influence over your life…

like this:
http://www.ft.com/cms/s/1/76e9a1f2-9ed9-11dc-b4e4-0000779fd2ac.html

if a state run fund with all it’s regulations and conservancy cannot be trusted…

like flu and others that have amassed sizable retirement portfolios… if they had invested that money in real estate during the late 90’s instead of their 401, how would things be different for them today? without even bothering with price appreciation and just focusing on slum lord income…

all in all, i may be looking for a get rich quick bullet. or i may be gaining greater awareness of wealth and wealth creation. either way, i’m looking to be more proactive about it rather than simply relying on funds, pyramids, the best intentions of government, federal reserve and stock brokers…

[drunkle]

“What do well-to-do or rich people own that makes or keeps them that way ?”

factories. that make… miniture factories.

i hear what you and everyone else are saying about net worth and tax benefits and yes i am uncertain about the stability of the markets.

i’m not suggesting that you blow your excess cash on power boats and concert tickets. but i do think that investing in more immediate and powerful vehicles/businesses such as real estate, entreprenurial endeavors, inventions, whathaveyou are more direct means of building wealth. the risks are obviously higher, but you control your own destiny, for better or worse. and allowing someone else, whether a fund manager or the institutional investors what manipulates the underlying assets of your fund, to have such control or influence over your life…

like this:
http://www.ft.com/cms/s/1/76e9a1f2-9ed9-11dc-b4e4-0000779fd2ac.html

if a state run fund with all it’s regulations and conservancy cannot be trusted…

like flu and others that have amassed sizable retirement portfolios… if they had invested that money in real estate during the late 90’s instead of their 401, how would things be different for them today? without even bothering with price appreciation and just focusing on slum lord income…

all in all, i may be looking for a get rich quick bullet. or i may be gaining greater awareness of wealth and wealth creation. either way, i’m looking to be more proactive about it rather than simply relying on funds, pyramids, the best intentions of government, federal reserve and stock brokers…

[drunkle]

“What do well-to-do or rich people own that makes or keeps them that way ?”

factories. that make… miniture factories.

i hear what you and everyone else are saying about net worth and tax benefits and yes i am uncertain about the stability of the markets.

i’m not suggesting that you blow your excess cash on power boats and concert tickets. but i do think that investing in more immediate and powerful vehicles/businesses such as real estate, entreprenurial endeavors, inventions, whathaveyou are more direct means of building wealth. the risks are obviously higher, but you control your own destiny, for better or worse. and allowing someone else, whether a fund manager or the institutional investors what manipulates the underlying assets of your fund, to have such control or influence over your life…

like this:
http://www.ft.com/cms/s/1/76e9a1f2-9ed9-11dc-b4e4-0000779fd2ac.html

if a state run fund with all it’s regulations and conservancy cannot be trusted…

like flu and others that have amassed sizable retirement portfolios… if they had invested that money in real estate during the late 90’s instead of their 401, how would things be different for them today? without even bothering with price appreciation and just focusing on slum lord income…

all in all, i may be looking for a get rich quick bullet. or i may be gaining greater awareness of wealth and wealth creation. either way, i’m looking to be more proactive about it rather than simply relying on funds, pyramids, the best intentions of government, federal reserve and stock brokers…

[stockstradr]

I’m astounded at the amount of really BAD financial advice doled out in this Forum (Drunkle and others).

I won’t even comment on all the absurdly stupid posts in this thread. I will comment on a bit of the good advice. Michael’s post on this topic was EXCELLENT, as were posts by FormerSanDiegan, ucodegen and others.

a bit of Michael’s post:

….If you want to hedge against this risk some employers are now offering Roth 401k.

My wife and I earn over $200k per year. That places us in the 33% federal tax rate. By contributing to our 401k’s our AGI comes in at about $190k, dropping us into the 28% federal tax rate.

That’s sound advice. Our total family income is near $200k.
As for us, we obviously each MAX out our 401K contribution every year (2 X $15500 for 2007), substantially reducing our tax load each year.

We also “convert” a tax-affordable amount each year from our Traditional IRA (containing funds “rolled” in from our previous employer’s 401K)) into our ROTH IRA’s. I will not rehash the debate on Pro’s and Con’s of that Traditional IRA -> ROTH IRA financial move because I don’t think it is debatable, and it was nevertheless debated to point of insanity in previous thread. I will however, note that you should always talk with a retirement accounts specialist and tax specialist before making these kinds of transactions (and don’t make retirement account decisions based on general advice in THIS forum!).

A few other comments:

1)
The real benefit of maxed 401K contribution is that it forces at least minimal retirement savings habits, which quickly builds a nice retirement nest egg. I know people, including yours truly, who consistently followed this rule starting from Day 1 at first job. The HUGE cumulative benefit is that in only about 10 or 15 years, our retirement accounts grew so much that most (or all) years, our annual appreciation in those accounts EXCEEDS our paid annual salary, which is a real nice position to be in.

2)
Anybody on here think that holding a “good” diversified bull market mutual fund is “always” good for your 401K?

True Story: retirement accounts financial adviser at my wife’s new employer personally called me up and tried to lecture me because I told my wife to NOT invest in the long market funds the financial adviser suggested. Instead, I told my wife to position her 401K in cash and in inverse (short) market funds appropriate for the current (unusual) market conditions.

I told that financial adviser to go to hell and keep his opinions to himself. During the following 50 days, the overall stock market (and his recommended funds) fell 10%. (So much for idea that “good” diversified bull market mutual funds are “always” the right place to park your money!) My wife’s 401K increased substantially because we ignored that conventional advice.

3) If your US (dollar asset) mutual fund rises 10% next year, are you going to brag about your success if the dollar has meanwhile fallen another 10% (or more) during same year? That is another reason to avoid following the old rule of parking cash into a conventional dollar-asset mutual fun. The dollar is TANKING.

[stockstradr]

I’m astounded at the amount of really BAD financial advice doled out in this Forum (Drunkle and others).

I won’t even comment on all the absurdly stupid posts in this thread. I will comment on a bit of the good advice. Michael’s post on this topic was EXCELLENT, as were posts by FormerSanDiegan, ucodegen and others.

a bit of Michael’s post:

….If you want to hedge against this risk some employers are now offering Roth 401k.

My wife and I earn over $200k per year. That places us in the 33% federal tax rate. By contributing to our 401k’s our AGI comes in at about $190k, dropping us into the 28% federal tax rate.

That’s sound advice. Our total family income is near $200k.
As for us, we obviously each MAX out our 401K contribution every year (2 X $15500 for 2007), substantially reducing our tax load each year.

We also “convert” a tax-affordable amount each year from our Traditional IRA (containing funds “rolled” in from our previous employer’s 401K)) into our ROTH IRA’s. I will not rehash the debate on Pro’s and Con’s of that Traditional IRA -> ROTH IRA financial move because I don’t think it is debatable, and it was nevertheless debated to point of insanity in previous thread. I will however, note that you should always talk with a retirement accounts specialist and tax specialist before making these kinds of transactions (and don’t make retirement account decisions based on general advice in THIS forum!).

A few other comments:

1)
The real benefit of maxed 401K contribution is that it forces at least minimal retirement savings habits, which quickly builds a nice retirement nest egg. I know people, including yours truly, who consistently followed this rule starting from Day 1 at first job. The HUGE cumulative benefit is that in only about 10 or 15 years, our retirement accounts grew so much that most (or all) years, our annual appreciation in those accounts EXCEEDS our paid annual salary, which is a real nice position to be in.

2)
Anybody on here think that holding a “good” diversified bull market mutual fund is “always” good for your 401K?

True Story: retirement accounts financial adviser at my wife’s new employer personally called me up and tried to lecture me because I told my wife to NOT invest in the long market funds the financial adviser suggested. Instead, I told my wife to position her 401K in cash and in inverse (short) market funds appropriate for the current (unusual) market conditions.

I told that financial adviser to go to hell and keep his opinions to himself. During the following 50 days, the overall stock market (and his recommended funds) fell 10%. (So much for idea that “good” diversified bull market mutual funds are “always” the right place to park your money!) My wife’s 401K increased substantially because we ignored that conventional advice.

3) If your US (dollar asset) mutual fund rises 10% next year, are you going to brag about your success if the dollar has meanwhile fallen another 10% (or more) during same year? That is another reason to avoid following the old rule of parking cash into a conventional dollar-asset mutual fun. The dollar is TANKING.

[stockstradr]

I’m astounded at the amount of really BAD financial advice doled out in this Forum (Drunkle and others).

I won’t even comment on all the absurdly stupid posts in this thread. I will comment on a bit of the good advice. Michael’s post on this topic was EXCELLENT, as were posts by FormerSanDiegan, ucodegen and others.

a bit of Michael’s post:

….If you want to hedge against this risk some employers are now offering Roth 401k.

My wife and I earn over $200k per year. That places us in the 33% federal tax rate. By contributing to our 401k’s our AGI comes in at about $190k, dropping us into the 28% federal tax rate.

That’s sound advice. Our total family income is near $200k.
As for us, we obviously each MAX out our 401K contribution every year (2 X $15500 for 2007), substantially reducing our tax load each year.

We also “convert” a tax-affordable amount each year from our Traditional IRA (containing funds “rolled” in from our previous employer’s 401K)) into our ROTH IRA’s. I will not rehash the debate on Pro’s and Con’s of that Traditional IRA -> ROTH IRA financial move because I don’t think it is debatable, and it was nevertheless debated to point of insanity in previous thread. I will however, note that you should always talk with a retirement accounts specialist and tax specialist before making these kinds of transactions (and don’t make retirement account decisions based on general advice in THIS forum!).

A few other comments:

1)
The real benefit of maxed 401K contribution is that it forces at least minimal retirement savings habits, which quickly builds a nice retirement nest egg. I know people, including yours truly, who consistently followed this rule starting from Day 1 at first job. The HUGE cumulative benefit is that in only about 10 or 15 years, our retirement accounts grew so much that most (or all) years, our annual appreciation in those accounts EXCEEDS our paid annual salary, which is a real nice position to be in.

2)
Anybody on here think that holding a “good” diversified bull market mutual fund is “always” good for your 401K?

True Story: retirement accounts financial adviser at my wife’s new employer personally called me up and tried to lecture me because I told my wife to NOT invest in the long market funds the financial adviser suggested. Instead, I told my wife to position her 401K in cash and in inverse (short) market funds appropriate for the current (unusual) market conditions.

I told that financial adviser to go to hell and keep his opinions to himself. During the following 50 days, the overall stock market (and his recommended funds) fell 10%. (So much for idea that “good” diversified bull market mutual funds are “always” the right place to park your money!) My wife’s 401K increased substantially because we ignored that conventional advice.

3) If your US (dollar asset) mutual fund rises 10% next year, are you going to brag about your success if the dollar has meanwhile fallen another 10% (or more) during same year? That is another reason to avoid following the old rule of parking cash into a conventional dollar-asset mutual fun. The dollar is TANKING.

[stockstradr]

I’m astounded at the amount of really BAD financial advice doled out in this Forum (Drunkle and others).

I won’t even comment on all the absurdly stupid posts in this thread. I will comment on a bit of the good advice. Michael’s post on this topic was EXCELLENT, as were posts by FormerSanDiegan, ucodegen and others.

a bit of Michael’s post:

….If you want to hedge against this risk some employers are now offering Roth 401k.

My wife and I earn over $200k per year. That places us in the 33% federal tax rate. By contributing to our 401k’s our AGI comes in at about $190k, dropping us into the 28% federal tax rate.

That’s sound advice. Our total family income is near $200k.
As for us, we obviously each MAX out our 401K contribution every year (2 X $15500 for 2007), substantially reducing our tax load each year.

We also “convert” a tax-affordable amount each year from our Traditional IRA (containing funds “rolled” in from our previous employer’s 401K)) into our ROTH IRA’s. I will not rehash the debate on Pro’s and Con’s of that Traditional IRA -> ROTH IRA financial move because I don’t think it is debatable, and it was nevertheless debated to point of insanity in previous thread. I will however, note that you should always talk with a retirement accounts specialist and tax specialist before making these kinds of transactions (and don’t make retirement account decisions based on general advice in THIS forum!).

A few other comments:

1)
The real benefit of maxed 401K contribution is that it forces at least minimal retirement savings habits, which quickly builds a nice retirement nest egg. I know people, including yours truly, who consistently followed this rule starting from Day 1 at first job. The HUGE cumulative benefit is that in only about 10 or 15 years, our retirement accounts grew so much that most (or all) years, our annual appreciation in those accounts EXCEEDS our paid annual salary, which is a real nice position to be in.

2)
Anybody on here think that holding a “good” diversified bull market mutual fund is “always” good for your 401K?

True Story: retirement accounts financial adviser at my wife’s new employer personally called me up and tried to lecture me because I told my wife to NOT invest in the long market funds the financial adviser suggested. Instead, I told my wife to position her 401K in cash and in inverse (short) market funds appropriate for the current (unusual) market conditions.

I told that financial adviser to go to hell and keep his opinions to himself. During the following 50 days, the overall stock market (and his recommended funds) fell 10%. (So much for idea that “good” diversified bull market mutual funds are “always” the right place to park your money!) My wife’s 401K increased substantially because we ignored that conventional advice.

3) If your US (dollar asset) mutual fund rises 10% next year, are you going to brag about your success if the dollar has meanwhile fallen another 10% (or more) during same year? That is another reason to avoid following the old rule of parking cash into a conventional dollar-asset mutual fun. The dollar is TANKING.

[stockstradr]

I’m astounded at the amount of really BAD financial advice doled out in this Forum (Drunkle and others).

I won’t even comment on all the absurdly stupid posts in this thread. I will comment on a bit of the good advice. Michael’s post on this topic was EXCELLENT, as were posts by FormerSanDiegan, ucodegen and others.

a bit of Michael’s post:

….If you want to hedge against this risk some employers are now offering Roth 401k.

My wife and I earn over $200k per year. That places us in the 33% federal tax rate. By contributing to our 401k’s our AGI comes in at about $190k, dropping us into the 28% federal tax rate.

That’s sound advice. Our total family income is near $200k.
As for us, we obviously each MAX out our 401K contribution every year (2 X $15500 for 2007), substantially reducing our tax load each year.

We also “convert” a tax-affordable amount each year from our Traditional IRA (containing funds “rolled” in from our previous employer’s 401K)) into our ROTH IRA’s. I will not rehash the debate on Pro’s and Con’s of that Traditional IRA -> ROTH IRA financial move because I don’t think it is debatable, and it was nevertheless debated to point of insanity in previous thread. I will however, note that you should always talk with a retirement accounts specialist and tax specialist before making these kinds of transactions (and don’t make retirement account decisions based on general advice in THIS forum!).

A few other comments:

1)
The real benefit of maxed 401K contribution is that it forces at least minimal retirement savings habits, which quickly builds a nice retirement nest egg. I know people, including yours truly, who consistently followed this rule starting from Day 1 at first job. The HUGE cumulative benefit is that in only about 10 or 15 years, our retirement accounts grew so much that most (or all) years, our annual appreciation in those accounts EXCEEDS our paid annual salary, which is a real nice position to be in.

2)
Anybody on here think that holding a “good” diversified bull market mutual fund is “always” good for your 401K?

True Story: retirement accounts financial adviser at my wife’s new employer personally called me up and tried to lecture me because I told my wife to NOT invest in the long market funds the financial adviser suggested. Instead, I told my wife to position her 401K in cash and in inverse (short) market funds appropriate for the current (unusual) market conditions.

I told that financial adviser to go to hell and keep his opinions to himself. During the following 50 days, the overall stock market (and his recommended funds) fell 10%. (So much for idea that “good” diversified bull market mutual funds are “always” the right place to park your money!) My wife’s 401K increased substantially because we ignored that conventional advice.

3) If your US (dollar asset) mutual fund rises 10% next year, are you going to brag about your success if the dollar has meanwhile fallen another 10% (or more) during same year? That is another reason to avoid following the old rule of parking cash into a conventional dollar-asset mutual fun. The dollar is TANKING.

[(former)FormerSanDiegan]

like flu and others that have amassed sizable retirement portfolios… if they had invested that money in real estate during the late 90’s instead of their 401, how would things be different for them today?

I don’t understand why it has to be an either/or proposition. Why not diversify across them all ?
Trying to time for the optimal invesment over the short term is a fool’s errand.

[(former)FormerSanDiegan]

like flu and others that have amassed sizable retirement portfolios… if they had invested that money in real estate during the late 90’s instead of their 401, how would things be different for them today?

I don’t understand why it has to be an either/or proposition. Why not diversify across them all ?
Trying to time for the optimal invesment over the short term is a fool’s errand.

[(former)FormerSanDiegan]

like flu and others that have amassed sizable retirement portfolios… if they had invested that money in real estate during the late 90’s instead of their 401, how would things be different for them today?

I don’t understand why it has to be an either/or proposition. Why not diversify across them all ?
Trying to time for the optimal invesment over the short term is a fool’s errand.

[Author]

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