The secret to a great 401(k) is that anyone with the intent and determination to enroll, contribute and invest in a 401(k) absolutely can, if your employer offers one. You are fully empowered! In fact, I contend and advocate that DIY 401(k) investing is easy, seamless and simple, and can be radically understood and implemented by any Millennial looking to build their investing skill set and starting the path to financial empowerment. But if I had to say what the secret is, here are three secrets that will make you a great DIY 401(k) investor and set you on your path to wealth and retirement income. Let’s take a peak.
- Let time take care of the heavy lifting. Start to invest in your 401(k) as early as your employer allows, and invest consistently over time with automatic salary deferrals. Invest even if your employer doesn’t offer a match. The more time you have on your side when you are in your 20s/30s to invest, then the more time you leave your money to the awesome power of compounding.
- Give more to receive more. You need to save as much as you can to live a comfortable retirement. Make sure you save enough, between 10-15%, and certainly above any matching contributions your employer may offer through your 401(k) plan. Can’t start there? Start saving at least your employer match and make it a financial goal to save at least 1% more each year until you do.
- Think and do long term. To get the highest return, you’ll need to invest almost exclusively in the stock market. Investing in the stock market is a long term endeavor, and the historical long term return is 8%. Long term thinking and doing requires discerning your core priorities and ignoring distractions, such as short term market turbulence. Have faith you’ll reach your goals and stay in the game until you reach your destination.
Follow me on Twitter @MatthewKMiller. In my upcoming book, I’ll be exploring more in depth on how to use these strategies to make sure you’ve got your 401(k) set up for millionaire success. You can go from a Millennial to a Millionaire with your 401(k).
Stay tuned! To get this blog started, I’ll be taking inspiration from my upcoming book, From Millennial to Millionaire: DIY 401(k) – 5 Do-It-Yourself Steps for the Digital Generation to Design and Manage their 401(k), to write blog posts. My new book should be available in eBook and paperback on Amazon by summer 2017.