Latest news with #Money.com
Washington Post
14-04-2025
- Business
- Washington Post
Don't look at your 401(k), they said. I looked.
I opened my first 401(k) at 24, when my first grown-up job agreed to transition me from hourly to salaried. 'It might look like a pay cut,' the human resources rep told me, acknowledging that my monthly check was about to shrink. 'But you get benefits.' She encouraged me to contribute to the organization's retirement plan, which she said involved a 3 percent match at 100 percent and a 2 percent match at 50, and I nodded like I understood what that meant, and then later that night I proudly called my dad to tell him I had a 401(k), and I pronounced it 'four hundred and one.' And then — then nothing, mostly. The funds were direct-deposited, the match was matched, and every few months I'd dig up my T. Rowe Price log-in to see how things were going, and years passed, and that basically brings us up to this past week. 'Don't look,' an analyst warned as I flipped past NBC. 'I haven't looked,' confided The Post's columnist Michelle Singletary. teased of the 'worst thing you can do' to your 401(k) right now — and, spoiler alert, that thing was to check it. Your 401(k) was essentially Medusa, and direct eye contact with it could kill you. My favorite surreal headline came from the Times of India, of all places, and it read: 'Donald Trump says he didn't check his 401K. Experts say you shouldn't too.' I probably don't need to explain to you why financial analysts are right, but as an elder millennial, I feel I need to explain to them what it felt like to be the rest of us this week, us normies, as we all trapped ourselves to the rocket ship called the U.S. economy and waited for either a blastoff or an O-ring failure. Whatever the American Dream once was, for whole generations of us, it has been distilled down to a 3 percent match. You get to be in charge of your own destiny, was the enthusiastic promise of the 401(k). You get to decide what investments are right for you. Never mind that I have no business deciding what investments are right for anybody. Sir, I majored in English. But this is what we were given, so this is what we would work with. We rode the bus and we saved enough for the 3 percent match. We side-hustled with Uber and saved enough for the 3 percent match. We bought avocado toast and listened to elders say that if we stopped buying avocado toast then we could be retired by now. (If food tariffs go into effect, they are probably right.) We watched housing prices outstrip income to unprecedented levels, and watched universities start charging 60 grand a year with straight faces, and paid for health insurance with deductibles so high that you wondered how it was even legal to be called insurance. Sometimes I lie awake and marvel about the fact that my granddad was able to raise six kids on the wages of a garbageman, while I just paid $900 to have a splinter removed, but I digress. The 3 percent match was your gateway to financial security. It's pretax, don't you see? It was the best we could do. It was everything we had. How privileged we were, to have a job with a 3 percent match. And how crazy it is that the chance to gamble your own hard-earned money on the stock market — because the choice is either that or post your personal sob story on GoFundMe — is, in this country, privileged? By now I hope it's clear that I have no idea what the stock market did this week, or is doing, or will do. But when we are talking about the stock market, what we are talking about is how 35 percent of working-age Americans, according to the Census Bureau, have money in 401(k)s or similar accounts (18 percent have IRAs, and about 14 percent have pensions), and how each of us walked into an HR office at one point believing that we were holding up our end of the bargain. And how each of us saw this week that we might be in charge of our own destinies, but our destinies could explode if one man decided to roll out of bed and declare 145 percent tariffs on China. There's no bargain there. Not in any sense of the word. There are only the expectations of progress we have been trained to have in this country. That stock markets would rebound, that things would be better for our kids. Three percent better, maybe, with a 100 percent match. I've also found myself thinking a lot about Florence Thompson this week. In 1936, Thompson was a mother of seven, following crop patterns along the West Coast, as her family eked out a living picking their way through those fields. Outside a pea farm in California, the car broke down and Thompson and her children set up a temporary camp, while Thompson's partner set out to acquire what was needed to get them back on the road again. They stayed awhile, days or weeks, and at one point a photographer named Dorothea Lange stopped by and asked to take Thompson's photograph, and those images — Thompson nursing one rag-clad child, two others burying their faces in her shoulders, Thompson's hand grazing her chin as she stares out into bleakness and dust — those images became the defining portraits of the Great Depression, a time that nobody would aspire to return to. The first Social Security payments hadn't been doled out when those photos were taken. They would happen the following year. Medicaid arrived in 1965. Section Eight housing came in 1974. 401(k)s came in 1978. All of those changes would be within Thompson's lifetime. I wonder whether she understood, then, that things would get better, that the country would try really hard to figure out how to provide for its struggling residents. There's a rocking chair in one of the images. If you're familiar with only the most famous portrait, a close-up, you might not have realized that. But if you look at the whole set of pictures, you'll see: Thompson and her children are sitting in a three-sided tent, and there are wooden crates and a few steamer trunks, and in front of all of it there's an intricate rocking chair. I think about the possibility that Florence Thompson packed up that rocking chair every time she and her children moved. How cumbersome it would have been. How impractical. But how she took it with her anyway, a promise for a better future. The best she could do, everything she had in the world.
Yahoo
02-04-2025
- Business
- Yahoo
6 Boring Ways To Get Rich and Why Boring Is Better
Get-rich-quick schemes may sound great, but they fail more often than they succeed. Flashy investment strategies, risky business ventures and chasing trends can lead to stress, losses and even financial ruin. Trending Now: For You: Real wealth comes more often than not from discipline, patience and predictable strategies. Boring doesn't mean ineffective. It means reliable, repeatable and proven over time. The least exciting wealth-building methods are often the most effective and here are six to consider. Picking stocks feels like a game but most people lose. Actively managed funds charge high fees and still struggle to beat the market. Index funds require no effort and deliver better results. They spread risk across hundreds of companies, providing steady long-term growth. While others ride the emotional rollercoaster of stock picking, index fund investors let compounding do the heavy lifting. Check Out: For example, according to the S&P 500 has grown an average of 10.52% per year for 30 years, while a fund that tracks it, the SPDR S&P 500 Trust (SPY), has risen 1,180% since 1993. The Nasdaq Composite has been more volatile but still averaged 10.9% yearly over 20 years, with a fund tracking it, ONEQ, growing 823% since 2003. House flipping looks glamorous, but the real money in real estate comes from buying and holding, something that millionaire 'Shark Tank' star and real estate mogul Barbara Corcoran told was 'a very slow way to get very, very rich.' Property values tend to rise over time and rental income provides steady cash flow. Long-term real estate investors don't waste money on rushed renovations or risky flips and while flipping can bring in quick profits, slow and steady often wins the race in the real estate world. The process of manually putting money into savings cab take effort that many people don't want to put in, whereas automated savings eliminate the decision-making process. Setting up automatic transfers into investment accounts may not be the most exciting of 'get rich' schemes, but it makes sure money is saved before it can be spent. It's a habit that some might say is boring, but a habit that builds wealth consistently nonetheless. Dividend stocks don't promise overnight gains but they deliver steady income. Instead of just chasing stocks that may (or may not) skyrocket, smart investors set up dividend reinvestment plans or DRIPs. A DRIP automatically reinvests dividends from stocks and funds, turning even small investments into wealth over time. For example, according to Charles Shwab, a hypothetical $100,000 investment in a fund tracking the S&P 500® Index in 1990 would have grown to over $2.1 million by 2022 with reinvested dividends, but only $1.1 million without. Debt, although sometimes beneficial, can drain cash flow and limit financial flexibility. Car loans, credit card balances and personal debt eat away at long-term wealth. The key is to avoid unnecessary debt, so more money can stay invested and grow. Keeping liabilities low creates financial stability and security. Getting distracted by trendy investments and viral stock tips or making decisions based on fear or panic, can wreck financial progress. Wealth grows more solidly through consistent disciplined strategies. Long-term investors don't panic during market dips or chase the latest hot trend. They create a plan, stick to it and let time do the work. Boring strategies may not make for exciting stories, but what they do is create lasting financial freedom. Flashy risks lead to stress, losses and instability while patience and discipline lead to wealth. Building slowly and predictably beats gambling every time. More From GOBankingRates 5 Luxury Cars That Will Have Massive Price Drops in Spring 2025 4 Things You Should Do if You Want To Retire Early The New Retirement Problem Boomers Are Facing 8 Common Mistakes Retirees Make With Their Social Security Checks This article originally appeared on 6 Boring Ways To Get Rich and Why Boring Is Better Sign in to access your portfolio
