401(k) Plans

I've been in and interested in the stock market so long (one year shy of forty years) I can remember when the mutual fund pages in my home town paper were just one page! Now it looks like there are more mutual funds then there are stocks listed on the New York stock exchange.

I wonder how many billions of investor dollars are supporting these funds. How many investor dollars are supporting all the brokerage firms? How many times has 401(k) monies been given to a 'financial expert' to manage after retirement, then three years later the $400,000 is down to $200.000 (Yet, the financial expert is still driving around in a new Lexus).

I could tell you stories from the people I know, who have retired and aren't so happy with these experts, but I bet you know some stories of your own.

Do you know what you're going to do with your 401(k) money when you retire? If you are going to hand it over to a financial expert to manage, see if you can get the names of some of his/her clients. See if you can call some of the expert's clients, tell them what you're planning to do and ask them if they're satisfied with the expert's performance. Or you could talk to those people you've once worked with, have retired, and went with a financial advisor or planner. Try to get some reference from a live body that has already been there, rather than just a bunch of statistics thrown at you by the expert.

Today's 401(k) plans are excellent vehicles for saving money and here's what I like about mine:

I like the 10 percent contribution being a tax write-off (some plans, sixteen percent). I can contribute up to 16 percent, but 6 percent would have to be after-taxed dollars.

I like that the monies made in a 401(k) are tax-deferred.

I like the company's 70 to 100 percent company match (it differs every year with my company) up to 6 percent of my contribution.

I like the option to move my money (every business day, if I wished) into my company's stock or an Interest Income fund, Bond fund, Mutual fund or Index fund, at no cost.

I like the option to roll-over into an individual IRA account, twice a year, any after-tax and company matched dollars put into my 401(k), with no penalties or fees, even while I am still employed with the company. This allows me to select individual stocks and allows the dividends from those stocks to be rolled-over automatically into more shares of each company, also at no cost. (However, there are commission fees for the purchases of the stock. Dividend purchases only are commission-free. In my book 'The Stockopoly Plan' I explain how to purchase stocks commission free.)

I like that the company's dividends in my IRA (set up by monies from my 401(k) plan) are also tax-deferred and are 85% tax free.

I like knowing that when my retirement day arrives, I'll already have an individual IRA set up to move the rest of the 401(k) monies into, with twelve stocks already chosen, owned and proven to provide reliable ever-increasing dividend income. (The companies owned all have a history of raising their dividends every year.)I like the free 1% the company gives me, just for being in the 401(k) plan.

I like the option to borrow money from my 401(k) plan, pay a low interest rate on the loan and know that the interest rate I'm paying on the loan goes to me (if I were paying a credit card bill of $3,000.00 at 18%, I know I have the option to pay off the high interest credit card loan and pay only 6% interest (to myself) on the $3000.00 loan from my 401(k).

I like knowing that when I move the rest of my 401(k) monies into my IRA when I retire, I'll know about how much income I can reasonably expect in dividend income four times a month, twelve months a year (all twelve stocks have staggered dividend pay-out dates, providing cash dividends every week of the year).

The companies chosen in my IRA, with their history of raising dividends every year, will provide the comfortable, worry-free income which I believe investing should be all about.

My advice on 401(k) plans is to talk to an expert from the firm your 401(k) monies are with and find out what options are available to you and/or what your company allows. My point was simply to inform you that you may not be restricted to just putting your money into a Mutual fund or your company's stock. You can transfer monies from your 401(k) to an individual IRA (Tradition, Roll-Over or Roth), at no fee and build your own Mutual fund. (I have been doing this in my 401(k) plan for years while still employed with my company.) If those companies you choose in your IRA have a dividend reinvestment plan you can request to have the dividends reinvested back into the stock each quarter. And this would be done for you, commission-free.

Charles M. O'Melia is an individual investor with almost 40 years of experience and passion for the stock market. Author of the book 'The Stockopoly Plan', published by American-Book Publishing. For more excerpts on'The Stockopoly Plan' visit http://www.thestockopolyplan.com/

BlackRock Announces Investment Policy Changes for Certain Insured Municipal ... MarketWatch (press release) In September 2008, the Funds adopted an amended investment policy of seeking to limit their purchase of municipal bonds to those bonds insured by insurance ... and more »

Some tips for teaching children about saving and investing Washington Post ... is explained and explored: Many people experience financial hard times when they get older because they never got the facts on saving and investing. ...

Investing After the Crash CNBC The line between trading and investing may have blurred, Cramer said Friday, especially after the crash of 2008. He used to define investing as a long-term ... and more »

Japan Ozawa:investment could help control yen rise Reuters ... challenging Prime Minister Naoto Kan in a party leadership vote, said on Friday that investing in foreign resources could help curb a rapid rise in the ... and more »

Goldman Sachs, Whitebox Investing $55M in Battery Maker ENER1 PIPEwire Goldman Sachs Group and Whitebox Advisers are investing $55 million in a private placement of unsecured notes, common stock and warrants of ENER1, ... and more »

Telegraph.co.uk

Walsh hints at Indian investment after BA & Iberia complete their merger Financial Times A newly merged British Airways and Iberia would be “very interested” in investing in an Indian airline, BA chief Willie Walsh said ... BA-Iberia could buy Indian airline, says Willie WalshTelegraph.co.uk all 16 news articles »

IFC's Annual Africa Investment Hits Record US$2.4bn Liberian Daily Observer The International Corporation (IFC), a member of the World Bank Group, has announced a record investment volume in Sub-Saharan Africa for its 2010 fiscal ... IFC annual investments surpass $2 billion in AfricaInternational Business Times all 3 news articles »

Mozambique: Portuguese Companies Will Go on Investing, Despite Riots AllAfrica.com Maputo — This week's riots in Maputo will not prevent Portuguese businesses from investing in Mozambique, according to Telmo Fernandes, managing partner of ... and more »

Reuters India

Goldman Sachs Said to Shut Principal Strategies Unit Bloomberg The so-called Volcker rule is an attempt to limit risky trading and investing by depositary institutions after the worst financial crisis since the Great ... Goldman shutting principal strategies unit: reportMarketWatch Goldman Sachs Disbanding Prop Trading Unit (GS)Benzinga Goldman Sachs Is Closing Its Principal-Strategies Business (GS)Comtex Smartrend all 65 news articles »

New Mutual Fund Investing In Non-Agencies Launches Another Financial Portal Performance Trust Investment Advisors, LLC (PTIA), an affiliate company of Performance Trust Capital Partners, LLC, today launched its first mutual fund, ... and more »