Comments on: How I earn extra 1.45% return without risk in my 401k account

By: Frugal

Frugal — Sat, 21 Apr 2007 14:54:30 +0000

Closing comments.

By: New Yorker

New Yorker — Sun, 18 Mar 2007 20:17:12 +0000

Fred,

Deals of the century .. namely, perchance? )

By: Adventures In Money Making

Adventures In Money Making — Sat, 17 Feb 2007 00:08:46 +0000

Fred,

why are the 100% return (regardless of the risks) considered once-in-lifetime opportunity? I’ve seen several of them in the past 4 years and have upped my network significantly because of them. (even inspite of the 2 where I lost my complete investment)

If you look around, you can find these deals-of-a-century a few times a year.

By: cecil

cecil — Thu, 15 Feb 2007 17:19:12 +0000

Ok now that we have made changes at home depot with our CEO taking 210 million and weeded out a few others, plus we are talking about selling HD supply. I have put my money in a equity value fund witch is dodge and cox. Ans a equity growth with my company. I know that internation TEMFX is on there and it seems to be doing good, But the return is below average. So should i just stay with DODGX equity growth? it has the highest return for all my funds. I still have another year before i can roll over and invest elsewhere. I just dont trust Hd even though it is starting to shoot up a little bit. Im tired of riding the roller coaster and getting nothing in return! if you have any thoughts or know about what companies will do better in the long run, please let me know. im new to the market and just want to win! thank you….cecil

By: Frugal

Frugal — Thu, 08 Feb 2007 05:31:52 +0000

Make sure you manage your cash flow properly. But it will definitely give you extra return as I have shown.

By: Soon to be millionaire

Soon to be millionaire — Wed, 07 Feb 2007 04:08:26 +0000

I thought of this strategy recently, but I am going to try it for the first time this year to see if it saves taxes: We get our annual bonus for the previous year in our first March paycheck and every year everyone is so cynical about the almost 40% that is withheld – if not more. So, I’m going to increase my 401k contribution for that particular paycheck to the maximum allowed by our plan: 80%. That will leave me with only 20% of that paycheck getting dinged with the high-end bonus taxation and 80% of the check will be in my 401k tax deferred.

By: Frugal

Frugal — Wed, 31 Jan 2007 08:45:56 +0000

Fred,
I agree with most of your comments. But I don’t know any once-in-a-lifetime opportunity that will give you 100% return in a year, without the RISK of let’s say losing 50% of your money.

Risk is always proportional to the return. That will never change. If the money liquidity dries up, and cash becomes king, the cost of capital also goes up, meaning that interest rate will go very high (so that you get paid to compensate the risk of loaning out your money).

By: Fred

Fred — Mon, 29 Jan 2007 23:44:47 +0000

Liquidity is king.

1.46% return is peanuts compared to a scenario where you find a fantastic investment one year where you absolutely have the highest confidence. Let’s say, in the next 20 years, you come across a potential investment one year which can make you 100% in one year. Once in a lifetime opportunity? pretty much.
The fact that you’ll have all your money tied up into Government-run savings programs is a huge detriment in this case, expecially if the once-in-a-lifetime return ends up being greater than 100%.

Better to be a finicky investor, waiting for that one big opportunity, while maintaining the liquidity to actually do something about it when the time comes. With caution, inevitably comes low returns, and meanwhile the government is stealing your money using inflation every year. 1.46%? That’s no good.
and hopefully you can come up with a winning idea more than once every 20 years.

Maintain liquidity for opportunities, avoid government sponsored savings programs at all costs.

$1mm doesn’t get you much these days. Unfortunately, with Uncle Sam diluting the snot out of the currency since the US went off the gold standard in the 70s, a millionaire is just a middle class goal these days.

By: Frugal

Frugal — Sun, 14 Jan 2007 09:31:20 +0000

Cecil,
The best thing is to read my blog on my market thinkings. Market changes, and my thinking changes too. Currently, I would suggest to put in your money in June to October AFTER the general stock market has declined. And I have a negative view on Home depot, so I definitely won’t put my money into housing-related stocks.

By: cecil

cecil — Sat, 13 Jan 2007 17:07:06 +0000

I work for home depot, and everyone knows what has happend to my company. i need to find out what i should do with my 401k? alot of people say go all stock! well the stock goes up and down, and it hasnt split since nardelli took over. well my question is. i want to know how to invest my stock? should i go all in on like a mutual fund, international, equity growth, basic, small company equity, or equity value. these seem like good funds, like one is the dodge and cox fund. it seems like an ok stock, it has gone up alot but had declined hard in the past. im just worried about losing or not gaining on this. if you have any good choices i have laid out, i would appreciate it if you would help me out. thank you

cecil

By: Frugal

Frugal — Wed, 20 Dec 2006 15:51:39 +0000

Bill,
You can get your money “back” into your own IRA account if you change your job. It’s a bit unfortunate, and I wish there are other ways.

By: Bill Carson

Bill Carson — Sun, 17 Dec 2006 03:02:15 +0000

401K’s are ripoffs. They are only for people not disciplined enough to contribute to they’re own retirement. You pay fees to a company that buys mutual funds for your companies’ retirement plan. You are paying fees to that company which is paying loads(usually) to the mutual funds they are buying. Anyone can track the exact stocks there mutual funds are buying by going to it’s website. You can mirror these holdings on your own very cheaply in a ira-based online broker with minimal fees. My company match(3%) compensates these management fees, but when I asked If I could have my deductions and Company match put in my own retirement account instead of my companies program, I was told no. It was State law that I had to be in the company plan. Why? I won’t get my social security back (I’m 30), so why can’t I control my 401k? Since controlling a portion of our SS will never be a possibility, why can’t we at least manage our own 401k’s when it is so easy with the internet to match our favorite funds holdings?

By: Novice

Novice — Thu, 11 May 2006 08:36:37 +0000

My employer does not provide a match at all.

By: Anonymous

Anonymous — Wed, 26 Apr 2006 16:35:36 +0000

60% is nothing. My company allows 100%.

By: frugal

frugal — Tue, 18 Apr 2006 18:38:17 +0000

Akhil, you’re right about company match. But you can also come up with a different schedule of contribution to take advantage of the maximum company match percentage, while at the same time, making upfront contribution as early as possible. By the way, my company is matching 401K (finally), and accomodating weirdos like me and more often the procrastinators who contribute last minute. My company will calculate the total amount of match by treating all contribution in the same year evenly, and then adjust for the match amount properly at the end of year. So for me, I will get most of my match dollars (which is not much) at the end of the tax year.

By: Tim MMF

Tim MMF — Tue, 18 Apr 2006 16:11:26 +0000

60% that’s a lot. I’ve never heard of a company allowing someone to contribute that much, I didn’t even know that was allowed legally! Good post!

By: Akhil Jain

Akhil Jain — Tue, 18 Apr 2006 14:37:51 +0000

If your company also contributes then this is not a very good idea. You get company contribution only if you conribute in a given paycheck. In this case you will lose company contribution after paycheck number 7

By: fivecentnickel.com

fivecentnickel.com — Mon, 17 Apr 2006 02:10:42 +0000

Carnival of Personal Finance #44…

Good morning, and welcome to the 44th edition of the Carnival of Personal Finance. Coming on the heels of two somewhat ‘elitist’ Carnivals, I’ve decided to return the Carnival to it’s inclusive roots. If an on-topic post was sub…