I listened to Econo-heads always telling me to 'stay the course', think 'long term'. That was true when America ruled the economic roost. We don't any longer. I watched my 401K and my liquid investments grow pretty good over the last ten years or so. The world and USA have changed now though. You know the current situation. I was watching current events and getting nervous about the SM. Then I read an article about the Royal Bank of Scotland recommending that there will be a S&P bust come this September or so and why it will occur. And my studies agreed. Now my 401k is sitting in a nice safe CD gaining interest but more importantly NOT losing money. And my nerves are calm. Its called cash! Can someone please write me and tell me what is going to happen that will save us from this downturn. I bet when you think about it you can't come up with anything. Our econ is based 70% or more on consumers buying things. Great way to run a country. Mainly on credit. Are you and your neighbors going on a spending spree soon? Have your read what the consumer confidence is? But the elephant in the room is Iran and Israel. Iran says Israel should not exist. Israel says it will not allow Iran to develop a nuclear weapon. Not now. Not ever. Iran is giving the finger to the world. And when Israel speaks, you better listen. They don't do a military training exercise with over 100 fighter/bombers for fun. Just do a web search Iran Israel War and come to your own conclusion. I also read econ articles about investing here and there, how to, etc. But at the end, it was said: You know, there's nothing wrong with cash. Mr. Schiff: Are you sure, today, its still five times as much? I'm 61. Laid off from Motorola in 9/01. Currently unemployed. We cut our expenses to the minimum and hanging on. I can't afford to stay the course and try to recover what i would have lost recently. The next six to eight months will tell the tale of the future of USA economy. Like, do you see a booming Holiday spending spree? I missed my chance to get rich long ago and the SM wasn't going to do it for me now. I'm keeping what i got. Do what you want, but based on what i see happening, i dropped out. And if a miracle happens, you can always get back in. Me, I'm waiting for SS and hopefully, ten, 15 years from now, a nice quick heart attack for my final exit.
Joe Mash
of MA
@
Jul 25, 2008 10:45:42 AM
self-employment tax
is there a private investment used n lieu of self-employment tax?
Monica a=Tatet
of FL
@
Jul 17, 2008 20:01:18 PM
Listening to your wife
All my adult life I was a pretty good small businessman, but a terrible investor.
Fortunately, I sold my business for a pretty good amount at the age of 50. I'm now 89. I let my bank's trust department handle all my investments.
One day my wife heard an author touting his book "How to Beat the Coming Devaluation" back in the late 70's. He recommended selling all stocks and bonds and buy gold and silver. She convinced little old naive me, and it worked out OK. for a while. But instead of getting back into the market, I bought CD's which paid lots of interest when income tax rates were at their highest.
My ultra conservatism, as I grew older, kept me in CD's mostly. Now, I still have
enough assets if inflation doesn't go crazy, if my health remains fairly good and I don't live past 100.
If I let the bank continue to handle my account, my assets would be at least five times more than they are now.
The moral of the story is learn all you can re investing at an early age, and don't give in to your wife's opinions unless she knows a lot more than you do.
Sam Schiff
of MI
@
Jun 05, 2008 17:58:53 PM
Not Just Company Match that is being missed
In Mistake #1, it mentions by lowering your contributions, or not contributing at all, the loss of a possible company match, which is typical for 401(k) investors would be like missing out on free money. I agree. However, don't forget that contributing to your plan on a PRE-TAX basis is also a benefit that needs to be addressed.
The advantages of PRE-TAX contributions will be felt each year at tax-time, as Uncle Sam has less "eligible income" to tax. And when you do finally take the money from the plan at retirement, you are typically taxed at a much lower percentage rate than you would be taxed if it was eligible income each year. Since taxes and tax brackets can be confusing stuff for most people, many plan participants miss the financial relevance of saving on a PRE-TAX basis.
My big question: Why the heck don't they require teaching this valuable information in high schools? If twenty-some years ago, I had the knowledge I have now, I would likely retire a multi-millionaire without feeling a pinch in the pocketbook because of the beauty of compound interest over all those missed years. Now, I will definitely have to use the catch up contributions once I turn age 50 to boost my own retirement funding prior to my retirement.
M. Limberty
of FL
@
Jun 01, 2008 19:04:40 PM
A Bigger Mistake - doing a regular rollover
In Mistake #4, the author suggests rolling over a 401k to an IRA. HUGE MISTAKE! Doing a regular rollover requires that the outgoing custodian withhold 20% in taxes and then distributing only the remaining 80% to the account holder. If you're under 59 1/2, that 20% withheld for taxes will be considered a pre-mature distribution and you wil owe taxes and penalties on it.
The better way is called a "direct rollover" in which the funds are rolled directly to the custodian of the new IRA. That way, the 401k plan does NOT have to withhold 20%, and the investor gets all of the money transferred.
David W. Austin, CFP
David W. Austin, CFP
of FL
@
Apr 30, 2008 14:19:54 PM
Joe Mash of MA @ Jul 25, 2008 10:45:42 AM
Monica a=Tatet of FL @ Jul 17, 2008 20:01:18 PM
Sam Schiff of MI @ Jun 05, 2008 17:58:53 PM
M. Limberty of FL @ Jun 01, 2008 19:04:40 PM
David W. Austin, CFP of FL @ Apr 30, 2008 14:19:54 PM
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