Instead of putting money away each month into your 401k, why don't you use it to get a better job?

[oiprocs]

A lot of workers take a chunk out of their paycheck and put it into their 401k in hopes that when they retire, they will have enough to live on for the rest of their days.

Wouldn't a better idea be to take that money and use it to pay for higher education? Like a medical/law/pharmacy/dental/etc. degree that would result in a higher income? Then you can put even more into your 401k?

I just don't get how people think that they are putting good money into their 401k when they could spend a few years getting training to do something that will help them put more money into that same account.

 

[chorb]

By the time the average joe's 401k has enough money to pay for a master's/MBA/etc... the average joe will have an average family to support. The average joe then needs more money to live off of while in school.

 

[DaveSimmons]

That assumes they have the skills and motivation to become a doctor, lawyer, dentist etc. and that they have the business and management skills to create a successful practice.

If a person has all of that, they probably are in school working towards the degree.

 

[summit]

not everyone wants to be a doctor, lawyer, pharmacist, dentist. i enjoy my job and put money into my 401k because of company matching, tax credit, and i hope to retire one day.

 

[SparkyJJO]

Originally posted by: Summit
not everyone wants to be a doctor, lawyer, pharmacist, dentist. i enjoy my job and put money into my 401k because of company matching, tax credit, and i hope to retire one day.

This. I couldn't stand being any of those things. You wouldn't want me to be your doctor anyway

 

[nerp]

Two words:

COMPANY MATCH.

Free money is free money. Giving up the opportunity for free money is a bad financial decision no matter what.

If your company doesn't have an employer match, and IRA is a good option instead of a 401k supplied by the company.

The idea of a 401k or other long term investment is that you put a small portion of each paycheck into it so that you don't feel the hit, really, and accumulate wealth slowly over the long term. Smart investing is such that you can contribute to a 401k AND build traditional savings AND set aside money for things like education. IF you can't do this then either you are putting too much money in one investment and need to adjust your allotments or you need to reduce your spending.

 

[Kyle]

Originally posted by: DaveSimmons
That assumes they have the skills and motivation to become a doctor, lawyer, dentist etc. and that they have the business and management skills to create a successful practice.

If a person has all of that, they probably are in school working towards the degree.

exactly- you can't just throw money at a school and end up a doctor...most people are not motivated/smart enough even if they could afford it.

 

[Mo0o]

Originally posted by: Kyle

Originally posted by: DaveSimmons
That assumes they have the skills and motivation to become a doctor, lawyer, dentist etc. and that they have the business and management skills to create a successful practice.

If a person has all of that, they probably are in school working towards the degree.

exactly- you can't just throw money at a school and end up a doctor...most people are not motivated/smart enough even if they could afford it.

I see you've not heard about some of the less reputable medical schools. The entrance requirements are ridiculously low and all you realy need is to jsut give them tons of cash. DOesnt take alot to be an MD, especially if you just do a rural family practice.

If people really want a career change, nursing is the best bang for buck and the training is way way shorter. Really good money.

 

[thegimp03]

Originally posted by: obscenethistle
Wouldn't a better idea be to take that money and use it to pay for higher education? Like a medical/law/pharmacy/dental/etc. degree that would result in a higher income? Then you can put even more into your 401k?

Well, yeah, but the whole thing about the 401k is the sooner you start investing once you get your first job, the more you'll have in there. I'm not saying that you have to put the maximum ($16.5k for 2009) in there, but at least put enough in to fully take advantage of your company's match (if they have it, some companies are cutting this benefit to save cash).

 

[DaveJ]

Originally posted by: nerp
Two words:

COMPANY MATCH.

Two more words:

COMPOUND INTEREST

[edit]Stupid Enter key. Start saving in your 20s and the compound interest alone would do more for you than if you waited to start saving until you were 30.

 

[zzuupp]

Originally posted by: SparkyJJO

Originally posted by: Summit
not everyone wants to be a doctor, lawyer, pharmacist, dentist. i enjoy my job and put money into my 401k because of company matching, tax credit, and i hope to retire one day.

This. I couldn't stand being any of those things. You wouldn't want me to be your doctor anyway

:laugh:

 

[Slew Foot]

Originally posted by: DaveJ

Originally posted by: nerp
Two words:

COMPANY MATCH.

Two more words:

COMPOUND INTEREST

[edit]Stupid Enter key. Start saving in your 20s and the compound interest alone would do more for you than if you waited to start saving until you were 30.

Three words


STOCK MARKET CRASH

 

[nerp]

Originally posted by: Slew Foot

Originally posted by: DaveJ

Originally posted by: nerp
Two words:

COMPANY MATCH.

Two more words:

COMPOUND INTEREST

[edit]Stupid Enter key. Start saving in your 20s and the compound interest alone would do more for you than if you waited to start saving until you were 30.

Three words


STOCK MARKET CRASH

Yep. Aka, historic buying opportunties. Investing at the peak of a boom will get you nowhere. Investing in the middle of a crash will let you reap huge rewards in the long term.

Why do people think a 401k is some sort of short term investment, get-rich-quick scheme that is only viable when the market is exploding? The whole point is to buy consistently over several DECADES to build an investment over time. The swings of the market should be expected. Someone who starts a 401k at 25 and then bails on it at 30 because of the market crash are essentially wiping out their retirement and forcing themselves to start from scratch. The people who will ride this out will be better off in 20 years than the people pulling out. In fact, the people who are buying in NOW will be better off than the people waiting for a recovery.

 

[DaveSimmons]

Originally posted by: Slew Foot

Originally posted by: DaveJ

Originally posted by: nerp
Two words:

COMPANY MATCH.

Two more words:

COMPOUND INTEREST.

Three words

STOCK MARKET CRASH

LISA NEEDS BRACES.


But seriously, with 50% employer matching you start off with a 70% gain on your investment.

Unless you think the market is going to decline another 70% this is a very good time to put money into your 401k up to the employer match.

 

[thomsbrain]

It is extremely easy to retire a multi-millionaire if you contribute early and aggressively to your 401K, and that doesn't even count additional savings in IRAs or non-sheltered accounts. You don't even need to have a high salary to do it.

You can forgo a regular paycheck for 7 years and spend $150,000 on tuition to get your medical degree, meaning you enter your medical profession with the equivalent of a fair-sized mortgage in student loans, little to no savings, probably no home, and you're 30+ years old and want to start a family. So now maybe you're making $100,000 a year off the bat and that's great, but it could take a decade or more to catch up to someone who just worked right out of college.

I'm not saying more education is bad or even a bad investment, but it's not the end-all be-all, and you can retire comfortably without post-graduate degrees.

 

[imported_Lothar]

Originally posted by: obscenethistle
A lot of workers take a chunk out of their paycheck and put it into their 401k in hopes that when they retire, they will have enough to live on for the rest of their days.

Wouldn't a better idea be to take that money and use it to pay for higher education? Like a medical/law/pharmacy/dental/etc. degree that would result in a higher income? Then you can put even more into your 401k?

I just don't get how people think that they are putting good money into their 401k when they could spend a few years getting training to do something that will help them put more money into that same account.

What if you already have one of those degrees?

 

[imported_Lothar]

Originally posted by: Mo0o

Originally posted by: Kyle

Originally posted by: DaveSimmons
That assumes they have the skills and motivation to become a doctor, lawyer, dentist etc. and that they have the business and management skills to create a successful practice.

If a person has all of that, they probably are in school working towards the degree.

exactly- you can't just throw money at a school and end up a doctor...most people are not motivated/smart enough even if they could afford it.

I see you've not heard about some of the less reputable medical schools. The entrance requirements are ridiculously low and all you realy need is to jsut give them tons of cash. DOesnt take alot to be an MD, especially if you just do a rural family practice.

If people really want a career change, nursing is the best bang for buck and the training is way way shorter. Really good money.

Seriously.
Just go to med school in the carribean.
I know lots of people who couldn't end up in an American med school if their life depended on it.
Why go to med school in the US when you could go to a med school in Antigua for $20k/year on a 3.0GPA and shitty MCAT scores?