Well I think this article is just meant to be an entertaining read, and not meant to be taken seriously. As has been noted, people don’t buy Time Out for financial advice, they buy it because it’s considered to be an up-to-date guide on urban trends. So articles about the lifestyles of their carefree and irresponsible writing staff really just bolster the image they’re selling. As in, look, you don’t have to piss away your savings to find the hottest new bar/lounge/restaurant in town, TONY has people who do that already! You just have to buy the magazine and see what they have to say.
Forgive me for bringing up gender, but … I wonder if it’s a coincidence that a woman wrote the article (whose cute picture is also included). The typical main character of ‘chick lit’ novels is a single woman living in NY or London, with a low-paying job in fashion or publishing who still finds the cash for designer clothes and mid-week bar hopping. Sounds like our heroine.
Are you exaggerating for effect? I look at mine and the 12 month annualized return for 2007 was 11.46%. There are dozens of options in my plan, and I don’t think any of them lost that much in '07.
Unless you’re less than 5 years from retiring don’t worry too much about it. I had about $25k wiped off the value of my 401(k) during the first dot-com crash. It bounced back over the next 3 years.
No, this is a rare instance where I was not, unfortunately. My return for 2007 was -2.6%, and for reasons I don’t fully understand, the value dropped over 11% in the first three weeks of January, during which time I made no contributions or asset allocation changes.
Looking at it now, it appears to have climbed back up somewhat: showing a YTD of -7.4%, making it around -10% since January 2007.
Which is nice. At this rate, I may be able to retire around age 250 or so.
Yeah, well the whole market sucked for the first three weeks of January so it wasn’t just your funds. Just consider it a dip it the long, long run. There will big ups and downs a plenty over the history of your 401K but in the long run the up swings outweigh the down historically (crosses his finger).
Actually you should be happy. Assuming you are still contributing, you are using dollar cost averaging, and low markets are good places to buy. The optimal market for a 401 K is to have it suck right up to the point where you need the money, and then boom. So don’t think that you’ve lost money, think that you’re getting a bargain on the stuff you are buying now.
BTW, a new option I’ve seen is a set of funds designed for people so many years away from retirement, which automatically rebalance assets from more aggressive to more conservative as you get closer.
Yeah, that would be swell. Unfortunately, I employed the same strategic acumen I possess for picking investments to get myself laid off just at the right time, so I can’t presently contribute to it, and can’t join my new employer’s 401(k) for another four months or so. In other news, I’m thinking of becoming a financial advisor!
