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Tuesday, November 1, 2011

401K Tip of the Day

Most people reading this may not know much about their 401k except, they take money out my check and it goes towards my retirement. What you should know is you all have the capabilities to single-handedly maximize your balance. If you work in an office setting and have access to your account daily, this tip should be very easy for you to do. If you do not have access to your account while at work, find out what broker handles your 401 and find out what their website is, this way you can access your account from home. Once logged into your account online, you will notice you have 2 initial options, 1 option is to allow that broker to handle your 401 and manage it for you based on a retirement date package they put together. That's cool, if you're ok with someone who doesn't really care about YOUR money as much as you do, to handle YOUR money. The 2nd option is, to manage your account yourself; which is not hard at all. So once you have selected the option to handle YOUR account, I want you all to find 5 different catergories to split your money up and put into. This will diversify your 401k. Now getting into my Tip of the Day, you will notice that you have the options to choose a range of stocks (i.e. small cap, mid cap, large cap, international), bonds, funds, and money market to put your money into. At this point, I want you to look at the 52 week range of price that each of the Stocks has had and see if the current price is closer to the low or closer to the high. If it's closer to the low of the 52 week range, I want you to choose these stocks to put your money from your check into, leaving 20% of that money to be put in another catergory. The another catergory I want you to put that 20% into is the Money Market. Now, once you have begun this process, just sit and wait and watch. Once you begin to see the prices move up on the stocks you put your money into, and you begin to notice a profit and a potential change of the stock about to drop again, I want you to switch this money out of those stocks and into your Money Market. At the same time doing this, switch the money you accumulated in your Money Market to the stocks that you notice or noticed have dropped. If you continue to do this process a few times out of the year, what you are doing is maximizing your 401K by taking profits. I hope you all enjoyed this Tip of the Day, and remember, no one cares more about your money than you do!

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