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"to Grant's point, they won't help you get rich quickly or invest in opportunities today." It all comes down to [being able to] taking risks and having the fun
by jrs235 10y ago
"to Grant's point, they won't help you get rich quickly or invest in opportunities today."
It all comes down to [being able to] taking risks and having the funds available when opportunities arise to be able to. Without a "risky opportunity" fund then one can't participate in high risk high reward opportunities.
However, if one has a company match to their 401(k), why couldn't someone contribute to their 401(k) to get the max "free" match and then if an opportunity arises one could do an early withdrawal of some funds to pay for it? Yes, you'll pay taxes and penalties but if you view the companies match as free money and it covers those taxes and fees, then are you really any worse off then never having contributed? Until an opportunity presents its self you're also getting returns on the free company match money.
Thoughts?
- i_don_t_know 10y agoI think it's a really bad idea. High risk high reward opportunities are essentially gambling. Whereas a 401k is a back-up plan and a safety net. Don't take money out of your safety net and gamble it away (which is a very likely outcome on a high risk opportunity). If you want to participate in high risk high reward opportunities, create a separate account for it and consider it "throw away" money from the beginning. (Your high risk opportunity might pay off, but don't count on it.)
- JoeAltmaier 10y agoIts a matter of degree of risk. The 401K isn't guaranteed either. The job isn't guaranteed. Each of us has to make our own call on this.