Comments on: Thinking about the 401(k) Account: Should I Have One? How Much Should I Contribute? What are the Risks? Trying to Interpret the Experts

By: Presh Talwalkar

Presh Talwalkar — Fri, 11 Jul 2008 04:47:53 +0000

Len: Thanks for the compliment. I don’t think it’s ever too late to take control of money. Didn’t someone once say life begins at 50? Even most retirees have plenty of time to enjoy. The main problem people have is getting started, and you have overcome that.

On a side note, I think the real problem is we put too much pressure on people early. I just read about some people trying to teach budgets to first grade students. That is overkill. Let kids be kids

By: len

len — Thu, 10 Jul 2008 15:37:44 +0000

Thanks for the web site. I have learned much about money online. I hate you guys that are so smart when it comes to money. just kidding! I am 57 years old and I am just getting my head out my
private parts about money. It seems so complicated to me but I can understand you people who are not accountants with degrees. I think it is too late to start a financial plan for me and my wife but I am willing to listen and learn. thanks again

By: Presh Talwalkar

Presh Talwalkar — Tue, 20 May 2008 05:03:15 +0000

Jemimah Ruhala: I have been an individual investor since my freshman year of high school, so I agree with you that it’s not as hard as people make it seem.

It is true that investing is made to be an overly complicated thing. There are so many terms that get overblown to be made up just to scare people into hiring professional money managers.

You allude to things like diversification and fundamental investing. I think these are useful concepts, and it reminds me I should write some articles about these things!

By: Jemimah Ruhala

Jemimah Ruhala — Mon, 19 May 2008 06:07:08 +0000

My reason for bringing this up is that I think most people in our generation have been told countless times both explicitly and implicitly that investing, like taxes, is extremely complicated, and best left to experts, and that taking risks with money should be avoided. I had internalized this advice, until my husband proved me wrong. He, who never traded before and never took a class on trading, set up a Scottrade account and after a bit of internet research started doubling our investment money every six months. We started with a small amount of money, invest mostly in commodities, and play volatility and seasonal fluctuations. We avoid sophisticated stuff like “technical analysis”; most of the principles we use are either common sense or deduced from observation and basic research. I’m not saying that it’s so easy a caveman can do it, but neither is it as complicated as it’s made to seem.

Your twenties is generally the time to take a few risks (calculated ones) and in doing so, learn how the system works. It’s true that in many ways trading is like gambling, but the difference is, in trading if you’re smart, the odds are in your favor. You don’t have to make a good bet every single time to be profitable, just 51% of the time. You control your risks by picking things with a low potential for going down in price significantly, not taking mainstream investing advice, and not putting all your eggs in one basket.

By: Presh Talwalkar

Presh Talwalkar — Sun, 18 May 2008 23:24:34 +0000

Jemimah Ruhala: Thanks for pointing out the information on margin calls. This is very useful for others.

I would caution, like RohoMech did, that margin increases risk as opposed to decreasing it like the company match. I agree sophisticated investors use it, and I suspect those people aren’t like to max out their 401(k) for the liquidity problems.