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Angelina
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0.10 Dollars($)
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 Posted: Fri Jan 05, 2007 2:32 am Post subject: Should I invest more in stocks or into 401K? |
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I have a $200,000 home with $70,000 mortagage, $25,000 car loan, $110,000 in IRA and $8500 in my 401k. i am now planning to contribute $12,500 yearly into the 401k. i am also buying $550 of my company's stock after every 6 months at 15% discount price from the lowest price of past 6 months. I am a bit doubtful as to whether i am going the right way. Should I stop buying stocks and contribute more towards the retirement plan by $1000 each year.?
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valerie
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0.10 Dollars($)
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| Posted: Fri Jan 05, 2007 2:55 am Post subject: |
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| i think investing into 401k is better as that concerns your retirement money. The more you invest now the more you make for future. |
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mac-7
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| Posted: Fri Jan 05, 2007 2:55 am Post subject: |
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| but there are taxes on withdrawals, the more you invest, the more you earn and the more you pay taxes on. |
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valerie
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0.10 Dollars($)
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| Posted: Fri Jan 05, 2007 2:58 am Post subject: |
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| Oops! just didn't think about taxes, but at least there is pretax money involved. |
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 Samantha
Community Mentor
Joined: 16 Sep 2005
Posts: 1515
Location: MASSACHUSETTS
132.59 Dollars($)
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| Posted: Fri Jan 05, 2007 4:37 am Post subject: RE: investment in stocks vs 401K |
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Hi Angelina,
It's good to invest into the 401k plans as they offer tax deferred investment gains. You also get the chance to get tax deduction benefits on the contributions. You can put in as much money as you can afford. But take care of your expenses also.
Check if matching contributions to the 401K are offered by your employer. This will help you increase your investment gains.
However, buying the stock also seems to be a favorable option, that too, when you are getting it at an affordable price.
If I would have been in your place, I would have invested another $1000 into the 401K and taken out another $1000 for the stock purchase.
Hope you will benefited from this information.
God bless you.
Samantha
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Alex
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| Posted: Tue Jan 09, 2007 4:51 am Post subject: |
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Your financial situation is quite impressive.
The 15% discount is too good! Just think if you sell the stocks at the price at which you have bought the stocks, you will be gaining a reasonable percentage. For instance, if you buy shares worth $100 for $75 and then again you sell at $100, you"ll be gaining 33.33% which is good enough.
You can even hold the shares until and unless you think it will create some kind of financial burden on you. |
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