Walter Updegrave is the staff expert at CNN Money, and he fields questions from those who write in to his column called, as one might guess, Ask The Expert. The latest question comes from a twenty-four year old:
My 401(k) plan will actually give me the 50 percent match on as much as 15 percent of my salary, but I’m unsure whether I should put less in my emergency account and increase my 401(k) contribution or stick with my current plan. What do you think I should do?
Walter offers great advice—take advantage of the full company match. You can’t turn free money down. Fill up the emergency cash fund next, then fill up a Roth IRA with any available savings left over.
I’m only saving 4% of my income in my 401(k) currently, but that takes advantage of the full company match. My Roth IRA comes next, and that’s being funded to the $4,000 maximum. My emergency fund is stagnant, but with all my cash accounts, it should be sufficient to cover my expenses for several months if necessary.
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12:33 am (reply)
It’s acutally pretty irresponsible for Updegrave to be dispensing such advice on such little information about the investor. Besides, I don’t think Updegrave has any real credetials anyway.
12:40 am (reply)
Well, I think the case with any advice column, whether financial in nature or otherwise, is that the advice given is intended to be general in nature, in order to apply loosely to the majority of readers. If the writer wanted personalized financial advice, she should have asked a financial advisor, not a columnist.
The problem with financial advice is that if one tells an other to do one thing and then market conditions make that a bad choice in hindsight, people want to hold the advice-giver accountable.
12:55 am (reply)
You make a valid point except that publications like Money Magazine have convinced less sophisticated investors that they don’t need personalized financial advice, all they need do is read their magazine. (Isn’t Updegrave on the staff at Money?)
To your second point, providers of financial advice should be held accountable. That’s why it’s important that they are experienced and hold credentials. It takes more than just a journalism degree.