It’s Not “Free” Money

More than one young person has gone to their first job this year with a parent or loved one encouraging them to “take the free money” when it comes to their company’s 401(k).  There’s a lot of reasons that is a good thing and even some that make it a terrible idea. For starters, the 401(k), a product of the 1970s, was never designed to be an individual’s entire retirement asset.  Over the years, though, as pension plans have fallen away, we’ve come to expect it to do that, and many new retirees are only now realizing they’ve saved far too little.  This month, let’s shed some light on alternate ways to create retirement assets.

• Learn how to invest in real estate.  Unlike the stocks, bonds, and mutual funds that make up a 401(k), real estate is a “real” asset.  It has a tangible value and that value can be liquidated for cash.  By understanding the limits on contributions to retirement accounts, it’s easy to see that real estate offers a valuable return to those who are willing to understand it.
• Educate yourself on the Roths.  The Roth-based retirement accounts – IRA, Coverdell, Self-directed 401(k) and others all offer savers the chance to contribute a lot of money annually while protecting themselves against taxes in the future.  Again, though, through ignorance of their scenarios, many people fail to realize how quickly they will use the monies they have saved for retirement. 
• Quit Keeping up with the Jones’.  Somebody will always have a nicer car, a bigger house, more money, and a larger television.  Quit chasing the material things now and set yourself up for success in the future by buying assets, not “stuff.”  Stuff gets old, assets never do.

Your retirement is as far away as it ever will be today.  Tomorrow it will be closer, and if you expect to be able to enjoy compounding interest and double-digit returns, you cannot expect others to invest your money for you.  Now is the time to learn and take action.   

Hope you are finding time to relax during this busy time of year!

Until next post,
Nicole Odeh
Connect to Us ~ Facebook ~ Twitter ~ LinkedIn

---