Another (unrelated) 401(k) question
PaulP...@bigfoot.com
(designed to "retain value" - I interpret that to mean not lose value, but
not really grow much) until I get the packet of information about their
funds.
While in a bookstore, I've seen "Complete Idiot's Guide to 401(k)" which
looks like it may be pretty informative reading (since I'm completely
ignorant of these things). My question is this - the book has a copyright
date of a few years ago (1998 or 1999). Is this still current enough to be
of use? Or have things changed dramatically in the past couple of years?
Any recommendations on another book for a 401(k) newbie like me? I know
virtually nothing of stocks or any of that.
--
Paul F. Pearson (ppea...@hiwaay.net) http://home.hiwaay.net/~ppearson/
"Lord heal our land. Father heal our land. Hear our cry and turn our nation
back to You" - Heal Our Land, _Magnify The Lord_ (Integrity Music)
Greg Bacon
<PaulP...@BigFoot.com> wrote:
: [...]
: Any recommendations on another book for a 401(k) newbie like me? I know
: virtually nothing of stocks or any of that.
Here are a couple of resources on the web that I like:
- <URL:http://www.fool.com/money/401k/401k.htm>
- <URL:http://www.armchairmillionaire.com/>
Hope this helps,
Greg
--
So long as Social Security remains in government's hands, it will be in
trouble. We can't leave our retirement money lying around on the table,
because the politicians will grab it and spend it on their favorite pork
barrel projects. -- Harry Browne
Bo Williams
>I finally enroled in a 401(k) at work. I'm starting out in a "Mutual Find"
>(designed to "retain value" - I interpret that to mean not lose value, but
>not really grow much) until I get the packet of information about their
>funds.
Sounds like you're thinking about increasing your risk once you do a
little reading, which is smart. You're a pretty young guy to be
playing your 401(k) too conservatively.
--
Bo Williams - will...@hiwaay.net
http://hiwaay.net/~williams/
Google refuses business from gun and knife advertisers:
http://www.bowmansbrigade.com/google1.htm
PaulP...@bigfoot.com
>On Thu, 11 Apr 2002 19:53:59 -0000, PaulP...@BigFoot.com wrote:
>>I finally enroled in a 401(k) at work. I'm starting out in a "Mutual Find"
>>(designed to "retain value" - I interpret that to mean not lose value, but
>>not really grow much) until I get the packet of information about their
>>funds.
>Sounds like you're thinking about increasing your risk once you do a
>little reading, which is smart. You're a pretty young guy to be
>playing your 401(k) too conservatively.
Well, I do tend to be conservative (this time, I'm *not* referring to
politics!). I don't like to to take too many chances. I'll probably end up
with a fund in the "more conservative" list. Less conservative than a
Mutual Fund, but probably not a *whole log* less conservative.
Greg Bacon
<PaulP...@BigFoot.com> wrote:
: Well, I do tend to be conservative (this time, I'm *not* referring to
: politics!). I don't like to to take too many chances. I'll probably end up
: with a fund in the "more conservative" list. Less conservative than a
: Mutual Fund, but probably not a *whole log* less conservative.
In investing, you have to balance greed with fear. There is such
a thing as being too conservative. In his book *Beating the Street*,
Peter Lynch makes an excellent case for this argument. On the other
hand, you have to do what lets you sleep at night because constantly
second-guessing yourself can hurt your returns even worse.
Greg
--
It used to be that kids learned about sex from the kids next door and
mathematics from trained teachers in schools. Now it's directly the
opposite.
-- G. Gordon Liddy in reference to New Math and sex ed
Gary Heston
>Well, I do tend to be conservative (this time, I'm *not* referring to
>politics!). I don't like to to take too many chances. I'll probably end up
>with a fund in the "more conservative" list. Less conservative than a
>Mutual Fund, but probably not a *whole log* less conservative.
There are lots of mutual funds, some extremely conservative, some wildly
speculative.
The trick is to split up your money, at least three ways, and preferrably
four or five. Put a small amount, say 10% of your contributions, into a
speculative fund--if it pays off, you do well, if not, you don't lose
much. Distribute the rest between moderate growth, capital growth, maybe
a technology sector fund, and a bond fund. In this area, you act
conservatively by investing for the long term, not by trying to play
day trader.
Your employer should have several funds for you to choose from (unlike
an IRA, you can't just pick any fund) with varying levels of risk and
potential return. You should be more aggressive (i.e., taking a bit more
risk) now while you're young. Once you get past 50, start shifting to
lower risk funds. The rationale there is that you can survive losing a
big chunk now if a fund collapses, whereas at age 55 it'd be a major
disaster.
This is what I do, and I recently doubled my 401K contributions. (The
day after they told me I could, in fact.) Max out your contributions as
soon as you can, if your employer still has the 15% limit. I plan to
keep increasing my percentage until the takehome gets too small (I can
contribute 100%, but without an alternate source of income, that would
be a bit difficult).
Of course, I'm not a professional investment advisor, etc., use this
advice at your own risk, my liability is limited to what you paid for
it.
It was nice seeing you at Subways today.
Gary
--
Gary Heston ghe...@hiwaay.net
Yea, though I drive through the Vally of Truck Country,
I shall fear no SUV,
for I drive an old Volvo, and they quail before me.
Bo Williams
wrote:
>You should be more aggressive (i.e., taking a bit more
>risk) now while you're young. Once you get past 50, start shifting to
>lower risk funds. The rationale there is that you can survive losing a
>big chunk now if a fund collapses, whereas at age 55 it'd be a major
>disaster.
Excellent advice. And an implied part here--remember that while your
401(k) is in the toilet, your contributions are buying more shares.
My last three or four statements have been mediocre to disastrous when
I look at the bottom line, but I feel better when I see the "shares
held" column increasing so rapidly. Greg recently referred to this as
"the great 50% off sale" or something similar.
I agree wholeheartedly with Gary on not trying to play "day trader."
I used to work with someone who moved her allocations around as often
as she was allowed, which I think was once a month. DON'T be that
person.
Moe Kunkle
However, I am in it for the long term. So I look at the number of shares I
am buying as the one saving grace (pun intended).
Back in "95" when my account was really flush, I went against all advice and
borrowed nearly the max to put a down payment on my Harvest home so I
wouldn't have the PMI. The payments come out of my paycheck with 10%
interest tacked on. However, the whole amount goes right back into my
account. The number of shares the payment buys right now is stunning. And on
top of that, I got use my money when it was really worth something. That
payment used to by back 6 shares/mo. Now its buying 60/mo.
With my "long term" shades on, it is a good thing. When I put my "greed is
good" shades on, the loss of nearly $100K makes me sick.
A lot of new investors (me included) were mesmerized by the daily climb our
balance sheets experienced during the 90's.
Moe
"Bo Williams" <will...@hiwaay.net> wrote in message
news:sk4fbus6iae3ujo10...@4ax.com...
Kapp
news:ubbqend...@corp.supernews.com...
Greg mentioned good websites for reference. In addition to this you may
also want to take a look at www.vanguard.com which does a very good job
explaining mutual fund basics.
_________________
PaulP...@bigfoot.com
>In article <ubdo9qk...@corp.supernews.com>,
> <PaulP...@BigFoot.com> wrote:
> [ ... ]
>>Well, I do tend to be conservative (this time, I'm *not* referring to
>>politics!). I don't like to to take too many chances. I'll probably end up
>>with a fund in the "more conservative" list. Less conservative than a
>>Mutual Fund, but probably not a *whole log* less conservative.
>There are lots of mutual funds, some extremely conservative, some wildly
>speculative.
>The trick is to split up your money, at least three ways, and preferrably
>four or five. Put a small amount, say 10% of your contributions, into a
>speculative fund--if it pays off, you do well, if not, you don't lose
>much. Distribute the rest between moderate growth, capital growth, maybe
>a technology sector fund, and a bond fund. In this area, you act
>conservatively by investing for the long term, not by trying to play
>day trader.
I'd heard that before.
>Of course, I'm not a professional investment advisor, etc., use this
>advice at your own risk, my liability is limited to what you paid for
>it.
"Free advice is rarely worth what you pay for it" - ???
>It was nice seeing you at Subways today.
Same here. Didn't htat was "the place" to handg out. I saw someone else I
knew after you left.
PaulP...@bigfoot.com
>To: <PaulP...@BigFoot.com> wrote in message
>news:ubbqend...@corp.supernews.com...
>Greg mentioned good websites for reference. In addition to this you may
>also want to take a look at www.vanguard.com which does a very good job
>explaining mutual fund basics.
Thanks. That brings me back to my original question(s):
1) How current it the "Complete Idiot's Guid to 401(k)"? It has a
copyright date of circa '98. It looked like it was written in a hepful
style, but I worry about it's current-ness.
2) Any other good *books*? My wife might like one for reference (she's not
one to read Web Pages for this kind of stuff).
Gary Heston
<PaulP...@BigFoot.com> wrote:
>Gary Heston <ghe...@hiwaay.net> wrote:
[ ... ]
>>It was nice seeing you at Subways today.
>
>Same here. Didn't htat was "the place" to handg out.
Not sure it is. I go there about every three or four weeks.
> I saw someone else I
>knew after you left.
Was that they guy who told you he didn't have time to stick around, and
then stood there and talked for 20 minutes?
PaulP...@bigfoot.com
>In article <ubjre44...@corp.supernews.com>,
> <PaulP...@BigFoot.com> wrote:
>>Gary Heston <ghe...@hiwaay.net> wrote:
> [ ... ]
>>>It was nice seeing you at Subways today.
>>
>>Same here. Didn't htat was "the place" to handg out.
>Not sure it is. I go there about every three or four weeks.
>> I saw someone else I
>>knew after you left.
>Was that they guy who told you he didn't have time to stick around, and
>then stood there and talked for 20 minutes?
Yup. Used to work with him at a previous job. I observed the contradiction
between his statement and behaviour, too.
Kathi
a book yet. Try Amazon and search for 401(k) books - the reviews and
descriptions may help. I'm looking for a book that discusses how
participation in your company's 401(k) affects your ability to
contribute to IRAs.
Not sure about the 1998 date, though. Main change I can think of
since then would be the increased contribution amounts that have been
passed. Plus there has been a law change that allows 'catchup'
contributions for folks over 50. Not sure if your book discusses that
you can withdraw up to $10K for 1st time home purchase without 10%
penalty. I'm sure that there are other changes also.
One caveat regarding maxing out your contribution as soon as
possible... if your employer matches a portion of your contribution,
you may not get the maximum amount of matching if you don't make the
contributions evenly throughout the year. This payroll glitch may
have been fixed, but I ran into it when I worked at Ingr. They
matched up to 6% each payroll automatically - that would stop when you
maxed out before the end of the year even though it wouldn't be 6% of
the total allowable contribution.
Standard disclaimer - this is worth what you paid for it :)
Kathi
Kapp
A very good book regarding all types of financial advice is Suze Orman "Nine
Steps to Financial Freedom". You'll find more info at: www.suzeorman.com
This book does touch on 401k's as well as other investment vehicles for
retirement - easy reading and not alot of financial jargon.
I can't comment on the 'Guide to 401k' book below as I've not read that.
In an earlier post Greg referred you to a site www.fool.com - there is a
column called 'The Motley Fool' in the business section of the Huntsville
Times which occasionally answers questions to financial matters. From
time-to-time you'll see helpful info on 401k's.
______________________
Greg Bacon
Kapp <@.com> wrote:
: [...]
: In an earlier post Greg referred you to a site www.fool.com - there is a
: column called 'The Motley Fool' in the business section of the Huntsville
: Times which occasionally answers questions to financial matters. From
: time-to-time you'll see helpful info on 401k's.
An excellent book from the Fool is *The Motley Fool You Have More Than
You Think: The Foolish Guide to Personal Finance*[1]. The cover price
is $14 or so, but their advice on 401(k) investing is that your best
bet is going with an S&P 500 index fund.
[1] <URL:http://www.foolmart.com/Shopping/Product_View.asp?PRODUCT_ID=MF142_10>
Another *excellent* book is Dave Ramsey's *Financial Peace*[2]. His
approach is to look for a mutual fund with a long winning track record
(i.e., returns that beat the S&P 500 or some other benchmark). However,
Dave recommends against investing for retirement until you've cleared
off all debt except possibly the mortgage on your home. Part of his
reasoning is as follows: if you owned your, say, automobile free and
clear, would you borrow on it to invest?
Hope this helps,
Greg
--
Greg Bacon, Libertarian for Alabama Senate (District 7)
Mission: Fighting for small, just, inexpensive, non-intrusive government
Remember: The only pork Alabama needs is Bacon!
URL: http://www.VoteBacon.com/
PaulP...@bigfoot.com
>In article <fBEu8.95173$gA5.7...@e3500-atl2.usenetserver.com>,
> Kapp <@.com> wrote:
>: [...]
>: In an earlier post Greg referred you to a site www.fool.com - there is a
>: column called 'The Motley Fool' in the business section of the Huntsville
>: Times which occasionally answers questions to financial matters. From
>: time-to-time you'll see helpful info on 401k's.
>An excellent book from the Fool is *The Motley Fool You Have More Than
>You Think: The Foolish Guide to Personal Finance*[1]. The cover price
>is $14 or so, but their advice on 401(k) investing is that your best
>bet is going with an S&P 500 index fund.
>[1] <URL:http://www.foolmart.com/Shopping/Product_View.asp?PRODUCT_ID=MF142_10>
>Another *excellent* book is Dave Ramsey's *Financial Peace*[2]. His
>approach is to look for a mutual fund with a long winning track record
>(i.e., returns that beat the S&P 500 or some other benchmark). However,
>Dave recommends against investing for retirement until you've cleared
>off all debt except possibly the mortgage on your home. Part of his
>reasoning is as follows: if you owned your, say, automobile free and
>clear, would you borrow on it to invest?
I'd forgotten about Financial Peace. I've read that before. I'll read it
again. Thanks.
Moe Kunkle
all of our problems are fighting over how to prevent another Enron type 401K
mess.
Expect lots of blather about how they fixed it and probably lots of fine
print that actually limits your choices.
When Washington is in session, grab your rights by the ass and hold on
tight!
Moe
"Kathi" <kate...@hotmail.com> wrote in message
news:c0b4b6dc.0204...@posting.google.com...