I took a crash course on 401k’s back in the day.
The year was 1997, and I was looking for a job.
Merrill Lynch hired me into their 401k department, taking phone calls from participants across the country and answering their questions. It was very interesting, as I basically got to see the nuts and bolts behind several dozen 401k plans.
The savings vehicle has become a monster. Over $6.6 trillion sit in 401k plans, another $2.7 trillion sit in defined contribution plans, and another $11 trillion reside in IRA accounts. (Source, end of 2022).
There are certainly advantages to a 401k, tax deferral and tax reduction being the most prominent.
But like anything, the government attaches strings to your account, you basically take it on the chin if you withdraw funds before retirement. The government always gets theirs.
Personally, I have begun to wonder about the “rules” and “safety” of 401k and IRA accounts, mainly the tax code surrounding them.
It won’t be long til the government sees that huge pile of money, and decides for the “sake of fairness” that people who’ve accumulated a nice nest egg should pay more.
You know, “fair share” kind of talk. The government is always interested in you being more fair with them.
That’s why if you contribute to a 401k, you should STOP IMMEDIATELY and do this first.
The Scarcest Money EVER Created is On Sale Right Now
Bitcoin is scarce decentralized money which competes against dollars, yen, gold, the Euro and basically every other financial asset.
If you’re new, you probably have heard about it, but dismissed it as “fake” or a “Ponzi” based on what friends or the media have told you.
If so, here is your warning.
Buy Bitcoin now, and don’t stop until you have 1/10th of a Bitcoin - at minimum.
If you want to ease up after that, go ahead. But buying a tenth of a Bitcoin will put you in the top 3% of Bitcoin holders — FOREVER.
This is absolutely critical to your long-term financial health.
You may not understand it, yet. But you will. Everyone will.
There will not be a choice on saving and holding Bitcoin.
So you might as well get in now, while it’s on sale. You can get a tenth of a Bitcoin for around $2,600 dollars today, on sale from $7,000 in late 2021.
The Advantage of Holding Bitcoin Money Over a 401K
But why quit your 401k?
Because it’s just a savings account, one you may not be able to get at in a time of need!
With Bitcoin, you can always access it in an emergency.
No, I don’t recommend it. It should be the absolute last resort, and you’ll pay tax on the capital gain with Bitcoin.
But you won’t have to quit your job, or take a loan on your 401k, or be completely locked out - some 401k’s don’t allow any access.
Bitcoin is diversification - in SAVINGS.
You’re told from day one to DIVERSIFY, but they only tell you to diversify your asset mix in the retirement plan.
You need to diversify the types of savings you have. A 401k, some Bitcoin, and even (gulp, yes I’ll say it) some cash in the bank.
That way, you can keep on going without acquiring debt.
The Real Bitcoin Advantage - Rapidly Monetizing Digital Money
The real benefit though is participating in all the Bitcoin network offers.
Millions of people cooperate to make Bitcoin work.
Some mine it with special machines, others run nodes to accept and verify valid transactions. Most of us just hold Bitcoin, keeping some savings away from corrupt banks. Many also build products around Bitcoin or write code to support all of it. Finally, educators spread the word with the modern tools provided by the internet.
All of this is voluntary, creating digital money for the world one day at a time.
So it’s a good idea to get some.
Once you’ve secured a tenth of a Bitcoin, go back to funding your 401k if that’s what feels right.
But you’ll have some money for retirement that grows independently of the traditional system, helping you sleep better at night.