[Rogozhin]

gnm-I'm putting $400 per month into gold and silver rounds and paying off the debt as quickly as I can (roughly $2500 per month on the cards and doubling my car payment).

Thanks for the advice treefarmer, I'll look into the energy fund. I can put up to 50% of my gross pay into the 401k and the employer will match the ratio. I can't wait until I'm debt free too.

[joeltrout]

I currently max out my 401(k). Some people will call me crazy. The limits I believe are 25% of your salary with a max of $15,500 for 2008 but don't quote me on that.

Unlike you my employer only matches 3%. I would say you have a killer deal at 25%. The most I have ever heard of is 10% which I thought was incredible.

Free money is just that Free money. Contribute the max in order to receive the most free money and then when you leave the company you can either roll it over into a personal retirement account or take the tax penalty and cash out.

joeltrout

[joeltrout]

$this->bbcode_second_pass_quote('Rogozhin', 'I') can put up to 50% of my gross pay into the 401k and the employer will match the ratio.

[joeltrout]

$this->bbcode_second_pass_quote('TreeFarmer', '
')
If you want to mix things up and believe in Peak Oil, put a % of your money into Vanguards Energy fund ( I don't know the exact name).

[xerces]

Out away the max amount possible given the company's matching shares offer. I'm only dumping 4% right now which is the max my firm is offering me.

[Rogozhin]

Just double checked the allocation percentage and you can contribute up to a maximum of 50% of your gross salary and yahoo! will match 25% up to a $15550 yearly contribution.

I'm going to bump my allocation to 25% until I get all my dept paid off, then I'll go to 50%.

[mmasters]

I would HIGHLY advise not to invest anything in it unless you have the option to have an individually directed account. That is you can invest outside of the standard garbage stock/bond funds (and get into things like foreign currencies and essential commodities). When the market crashes if you're in a 401 K with the standard fund investment options you will lose your shirt. If you have money in one roll it over to an IRA now and make some smart investments!

[Heineken]

I totally agree with mmasters about funds. They're dangerous crap over which you have no control and pay extra for the "privilege"!

I did well in individual stocks from 1999 to 2007, but I'm dubious about even them nowadays.

Many of us are conditioned by now to believe that stocks are the road to easy money and "always go up," but there have been periods when the market went sideways or down for DECADES. We are probably entering one of those eras, except in this case it might last, like, forever. Stocks depend on economic growth, and we may be entering a long and permanent economic contraction driven by all the factors we discuss on this website.

I would put a modest percentage into the 401(k) to take advantage of your employer's generous match. Even that strategy may prove a loser the way things are going. But it's hard to pass up free money. Put the money in the "guaranteed" slot, not stocks or bonds.

Where to put the rest of it? I have the same problem (as a retiree with some money left over at the end of each month). All I can do is keep pointing to real things like gold, silver, land. And, farther down the list, cases of Jack Daniels and ammo, carefully stored.

[Rogozhin]

$this->bbcode_second_pass_quote('', 'I') would put a modest percentage into the 401(k) to take advantage of your employer's generous match. Even that strategy may prove a loser the way things are going. But it's hard to pass up free money. Put the money in the "guaranteed" slot, not stocks or bonds.

[mmasters]

$this->bbcode_second_pass_quote('Heineken', 'I') would put a modest percentage into the 401(k) to take advantage of your employer's generous match. Even that strategy may prove a loser the way things are going. But it's hard to pass up free money. Put the money in the "guaranteed" slot, not stocks or bonds.

[Heineken]

$this->bbcode_second_pass_quote('Rogozhin', '')$this->bbcode_second_pass_quote('', 'I') would put a modest percentage into the 401(k) to take advantage of your employer's generous match. Even that strategy may prove a loser the way things are going. But it's hard to pass up free money. Put the money in the "guaranteed" slot, not stocks or bonds.

[Revi]

Are 401 K's covered by the FDIC? I don't think so. I like IRA's and hard assets. I have come to distrust almost all paper assets lately. Call me crazy, but the value of those things can gyrate wildly. The value of hard assets seems to go up, lately.

I think that there was a time when you could not go wrong with stocks and mutual funds.

Unfortuately, I agree with McMasters. Those days are gone.

[BigTex]

$this->bbcode_second_pass_quote('Heineken', 'T')ex, I am no longer employed---I retired early (very early).
No, I don't need the money right now.

[Heineken]

Excellent post, Tex. I appreciate the effort you put into it.

I do differ with you on some key points.

In the 1990s I read a small library of books on stocks, and I got into stocks, and I did well in them. (I focused on stocks with a long record of rising, compounding dividends; I was in love with old-economy dividend payers while everyone else was chasing 3Com.) I agree with everything you said about stocks, historically. However, I think that the age of stocks as good investments is drawing to a close. We're going to have a paradigm shift that will render many of the old rules and axioms useless. It may already be under way.

Over the long haul to come, I believe that the economy will contract instead of grow. High prices will be a symptom of that and will not be good for companies. They may be able to charge more for widgets but they will sell fewer widgets. Not only will it be harder for people to buy the widgets at the higher prices, but there may actually be fewer people to sell the widgets to.

How industrially efficient were companies, really? When the energy and material inputs were so incredibly cheap, thanks to the one-time FF bonanza? We'll see how efficient they are at $200 oil. $300 oil. I think not very. They're going to struggle and many of them will go under. OK, so maybe there'll be a growth industry in buggy whips.

Economic growth will be replaced by economic contraction. Not good for stocks.

In addition we have the debt and the housing mess. These are SERIOUS problems with no foreseeable solution. The Mount Everest of government and individual debt cannot be paid; and we are borrowing to pay interest. As someone with assets, I want as little as possible to do with an economic system that sits balanced atop an Everest of unpayable debt.

As for gold, I think that $1,000 gold will soon look cheap.

You're right that the psychology of doom can be blinding. But I'm into it now and I (blinded) see no way out. My faith in the system is approximately zero. So far my thinking has served me reasonably well.

[BigTex]

$this->bbcode_second_pass_quote('Heineken', 'E')xcellent post, Tex. I appreciate the effort you put into it.

I do differ from you on some key points.

In the 1990s I read a small library of books on stocks, and I did well in them. (I focused on stocks with a long record of rising, compounding dividends; I was in love with old-economy dividend payers while everyone else was chasing 3Com.) I agree with everything you said about stocks, historically. However, I think that the age of stocks as good investments is drawing to a close. We're going to have a paradigm shift that will render many of the old rules and axioms useless. It may already be under way.

Over the long haul to come, I believe that the economy will contract instead of grow. High prices will be a symptom of that and will not be good for companies. They may be able to charge more for widgets but they will sell fewer widgets. Not only will it be harder for people to buy the widgets at the higher prices, but there may be fewer people to sell the widgets to.

How industrially efficient were companies, really? When the energy and material inputs were so incredibly cheap, thanks to the one-time FF bonanza? We'll see how efficient they are at $200 oil. $300 oil. I think not very. They're going to struggle and many of them will go out of business.

Economic growth will be replaced by economic contraction. Not good for stocks.

[mmasters]

$this->bbcode_second_pass_quote('BigTex', 'W')ell, shouldn't there be plenty of stocks that will still be able to make money off of food production, energy production, defense contractors, pharmaceuticals, pawn shops, and toilet paper?

[BigTex]

$this->bbcode_second_pass_quote('mmasters', '')$this->bbcode_second_pass_quote('BigTex', 'W')ell, shouldn't there be plenty of stocks that will still be able to make money off of food production, energy production, defense contractors, pharmaceuticals, pawn shops, and toilet paper?

[Rogozhin]

$this->bbcode_second_pass_quote('', 'I')'m not disagreeing with you, but help me understand how a pharmaceutical company won't be able to make money if they have a drug that people will die if they can't get? Won't those people sell everything they have to buy a drug like that?

As for defense contractors, how will they not make money if we are gearing up for a period of more or less constant conflict all over the world?

Pawn shops? How can you lose if the world is falling apart?

I assume you agree that even in a total meltdown, wealth will still exist in some form, and that wealth will continue to accumulate in the hands of those who control whatever tools of power and coercion exist.

I was just taking the traditional paradigm approach to commenting on the issue because it arose in a discussion of 401(k) plans.

Tell me what would prevent one from becoming a victim. I'm really curious what your thoughts are. I know you like commodities and a basket of currencies, I think.

Just lay out your take on the whole thing (if you would like). That's sort of what I did above. I REALLY prefer to discuss this kind of thing as a comparison of perspectives, rather than an argument over who is right. Plus, I like the way you think about things, so I'm certain you can add a lot to the issues Heineken has raised.

[roccman]

This guys wife's statement...got slaughtered.... Just a "correction" I am sure...

[seldom_seen]

Those losses don't account for inflation either, so you can just about double them in many instances.

The American people are being robbed blind right now, and they're none the wiser. You have to credit the fed and treasury for this grand deceit as they laugh all the way to the bank (that they own).