Who here is wealthy?

[YALE]

The primary reason you would max out your contributions is to lower your taxable income for the year. Also, a lot of guys don't have the inclination or the time to do research on their investments, so they're not likely to beat an index fund. It's win/win.

[slow99]

More specifically, maxing out the part that is matched by your employer. I wouldn't put anything more than that into MY 401K. I'm happy with the free money but the investment options are way to limited.

Yours may be limited but many are wide open. Like Yale said, 'active participant' starts to affect what you can deduct from an IRA contribution as income level rises.

[TeeShock]

Lolz yeah. Fwiw tee shock, mine goes 401k, Ira, fidelity brokerage account.

I maxed what they will match for now. It's set up for a Roth 401k Rowe 2050 target date fund (mostly stocks) . With the way our government likes to ruin the future how am I supposed to trust that all this money I put into it will really be there for me down the road? I want to be able to make some money with my investments and use it early.

[slow99]

I maxed what they will match for now. It's set up for a Roth 401k Rowe 2050 target date fund (mostly stocks) . With the way our government likes to ruin the future how am I supposed to trust that all this money I put into it will really be there for me down the road? I want to be able to make some money with my investments and use it early.

Right. I meant contribute the max you can to 401k before looking elsewhere - $17,500 this year, $35,000 if married and spouse can contribute at her employer.

[snacksnack]

So me and a coworker have been upping our contributions and he went all in with the max of 35%. He will be maxed out this coming paycheck and for the remainder of the year wants to put the 35% towards hos house principle. Neither of us honestly know what we are doing but I think thats a bad idea. If it is then where should the money go?

[Sean88gt]

Are cash value life insurance plans worth a damn?

[BMCSean]

Are cash value life insurance plans worth a damn?

Depends on the company, the good ones will still take 12-15 years before you are at a breakeven point with your contribution. You can find some that will average 6% compound interest though.

[talisman]

So me and a coworker have been upping our contributions and he went all in with the max of 35%. He will be maxed out this coming paycheck and for the remainder of the year wants to put the 35% towards hos house principle. Neither of us honestly know what we are doing but I think thats a bad idea. If it is then where should the money go?

This is on a house he already owns? He would be better off putting the max your employer matches in, then putting the rest immediately towards the house principle to reduce compound interest.

[Roscoe]

This is on a house he already owns? He would be better off putting the max your employer matches in, then putting the rest immediately towards the house principle to reduce compound interest.

Investment compounding interest > mortgage interest, unless he has a ridiculously high mortgage rate.

[talisman]

Investment compounding interest > mortgage interest, unless he has a ridiculously high mortgage rate.

Well, he is talking about pretty much taking it out immediately, so I'm not sure it will have much time to compound, not to mention the early withdrawal taxes. Not enough info.

[Roscoe]

Well, he is talking about pretty much taking it out immediately, so I'm not sure it will have much time to compound, not to mention the early withdrawal taxes. Not enough info.

I'm saying he's better off investing that money into a brokerage account of some sort than putting it towards principle on a mortgage.

[David]

Rental properties have always done our family good.

[snacksnack]

Investment compounding interest > mortgage interest, unless he has a ridiculously high mortgage rate.

Thats what I say. The question is what to buy? Also we have learned that this is the easiest way to hide and convince our wives we are broke and I must say its working well. The growth of this along with the company match is great so far.

[talisman]

I'm saying he's better off investing that money into a brokerage account of some sort than putting it towards principle on a mortgage.

Ah, gotcha.

[akfodysvn]

401k up to the max your employer will match. Never pass up free money. Then Roth Ira due to it's instant access of any of the money you invested that isnt interest made. No early withdraw fees with the Roth. Roth is also taxed before it goes in which can be a big benefit depending on your tax bracket you retire in.

The additional mortage vs investment is very much opinion based and you will get very conflicting opinions. Altgough the market has done well lateley sometimes you can't beat the interest that your mortgage is. Mortgage is a sure thing while investments are still a gamble. If everyone returned the 7% we talk about then everyone would retire Rich. Simply it isn't that easy. I pay about 50% additional to my house payment. It will be paid off in under 15 years and will be a rental property. Thus providing me with additional income as long as I own it. Match that with my awesome pension, savings and my wife's 401 we will be good. I hope to continue to acquire rental properties along the way.

Rental biz can be tough. My inlaws own about 10 properties that are a combo of single family homes and duplexes. They have done well but made some mistakes and refinanced them finally at a lower rate. Now they wont be paid off until my FIL is 70 and my MIL is over 80. Thus they dont get to reap the benefits of the.properties for very long.