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02-06-2012, 04:17 PM | #67 |
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Don't be, been happily married for a few years now
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02-06-2012, 05:47 PM | #68 | |
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If you are consistent and buy during all markets, including the worst bear market we've had in some time, you can still make a good return. The key is consistency and actually increasing your contributions when the market drops say, 10%. I double my contribution during these times and back it off as the market recovers. When the dow was <10,000 and even 7,000, I was pouring money in as fast as I could in my 401k, IRAs, and brokerage accounts. Like many others, I have been rewarded for my patience and consistent approach. Honestly, I am more scared to buy stocks now than I was during the crash in 2008-2009. |
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02-06-2012, 06:03 PM | #69 | |
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Engineers do it better :)
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Does your company match your 401K input? I would recommend contributing only the maximum your company will match. You could probably trim that down to $500 and invest the rest in addition to having extra spending money if they do not match. It is smart to contribute to your 401K @ your age. My wife and I did at your age and we both have at least $500K in retirement. We also have investments and an annual tuition bill for my daughter. My generation alone will need at least $1 million in retirement (total w/investments) to retire a bit early so you are already ahead by planning. Good luck, and yes, people have different priorities. I have not had a sports car (coupe) or motorcycle since college
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02-06-2012, 07:32 PM | #70 | |
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02-06-2012, 07:58 PM | #71 |
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All I am saying is the OP can diversify. At his age there is a higher risk acceptance versus my age and my philosophy has always been match the company contribution only. He can diversify with stock, bonds, and CDs. The 401K funds are not immediately available.
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02-06-2012, 09:29 PM | #72 |
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That's the beauty of it along with it being pre-tax. At a young age, piling that money with compounding returns and not ever seeing it is huge. Most decent 401k programs have a diverse mix of investment options. I have index funds, bond funds, actively managed funds, etc.
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02-06-2012, 10:05 PM | #73 | |
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as someone who owns their own business (and "employs" their wife) I max our 401(k) every year plus 4% match plus profit sharing...(as the highly compensated employee...i get most of it)...the tax advantages are overwhelming...I get to save >100K/yr tax free...
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02-06-2012, 10:07 PM | #74 |
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not even close!
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02-06-2012, 10:10 PM | #75 | |
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**** depends on your personality, do you want nice things when you're young and fun (correct answer), or when you're old and boring? no bias. haha, it's up to you, but personally I'd rather have nice things when I can enjoy it more. fuck it, do it
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02-06-2012, 10:13 PM | #76 |
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02-06-2012, 11:05 PM | #78 | |
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Statistically though, 401k plans have failed in performance as an investment vehicle over the past 25 years. Here's a statistic to mull over: The past 25 years the S&P 500 had annualized returns of around 12%. Bonds around 7.5%. Mutual funds? 4.4%. I'm not trying to bash on people who put a lot of their hard earned cash into a 401k, but I'm not seeing the performance numbers. It could be for a variety of reasons which I'm too busy to actually seriously research myself; hidden costs in plans, people making uninformed decisions and following funds based on return history, no rebalancing, etc. The simple fact that your boring t-bill has outperformed your average investor fund the past 25 years shows that 401ks don't perform very well.
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02-06-2012, 11:13 PM | #79 |
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You guys do realize that many 401 can be designed in very compelling ways... I have index funds, EFTs, treasuries or even individual stocks if desired...The goal is to keep the costs to a minimum...
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02-06-2012, 11:28 PM | #80 |
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100k, 1 year out of college?! I'm a mechanical engineering student and I'll be graduating this spring..and I'll be lucky if I make 70k. If you don't mind me asking, what type of engineer are you and what is an "SV tech" company? sorry, but I haven't heard that phrase before
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02-06-2012, 11:34 PM | #81 | |
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02-06-2012, 11:35 PM | #82 | |
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I don't want to say exactly, but its one of these: Google, Facebook, Apple, Twitter, Dropbox. |
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02-06-2012, 11:57 PM | #84 |
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The reason you can't afford an M3 on a $100k salary is because you're an engineer! Engineers are very smart people typically and extremely dense on financial issues. If you want an M3, go get one. You can afford it.
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02-07-2012, 12:26 AM | #85 | |
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I think the assumption that the 401k is being personally managed, and managed well by your average W2 is a huge assumption. If that is to be assumed, then that person could do a lot better than an employer sponsored 401k as an investment vehicle.
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02-07-2012, 12:31 AM | #86 | |||
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Here's a good article you should read explaining exactly what I'm talking about. The research has proven on average, 401k plans are mismanaged, non-performing investment vehicles over the past 25 to 30 years: http://www.mibiz.com/opinions/money-...01k-plans.html Quote:
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Although some will claim that they are hot shot investors disguised as regular W2 workers and have great returns via a 401k, the actual data doesn't support that conclusion in general. The 401k for all statistical purposes is a failure.
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02-07-2012, 01:41 AM | #87 |
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Mismanagement of your 401k is not the same thing as poor returns from your 401k. If you are not looking at your 401k as a long term investment, and treat it like a checking account to draw money from, it will most likely not give you the returns you expect.
Failure of 401ks are mostly attributed to participants that do not understand what they are for, and not the 401ks themselves. They contribute too little, too late in the game to save enough to retire, or they cash out of them when they change employers. |
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02-07-2012, 02:10 AM | #88 | |
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You highlighted "About 29 percent of workers have less than $1,000 available for retirement. Another 27 percent have more than $1,000, but less than $25,000.". Thats because they're not contributing to the 401k, not because the returns aren't good. You can contribute 1k in a month, let alone 30 years... The 401k aren't doing bad because the returns are bad, the article clearly says its because a number of reasons, most being the people don't enroll, or don't contribute enough. And if they can't setup proper allocation in a 401k, what makes you think they will be better off with a regular investment account? Asset allocation is the same all across the board, no matter if its a 401k, IRA, or a regular investment account. According to that article, almost 60% of people contributed less than 2 years worth of contributions over a 30 year period. Thats because they messed up, nothing to do with the returns. |
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