Iam new to investing (or learning about it more accurately). My question is this...my company offers a 401k with a annual match of $300.With that amount of a matching contribution, would i be better off to place my income into a DRIP or some other stock vehicle..or stay with the 401k.Persoanl finances are such that i can only contribute a couple hundred a month right now...but am vigorously working at climbing out of "the hole".I haven't been "real satisfied" with the return of my 401k....approximately 8 - 9 % on the average.
Mmmmm, if they're only offering $300/per year match, I'd say you might be able do better. Especially if you can put away $200/mo. That's $2400/year, which means your Co. match would be 12.5% free money. Not BAD, not great, slightly better than the historical S&P Index. Not knowing what your 401 (k) choices are, of course, it's tough to suggest alternatives. Seems to me that maybe those moneys should go to filling in the hole first. Try reading the Fool's School on TMF homepage, then take a look around at the various message boards. TMFPixy and others are very knowledgeable about 401 (k) investments, and WILL respond to direct e-mails.Hope this helps,OilyFool
Greetings, Continentalfool, and welcome. You wrote:Iam new to investing (or learning about it more accurately). My question is this...my company offers a 401k with a annual match of $300.With that amount of a matching contribution, would i be better off to place my income into a DRIP or some other stock vehicle..or stay with the 401k.Persoanl finances are such that i can only contribute a couple hundred a month right now...but am vigorously working at climbing out of "the hole".I haven't been "real satisfied" with the return of my 401k....approximately 8 - 9 % on the average.You didn't say how much you had to contribute to receive that $300. Around Fooldom, we take as much FREE MONEY as we can get, and that's what that $300 represents. I can't say what you should do because there's little I know about you. However, I can suggest you read my 13 Steps to Foolish Retirement Planning available at http://www.fool.com/retirement . Pay particular attention to Steps 3 and 4.You say you're new to investing. I assume you're new to Fooldom, too. That's great on both counts! You have wandered into a forum that believes you, as an individual, can do far better for yourself than most professional money managers. Provided, that is, you take some time to learn a few basic investment concepts and do some self-examination to see where you fit on the risk tolerance scale. Therefore, why not take some time now -- not later -- to be sure about what you want to do. Start first by reading The 13 Steps to Investing Foolishly, which you can access from the main, opening screen to The Motley Fool. They will suggest some important things you should consider. Then I suggest you toddle over to your local library, discount bookstore, or even here in the Fool Mart, and pick up some easily read, easily understood, inexpensive texts that will thoroughly explain how to invest in stocks using some simple systems that will take but an hour per year of your time (if you're slow) yet produce returns that put the majority of professional money managers to shame. I suggest and commend the following to you: "Beating the Dow" by O'Higgins; "The Dividend Investor" by Petty and Knowles; "The Motley Fool Investment Guide" by the Gardner brothers; "One Up on Wall Street" by Lynch; and "What Works on Wall Street" by O'Shaughnessey. All are well worth their low cost and the small investment in time it takes to read them. Get them and read them. You'll be glad you did.While you're doing all that, also take some time to explore the various nooks and crannies of Fooldom to see what others are doing and what they're discussing. In the process, you'll gain a wealth of knowledge and information that will serve to claify how you want to approach this very personal issue. Don't be afraid to ask a question anywhere in Fooldom. Folks around here are great about answering questions and clearing up misunderstandings.Regards.......Pixy
OilyFool said: "Mmmmm, if they're only offering $300/per year match, I'd say you might be able do better. "Not to contradict a fellow petroleum geologist, butfree moolah is free moolah. What's the minimum YOU have to contribute to get the 300 dollars? If you only need to contribute 300 dollars to get 1-1 matching, then contribute 30 dollars a month to the 401(k) and then send the rest that you would normally contribute to a better place (S&P500 index fund, stocks, what have you). If your company requires you to put in thousands of dollars before it gives you the 300, then it becomes less worth it. Figure out the % that you generally earn in your 401(k) and see if you'd earn over that + 300$ by stuffing it all into the S&P500 or something else more lucrative. That should help determine whether it's worth your effort to get the free $300 or not.Yours in attempted Fooldom,Malachite
Yep, my hydrated carbonate friend is kee-rect;-). When I wrote that, I was thinking that the amount seemed small and niggly, compared to say, putting 10% of each paycheck in to your 401(k). But free bux is free bux, and YOUR input percentage determines whether or not it's a good match, as he so Foolishly stated.That's what I get for non-self-editing and having any itchy mouse finger.Oilier than some of you,OilyFool
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