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Author: wisenlucky One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76397  
Subject: Re: 401(k) contribution increase? Date: 3/18/2001 5:37 AM
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(If it matters I am 24 years old, 15% of my pay is about 5000 dollars a year.)

Hihio,

I wish I'd had your outlook at 24. I was buying cars and motorcycles at that juncture in my life. Now I am figuratively (and literally!) paying for my youthful indescretions.

I think you are on the right track. It's hard to look at your investments and see less than what you put in, but that's a factor of your timing, not your decision-making ability. Don't let it fool you into giving up. All of the rules about dollar cost averaging say that you should continue to contribute no matter what the current condition of the market. Contributions you make now will buy more shares than your earlier contributions would.

When the market starts moving in the other direction (and we all know it will, we just don't know when or how much longer it will keep moving in this direction) all those extra shares you bought at lower prices will increase faster than the fewer shares you bought at higher prices.

Maxing out is a great idea because you will get accustomed to living below your means. With future raises, you may want to start a Roth IRA, and once you've gotten to the point of maxing that out, start a taxable investment account.

Time is certainly on your side.

WNL

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