I have a brother in law who is self employed so has his own retirement account. He is always moving stuff based on highs and lows. He is missing out on all the highs. My dad has told him over and over to just let it sit. My parents are milionares having been middle class because they just left their money sit.
Ferguson101 You can start kids earlier than that if you wish. Fill out beneficiary line. My oldest niece is 24 and has over $70k in hers last I checked.
Phillip Johnson You should have pumped it up all the time. I put the full $18k in the 401k and max the Roth IRA each year. When the market is high like it is now it goes into the brokerage money market or credit union savings in my 401k then when the market drops the money is there waiting to be used.
BlackWorldTraveler If I had enough money to do it, then I would have put maximum amount into Roth IRA and my 401K account (which by the way is a Roth 401K). But I clearly don't. I wish I could, however.
I lost nothing in 2008, just moved into MIP (managed income portfolio) for a short time until the market bottomed, then reinvested into mutual funds...much like I did last year. This year I have a 23% return. At some point the market will correct (back into MIP) and bottom out (back into funds). Do people not watch?
By my numbers, it would’ve taken 5 years just to get your money back if you’d invested just before the crash of ‘08 if you were in the S&P 500, not 2.5 years.
This is why Dave recommends people have an advisor in their corner. Even Warren Buffet has said that most people not disciplined investors. Pay your advisor a commission!
Dominion Lose more of what? Are you one of the many that was unprepared financially, panicked, and sold at the bottom? I was still getting over $40k a year in reinvested dividends on top of my continued $18k-$20k a year contribution in my 401k through the recession and housing crash. Same with my Roth IRA and other investments. If the recovery was slower all that would mean to me is I would have accumulated more shares which would mean more dividends,growth,and passive income. A few companies like Netflix and Oneok I bought during the recession at around $6 a share are doing very well. Everything I bought back then has at least a 400% return since. Didn't need to use any of my emergency fund during that period. Still maintaining zero debt. All I saw was opportunities. Even bought a place I've always wanted with a view of the Gulf and marina at a over 60% discount back then. Still took an extra 4 to 8 weeks off work without pay on top of my paid 6 weeks vacation each year. Did a partial remodeling of my home then as well. Heck my pension was even permanently frozen during that time and that was no big deal.
Luckily the government pumped in trillions to support the markets. Wonder whether government could afford interest replacements if they did the same again?
They won't be able to support the markets 2008-style again. The dollar would collapse. Should be interesting to see their response next time. Plus, once interest rates rise enough to make a difference (not just a paltry 1%), all the banks they bailed out will fail again. Next time the choice very well could be 1) a collapsing dollar or 2) failing banks. The Federal Reserve will only be able to save one of them.
Didn't mention the collapse of the dollar. Government can use Dollar2.0 and start fresh using the same tricks stealing future wealth piling on debt. No room to reduce the base rates. Best invest in a wheelbarrow to replace our wallets when hyperinflation occurs with the flooding of dollars. I still do invest in self-invested pension fund, so not boycotting markets completely.
USMC 2MSU That's not a big deal. Never liked that part of the 401k when I started mine 30 years ago. I was one of the few people asking questions back then on what happens after retirement. Never liked the idea of forced RMD at 70 1/2 so I did things differently. I did contribute pretax in my 401k though (also put money in after tax and created a type of super Roth) But jumped 100% into the Roth 401k soon as it was offered. Never had a traditional IRA for the same reason and also jump on the Roth IRA soon as it was available. Well that $6k-$7k a year matching is helping since it's pretax. My RMD will be around $30k/yr. a year now instead of $90k/yr. or more with current calculations. Retiring early and prefer to blend my Roths,pensions,savings,qualified dividends,and other passive income to stay at or below 15% tax bracket while maintaining a $60k to $90k a year retirement income and pay around $250/month for medical instead of over $1k a month before Medicare kicks in. No thanks. In 1986 I figured it would be better to pay the taxes up front than hit with RMD later. When I asked questions about this back then it was like pulling teeth and that has always bothered me. Heck I don't even care about the tax break from mortgage and paid my 30 year mortgage off in 10 years. I want to get as close to EZ form and simple as possible at retirement. I hear they want it from $18k a year to around $3k or something like that. Put that $15k or more into something else like a Roth or qualified dividends like dividend aristocrats and live within means.
Trump said Monday in a tweet: "There will be NO change to your 401(k). This has always been a great and popular middle class tax break that works, and it stays!" What is your source detailing these changes?
Andrew I read it somewhere two weeks ago. Appears many are a bit excited and frightened over it Things like this is why I am more in control and proactive with my own personal finances,apolitical,don't own or watch tv,and never join in any political reindeer games.
LOL i would like to hear what you are going to say after next crash. Only stock market recovered is because of FED pumping money into market. After next crash no one is going to touch stock market. It will drop and stay down for long time. Maybe next 30 years.
This is antithetical to common sense. If the market dives then myself and millions of others will pounce and buy up everything and the prices will rebound. It's called supply and demand.
There are many things I agree with Dave, but not on this one. Your best chance of making real good money is to time the market. Warren buffet does this too you know - Buying low selling high is a form of "timing" the market. Dave you also "timed" the market. You mentioned you bought a property for 1mil in the crash, and sold it for 3mil few years later. What do you call that? That is what's know as TIMING the MARKET. duh. Now, if you were lazy and already took the full blow of the market crash... then stay in there. Damage is already done. might as well stay there. But there are whole bunch of people who cashed out (i.e., shifted to fixed income or money market type funds) when the market came down 14000->12000, then jumped back in when it bounced back up 6000->8000 (myself included). I don't even want to think about what my 401K would be today if I rode out the whole crash.... PHEW. I feel sorry for all those who took Dave's advise on this one. Learn to make "decision" based on "information" you get out of "data".
Learn to recognize the dips (often very easy to do) and throw money at them. Don't bother trying to exit on highs. More often than not you will miss out on the continuing climbs beyond what you thought were the highs.
Mr. Ramsey, I lost 0 in 2008! I don't like roller coasters nor do I like losing any of my hard earned $$. Even if you don't jump off, you risk (albeit small) getting hurt, that's why the Parks have a "liability clause". The only safe way is don't get on! For 20+yrs, I've only invested in safe guaranteed investments, no stocks, mutual funds etc... and no fees. For years, my "planner" recommended riskier investments which I avoided. In 2008, I lost nothing, my financial planner tells me I was his best client averaging 5% interest over 20yrs with 0 loss'. No ride for me!
sharon s Must be nice. The second quarter of 2008 cost me $5,300! That wasn't easy to get past. On the day that statement came in the mail, I had all kinds of problems sleeping that night. Be glad that you didn't have to face that rat trash.
You obviously didn't listen to what Dave said here. NO ONE LOST ANYTHING IN 2008-2009 (EXCEPT FOR FOOLS WHO JUMPED SHIP because they make decisions based off emotion instead of common sense.)
Dave here talks about the stock market as if it will always exist, but I understand his stance since it has existed his entire life so far. He doesn't ask why it moves up and down. The problems our monetary system faces today are severe and can bring everything down with it in the next economic storm.
