401k or anything???

Discussion in 'Business Operations' started by N.H.BOY, Jun 21, 2007.

  1. N.H.BOY

    N.H.BOY LawnSite Bronze Member
    Posts: 1,604

    Not sure if this is the right place for this, but does anyone put money aside for any 401k plans and or other retirement funds? Just wondering once I get older and all:cry:
  2. J&T Kiev

    J&T Kiev LawnSite Senior Member
    from N.W In.
    Posts: 416

    401K , stocks , savings bonds, CD's and a Military pension.

    Even with the assumption of a fully funded future "Social Security" program, "Social Security" alone will not support a decent retirement lifestyle for most people. It's wise to invest in alternatives, and start investing as early as possible.
  3. bullethead

    bullethead LawnSite Senior Member
    from Texas
    Posts: 273

    I do and you should. SS isn't enough, even if it does survive
  4. IA_James

    IA_James LawnSite Silver Member
    from Iowa
    Posts: 2,593

    Not unless a person is into "poor" for their twilight years. I have a 401k that I put 12% of money into. And I'm looking into an annuity from possibly Pacific Life or John Hancock. I need to find out for sure on that and get it started up. The sooner a person gets started on this stuff, the better. Compounding interest and all.:cool2:
  5. N.H.BOY

    N.H.BOY LawnSite Bronze Member
    Posts: 1,604

    What type for self employed person like most of us? What set up and do you put away in a fund every week and a broker too? Just trying to figure this stuff out any help will be great I have a 401k from Frito Lay Inc when I worked and also a pension, but what and how do I contribute being self employed???
  6. PTP

    PTP LawnSite Bronze Member
    from Tulsa
    Posts: 1,383

    It is a great idea to put away money for retirement. A 401k is not your only choice though. Here are several other ideas.

    I assume that you are building a business. Perhaps you can get that business to a state where it provides you with residual income or a lump sum payment if you sell it. You could have the business pay you $50K per year. That is a very reasonable and attainable goal for the long term.

    You could own real estate. What if you bought a property that you were able to break even on with the rent (actually, you should do better than this)? If you took out a 30 year fixed mortgage on that property, it would be paid off in time for retirement and would give you a nice income. What if you were able to do that with 10 properties over the next 20 years - very attainable. Here you would have the increased value of the property as well as the cash flow.

    You could invest your money in the stock market or in good mutual funds - goes along with the 401K idea. Take the time and spend the money it takes to become knowledgeable about your investments - don't trust your retirement solely to an "expert" that gets paid commission off of selling you certain products.

    Those are just a few suggestions. Take the time to think and strategically plan your investments and you will do well.
  7. causalitist

    causalitist LawnSite Senior Member
    Posts: 610

    i would suggest a ROTH IRA through a online discount broker such as firstrade .. there are a few others, but firstrade is one of the very few to not have a yerarly ira fee.

    purchase vanguard index funds, they have the lowest fees and fees have been proven time and time again to determine the vast majority of return over the long run.
    a simple portfolio that will beat 80% of other peoples is buying and holding
    vanguard total stock market, and vanguard total international in equal parts.
    you will own many thousands of stocks and pretty much the entire world.

    once you have 20k in there or so, buy the funds directly from vanguard.

    any fees associated with the purchase of a fund or exchange traded fund should never exceed 1% of the purchase amount... i.e. buy in lumps.

    once your going directly through vanguard there will be no purchase fee, and the expense ratios are less than 1/4%

    no i dont work through vanguard, they are just well known as being the cheapest/best among investing circles .. check out the vanguard diehards forum on morningstar.com

    sharebuilder.com offers 401k's for small business's and you could open them for employees too ... but there are much more fees, and there is nothing better about a 401k over a roth ira ... roth is actually a little better tax wise, however contributions are limited to 4-5k/yr whereas in 401k's its like 15k/yr
  8. causalitist

    causalitist LawnSite Senior Member
    Posts: 610

    the 100 year historical average for price appreciation on real estate is inflation.. i.e. ~3% .. meaning that in effect, the value does not go up at all.

    these last ten years have been insane for real estate, and have made it seem like a much better investment than it is.

    one phrase: "reversion to the mean"

    i know that mentally it seems really great to have someone else paying a house off for you, but a diverse portfolio of index funds has done better than real estate by far, and without the hassle.

    i suppose the only advantage is that your making the money on money thats not even yours lol .. if you mortgage it that is.

    the best way would be to have someone pay off a house for you and then sell it and put it in stocks/bonds.

    so i guess its up in the air ... but it is a hassle though.

    sorry, im a nerd lol
  9. N.H.BOY

    N.H.BOY LawnSite Bronze Member
    Posts: 1,604

    Thanks for all who put there two cents in. Love reading about this stuff. I've done some research, but was wondering what people did and or have. Ive got stock in pepsico and have a 401k, I have a 250,000 home and only have half that for a mortage. Been pondering the idea of buying a rental apt. with two or three apt. People need to start now for saving and it is hard to do, but I wish they had a class for all this when I was in high school:hammerhead: I'm 37 and I'm still learning
  10. PTP

    PTP LawnSite Bronze Member
    from Tulsa
    Posts: 1,383

    The rental is not a bad idea but make sure that you crunch your numbers and that it really will be profitable at the end of the day. It might look good on outset but often times your actual net is much less. I have a couple of friends that are actually going negative each month on their 4-plex. It's really hard to unload a property that is negative cash flowing.

    But it can be a really good thing - just be careful and learn from your mistakes.

    As far as school goes. I would suggest that you surround yourself with other people who are successful and are doing what you are trying to accomplish. That is 10 times better than any school because they have the actual experience.

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