Does your 401k send you checks every month? – My properties do...

[Account Closed]

Someone just told me that their 401k just sits there. It doesn't send them a check every month. Sure, they said, they get a growing amount (as long as the stock market doesn't crash) but when I saw their numbers, it was pathetic. And, they don't get any cash flow. Is this typical? 

Why would they risk their money in a 401k that just sits there without using it to buy a property for cash flow? It is so easy to cash flow. I thought that was the whole idea of a 401k, to invest and to have something to retire on.

Please, someone, enlighten me!

[Brian Eastman]

@Account Closed

A 401k plan provides several tax benefits, including deferral of taxes, potential employer match, and the possibility of lowering your overall marginal tax rate. On the front end, you essentially get between a 30-100% automatic ROI depending on your tax rate and whether your employer matches.

Sure, most conventional 401k plans have limited investment choices, but that does not have to be the case long term.  If you use an employer plan to sock away some real capital, when you change jobs or retire, you can move that 401k to a self-directed plan, and then invest those tax-sheltered dollars into non-traditional assets such as real estate, notes, etc.

Use wisely, even a basic employer 401k can put you well ahead.  Educate yourself.