As featured in The Wall Street Journal, Money Magazine, and more!

Rule for Building Wealth: Use Your 401(k)

by Flexo on December 12, 2006

in Uncategorized

Fortune Magazine is looking at 10 Rules for Building Wealth, and here is the second item on the list: Use your 401(k).

If you have access to a 401(k) or 403(b) at your job, particularly if the plan offers employer match, then it makes sense to invest in the plan. The employer match is basically free money, even if the investment options aren’t spectacular. If there is no match offered, you should probably weigh your other tax-advantaged investment options, like a traditional or Roth IRA, against the 401(k) choices.

Fortune has an additional thought:

New pension legislation is encouraging companies to offer third-party investment advisory services, so call HR to find out if yours offers any on-the-house guidance.

If you are self-employed through a corporation or a sole proprietorship, the Solo 401(k) is another option, but once again, weight investment options and take fees into account. Unless I quit my day job, I won’t have an opportunity to test the waters with a Solo 401(k).

VN:F [1.7.4_987]
Rating: 0.0/5 (0 votes cast)


Email this article Email this article Print this article Print this article
Share this article: Twitter | Tip'd | Facebook | Delicious | Reddit | Digg
About the Author

Flexo, the owner and creator of Consumerism Commentary, has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about him and follow him on Twitter.

If you enjoyed this article, get the free RSS feed or get daily emails.

Join the free Consumerism Commentary newsletter. Enter your email address here to receive weekly emails with behind-the-scenes information, exclusive giveaways, and money tips.



Related Entries on Consumerism Commentary

  • ntguru
    If one is both employed (W-2) and has significant income through an LLC (1099), can LLC income be invested in a solo 401(k)? Unfortunately Roth is not an option due to its income cutoff.
  • Rule for building wealth simply means " He who has the gold rules." In this way having 401(K) saving plan for investment purposes especially for mutual bond is adhering to the golden rule on how to build wealth. Save, save and save and invest all interest earnings by procuring stock, bonds and treasury bills would enable a person build wealth beyond compare. Save but do not hoard as it is unproductive. Diversify investments to minimize and decrease the probability of investment risk. I always believe that life is a matter of adhering to the natural and scientific law of nature: " The accumulation of wealth attracts more wealth as the proposition and advocacies of poverty attracts more poverty."
blog comments powered by Disqus

Previous post: American Express and Spinal Tap?

Next post: Letter From Reader: 2007 Financial Literacy Calendar