448-Mythbusting: Your 401(k) Won't Make You Rich! Here's Why...

Radical Personal Finance

Joshua J. Sheats, MSFS, CFP, CLU, ChFC, CASL, RHU, REBC, CAP

Finance, Retirement, Insurance, Business, Money, Education, Self-improvement, Financial, Independence, Growth, Advice, Investing, Family, Personal, Radical, Christian, Faith

4.4 • 1.9K Ratings

🗓️ 6 April 2017

⏱️ 45 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

I've often made comments like, "Your 401(k) won't make you rich." Or, "People Don't Get Rich Because they Invested in Their 401(k)."

A listener recently asked for clarification on that statement. I thought it was so important that I dedicated an entire show to it.

In today's show, I give my defense of my statements and argue my case.

My thesis is simple: high 401(k) balances are correlated to people who are rich, but they are not a causative factor of wealth.

Enjoy!

Joshua

Please support my show on Patreon! www.radicalpersonalfinance.com/patron

Transcript

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0:00.0	Welcome to Radical Personal Finance, the show dedicated to providing you with the knowledge,
0:04.0	skills, insight, and encouragement you need to live a rich and meaningful life now, while
0:09.0	building a plan for financial freedom in 10 years or less.
0:12.0	My name is Joshua Sheets and I'm your host and today we
0:14.4	continue with a myth-busting show, why your 401k won't make you rich.
0:20.3	Inspiration for today's show comes in via a comment that was recently
0:24.9	posted just this week here in our radical personal finance community Facebook
0:28.9	group. Listen to writes in and said this, Joshua has expressed repeatedly that people don't get rich using 401k's.
0:36.6	And I just heard another podcaster express similar sentiment.
0:40.1	Am I missing something?
0:41.7	I do really well working as an employee and have zero interest in running my own business
0:46.1	except possibly adding real estate to my portfolio. I've been investing 100% in stock since I graduated from
0:51.8	college and I'm happy with my personal rate of return.
0:54.9	I understand that most people don't get rich with 401k's, but to me it appears the problem is not
1:01.4	with 401k or the process, but the fact that people are not saving enough money and or choosing bad investments.
1:09.0	What am I missing?
1:11.0	Various community members piped in with good contributions, but I thought this was a valuable topic for today's show.
1:20.0	There are many things that I like about the structure of a 401k plan and there are many things that I don't like about the structure of a 401k plan.
1:29.0	I thought about doing today's show 21 things I hate about 401k's but if I do that it'll take away from the central objection
1:39.6	that I have to looking at a 401k as a primary engine of wealth building. The objection is
1:49.3	this it's not that you can't get rich using a 401k.
1:57.0	It's that the 401k is not causing you to get rich.
	...

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