Moxie Posted October 10, 2008 Share Posted October 10, 2008 Talk to me like a 4-year-old please, I'm clueless. If a young person was just starting out, would this be a good time to begin a 401K?? Quote Link to comment Share on other sites More sharing options...
nmoira Posted October 10, 2008 Share Posted October 10, 2008 Talk to me like a 4-year-old please, I'm clueless. If a young person was just starting out, would this be a good time to begin a 401K?? Assuming the economy doesn't collapse entirely (I don't think it will), yes. If it has an employer match, definitely. Yes, stocks were probably overvalued before, but IMHO they're undervalued now. You might see short term losses, but since 401(k)'s are long term, I wouldn't sweat it. Quote Link to comment Share on other sites More sharing options...
Soph the vet Posted October 10, 2008 Share Posted October 10, 2008 It would definitely be a good time to get into the stock market for some good deals. There is a risk of the market crashing further of course, but if you buy low now and then stay in for the long haul you'll probably come out ahead. I would stay diversified and put some money in coinage as well. But what do I know, I'm a vet, not a market analyst, Jim (Spock speaking):lol: Quote Link to comment Share on other sites More sharing options...
Sara R Posted October 10, 2008 Share Posted October 10, 2008 No. I think a young person just starting out would be better off using that money to eliminate debt, pay for college (or paying off student loans), a modest used car, a big emergency fund, 20% down payment on a house, appliances that save money over the long term, a medical savings account maybe, even paying off a mortgage. There are still a lot of problems that need to unwind in this economy, and I think it's too risky to put money in now unless you were absolutely finished making investments in your future that are risk-free. Investment is more than just the stock market. You can "invest" in skills and tools that reduce your future cost of living or increase your ability to earn, or enable you to live without debt. Quote Link to comment Share on other sites More sharing options...
Raders Fan Posted October 10, 2008 Share Posted October 10, 2008 It's a time to invest in yourself--paying off debt and learning new skills/college education. It's also a good time to store some food. With inflation in food prices, you're guaranteed a good return on your investment, as well as some peace of mind should a natural disaster or personal crisis hit. If you are still looking to invest in the stock market, at least spend some time trying to determine future trends as you analyze various stocks. Jennifer Quote Link to comment Share on other sites More sharing options...
clwcain Posted October 10, 2008 Share Posted October 10, 2008 How young are we talking? Are they debt free? If debt is it only student loans, or are there credit cards and/or a car? I work in finance and I'm not confident that we aren't headed for "The Worst". I'm not paniced, but I'm not hopeful that this will pass and we'll be back to the "good ol' days". I think that, even if the industries that undergird the markets are sound (and right now they're not), government solutions put in place by whomever wins the election will likely prove debilitating to free enterprise and economic growth. I'll sum up by saying I cashed out my 401(k) in 2005. I have no interest in starting one up right now. For the next year or so, I'd advise no, especially if this person has credit card or auto debt. HTH Quote Link to comment Share on other sites More sharing options...
PariSarah Posted October 10, 2008 Share Posted October 10, 2008 I think Dave Ramsey's baby steps are in the right order: until you've paid off all non-mortgage debt and built up an emergency fund, you have no business saving for retirement. You've got to get yourself on solid ground, first. But assuming that young person is comfortable living on a budget, has no debt and has an emergency fund, she should definitely start putting away money for retirement. Stocks are on sale right now. Now's a great time to be buying. Quote Link to comment Share on other sites More sharing options...
Jean too Posted October 10, 2008 Share Posted October 10, 2008 (edited) Yes, if there is an employer match and if the money (at least part of it) can be put in a money market. At this point, I would put in up to the company match. Edited October 10, 2008 by Jean too Quote Link to comment Share on other sites More sharing options...
Lux Et Veritas Academy Posted October 10, 2008 Share Posted October 10, 2008 No. I think a young person just starting out would be better off using that money to eliminate debt, pay for college (or paying off student loans), a modest used car, a big emergency fund, 20% down payment on a house, appliances that save money over the long term, a medical savings account maybe, even paying off a mortgage. There are still a lot of problems that need to unwind in this economy, and I think it's too risky to put money in now unless you were absolutely finished making investments in your future that are risk-free. Investment is more than just the stock market. You can "invest" in skills and tools that reduce your future cost of living or increase your ability to earn, or enable you to live without debt. I agree with Sara 100% - I do believe there will be some great buys, but we need to hit the bottom first. We don't seem to know where the bottom is yet! Quote Link to comment Share on other sites More sharing options...
suzf242 Posted October 10, 2008 Share Posted October 10, 2008 I agree with Sara and clwcain. Even though stock prices are low now, things are going to get worse. Our economy is incredibly weak, and our government and population in general are making bad decisions about how to deal with it. I would also suggest alternative investments to the stock market -- paying off debt; buying durable tools, clothing, etc.; having a plan for food and heat sources; precious metals; possibly land; educating yourself; or possibly starting some type of business that would be likely to survive in the hard times ahead. Suzanne Quote Link to comment Share on other sites More sharing options...
clwcain Posted October 10, 2008 Share Posted October 10, 2008 I'd like to clarify. The economy is fine. Quite healthy. The financial system which permits us to do more than barter is not. When markets are sane, the DJIA can be a good proxy for the health of the economy. When markets are insane, as they are now (due to solvency issues and government distortions), the DJIA stops being a good proxy. Quote Link to comment Share on other sites More sharing options...
Stacy in NJ Posted October 10, 2008 Share Posted October 10, 2008 Investing in a 401K doesn't necessary mean investing in stocks. Both your and your employers matching contribution can be put in T-bills. Quote Link to comment Share on other sites More sharing options...
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