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Exchange Traded Funds Primer
Exchange Traded Funds (ETFs) are a group of passive index funds that trade on an exchange like an individual stock. At the time of writing there are 162 ETFs with $220 billion in assets under management trading on U.S. exchanges. ETFs hold a basket...
Frog In The Pot
FROG IS IN THE POT You remember the story about the frog that was put into a pot of cold water on the stove. He was not concerned. Someone lit the burner and the water began getting warm, the frog was very comfortable and as the water became...
Investing in the Stock Market – 9 Power Packed Tips
You have permission to this article either electronically or in print as long as the author bylines are included, with a live link, and the article is not changed in any way. Please provide a courtesy e-mail to charles@thestockopolyplan.com...
The Nasty Truth About Mutual Funds Investing
Here are some facts that might make many fund investors question why they have chosen to invest in funds at all. According to John Bogle, former CEO of Vanguard Funds, one of the most trusted authorities on investing in mutual funds and a strong...
Using an LLC to Protect Your Wealth
Bulletproof" Your Wealth with Family Limited Partnerships and LLC's A limited partnership is a partnership that has at least one limited partner and one general partner. Most states require the filing of a certificate with the state in order to be...
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THE 401(K): HOW THE INSIDER HAS STOLEN YOUR RETIREMENT!
Mutual funds were moderately successful in creating a presence in the stock market until the advent of the investment retirement account and in particular the 401(k). Corporate insiders persuaded the federal government to allow for the 401(k) in lieu of offering employees the traditional pension. When this happened the employees lost the protection of a specialized financial manager who could manage both the return and the risk of the retirement money of the worker.
This forced employees who are supposed to specialize in their work area into the field financial management with no training whatsoever. The 401(k) effectively FORCES individuals into mutual funds that as I just mentioned were notorious at the turn of the last century for defrauding the public of its savings. Ironically, these same executives had at the time, and still have, their company department of corporate attorneys. These secret departments do nothing but invent new ways for corporate insiders to suck more money out of the firm in the form of perquisites, stock options, and golden parachutes. This is the “new” form of executive stewardship over the shareholder value and employee retirement!
Why is this so tough on the employee? The 401(k) plans do not offer individual stocks only mutual funds. What a scam! Corporate executives have effectively forced you to place your retirement dollars with their cronies in the securities
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industry who manage these investment pools. If you could talk to someone in the 1920’s about this they would be shocked. Someone from back when these investment pools were actively fleecing the public would see this as a criminal act perpetrated by the US federal government, inside corporate executives, and mutual fund managers.
Does that mean the 401(k) is a bad deal? That depends. If your employer matches a percentage of your wages it may be a fair deal but you should only contribute only up to the matching limit. After contributing the maximum matching amount to your 401(k) then put the rest in a Roth IRA. If your 401(k) provider offers an indexed mutual fund then put your money into that. An indexed mutual fund uses a stock market index such as the S&P500 to guide which stocks are bought. The biggest and oldest indexed mutual fund is the Vanguard 500 (VFINX).
A computer divvies up the cash in the fund to match the index as closely as a possible. As such, there is not fund manager to sitting on your hard earned retirement savings to rip you off in bogus fees.
About the Author
ABOUT THE AUTHOR: Dr. Scott Brown, Ph.D., the Wallet Doctor, is a successful investor. Dr. Brown holds a Ph.D. in finance. The Wallet Doctor is sought after for investment advice and coaching. For more information visit Dr. Brown’s site at www.BonanzaBase.com or sign up for his investment tips at www.WalletDoctor.com
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