Your 401k, Recession's Perfect Sacrifice

Think that if you put your head in the sand and wish this recession away, that your 401k will be OK? It might be more like 0K (that’s ZERO K for those of you in Rio Linda).

The last recession came like a thief in the night. Those napping awoke and found they lost a majority of it. Many began calling it their 41k.

Don’t think that the Wall Street types are going to take pity on you just because you don’t care about what’s going on. These guys are great at telling you to buy and hold while they are moving their money around trying to catch the latest greatest deal. It’s ironic that you’re limited to moving the funds around in your 401k because the fund’s managers were caught moving theirs around EVERY day. Most of the people I talk to don’t even know HOW to move the funds around in their 401k!

I know it’s hard to know exactly what to do. It’s not a perfect world. We don’t even know if we’re actually IN a recession or not. In fact the government types that officially determine when recessions start and end can’t agree. In the last four recessions, it took them on average 8 months to let us know it started. Many recessions don’t even LAST 8 months! They are even worse letting us know when they’re done. On average, it took them almost 2 years to let us know the recession was over. If THEY don’t know, how are WE supposed to?

Think that the company running your 401k cares about you? When was the last time someone from there called you and said you should re-think the way your 401k is invested? When was the last time ANY financial type called you and said ANYTHING about your 401k? Maybe they’re too busy paying attention to their own. It’s probably the largest single investment you own. It’s also probably the single most ignored thing you own. I saw people who went into the last recession with $100,000 and came out with $30,000. I wonder how long it took them to earn the $70,000 they just gave away; a heck of a price to pay for not caring.

Don’t let them put your hard earned, perfect 401k onto the alter of Recession. Instead, sacrifice a little of your time and pay attention to your 401k, it will keep it from becoming THE Suckers Perfect Sacrifice.