The 401(k) Hoax, and How You Can Avoid It

Came across a good website and 11-minute video from Garrett Gunderson - author of the book, Killing Sacred Cows.

I recommend it because I'm not a fan of traditional financial planning, mutual funds and 401(k) plans. And I want more Americans to become financially literate, and not keep buying into financial myths that just aren't true.

The reasons why I don't like 401(k) plans are:

1) They offer limited choices for investors - usually several mutual funds, which only increase in value when the stocks these funds are invested in increase in value. If the market crashes (like it did last fall), your portfolio is in trouble. 401(k) and IRA plans came about in the early 1980s; and that's when the bull market in stocks started. These plans made it easy for workers to put money away, and they were sold to Americans as a supposedly safe way to invest in the stock market.

2) Even with employer matches to 401(k)contributions, and assuming employees consistently contribute to their accounts for 35-45 years, there's still a good chance that they'll outlive their money. If someone developed an asset or a business over several years, they could have a source of passive, residual income for retirement, and not have to worry about the stock market going up.

3) Baby Boomers are starting to retire, and pull money out of the stock market. Boomers' buying of stocks and funds were the primary reason for the stock bull market of 1982-2000. When tens of millions of Boomers start selling stocks and funds instead of buying them, the chances of the US stock market going up again are pretty slim.

But the biggest reason why I don't like 401(k) plans is this:

4) People aren't taught how to become skilled investors. I blame Wall Street and the government for this, because I believe they want ignorant, under-educated people blindly buying stock-based financial products.

How can people avoid the 401(k) trap? Get educated. You DO have choices when it comes to investing. You do NOT have to invest in stocks and mutual funds. Look at precious metals, tax lien certificates, or having a professional trade an account for you on a performance-only basis. In other words, he only makes a profit when he makes you money.

If you just have to invest in the stock market, for goodness sakes, get educated. Listen to Phil Grande at www.PhilsGang.com, or Tom O'Brien at www.TFNN.com. They have weekday live radio shows that are saved as podcasts, so you can listen to them at your convenience.

Listen to wise investing advice from Peter Schiff, Jim Rogers and Dr. Marc Faber; check out the weekly webcasts at www.financialsense.com, www.HoweStreet.com, www.GlobalEconomicAnalysis.Blogspot.com, and www.KEReport.com.

CNBC is a good Wall Street marketing show, disguised as investing advice. Don't depend on it for your only source of investing information. That's all for now, get started on your financial education TODAY.

Why Conventional Wisdom Is Hazardous To Your Wealth

I strongly urge you to read the chapters in Robert Kiyosaki's new book: Conspiracy of the Rich. It tells you why:

- Your house really isn't an asset
- Investing in a 401(k) could be the worst way to save for your retirement
- Why it's absolutely critical to invest at least part of your portfolio in gold and silver.

Go to: www.ConspiracyoftheRich.com. If you read it, fully understand it, and take the actions that Robert recommends... it's one of the best financial reads of 2009.

What you're being told in the mainstream and financial media is nothing more than Wall Street cheerleading. Yeah, the stock market has gone up about 2,000 points in the past few months. However, the Dow's still down at least 35% from it's peak of October 2007.

And it's still due for another downward correction. If you have any stocks or mutual funds that you hope will go up even further... don't keep "hoping and holding."

Get 'em sold - pronto. And put some of the proceeds into gold and silver.

Bush's - and now Obama's - insane federal spending has bankrupted our country, and a sharp decline (if not outright collapse) in the US Dollar is coming. And probably sooner than you think.

For you and your family's financial future, go to www.ConspiracyoftheRich.com.

Do it TODAY.

The Mother of All Bad Ideas

Peter Schiff hits it on the head with his latest column. President Bush and Secretary Paulson are putting the best possible spin on this proposal, and how it will alleviate problems in the sub-prime and overall housing market. But the only thing that will "solve" this problem is time, sanity and better lending practices.

Whenever government gets involved to 'help' free markets, bad things happen. As Schiff eloquently says, this is a stay of execution for the real estate market instead of a pardon. A majority of Americans are over-leveraged with bad debt (credit cards, auto loans and home mortgages on their residences) that doesn't put any cashflow into their pocket.

While a growing number people are focused on rapidly-declining (or negative) equity in their homes, they're ignoring the most important part of personal or business finance - cash flow. The flow of cash is to a business or household what blood is to the human body. These high levels of debt Americans have incurred to finance their rock-and-roll lifestyle, are clogging their financial arteries (and reducing the net positive flow of cash) like a baked potato loaded with sour cream and butter constricting human blood vessels.

The only way to solve cardiovascular and financial problems is to make healthier financial choices - cut back on bad debt... learn to sell and market... start your own (or a more profitable business). I'd recommend reading authors such as Peter Schiff, Robert Kiyosaki, and Dave Ramsey. All three are healthy oases of common sense in an increasingly insane world.