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Yes, the RBA seems an incredibly bad long term investment strategy. You are essentially switching to your retirement strategy being loaning your money to IBM a
by danielvf 3y ago
Yes, the RBA seems an incredibly bad long term investment strategy.
You are essentially switching to your retirement strategy being loaning your money to IBM at the lowest possible interest rate, vs investing with and growing with the American economy as a whole. The difference in compound interest between the two is going to epic over twenty to forty years.
The SP500 has more than 50x since 1970. If you had your money in 10 year treasury bonds, that would be less than 12x. So you'd have 1/4 as much, and IBM would have 3/4 of what you would have had.
- pinewurst 3y agoFor clarity's sake though, we're talking about yield theft on what was IBM's already evasive 401k match. One's "real" 401k contributions remain separate, portable and their yield bounded only by IBM's limited choices/fees.
- bunabhucan 3y agoHow did their 401k match work?
- pinewurst 3y agoYou had to be there on 12/15 of each year to get it, else zip.
- lisplist 3y agoThey used to wait until end of year to match funds until recently they switched to monthly matching. So if you left before end of year, your match didn’t pay out iirc. Now they’re getting rid of 401k matching entirely so suppose it’s a moot point.
- UncleOxidant 3y agoDidn't they get to write off their contribs to the 401k? And if they're now contributing to the RBA instead would they still get to write that off?
- Rebelgecko 3y agoI think outside of a few edge cases employee compensation is always a writeoff for the employer
- sidewndr46 3y agoIf an IBM employee asked me for investment advice, I'd suggest they loan money to short sellers of IBM. That's the only people IBM makes money for.
- gosub100 3y agothey made money for me when I was overemployed with them + 2 other companies.
- jkaplowitz 3y agoThat sounds like a violation of pretty much any well-developed corporate conflict of interest policy, at least assuming they remain employed at the short-sold company during the loan.
- RC_ITR 3y ago>investing with and growing with the American economy as a whole. A very important nuance (not disagreeing with you, just sharing my pet thing), is that the stock market outgrows GDP because you aren't investing in the economy as a whole. You are investing in the good parts of the economy that people are excited about (i.e. When you invest in Amazon, you assume that they will continue to take share from mom and pop retailers, even in a flat-GDP scenario). You are also generally assuming that US-HQ companies will gain share globally, not just in the US. That's why the Internet has been so positively impactful to the S&P 500 - it has really accelerated share shift to large companies (even if it hasn't accelerated GDP) and it has increased the global share of US-based companies.
- cyanydeez 3y agoon the downside, those billionaires are leveraging that value to make your overall tax burden higher and quality of life lower along with ignorant externalities which will wipe it all out if you have any number of health issues or hurricanes. so, you know, might need to longer term forecast here.
- scarface_74 3y agoSo how are the billionaires making your life worse?
- Supermancho 3y agoSocializing the losses and privatizing the profits comes to mind. Leveraging their wealth to pass laws that are to their benefit at the cost of the "lower classes" is the next. I'm sure this is a fun game for someone who thinks it's useful to retread it.
- cyanydeez 3y agothey bankrolled Trump, bankroll science denialism, deadlock against universal health care, homeless increases. if you're ignorant of billionaires buying political policies, I doubt you see these things.
- thinkerswell 3y agoIs that 50x inflation/printing adjusted?
- ffgjgf1 3y agoNo, it’s not relevant when comparing ratios between stocks and bonds.