May 22 • General discussion
Your 401k is not invested properly....
Target-Date-Fund (to spot one, look at your investments and you'll see a bunch of words followed by a year: i.e. Bloomberg Index Target Fund 2045)
What is it?
What you are likely invested in with your 401k.
Nearly all companies auto-enroll their employees into TDFs.
And they are garbage for young people.
Why?
Because they are WAAAAAY too conservative.
Everyone talks about risky investments...but imo, more ppl need to focus on not being so conservative.
Target Date Funds ooze conservatism...and it will keep you HAVING to work until your 65 or older.
Why care?
Well those ppl who invest more aggressively...can hit a goal faster, not have to save as much, or have more money in retirement.
The cost?
Patience.
If you are patient - you will be rewarded if the stock market does anything even remotely close to what it's done for the last 100 years.
Get out of TDFs...move all the money to stocks (even a simple S&P500 index fund likely increases your odds of success).
*THIS IS FOR EDUCATION PURPOSES ONLY. PLEASE PLEASE PLEASE DO ADDITIONAL HOMEWORK ON THIS. DON'T BLINDLY FOLLOW ANYONE WITHOUT DOING YOUR HOMEWORK - IT IS A RECIPE FOR DISASTER.
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Your 401k is not invested properly....
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