Comments on: The Hidden Danger of the 401k http://www.fireyourfinancialadviser.com/blog/2009/10/the-hidden-danger-of-the-401k/ What your financial adviser doesn\'t tell you could be costing you millions! Sat, 31 Jul 2010 10:13:01 +0000 http://wordpress.org/?v=2.7.1 hourly 1 By: cmiles http://www.fireyourfinancialadviser.com/blog/2009/10/the-hidden-danger-of-the-401k/comment-page-1/#comment-242 cmiles Fri, 30 Oct 2009 14:24:26 +0000 http://www.fireyourfinancialadviser.com/blog/?p=291#comment-242 There are several ways to get a higher return than 12% per year, one of which can be through a business. However, without proper <a href="http://www.fireyourfinancialadviser.com/blog/2009/07/the-1-cause-of-failure-in-businessinvesting/" rel="nofollow">education or discipline</a>, even a business can give negative returns. The mutual funds are deceiving in their returns because if it says that you earn 12% per year, that is calculated BEFORE fees, taxes, etc. You also don't want to count on "average" returns since they are not "actual" returns (see<a href="http://www.fireyourfinancialadviser.com/money-not-math.html" rel="nofollow"> Money Not Math</a>). The general way to earn more than 12%/yr "cash-on-cash returns" is to leverage more than only your own money. For example, real estate may only grow about 6%/yr on average, but because you utilize the bank's or other people's money to purchase the property, the return can be much higher. If I put $20,000 down on a property on a property, but earn $500/mo from rent and tax breaks (after mortgage and other costs), my cash-on-cash return is 30%/yr. This also applies in business, certain commodities/stocks&options deals, and can especially be true if you "<a href="http://www.fireyourfinancialadviser.com/blog/2009/09/fire-your-401k/" rel="nofollow">become the bank</a>." There are several ways to get a higher return than 12% per year, one of which can be through a business. However, without proper education or discipline, even a business can give negative returns. The mutual funds are deceiving in their returns because if it says that you earn 12% per year, that is calculated BEFORE fees, taxes, etc. You also don’t want to count on “average” returns since they are not “actual” returns (see Money Not Math).

The general way to earn more than 12%/yr “cash-on-cash returns” is to leverage more than only your own money. For example, real estate may only grow about 6%/yr on average, but because you utilize the bank’s or other people’s money to purchase the property, the return can be much higher. If I put $20,000 down on a property on a property, but earn $500/mo from rent and tax breaks (after mortgage and other costs), my cash-on-cash return is 30%/yr. This also applies in business, certain commodities/stocks&options deals, and can especially be true if you “become the bank.”

]]> By: Marie http://www.fireyourfinancialadviser.com/blog/2009/10/the-hidden-danger-of-the-401k/comment-page-1/#comment-241 Marie Thu, 29 Oct 2009 20:07:53 +0000 http://www.fireyourfinancialadviser.com/blog/?p=291#comment-241 Are there ways to get higher than 12% a year. Yes, a business. A few mutuals return 12% a year and yes I invest in them The thing with the 401k if a person save something they a better off not saving anything Are there ways to get higher than 12% a year. Yes, a business. A few mutuals return 12% a year and yes I invest in them

The thing with the 401k if a person save something they a better off not saving anything

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