401K And 403B

Three Questions You’ll Face About Investing

Once you have made the decision to invest a portion of your income into your employer-sponsored retirement plan you will face three questions. The first is, “Where should I invest my money out of every paycheck?” The second is, “Should I keep my money growing in the same investments as my contributions?” The last is, “How often should I trade or make changes to my portfolio?”

The Financial Tales approach is basic for those looking to accumulate wealth and a bit more complicated for those that have achieved wealth or think they might have achieved wealth. For wealth seekers, the advice is simple: Invest 100 percent of your money in one or more low cost equity index funds available through your employer. After a few years, see how much you have saved and compare it to your salary.

As an example, if you make $50,000 per year and you have saved $50,000, you have accumulated 1 times your salary. This is hardly enough to retire so our approach dictates you must stay aggressive in your allocation to equities. As your capital grows, you constantly monitor the times your salary factor. Eventually the factor grows from one times your income to two times to four times and eventually to a level where you might have enough to retire. This level is what we call the wealth inflection point and for those that have reached this level or think they might have reached this level contact us for a questionnaire that can help you make a distinction because things can and do get complicated at this point.

Wealth Building for 401K and 403B Participants

Please note, the beauty of our wealth building approach is that it serves as a very good approximation of when equity markets are near or market tops. One of our favorite saying is “Time the market before it times you” and our approach often has you shifting your all equity allocation near a top of a market.

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One of the benefits our financial tales community enjoys is the ability to submit their own tale. We will keep your name private of course and if you send us a detailed overview of your financial situation we will respond to you directly in private and if your tale might be interesting to others we will share it with our fans and community.