Now since we are in fact living in a 401(k) world, here's some advice. You've got to save a lot of money for retirement. More than you think. More than you want to. And you need to put that money in a broadly diversified, low-fee fund. And you have to keep it there. Don't panic when the market plunges and sell. In fact, unless you're planning on retiring in the next decade, don't even check how it's doing. Just buy and hold and shift into something less volatile when you're near retirement. Vanguard has these good Target 20XX funds that automatically shift you into less volatile products as you get closer to your target retirement date, allowing you to do even more ignoring of the state of your investments. Which is good. The only way for anyone to make any money managing your savings is to try and trick you into making trades you shouldn't make, or buying products you shouldn't buy.
Thursday, May 2, 2013
The best personal finance paragraph I read yesterday
...courtesy of Slate business/economics blogger Matt Yglesias*:
I agree with this a lot. (So much so that I get pretty upset thinking about expense ratios that I impact me in my 401k and how much I do not like them.)
*One should note that Yglesias is better-off than the average household, so perhaps a grain of salt is in order.