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Commenter Kira Makes an Excellent Point
By JLP | June 6, 2006
In my DON’T Check Your 401(k) Balance Today! post, Kira left the following comment:
Actually I was very pleased by this drop because it meant my monthly contributions to my 403(b) – which were processed at the end of the day yesterday – got more shares for the money because NAV was lower. Since I am only 22 I am always quite happy to get some low priced shares, I’m not selling them!
I have to say that that kind of wisdom just isn’t seen very often in 22-year olds (or anybody else for that matter)! I’m telling you right now, if Kira sticks to her plan, she will be a millionaire by the time she is 40 (assuming she’s investing enough money!)
Topics: Retirement Planning | 3 Comments »
June 6th, 2006 at 11:47 am
I have to agree with you both. As a 23 yr old, I keep my 401 (k) pretty agressive. You just have to learn to accept the ups with the downs, especially when you’re in your early 20s and are not going to be needing this money any time soon, because the power of time will work in your favor in the long run!
June 7th, 2006 at 8:02 am
I certainly hope I will do that well =)
Right now I’m fortunate to work at a university where, instead of participating in the pension plan, the university pays 13.5% of my salary directly into my 403(b), and I get about 9% deducted from my paycheck in lieu of Social Security (which is fine with me since who knows what it will be like when I retire!) So even though money is otherwise tight (boyfriend is a grad student) I feel really lucky to be starting off my financial life with so much (essentially) free money to get a head start on. Having that much was what spurred me to learn more about finance – if I was only putting in $50 a month I might not care so much!
Amanda, I totally agree – I am 95% in equities. My only problem is that the basic 8 TIAA-CREF investment options are not risky enough!
June 7th, 2006 at 11:01 pm
[...] The Recent Market Losses We’ve all seen and experience first-hand the big market dip/correction consistently in the last few weeks. Rather than lamenting that the market took a shalacking, a contrarian thinking would be that these days are the best days to hunt for a bargain! Contrarians are busy evaluating the buying criterias for the stocks on their watch list. During this time period, they can buy more shares for the long-term with the same amount of investment capital. Every $1 you are investing during this time is buying you more shares than when the stock market is skyrocketing. If you are a young long-term investor, you should be loving the fact that your money can work much better for you during these 10 highest losses days rather than the 10 highest gain days (in the long run). “Be fearful when others are greedy and greedy only when others are fearful.” [...]