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right now it basically breaks even, but it, like most real estate investments has lost more equity that I would like (starting in 2007). So, in terms of my investments, its really not the one performing the best over the last 5 or even 10 years. One of the weaknesses in real estate investment is liquidity. I could sell it, but honestly, I wouldn't make much right now. Better to hold it, let renters pay the mortgage, and wait for real estate to improve. Fortunately, I have that option. Of course I also have my own home, which I see, ultimately, as an investment. We bought it well before the bubble, so even now, its a strong investment. I just refinanced the remaining mortgage on it at ~3.85%.
2a) You seem to be confused about what investments are found in a 401k. Sure, most include stocks and mutual funds (the "casino" that you refer to). But they also usually include bonds, treasuries, and even fixed interest funds where the gains are small, but consistent (kind of like a CD where you know exactly what you'll gain up front). And so the issue is not whether to have a 401k, but how to invest it.
2b) Two phrases for you to know ... "Company match" and "Tax deferred". Many companies will "match" your 401k contributions up to some percentage (usually 2%, 4%, 6% or so). And yes, some don't. If yours does, you are a fool not to take that money. Even if you stick it in the most boring investment. But even if your company does not "match" you still get the "tax deferred" benefit. So let's say you make enough to invest 10k in a 401k (the max right now is about 16k). If you invest 10k in a 401k, the taxes on that 10k are deferred, which probably saves you about 2k-3k in taxes now (you will pay taxes later, but only on what you take out when retired, which should be taxed at a lower rate because your overall income will be lower).
3a) Those buying at 14k because of advice from an adviser. Chumps. When the market runs up, you take out gains and put them in more stable investments. You ever hear the phrase "buy low, sell high" .. ?? Personally, I started shifting money to safer investments when the DOW hit 13k back when Bush was President. It was moving up too fast, and for no good reason. Some might argue that I missed some gains between 13k and 14k, I say "so what!!" ... when the DOW dropped, I had fewer aggressive investments.
3b) Dollar Cost averaging. You are correct that any DOW shares that I bought at say 12k years ago, gained no value. But, the shares that I bought at 7500, 6500, 7500, 8500, 9500 as the DOW returned have done VERY WELL. That is the point of dollar cost averaging. And so, if you combine shifting gains when the market runs high, with a dollar cost averaging approach, you can do very well. This past summer, many on DU were declaring the end of the market because it dropped to like 9500. I saw that # as LOW. Now that we hit 12k, I have AGAIN, shifted money to more conservative investments. btw ... I started investing in y 401k around 93 or so when the DOW was at about 4k or so.
4) At no point did I say that the DOW "never really changes, just runs in a range" ... what I explained was that for a SPECIFIC PERIOD, from around 2001 to 2007ish, that is what it was doing. Bush economics at its finest. My point was that if you want to deal with the FUTURE, you better know the PAST. And thanks to GOP economics, we saw a collapse of the DOW, which caused millions to panic, so that some could swoop in and "buy low". But where is the DOW now? Its back at about 12k. Which is probably close to where it should have been. The Bush years are basically a flat line until the end. He came in with a DOW at 10.5k, and left with a DOW of ~7500. The jump to 14k is makes no sense.
Bottom line ... The less money you have to invest, the less you should be investing aggressively. The younger you are, the more aggressive you can be. There is a balance here. If you want to invest aggressively, then yes, you are in Vegas. But one can do quite well investing in very stable areas too. The most important thing is to be paying attention. Most of the advisers are useless. You need to determine your own risk tolerance and go from there. Back in the 80s when I was a teen, I accepted the fact that Social Security would be gone when I hit 65. I'm ~47 now. And I still expect it to be gone. I've been actively managing my 401k (and other investments) for more than 20 years. And right now, my 401k investments are doing very, very well. And as I said,
This "real enough" for you??
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