5/09/2014

How to make money in 401k



First step is by educating yourself about 401k and various options available to you and understanding commonly used strategies and their advantage and disadvantage. Most people with 401k have very little understanding of how to invest in 401k. many just put money in any random fund or group of funds.

For a working person with good job, 401k can be big chunk of money for retirement. If you are going to put away 35 *17500= 612500 in 401k assuming 35 years of working career, you better spend some time understanding it.

The 612500  is just your part of contribution . The 612500 can becomes few millions if you manage that money properly and give you comfortable retirement.

If compounded at  8% it will be 3.5million and at 10% it will be 5.7 million in 35 years , provided you have a strategy to compound .

That is possible if you have a strategy. And if you use strategy like Stockbee Lemonade strategy for 401K you can do significantly better than that in some years resulting in big difference in your overall returns.

Ask yourself how much time you spent on something which will make you 5 million.

There is one major trick to making millions in 401k, and that is to avoid negative compounding.

Negative compounding reduces your returns significantly.

Select a strategy for 401k which will avoid negative compounding

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