Everyone has a 401k and everyone seems to follow the basic 401k tips which tell them to to invest all their money into the plan for the long term and hope for the best. But, that is as far as most people go. They do not take the time to learn about their plan and try to figure out how to get even more out of it.
Before your retirement comes along and you find out that your money was not exactly invested as well as it could have been here is some basic information that you might want to consider.
You probably know that your 401k can save you taxes. All of the money that is invested into the plan is invested into the plan before it can be taxed. But where exactly is that money being invested?
In most cases it is simply invested into a mutual fund which may or may not be the best choice for you. It may be that the funds which you are investing your money into are seriously underperforming the market. After all most mutual funds are in the business of getting new investors, not making sure that they are a great investment.
That’s why if you would like to start learning how to invest your own money it really can pay off pretty big. Of course it can also be riskier, which is why most companies don’t allow you to have a self directed 401k. But if your company allows it and you start learning how to invest properly it can be a great alternative.
Another thing to look into is to start Buying Real Estate with 401k money. Of course you cannot buy a house or an apartment building in your 401k plan. But what you can do is invest into something called an REIT or a Real Estate Investment Trust.
This is a trust that invests into real estate. It basically buys things like commercial buildings and apartment buildings and profits from the income and from the appreciation that they produce. Then each investor benefits as their investment makes money.
This can help you to diversify your holdings a little bit so that you are not as dependent on the ups and downs of one market.
For more on 401k plans visit this site on some basic 401k information and regulations Also published at Getting More Information On Your 401k.