Comments on: Retiring Rich Means Using Your 401(k) http://www.bargaineering.com/articles/retiring-rich-means-using-your-401k.html personal finance blog with anecdotes, advice and commentary. Sun, 12 Feb 2012 22:21:00 +0000 hourly 1 By: jim http://www.bargaineering.com/articles/retiring-rich-means-using-your-401k.html/comment-page-1#comment-2598 jim Sun, 18 Dec 2005 17:08:40 +0000 http://www.bargaineering.com/articles/retiring-rich-means-using-your-401k.html#comment-2598 One of the first books I ever read was A Random Walk Down Wall Street a few years ago and I loved it (and I agreed with it). I endorse the book as well and it's still sitting on my shelf. I think the fact that your mortgage stays the same (minor increases for the escrow for taxes, etc) while inflation devalues the currency bit by bit is something people don't really realize. In ten years my mortgage payment will be cheaper than it is now. One of the first books I ever read was A Random Walk Down Wall Street a few years ago and I loved it (and I agreed with it). I endorse the book as well and it’s still sitting on my shelf.

I think the fact that your mortgage stays the same (minor increases for the escrow for taxes, etc) while inflation devalues the currency bit by bit is something people don’t really realize. In ten years my mortgage payment will be cheaper than it is now.

]]> By: Jim Robinson http://www.bargaineering.com/articles/retiring-rich-means-using-your-401k.html/comment-page-1#comment-2597 Jim Robinson Sun, 18 Dec 2005 16:47:05 +0000 http://www.bargaineering.com/articles/retiring-rich-means-using-your-401k.html#comment-2597 The point you make about about investing in ownership of your own home is also good one. Owning your own home seems like a great investment for retirement, lowering your annual housing costs to property taxes and repairs (or upgrades, to improve the value). I live in the Bay Area, so it's going to be a long time before I can buy a house. For years now I've been thinking it is better for me to pour money into my retirement savings, while slowly building enough off to the side to make a down payment on a house someplace affordable (moving to the mid west, for example). If you're interested in another theory book about index funds and asset allocations, you might be interested in "A Random Walk Down Wall Street" by Burton G. Malkiel. His theory is that it is far better to invest in broad segments of the markets via index funds than it is to try and pick the next set of hot stocks. He outlines many of the stock picking techniques used by brokers, and points out numbers which indicate random chance is as much a factor as skill with most of them. His theory is that the market is already very efficient at adjusting to news, and that it is therefore very difficult to win through active trading. He also has a decent coverage of regular and tax-free bonds and bond funds, and several other investment vehicles (buying your own home, etc.). The point you make about about investing in ownership of your own home is also good one.
Owning your own home seems like a great investment for retirement, lowering your annual
housing costs to property taxes and repairs (or upgrades, to improve the value).

I live in the Bay Area, so it’s going to be a long time before I can buy a house. For years now
I’ve been thinking it is better for me to pour money into my retirement savings, while slowly
building enough off to the side to make a down payment on a house someplace affordable
(moving to the mid west, for example).

If you’re interested in another theory book about index funds and asset allocations, you
might be interested in “A Random Walk Down Wall Street” by Burton G. Malkiel. His theory
is that it is far better to invest in broad segments of the markets via index funds than
it is to try and pick the next set of hot stocks. He outlines many of the stock picking
techniques used by brokers, and points out numbers which indicate random chance is as
much a factor as skill with most of them. His theory is that the market is already very
efficient at adjusting to news, and that it is therefore very difficult to win through active
trading. He also has a decent coverage of regular and tax-free bonds and bond funds,
and several other investment vehicles (buying your own home, etc.).

]]> By: jim http://www.bargaineering.com/articles/retiring-rich-means-using-your-401k.html/comment-page-1#comment-2595 jim Sun, 18 Dec 2005 06:17:29 +0000 http://www.bargaineering.com/articles/retiring-rich-means-using-your-401k.html#comment-2595 Well you can only get it from your employer and mine isn't offering it unfortunately. Well you can only get it from your employer and mine isn’t offering it unfortunately.

]]> By: Jonathan http://www.bargaineering.com/articles/retiring-rich-means-using-your-401k.html/comment-page-1#comment-2594 Jonathan Sun, 18 Dec 2005 04:56:05 +0000 http://www.bargaineering.com/articles/retiring-rich-means-using-your-401k.html#comment-2594 Also check to see if anyone is offering the Roth 401(k) in 2006. Also check to see if anyone is offering the Roth 401(k) in 2006.

]]> By: jim http://www.bargaineering.com/articles/retiring-rich-means-using-your-401k.html/comment-page-1#comment-2590 jim Sat, 17 Dec 2005 20:49:09 +0000 http://www.bargaineering.com/articles/retiring-rich-means-using-your-401k.html#comment-2590 I wrote a post in early November about how you should be wary, or at least concious, of your assumptions with regard to tax deferred accounts: <a href="http://www.bargaineering.com/articles/beware-of-tax-deferred-accounts.html" rel="nofollow">Beware of Tax Deferred Accounts</a>. Basically, your income taxes could be higher when you're older for a lot of reasons... However, that being said, I still think if you can handle contributing the maximum, contribute the maximum. There's more (pre-tax) money there to appreciate and you won't spend it. :) I wrote a post in early November about how you should be wary, or at least concious, of your assumptions with regard to tax deferred accounts: Beware of Tax Deferred Accounts. Basically, your income taxes could be higher when you’re older for a lot of reasons…

However, that being said, I still think if you can handle contributing the maximum, contribute the maximum. There’s more (pre-tax) money there to appreciate and you won’t spend it. :)

]]> By: Neo http://www.bargaineering.com/articles/retiring-rich-means-using-your-401k.html/comment-page-1#comment-2589 Neo Sat, 17 Dec 2005 20:37:55 +0000 http://www.bargaineering.com/articles/retiring-rich-means-using-your-401k.html#comment-2589 I am planning to contribute 22% since I want to try and reach the $15000 maximum contribution for next year. Is there any reason this wouldn't be advisable? Neo I am planning to contribute 22% since I want to try and reach the $15000 maximum contribution for next year. Is there any reason this wouldn’t be advisable?

Neo

]]> By: Rick http://www.bargaineering.com/articles/retiring-rich-means-using-your-401k.html/comment-page-1#comment-2582 Rick Sat, 17 Dec 2005 17:30:38 +0000 http://www.bargaineering.com/articles/retiring-rich-means-using-your-401k.html#comment-2582 I did the same exact thing as Jim did. When I started working, I was putting in the full 15%, but then I dropped it down to 6% (what my employer matches) when I got my first house. I have recently been thinking about upping it again and will be looking into that early next year. I did the same exact thing as Jim did. When I started working, I was putting in the full 15%, but then I dropped it down to 6% (what my employer matches) when I got my first house. I have recently been thinking about upping it again and will be looking into that early next year.

]]> By: jim http://www.bargaineering.com/articles/retiring-rich-means-using-your-401k.html/comment-page-1#comment-2581 jim Sat, 17 Dec 2005 16:48:30 +0000 http://www.bargaineering.com/articles/retiring-rich-means-using-your-401k.html#comment-2581 Yeah, that was the position I was put in so I dropped it down the 7% it's at now. It's difficult but you can think of your home as an investment right? :) Yeah, that was the position I was put in so I dropped it down the 7% it’s at now. It’s difficult but you can think of your home as an investment right? :)

]]> By: Lauren http://www.bargaineering.com/articles/retiring-rich-means-using-your-401k.html/comment-page-1#comment-2579 Lauren Sat, 17 Dec 2005 15:32:15 +0000 http://www.bargaineering.com/articles/retiring-rich-means-using-your-401k.html#comment-2579 I could put the max into my 401k, but then I couldn't save up for a down payment for a house in this ridiculous market. It's killer because I know my savings could go far considering I'm in my early 20s, but there are other priorities as well. I could put the max into my 401k, but then I couldn’t save up for a down payment for a house in this ridiculous market. It’s killer because I know my savings could go far considering I’m in my early 20s, but there are other priorities as well.

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