Are You, or Should You Have Been, the Owner of A 401K?
By Charles Carreon
Want to never worry about money for the rest of your life?
Looking to secure a comfortable old age with some time and money to do a few things you never got to do?
Worried you will not have enough money to live in decent circumstances, with adequate health care, for the rest of your life?
All three of these are good reasons to study investment. To not worry about money might seem idealistic. To seek merely “enough” seems more reasonable. The third reason, however, really puts the torque on the nut. All three are worthy motivators, for sure, and a 401K investment account could help you achieve them. Because — let's cut to the chase here — using a 401K is all about growing assets faster by deferring taxes. Why deferring taxes, not escaping taxes? Because when you finally take the money out, it will be at a later time, when your taxable rate will be lower.
But before we go too far with technical matters, let's return to the first goal. Learning how to worry less about money is something everyone needs to learn how to do — not because there's nothing to worry about, but because there's so much! Mere worry will ruin your judgment. Many ordinary investors destroy a good chunk of savings, and watch their assets diminish in the troughs of trends that swamp them as they repeatedly buy high and sell low. Absolutely do not start investing with real money based on hope, or based on hunches. On the other hand, you should test out your hopes and hunches using free online programs like those provided by every stock brokerage website. You will quickly see how far hope gets you. The same is true of worry. If you must worry about your money, worry about whether you paid the electric bill. When it comes to your retirement fund, make trades based on knowledge and your chosen strategy. Hunches come into it, yes, but never blind hope, which is the begetter of an endless stream of unprofitable harebrained schemes. You could even say that there are methods of managing assets that if followed, assure honest profits, but it is probably truer that there are practices to be avoided that are inimical to wealth acquisition. There are no magic formulas, like there are no rules for how to win a motocross race, but there are good riding techniques that all motocross riders apply, along with their own zeal and inspiration, to claim victory. So it is in investing.
Want to never worry about money for the rest of your life?
Looking to secure a comfortable old age with some time and money to do a few things you never got to do?
Worried you will not have enough money to live in decent circumstances, with adequate health care, for the rest of your life?
All three of these are good reasons to study investment. To not worry about money might seem idealistic. To seek merely “enough” seems more reasonable. The third reason, however, really puts the torque on the nut. All three are worthy motivators, for sure, and a 401K investment account could help you achieve them. Because — let's cut to the chase here — using a 401K is all about growing assets faster by deferring taxes. Why deferring taxes, not escaping taxes? Because when you finally take the money out, it will be at a later time, when your taxable rate will be lower.
But before we go too far with technical matters, let's return to the first goal. Learning how to worry less about money is something everyone needs to learn how to do — not because there's nothing to worry about, but because there's so much! Mere worry will ruin your judgment. Many ordinary investors destroy a good chunk of savings, and watch their assets diminish in the troughs of trends that swamp them as they repeatedly buy high and sell low. Absolutely do not start investing with real money based on hope, or based on hunches. On the other hand, you should test out your hopes and hunches using free online programs like those provided by every stock brokerage website. You will quickly see how far hope gets you. The same is true of worry. If you must worry about your money, worry about whether you paid the electric bill. When it comes to your retirement fund, make trades based on knowledge and your chosen strategy. Hunches come into it, yes, but never blind hope, which is the begetter of an endless stream of unprofitable harebrained schemes. You could even say that there are methods of managing assets that if followed, assure honest profits, but it is probably truer that there are practices to be avoided that are inimical to wealth acquisition. There are no magic formulas, like there are no rules for how to win a motocross race, but there are good riding techniques that all motocross riders apply, along with their own zeal and inspiration, to claim victory. So it is in investing.