Dilemma of our times

[Blueface]

Wife and I were just talking at length over this dilemma a whole lot of us are facing.

Things don't look good for our economy and that of the world. This is global.
Some experts are predicting our dollars will be worthless, even if backed by the government (FDIC).

Anyone changing what they have done until now with investments?
I have been thinking of reducing both my wife's and my 401K contributions to the minimum 5% the companies will match.

I recognize that will cause us to owe more taxes as it raises the tax liability but what the heck, I will have to pay it sooner or later and at least I can use the extra money to pay off my mortgage sooner. At least the roof over my head will be mine when all else is worthless.

Any ideas from investment experts?
I truly hope to solicit some advice.

[madurolover]

I was smart with my money Carlos.
I spend it as fast as I get it. At least that way I get what I want from it instead of it going down the drain.

Seriously though, I wish I had some words of wisdom about how to best approach our current economic situation but I am as lost as everyone else.

[Freight Train]

Great topic. I think that the values of the majority of items we buy are inflated. Most of this is due to the fact that people purchase most things on credit instead of cash. I am changing my investments also. I think that the market is way to emotional right now. My money is going toward GOLD.

[Footbag]

When you say the minimum the companies will match, do you mean the maximum?

If your companies will match above that 5%, and you are not considering retiring within the next 5-10 years, then I would still attempt to contribute more to the 401K rather then your mortgage. (That's assuming you have a typical mortgage rate, not a very high one)

You should also be able to re-position your 401K to take a little bit less risk if you are uncomfortable.

[TripleF]

Great topic.

Ya know, I was just thinking of how things "used to be." If you needed money, you made it. If you needed gas, you filled 'er up. If you were alive, hope was too.

The feeling in today's world is caution.....hesitancy.....looking both ways before you move, because the wrong move could cost you for a long time.

I just don't feel the "freedom of opportunity" that used to be apparent on every corner in this country years ago.

Stocks advice? Sorry bro. Never bought stocks.

[Blueface]

Originally Posted by Footbag

When you say the minimum the companies will match, do you mean the maximum?

If your companies will match above that 5%, and you are not considering retiring within the next 5-10 years, then I would still attempt to contribute more to the 401K rather then your mortgage. (That's assuming you have a typical mortgage rate, not a very high one)

You should also be able to re-position your 401K to take a little bit less risk if you are uncomfortable.

Good point.
I did mean "maximum" of 5% contribution.
I have 10 years to go before I can touch it at 59 and 1/2.
I have it spread all over the place and have had it that way for years.
Mortgage rate is low at only 5 and 3/4.
Just wondering where my money will be best served if it does reach the point it is worthless.
I figured the house paid for is at least my house.
Funds gone south won't help me pay it.

[Major Captain Silly]

I think the housing crisis + Wall Street bailout + pre-election jitters = very scared people. We will have a recession that will last longer than the recession of 2001 but will not cut as deep and will bounce back stronger. My biggest hope for a positive out of all of this is that we will realize that the big conglomerates are too big and make the biggest blunders. I'd like to see a resurgence of small business with dedicated and honest entrepreneurs at the helm.

MCS

[cvm4]

I'd only contribute the maximum the company will match to my company's 401k, regardless of economic situation.

You're talking like we're heading for hyperinflation (zimbabwe).

[Footbag]

Originally Posted by Blueface

Good point.
I did mean "maximum" of 5% contribution.
I have 10 years to go before I can touch it at 59 and 1/2.
I have it spread all over the place and have had it that way for years.
Mortgage rate is low at only 5 and 3/4.
Just wondering where my money will be best served if it does reach the point it is worthless.
I figured the house paid for is at least my house.
Funds gone south won't help me pay it.

You would be a prime candidate to do exactly what you suggested, decrease 401K contribution and increase mortgage contribution.

[BlewSmoke.com]

Yeah..great topic. I guess the answer is always...depends! So sounds like your just coming up on 50 and that makes a difference in strategy. If it was me, I'd contribute the max into my 401k that my company will match (free money), continue to just pay my mortgage as needed (if your investments can pay more than 5 3/4% then you're throwing away money at the mortgage - yes, it would pay off faster but may be better served elsewhere), pay off all excess revolving debt. And with the market so low, start looking at putting more back into wallstreet - at least in moderate movers. I'd cetainly start with Lehman (following Warren Buffett). Than look at BofA (one of the only surviors of this this market so far..and not sign of slowing). Then put the rest in metals like gold, silver. And until we have a real solution for fuel, Exxon and Bp sure look good. The key is timing of course..but the closer you get to taking the money our, the more conservative you'll want to become as to not lose in if things go really south. I'm at 34 so my strategy is a bit more aggressive. I just opened a cigar lounge, work in IT for my day job, and and sitting on a mortgage broker license waiting for the market to turn around in about 3-5 years. Maybe I'll sell it all and find some remote area of BVI to or Costa Rica to shack up after the kids are gone =)

[AAlmeter]

Until there is a turn around in the problems that have caused this in the first place (ie interference with the free market, CRA, socialism, etc), I'm leery in doing more than what I call BS stocks (short term, lots of hype...like a mid-cap penny). I'm doing my best to keep my money in tangible areas that are as free from over-regulation as possible. Been working very well lately. Anyone seen the price of ammo over the past 5 years?

[smokeyandthebandit05]

I dont want to sound like a crazy conspiracy person but I would start buyin ammo if you have any guns to defend your house and food





edit: and buy cigars so when your defending your home and food u have a cigar in your mouth lookin more like a bad a$$

[Dinosaur Jr]

Pump your money into something that will stand the test of time. The leaf! JK. Great thread.

[AAlmeter]

Originally Posted by smokeyandthebandit05

I dont want to sound like a crazy conspiracy person but I would start buyin ammo if you have any guns to defend your house and food

Sadly, it won't get to that. We are still not yet in the full stage of the buyout. There is one side of the government that still has a lot more that they can do for "us'es poo' folk" to get more power. They still only have unions, the welfare class, and the pseudo-intellectuals in their pockets. They've got more work to do...but they're doing a hell of a job and getting a lot closer! I'm putting my money on the next batter for them being a former country boy turned Ivy League scholar. Throw in a lisp and a couple autobiographies on Oprah's list and you've got a sure winner!

[cvm4]

Originally Posted by BlewSmoke.com

Yeah..great topic. I guess the answer is always...depends! So sounds like your just coming up on 50 and that makes a difference in strategy. If it was me, I'd contribute the max into my 401k that my company will match (free money), continue to just pay my mortgage as needed (if your investments can pay more than 5 3/4% then you're throwing away money at the mortgage - yes, it would pay off faster but may be better served elsewhere), pay off all excess revolving debt. And with the market so low, start looking at putting more back into wallstreet - at least in moderate movers. I'd cetainly start with Lehman (following Warren Buffett). Than look at BofA (one of the only surviors of this this market so far..and not sign of slowing). Then put the rest in metals like gold, silver. And until we have a real solution for fuel, Exxon and Bp sure look good. The key is timing of course..but the closer you get to taking the money our, the more conservative you'll want to become as to not lose in if things go really south. I'm at 34 so my strategy is a bit more aggressive. I just opened a cigar lounge, work in IT for my day job, and and sitting on a mortgage broker license waiting for the market to turn around in about 3-5 years. Maybe I'll sell it all and find some remote area of BVI to or Costa Rica to shack up after the kids are gone =)

I assume you mean Goldman Sachs or General Electric. I don't see how metals (gold, silver, etc.) will do well in a recovering economy. That's usually the go-to in times of uncertainty.