Getting the Most Out of Your 401(k)
If your boss handed you an envelope filled with cash, would you throw it away? Of course not! But employees do it every day. And that's not the only mistake they make. I often come across investors who have made simple, yet costly mistakes in their company retirement accounts (401(k)s). If you or your spouse have a 401(k) account, read on to make sure you aren't making the same mistakes.The most common mistake I find concerning a 401(k) is that some workers don't take advantage of it at all. This is especially amazing when many employers match a portion of their employees' contributions.
For instance, let's say your company matches your contributions dollar-for-dollar up to 3% of your salary. If you make $50,000 a year, that means the company will put in $1,500 if you put in $1,500. That's a 100% return! You should make these contributions even if you think you can't afford it. Most 401(k) plans allow you to borrow against the balance of your account at a low interest rate. So you get the company match and can still access the money in an emergency.
(Plans differ, so check the details.) The second mistake I see people with 401(k)s make is choosing the wrong investments for that money inside the plan. Perhaps they're very conservative and afraid of the stock market, so they put 100% of their money in the fixed account or a bond fund. What they don't realize is that those investments may not grow enough over time to outpace inflation. Sure, the balance may continue to increase, but the money will buy less when they take it out than when they put it in!Some with the wrong investments have what I call ?misguided loyalty'. These are the folks who have their entire 401(k) in their company's stock.
Perhaps this started because their contributions were only matched when the money went into company stock. Others might feel pressure to be ?loyal' to the company. In their minds, not having all their 401(k) in company stock would be like saying they thought their company was a bad investment.I met a bank employee who had done just that. His 401(k) was 100% invested in his bank's stock. When the stock took a hit in the market, he lost half of its value.
Now this ?loyal' employee has to put off retirement for several years to try to make up for the loss. If you're one of the lucky ones whose firm matches contributions into company stock dollar for dollar, by all means take full advantage of it. But you don't have to keep your funds in the company stock forever. Every six months, spread your money into several other baskets to keep your portfolio better balanced. The third mistake I see concerning 401(k) investments is having the wrong diversification.
Maybe you don't have 100% in bonds, but you still have the majority of the account in them. You may have most of your money in aggressive stock funds. Any time you're too heavily weighted in one area, it's a problem. Proper diversification isn't that hard to achieve, but there are a few guidelines to remember. While you do need some bond exposure, don't over do it.
Bonds' record-setting performance of recent years isn't likely to continue. When it comes to equities, select more than one stock fund. Try to spread your money between funds with stocks in large, mid and small sized companies. And don't forget to include some international stocks as well. For the next few years, I recommend those in their 40s put 20% into bonds and 80% into equities.
For those in their 50s, 30% to 40% should be in bonds with the remainder in equities. For those approaching retirement, remember that you might need to use your nest egg for another 25 years or more. You'll still need growth, so don't shortchange the equity side.401(k) programs have helped millions of workers achieve a higher standard of living through a more secure retirement. By taking full advantage of your 401(k) program and investing your money wisely, you too can achieve your retirement goals. If you'd like free, clear, unbiased advice send your questions to e-mail protected from spam bots.
Mr. Voudrie is the President of Legacy Planning Group, a private wealth management firm that employs sophisticated proprietary strategies designed to protect and grow its clients' investments. He can be reached toll-free at 1-877-827-1463.Looking for an energetic expert who is passionate about financial and wealth management?
Mr. Voudrie is an excellent speaker who will excite and inspire your audience.
Mr.
Voudrie is available for a limited number of speaking engagements, television appearances and radio talk shows.
For booking information, contact Christine Lavender at (877) 827-1463 or email e-mail protected from spam bots.Related Articles can be found at www.guardingyourwealth.com under the Guarding Your Wealth Article Archive:Q&A Stretching An IRARethinking Your Financial SecurityHow to Make Millions?Legally.
Student life and avoiding graduate loan debts
As a student, money is always a difficult subject.
Currently the average student leaves college with over ?13,000 in debt.
With the introduction in the autumn of top-up fees, students in England and Wales will be charged ?3,000 a year which is more than double what most pay now, things will only get worse.
Today's student needs to study hard, to stand any chance of getting one of the dwindling number of highly competitive graduate jobs that still exist.
Students also need to save what little money they have, and be extremely financially aware, if they are not going to experience lifelong crippling levels of personal debt after they graduate.
Standard student jobs such as stacking shelves in supermarkets, becoming a part-time retail sales assistant, bar work, call centre representative, data input operator, or working for the students union, are all useful tools to keep the funds coming in, but it seems that sometimes it is not always enough...
Hedge funds > Student life and avoiding graduate loan debts
Park La Brea Apartments, The Park La Brea Arts Council Team Up for 8th Annual Art in the Park Benefiting Camp Ronald McDonald for Good Times
LOS ANGELES, CA (ContentDesk) August 29, 2004 -- Park La Brea Apartments and The Park La Brea Arts Council will be holding the 8th Annual Art in the Park from 11:00 a.m. to 5:00 p.m. on Saturday, September 11 and Sunday, September 12 at Park La Brea Apartments, 6200 West 3rd Street.
The event will benefit Camp Ronald McDonald for Good Times, a cost-free sleep-away camp for children with cancer and their families.
The two-day event will be filled with world-class artists, live entertainment, a food court, a children's art workshop and special appearance by Ronald McDonald.
Admission, parking and shuttle service are all free.
For more event information, please call 323-525-1908."We are thrilled to be able to sponsor this fantastic cultural event once again for the community of Los Angeles," said Barbara Barsi, marketing director, Park La Brea Apartments.
"Most importantly, we hope to raise even more funds for the kids and families that look forward...
Hedge funds > Park La Brea Apartments, The Park La Brea Arts Council Team Up for 8th Annual Art in the Park Benefiting Camp Ronald McDonald for Good Times
Community Development Venture Capital Pays Off
(ContentDesk) October 22, 2005 -- CDVCA (www.cdvca.org), the network for the rapidly-growing community development venture capital (CDVC) industry, is pleased to announce several recent successes in its field. Three prominent CDVC funds, Coastal Ventures II, Pacific Community Ventures, and SJF Ventures, have realized significant financial returns through the sale of privately-held companies. CDVC funds provide equity capital to businesses in underinvested markets, seeking market-rate financial returns, as well as the creation of good jobs, wealth, and entrepreneurial capacity. "We are thrilled about these early successes in our industry," said CDVCA President Kerwin Tesdell. "These premium exits confirm what many CDVC investors have been saying for years: mission-driven venture capital investments can create important social impacts, while providing a handsome financial return." Coastal Ventures II, LLC, a fund...
Community Development Venture Capital Pays Off
Hedge funds > Community Development Venture Capital Pays Off
Marathon Walking a Growing Trend - Charity Programs Help Average People Achieve Remarkable Goals
Fort Lauderdale (ContentDesk) September 30, 2003 -- While less than one tenth of one percent of Americans has ever completed a marathon, that number soon may be changing.
Due to the growing trend of marathon walking, many people who otherwise thought completing a marathon was out of their reach are getting their shot at achieving a lofty personal fitness goal while helping millions of Americans at the same time.
Many people used to think a marathon was not for them or that completing a 26.2-mile event was an impossible feat because they were not seasoned runners.
However, with the advent of charity programs like the Arthritis Foundation's Joint in Motion program, marathon walking is becoming not only acceptable, but also popular.
In fact, of the more than 2,000 participants annually in the Arthritis Foundation's Joints in Motion marathon training program, 60 percent are walkers.
"I never thought I could complete a marathon," said PAM BELEY,...
Marathon Walking a Growing Trend - Charity Programs Help Average People Achieve Remarkable Goals
Hedge funds > Marathon Walking a Growing Trend - Charity Programs Help Average People Achieve Remarkable Goals
INSIDER INFORMATION FOR INVESTING IN INCOME TRUSTS
Copyright 2006 AAA Consumer Credit Solutions
Now that the Canadian elections are over, Investors can focus on the business of making money. Let's leave ugly politics aside.
In spite of my confessions, to CARP and 50 Plus last December, on insider trading with Income Trust Investments, which were published on their website: http://www.carp.ca . Investors, Senior Citizens and Equity-rich Home Owners are still looking for a good strategy to invest for income. Income Trusts remain the best Investments I know that would deliver: good Income and decent returns at a low level of risk.
Under current market conditions, Trusts are the ideal investment. The new Conservative government likes profits, Investments and income. The word is out that they would leave alone the issue of Income Trusts taxation. They may even sweeten dividend tax credit incentives and
capital gains as well.
For those investors who are worried about loosing Pension benefits...
Hedge funds > INSIDER INFORMATION FOR INVESTING IN INCOME TRUSTS
Seven Investment Terms Everyone Should Know
For those who have never given their financial future a second thought, the term "Financial Planning" could be a scary one. Investments can be a smart way to invest money for your future, but it can be confusing for those who have no experience in the financial business. Before you consult a financial planner it is wise to become familiar with some of the terminology that you are likely to hear from him or her.* Mutual Fund-An investment made with money that is collected by individuals with an investment goal in mind. The mutual fund is handled primarily buy a person known as the fund manager. Mutual funds are easy and cost efficient, since you are not responsible for making the decision as to where to invest the money.* Asset Allocation Fund-A mutual fund that incorporates several types of investments such as stocks, bonds, real estate, and foreign stocks.
These are typically for the small investors who want to invest in a variety of funds in order to maintain a constant return....
Seven Investment Terms Everyone Should Know
Hedge funds > Seven Investment Terms Everyone Should Know