CDs and Wealth Preservation, and 401K Plans
December 03, 2009
Famed "money guru" Robert Kiyosaki ripped into 401K plans the other day as "the biggest scam ever."
Citing facts such as the average 401K plan has not gone up at all for an entire decade, while costs on housing, food, and gasoline have gone up considerably, Kiyosaki makes a good case.
Are CDs the answer for conservative investors?
CDs Don't Plummet Like Stocks Do
Stocks, it is said, "climb the stairs going up, but ride the elevator going down." In truth, sometime stocks ride the elevator up, too, but the second half of the statement is undeniably and unequivocally true:
The stock market is perpetually in danger of taking a giant swan dive off a cliff, especially considering the incredible amount of orchestrated speculation that is now part and parcel of modern stock trading.
CDs remain a strong wealth preservation tool, even with CD rates low.
Low Rate CDs Only Make Sense When Conservative Investors Either Maintain Low Overhead or Already Have It Made
As fears of inflation ratchet up, conservative investors with money in CDs or money market accounts should be careful to maintain a low cost structure.
If you own a home, for example, get the best mortgage rate.
Unless you are already rich beyond any need to worry, an ultra-conservative investment strategy utilizing CDs and money market accounts only works when your costs are firmly under control.
One good cost control measure is to not purchase too many Robert Kiyosaki books, tapes, or seminars.
basicmoneytips
5 December 2009 at 10:57 am
I tend to agree with the writer. I have worked for a company for 15 years and my 401K has basically what I contributed. I might be a little ahead with the company match, but that is the only thing that had kept me above water.
The thing I advise people on now is to diversify. I own a farm and get side income off that. Whether it be a rent house, whole life insurance, etc - people really should not just have a 401K going into their golden years. The last 5 years has shown us that.
basicmoneytips
5 December 2009 at 10:57 am
I tend to agree with the writer. I have worked for a company for 15 years and my 401K has basically what I contributed. I might be a little ahead with the company match, but that is the only thing that had kept me above water.
The thing I advise people on now is to diversify. I own a farm and get side income off that. Whether it be a rent house, whole life insurance, etc - people really should not just have a 401K going into their golden years. The last 5 years has shown us that.