Putting your money in a 401 k has proven over andover to be a ponzi scam. Only the gangsters running the legal rackets will make more than peanuts.
Want security for retirement? Pay off your debts. Have no house payment. Live like a king instead of serf. No other retirement is more secure. Remember, no one ever went broke paying their way and not borrowing!!
You’ve probably heard that your most valuable asset is time. For new graduates, that line actually refers to two different ideas, both of which are critically important to understand. The first idea is that with few entanglements and draws on your time (mainly no kids), you can devote more of it to your career and engineer the largest advancements in your career.
The second refers to the power of compounding interest and that’s important to understand with regards to your retirement in forty+ years.
This post is part of Bargaineering’s 2010 New Graduate Guide series where I’ll share my insights and offer my financial guidance to the graduate class of 2010. This post is part of day 1, establishing your financial foundation.
Contribute to a 401(k)
When you start working, your employer may offer you the opportunity to contribute to your retirement through a 401(k) (here’s a primer on retirement investing). They will entice you to do this by offering some sort of matching offer, say 50 cents for every dollar you contribute up to 6% of your salary. You will not find a better deal in the entire world, I guarantee it.