A curious reader asked, can 401k make you rich? Most people who contribute to 401k plans asked, can 401k make you rich? Is this the right investment to prepare for my financial future? In investing, you should have a goal, and one of your goal is to prepare for your retirement.
Ask a person who already retired from work. Ask a person who contribute to 401k plan for a very long time. Observe their life and observe how they live today.
Can 401k Make You Rich?
It can make you rich or it can make you even poorer. It depends on how your funds increase its value. If you always contribute to a good performing 401k, probably you can have enough money for your retirement.
If you read the book “The Automatic Millionaire” written by David Bachs, 401k plans are one of suggested investments to become a millionaire.
The good thing about 401k plans is that you can save automatically. Since you are saving automatically, you are saving money as long as you are working. Unless you choose to stop contributing. I don’t know if it make sense. Why should you stop contributing to 401k if you know the money you saved and invested there is for your financial future.
Update: When I shared this to Investment Club Online on Facebook Group, a member write an interesting comment. Richard Anderson from Boise, Idaho studied accounting and finance at Boise State University and a Financial Analyst at Zions Bank from October 2011 to Present.
Absolutely. My net worth is above the ninetieth percentile for my age group, due mainly to my commitment to making the maximum allowable contribution. I know multiple 401(k) millionaires. Certainly it is not the only way to get where you want to go, but it is tax-efficient. Of course the main things I see as requirements for success as a 401(k) investor are that you have a sufficiently high income, spend sparingly and invest in diversified low-cost index funds for the long term.
What do you think? Do you think 401k plans can make you rich or not? Please share your thoughts in the comment box below. Thank you!