If you find yourself not ready to engage in your 401k, then here are a few thoughts (though some may be a little controversial). This is not about retirement. It’s about snowballing your wealth.
Do you have debt? While juggling your debt and your savings (and trying to figure out what priority to tackle them in), your 401k will go unscathed because no matter what happens, creditors can’t touch it. Creditors can eventually touch your other bank accounts though, making the 401k the safest place for your money to grow.
How about taxes? Do you enjoy paying those as much as I do? If you contribute pre-tax, that is also less money you pay taxes on. Tax advantage. Boom.
The 401k gives you that freedom to choose how and when you want to become debt free. It’s your money after all, you should have a say in what and how your money is handled.
Under this protection, open new and exciting doors for you at your own pace.
Now that you’ve discovered this overlooked-safe-house, here are a few ways to successfully get started with a 401k:
Start small. If you’re like me, I like to go all-in immediately, but there is no need to set yourself up for the feeling of defeat by biting off more than you can chew. Start with an amount or percentage that you won’t notice ($50/week?), then, “Hey, Siri…remind me in 4 months to increase my 401k.” Allow yourself to adapt your lifestyle iteratively.
Look at your subscriptions. Take a look at last month’s bills, are there any subscriptions that you don’t really need right now? Eliminate it. You can always add HBO back when the new season of your favorite show kicks off.
Throw darts. Not an investment guru? That is perfectly ok! Don’t let this scare you off. It’s simple: Take a look at vetted mutual fund lists like the Schwab Focus list, and pick 1-2 from each main category. I’m not telling you what to do, but your line up may look like this: 50% Large cap, 25% Small/mid-cap, 15% Bond, 10% International equity. Just an idea.
Using the 401k is your opportunity to discover more wealth for you and your family now in one of the fastest ways possible. Let go of your own presuppositions and step your feet into the wealth-creating-401k water. It’s a secret hiding in plain sight for building and enjoying your life now.
This income replacer opportunity stays protected while it grows, allowing you to find creative ways to live your best life now.