Recently I’ve been putting a lot of thought into my finances. I’m doing ok; I’m not neck-deep in debt but I’m not exactly rich either.
I found a great website a while back and I’ve been following it. It’s called Get Rich Slowly.
The link above goes to the archives, which is the easiest place to start reading from. You can see all the article titles and pick ones that interest you. The most recent entry I’ve read was the piece about the debit card fee raises coming up soon.
Besides that website, one of the things that got me thinking about money was getting my 401k quarterly statement last week. I saw that I lost over $6,000 last quarter. So even with my contributions, it still lost that much.
I hate the fact that so much of my money goes into a 401k; a fund that, at the end of the day, I really have no control over. Sure, you can pick what percent of your money goes to which investment plan… you can also choose stocks versus bonds… but you’re pretty limited. I know it’s a long term thing and it’ll come back eventually… but I really wish there were other investment opportunities.
For example, why aren’t there government programs where I could invest my money (tax free) in small businesses? (And if there are programs, where can I read more about them?)
Right now, a small business has to go to a big bank to get a loan. Banks are already making money hand over fist, regardless of whether they got bailed out by the government or not. Instead of helping a business I might actually care about, I put the money into a 401k account where people at some bank play games with it.
No one really cares about the companies they are “investing” in. All they care about is the short term, making money quickly. These people are getting paid with my money to day trade. Why can’t I take my money (with the tax benefits of 401k) and choose how to invest it? Instead of just complaining, I felt like trying to do something about it.
I opened an account at Scottrade. I’ve been looking over stocks for companies that I personally like and think will be good long term investments. Good companies out there will pay dividends quarterly, which amount to a percentage of the value of each share. As long as you’re willing to make a long term commitment, I think stocks can be a good idea. While your money isn’t liquid, you will at least earn more than the APR for any savings account I’ve seen. And to me, even though public companies aren’t small companies, it feels like I’m actually an investor when I choose to have a long term goal.
Long story short, I’m still sticking with my 401k account. I’m also continually stashing money into a measly 0.8% APR savings account. But I think buying stocks with dividends is a good compliment to those two options. I guess we’ll see what happens.