How much do you love your 401(k)?
How often do you share your love of your 401(k) with your colleagues and anyone else who will listen?! ;)
If you have good answers to these questions, you should stop reading this right now and go enter Jackson, Grant’s annual 401(k) Champion® Award contest where you can win one of three $1,000 cash prizes!
>>>> ENTER HERE <<<<
They give out $3,000 every year, and out of the last 6 winners, 3 of them were BudgetsAreSexy readers!! Which means either we’re super lucky as hell over here, or more probable – we’re smart as hell and know a good deal when we see one :)
In either case, if you’re over 21, a legal resident of the U.S., and currently enrolled (and in love!) with your 401(k) plan, be sure to take the time to enter! And don’t half ass it either – just a few extra minutes can be the difference between $1,000 and $0.00. Here are some of the winning essays here and here to give you an idea of what they’re looking for…
The deadline to enter is October 20th, and they’ll announce the winners November 14th.
Go go go!!
As for the love I have of my old 401(k)??
Oh gosh, I can’t even put it into words, but I’ll try…
I love 401(k)s more than…. Britney Spears!! (Woahhh!)
And beer! (double woah!)
Okay, well maybe not sex (is anything better than that?), but I’m not exaggerating when I say that investing in my 401(k) was one of the best things I ever did for my finances. And while I no longer have access to one as a self-employed degenerate (😢😢), I still carry on the tradition of maxing out my SEP and Roth/Traditional IRA every year which alone will get you to millionaire status in just a matter of time. Even if you spend every other penny you get!!
Here are 4 reasons I love 401(k)s so much:
#1. It’s FORCED savings! And you don’t even notice you’re doing it because it’s automated!!
#2. It SNOWBALLS when you leave it alone. Which was mind-blowing for me over a decade ago, and I can still remember to this day watching it climb to $50,000 and not believing how easy it was all because I never touched it… Something that excessive fees and penalties helped with as it only lowered the temptation to pull from it, unlike with savings!
(so PRO TIP: If you want to stash your money somewhere that’s hard to access, make it your 401(k)! And then see how fast it takes to become a 401(k) Millionaire like our friend Fritz 💪💪)
#3. FREE MONEY is involved! (Usually!) I’ve had employers match anywhere from 3% to 100% of my salary contributions (not a typo), and each time I soaked up as much as I could while it was free for the taking… Especially with the 100% company which was just INSANE, and even more so – the fact I was only one of 3 or so who actually contributed to the plan!!!
As soon as I found out about this I upped my paycheck contribution to 90%, thereby living off $200 paychecks (and draining my savings! Lol), until enough months passed where I hit the legal limit of $16,000 or whatever, and then dropped it down to 0% once it was maxed out to start refilling my savings again…
Easiest $16,000 I ever earned. Three years in a row!
(And really, as you know, it’s *much* more than $16,000 as it’s compounded year after year after decade now, easily crossing the $100,000 mark with how the markets have been these past handful of years…)
So something to think about when you decide not to invest or save, even for just one day. As my friend Jim Wang recently said,
“When you delay your savings for one day, you don’t lose today. You’re losing that last day your money would’ve been invested before you started taking withdrawals. If you’re going to invest for 20 years, that’s 7300 days of investing. You’re not giving up Day 1, you’re giving up the fact that Day 1 will have been invested for 7300 days. That’s a lot of money.”
Keep investing and grabbing that free money!
#4. And lastly, the more you invest, the higher your CONFIDENCE gets. Especially if you’re in the early part of your financial journey…
There’s a big difference between having $1,000 in your savings account and $100,000, the least of which is feeling more solid and confident in your overall standing and decision making! It’s a lot easier to make moves with a nice cushion behind you than it is without, whether we’re talking career moves or starting new businesses, or even asking a girl out on a date! More money gives you confidence across the board, and your 401(k) is a fantastic, easy way to get that train going…
(For those who don’t have access to 401(k)s, btw – OR – have employers who don’t believe in offering free matches (!!), start by maxing out your ROTH IRA first if you qualify (max limit for 2022 is $6,000), and then if you have extra left over from there move to your 401(k) to keep stashing away. Even without matches they still offer some solid benefits (like tax-free growth!), but you’re tied to your employer’s fund choices which aren’t always the best. Thus, why people recommend starting with an IRA first which you control 100% yourself, then moving to the 401(k).)
(And also – if you have multiple OLD 401(k)s laying around, take the time to consolidate them all into your IRA too! No reason to keep being invested in less than optimal funds if you’re no longer forced to!! And will help with overall management and planning too 👍)
So yeah, huge fan of 401(k)s even if they do seem to attract hate these days, so if you currently have access to one and are *not* contributing at least to the company match, please do yourself a favor and fix that by the end of the week! It should only take 5 minutes to log onto your company’s portal or pick up the phone/take a trip to your HR department…
And then I want an email when you hit your first $50,000 too, or better yet – $500,000! :) There’s no way you won’t get there if you keep at it year after year, but you gotta get the ball rolling NOW so Future You can bask in its glory!
Make it happen!!
And make sure to enter the contest for a chance at that $1,000 too. Who knows, maybe you’ll be the 4th BudgetsAreSexy reader to win?!
Yours in investing and Britney Spears,
PS: I’m not affiliated with the 401(k) awards at all – just love what they’re about and want you to get free money!!