In this episode, we discuss the matter of 401k plans and Grant Cardone’s view on this topic:
Cardon’s view: Don’t put your money in 401k.
“Traps that prevent people from ever having enough… keep money away for 40 years hoping in grows up”
According to the 2015 Retirement Confidence Survey,
- 53% of American workers who were asked how much they have saved for retirement and answered have less than $25,000 saved
- (excluding the value of their home) and 35% have less than $1,000 saved.
- If you have only 20 years until retirement and can sock away $10,000 per year growing at 8% annually, you’ll end up with close to $500,000.
- What are 401ks –
- Short comparison with Japan and Germany options
- Discuss Cardone’s interview including his key statements: we shouldn’t invest in 40k1s
- Becoming an entrepreneur is great and many should try but its not for everyone
- For the rest there is simply no other option – so they should especially if the company contribute half of it.
- The question would then be what to invest in and how?
David is for maintaining a sizeable cash position at all times and following an opportunistic approach to investing.
Angela prefers a more systematic approach to investing, that encourages regular contribution and automated wealth creation.
Both strategies work but depend on the individual risk appetite and personal preferences.