When Your Survival Guy graduated from Babson College in 1994, I got right to work. Right to work traveling, that is. I hit the road that summer, backpacking through Europe beginning with a trip to a Greek isle to visit a fraternity brother at his family’s summer place. That went so well that when I got home, I decided to be a ski instructor for the winter. Then, finally, I made my parents proud, and I got a “real” job at Fidelity Investments. That was March ’95. What’s the rush?
One of my tasks at Fidelity Investments was to jump on the phones when call volume was high. The other part of my day was handling back-office paperwork for 401(k) withdrawals. Sounds crazy, right? 401(k) withdrawals? How about additions? Isn’t investing all about adding to your savings like a 401(k)? Well, not exactly. Time and time again, I’d talk to folks who needed their money before retirement.
All these years later, the 401(k) still gets no respect. It gets thrown to the ground, and dirt kicked into its eyes when times are tough. Personally, I think it’s one of the greatest savings vehicles in town as long as you avoid owning too much company stock (don’t have all your eggs in one basket) and get away from the target maturities that have too much overlap.
But back to withdrawals, where I cut my teeth with 401(k)s. Yes, there are hardships that require taking money out of one’s savings, but if you can trick yourself into not knowing you have it (play along with me), you might not touch it. Here’s the deal. Investing is a psychological endeavor. You want to tell yourself, “Self, I don’t even consider that my money until I’m over 65.” That way, you can put your most precious asset, time, to work for you.
Action Line: Investing isn’t easy. If you have a 401(k), try to set it and forget it. Simple to say. Harder to do. Often it feels like time standing still. When it’s the right time for you, let’s talk.
Originally posted on Your Survival Guy.
