Free Money!

Posted by ECOKID on Jul 12th, 2009 | no comments home title

Okay, so we aren’t exactly giving free money away but your boss might be. Let me explain, you probably work for a big company with that allows you to take advantage of a 401K which your employer matches up dollar for dollar (or slightly less) up to a certain amount! That’s free money! So, why would you not want to take advantage of such a thing if it is available for you? Actually, you might want to think about signing on if you have a chance now because from the looks of it, being generous enough to offer a match is slowly fading away in any industry these days.

A 401k is a retirement account that an employer offers to its employees. A 401K holder my deposit a percentage of his earned income into a 401K tax free. Withdrawals are taxed accordingly and if you, and have the option, to invest pre-taxes, you will be tax on earnings plus deposits at a later date.
The coolest thing about having a 401K account is having someone give you free money for having one. It’s plain and simple, If your employer has this option, take it!

When you have decided that you would like to take advantage of this sort of thing, make sure that you look closely at the investment option you will have. In most cases your 401k can be focused on a particular set of investments like mutual funds, stocks, bonds, etc. In the next few entries will slightly go into each of these types of investments so you have a better understanding of each of these and can decide whether or not to have your money invested in any of these.

In some cases, you can actually borrow against your 401k account and repay own personal loan back to yourself! The interest that you pay is usually something incredibly small and the interest is money that you are earning! Isn’t that great? Well, this wasn’t exactly a hard thing to decided on I hope.