| What's Wrong With a 401k | | | | to, etc. |
| - You can't buy individual stocks | | | | Roth IRA as Opposed to a Regular IRA |
| - You can't sell individual stocks | | | | A Roth IRA allows for you to withdraw your |
| - You can't short the market | | | | "deposited" money without interest or penalties. This |
| - You can't control your investment at all | | | | is because you deposited "after tax" money into it, |
| What's Good About a 401k | | | | so you can get it back with no tax ramifications. Not |
| - Employer Matching (Free Money) | | | | so with a regular IRA. Nice to know you can use |
| - Delayed Taxation | | | | that, if your 401k loan payment makes things too |
| - What else? Um, uh . . . | | | | tight. |
| Are We in an Up Market or a Down Market? (Duh) | | | | Conservative Strategy: Buy Low, Sell High |
| The market looks like it will be down for 9 to 16 | | | | With IRA's you can buy individual stocks. So build a |
| months. If you leave your money invested in 401k | | | | nice collection of great companies that are having half |
| mutual funds, you will continue to lose before things | | | | off sales right now. You know they will be around for |
| turn around. If you move your money to your 401k | | | | a long time. You know who they are and you know |
| cash equivalent, you might have stopped the bleeding | | | | who they aren't. The ones showing up in Washington |
| but you won't gain a dime until things turn around. | | | | saying "I don't know what I'm doing. Give me money |
| That's the two huge problems with a 401k. You only | | | | to make up for it." are not the great companies. The |
| make money in good market times. And secondly, | | | | companies you buy from everyday are probably the |
| you can't buy individual stocks, only sectors (good | | | | great companies. |
| stocks mixed with garbage). | | | | Buy real gold. I don't mean gold coins and I definitely |
| Solution: | | | | don't mean gold stock. Just little pieces of actual gold |
| Borrow as Much as You Can Against Your 401k and | | | | metal you can save in your safety deposit box. If |
| Open a Roth IRA and One for Your Spouse Too and | | | | the economy gets really bad, you clip off a piece and |
| a Regular Brokerage Account for Any Left Over | | | | take it to a dealer and say, "I'd like a month's worth |
| - You get charged interest | | | | of groceries, please." So your 401k turns into a stash |
| - You are paying that interest with after tax money | | | | of real, tangible gold. |
| - You will pay tax on that interest again at the time | | | | For the More Adventurous: |
| you withdraw it. | | | | Short the market. You know the whole market is |
| But So What. Here's the Arithmetic: | | | | going down. You know there's a lot of companies |
| You pay 5% interest but it goes back into your own | | | | suffering. You know there are a lot of lousy |
| account so that part is your own money. You took | | | | companies out there barely hanging on. The tidal |
| money out of your pants pocket and moved it into | | | | wave is still crashing in. Bet that their stock will go |
| your 401k, so that's just your money shifting around. | | | | down and make some cash on it. This you can do in |
| No cost. | | | | an IRA. |
| You paid that 5% with "after tax" money. If you're in | | | | You can trade options in an IRA. Learn about options. |
| the 30% tax bracket, then 30% of 5% is only 1.5%. | | | | Work your way up to knowing what you're doing |
| When you retire and withdraw your money, you're | | | | with a few thousand. Then generate cash that you |
| going to pay tax again on it. If you're still in a 30% | | | | will use to either short stock or buy stock you want |
| tax bracket, that's another 30% of 5%, which is still | | | | to hold onto. My website has a link to the best |
| only 1.5%. The two 1.5 percents add up to an out of | | | | options trainer I have ever seen. For about $29 a |
| pocket cost of only 3%. Pretty cheap loan. Better | | | | month, he will take you safely, step by step showing |
| than losing 50% due to no fault of your own. | | | | you everything you need to know about safely |
| Of course you need to check with your 401k | | | | trading options. His name is Dr. Stephen Cooper. But |
| Administrator or HR Department for your plan's | | | | no matter what, you should be in control of your |
| specifics. Make sure of the interest rate. Make sure | | | | own investments. |
| you can pay it back early in a lump sum, if you want | | | | |