Journal Marxist Hacker 42's Journal: 401k scam 57
It was recently claimed in my journal that I was allowing my bad experiences with the 401k system to color my views. Well, given these numbers, I'll admit that I claimed it to be about 10x worse than it really is. But a positive times a negative is a negative, and a negative divided by a positive is still a negative. ANYBODY with a 401k that still has money in it, time to pull out- now.
Whoa There (Score:2)
Well, given these numbers, I'll admit that I claimed it to be about 10x worse than it really is. But a positive times a negative is a negative, and a negative divided by a positive is still a negative.
What are you talking about? So long as the average annual fee does not exeed the average annual return, you will be making money. It costs money to trade stocks and manage a mutual fund. Why would you think it would be free?
I agree that customers should be made more aware of the fees associated with their investments, and that the current employer-centric 401k model is very limiting, and should be opened up for increased competition. But the fundamental idea of a defined-contribution retirement plan is soun
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What are you talking about? So long as the average annual fee does not exeed the average annual return, you will be making money. It costs money to trade stocks and manage a mutual fund. Why would you think it would be free?
It is being presented as an alternative to private and public pension systems- which are free to the participants. And annual returns in the stock market are also not always positive either- so there goes the risk-free security most people expect from a retirement fund.
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It is being presented as an alternative to private and public pension systems- which are free to the participants.
Pension plans are not free. The costs associated with its administration are paid by the participants: in the form of decreased up-front compensation. And, they are not free for the public-at-large either. When a company fails, the taxpayer is there to make sure the pension remains solvent.
Nothing is without cost.
And annual returns in the stock market are also not always positive either- so there goes the risk-free security most people expect from a retirement fund.
Of course the stock market doesn't move up in a straight line. If the market is too risky for you, simply don't invest in it. Take the money in your 401k and invest in government bonds, gold, or wh
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Of course the stock market doesn't move up in a straight line. If the market is too risky for you, simply don't invest in it. Take the money in your 401k and invest in government bonds, gold, or whatever you want. Nobody's putting a gun to your head to force you to participate in the stock market.
The last time I was stupid enough to take a 401(k) for compensation, Fidelity only offered stock-based mutual funds. It greatly depends on the contract with the individual company whether or not participa
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The last time I was stupid enough to take a 401(k) for compensation, Fidelity only offered stock-based mutual funds. It greatly depends on the contract with the individual company whether or not participants have any choice.
I'm totally in favor of divorcing the 401k from the employer. It would be as simple as lifting the max contribution limit from traditional IRA's. Of course, you lose the employer matching (if available).
Seriously, consider an IRA (either traditional or Roth). You can choose from hundreds of brokers, and pretty much invest in anything you want. You'll end up with tax benefits which are very similar to a 401k, if you choose a traditional IRA. If you think taxes will be substantially higher by the time you wan
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What would people retire upon, if not investments made by someone?
True enough. Other than investment into tangibles directly, somebody *must* invest.
Now, if you're talking about the push toward individual retirement investment, then that's a simple issue: costs and freedom.
And as we're finding out, freedom is just a code word for able to lose everything.
The reduction in the number of employers offering pensions can be directly traced to the costs borne by t
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The problem is that most people are incompetent to diversify enough to reduce risk.
Yes, that's true. But, it's their money. If they value potential returns more than risk minimization, that's their call.
I can think of one no-risk investment, but it's a pretty cash-poor one: permaculture.
That's probably as close to a no-risk investment as you're going to get. There is some risk though, but most that I can think of involve some sort of Mad Max type societal devolution. Although, there is still some risk.
Any time you're selling something you haven't bought yet, that's fraud to me.
So, if you have a mortgage, sell your house before the mortgage is paid off, and use the money from the sale to pay back the bank, that's fraud?
Third, you actually do own every share of stock you legitimately short (not naked shorting, which is illegal).
But not at the time you sell it.
Sorry, but you don't know wha
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Yes, that's true. But, it's their money. If they value potential returns more than risk minimization, that's their call.
At which point you'll have to support THEIR failure through increases in YOUR taxes.
That's probably as close to a no-risk investment as you're going to get. There is some risk though, but most that I can think of involve some sort of Mad Max type societal devolution. Although, there is still some risk.
Even with a Mad Max societal devolution, permaculture i
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At which point you'll have to support THEIR failure through increases in YOUR taxes.
Ah yes. There's the rub. So long as society demands a social saftey net, we'll have that issue.
The bank was expecting *and budgeting for* regular payments for the next several years- plus you've cut off whatever interest they would have earned. Not that usury isn't it's own form of fraud, but yes, by paying off the contract early you've removed some of their profit.
Most mortgage contracts explicitly allow for early repayment. They budget for that possibility too.
But, I was refering to the sale, as it relates to a short sale. In both cases, you're selling something you borrowed. In both cases, you're going to repay the people you borrowed from, in full. In both cases, you legally "own" what you are selling, even though they are both borrowed.
You're not scamming anyone in eith
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Ah yes. There's the rub. So long as society demands a social saftey net, we'll have that issue.
And society will demand a social safety net for as long as the system produces more losers than winners. The only way to change that is to eliminate the losers from the equation. But to do that, you've got to also give up the winners.
But, I was refering to the sale, as it relates to a short sale. In both cases, you're selling something you borrowed. In both cases, you're going to repay t
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But in both cases, you're taking profit that really should be, by all rights, somebody else's.
Who's profit? In the case of a mortgage early-payoff, both you and the bank agree beforehand to the terms under which you may pay it off early. What have you "taken"?
In the case of the short-sale, the person who you are borrowing the stock from agrees to let you borrow it. You're not taking it from anyone.
Only because the person you're borrowing from is too stupid to realize they've been taken.
What, exactly, have you "taken" from them? Really, what?
If you don't want your personal stock to be lent out for short sales, you don't have to let it be. You don't know what you're talking about.
What you're really talking about is the myth of the economically rational individual; the idea that given a chance, everybody will do what is in their best interest. Life's more complex than that though.
Only if y
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In the case of the short-sale, the person who you are borrowing the stock from agrees to let you borrow it. You're not taking it from anyone.
I've never quite understood why somebody would do that. Favors in a free market never pay off.
What, exactly, have you "taken" from them? Really, what?
Couldn't they have made more profit by hanging on to their stock longer?
Only if you unnecessarily limit what you mean when you talk about "self-interest". It doesn't alwa
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I've never quite understood why somebody would do that. Favors in a free market never pay off.
Oh, it's not a favor. A short-seller has to pay interest to the owner of the stock he's borrowing. (Well, it's not exactly "interest", technically. But it works pretty much exactly the same). And, the short-seller has to pay, out of his pocket, any dividends issued by the company, during the time he is short the stock.
The only thing the lender gives up are the voting rights of the stock he has lent to the short-seller. But, that "interest" payment is what he's charging for that.
Couldn't they have made more profit by hanging on to their stock longer?
No. The process of lending a
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Oh, it's not a favor. A short-seller has to pay interest to the owner of the stock he's borrowing. (Well, it's not exactly "interest", technically. But it works pretty much exactly the same). And, the short-seller has to pay, out of his pocket, any dividends issued by the company, during the time he is short the stock.
But why shouldn't the lender make the interest equal to the amount the stock was shorted, thus eliminating the short-seller's profit?
Let's say that I was right, and th
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But why shouldn't the lender make the interest equal to the amount the stock was shorted, thus eliminating the short-seller's profit?
That's easy: He's not bearing any of the market risk. The lender gets his interest payment regardless of if the short-seller makes money (stock goes down), or loses money (stock goes up). He gets paid either way.
The short-seller's taking the risk, he gets the returns.
But why wouldn't the lender demand the full $5 for his interest?
Because that $5 isn't guaranteed. If he wanted to bear that risk, and obtain the same return as the short seller, he could, instead of lending the stock to the short-seller, sell his share at $10, and repurchase it at $5 later. That way, he has
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This has more to do with the government's mandate that mutual funds be long only. There has been a lack of instruments available to the general public which would allow them to profit in this type of market. If these kinds of investments were available to the public, you could make money when the market goes up and down. But, that's a whole 'nother issue.
I kind of wish large pension plans (such as CALPERS) had the option of opening themselves up to outside investors. Sure I know there would be a fee involved but I know the fund is being invested with retirement funding in mind and I believe pension funds have a bit more flexibility as regards hedging or going short.
The only reason anyone should pull their retirement savings out of a (stock heavy) 401k today is if they believe there will be no stocks or stock market by the time they retire.
At the very least GE should probably still be around by the time anyone here retires.
Then again if you told people even as recently as 10 years ago that GM would go bankrupt in 2009 they would ha
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I kind of wish large pension plans (such as CALPERS) had the option of opening themselves up to outside investors. Sure I know there would be a fee involved but I know the fund is being invested with retirement funding in mind and I believe pension funds have a bit more flexibility as regards hedging or going short.
I'm not sure of the rules regarding the investments that a pension may engage in, and don't know if they can explicitly short stock. But, they can invest in a wide range of different investments: real-estate, bonds, equities, venture-capital, commodities, etc. So, they have at least some hedging ability.
As to opening up to outside investors, you could always buy an annuity. You can get pretty much the same type of pay-out with a similar investment. Though I don't know if any annuity can match the market pow
Meh. I'm not locking in the losses. (Score:2)
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You're assuming the DOW will recover within our lifetimes. OR that the fees won't eat up what's left after the losses in the mean time. Especially if the government follows through on the threat to "reform" the 401(k)s- you know what will happen the day before regulation goes into play, your account will get hit with 75-100% new fees that they'll apply out of the woodwork, taking advantage of the fact that they can unilaterally rewrite the 401(k) contract whenever they want (like most financial contracts)
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I put some money in, because I think stewardship important, but I minimize emotional attachment, as materialism is daft and a source of great woe.
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Ya, I can't get too excited over suffering any larger losses to my retirement funding. The severity of this recession and my extended vacation from employment is, for me I think, God teaching me that money matters little, career isn't everything, and to rethink several of my past big assumptions that I formerly thought were safe to make.
Pull Out? (Score:2)
Never ever ever react to a sudden change in the stock market on a long term investment, unless it's something like enron...
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Really? 401k is a retirement, long-term investment
Correct, and the stock market is strictly short-term thinking.
The market goes up and down, so unless you plan on cashing out your 401k TODAY or next year, I say now is the time to put MORE into the 401k. It's the stock market! When it's low, put in more money, when it's high sell off!
That's of course assuming that not everything is an enron.
Never ever ever react to a sudden change in the stock market on a lon
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WOW! Been a long time since I saw that post.
Yep, atheism is indeed a faith and a myth, for any science needs supporting evidence.
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Yes, by neurotypical standards I am. Funny you should use that term- the same term used in an ABC sitcom to describe a person with my disorder.
Doesn't make it any less true- that the scientific method, which defines reality for science, requires *EVIDENCE*, not just statements out of the blue. There are, of course, other definitions of reality, but we call those religions.
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I know that without proof, a theory is just garbage, and that's all you've ever given is a theory.
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If you find that sentence to be incoherent, then English must be at least your second language OR your IQ must be below 80.
So I'll try to put it another way, like I was talking to my six year old: Science needs explanation, in things we can both see. We call that objective evidence. If only one of us sees the evidence, then that's not science.
Since only one of us sees the evidence that there is no God, the belief that there is no God is not science, but religion.
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What, prey tell, would you consider to be evidence that there is no god?
A complete explanation of the deterministic universe without reference to randomness on the micro level that does not require an intelligence to randomize it would do fine, but your model must be complete and infallible.
Also acceptable is reversing Godel's Theoroem and proving that your model of the universe is complete and has no assumptions or axioms.
Thirdly acceptable is taking into account the 20,000 years o
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Fucking retard. do you actually believe that if those three things were proved, that would be proof there is no god? Are you that dumb? None of them have anything to do with the existence of god.
You're the fucking retard if you think that God has anything to do with the existence of evil, or man's pitiful philosophical musings. No, the concept of God is drawn from quantum mechanics- the very nature of the physical universe itself, which is a subset of God.
Tell me how I can disprove
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Listen mongoloid, i'll go slower if you need to. Its obvious you can't follow. It must be tough on the ol' noggin, huh?
You're the one who isn't following. I don't accept rules such as "you can't divide by zero" or "you can't prove a negative"- I call that being a coward and avoiding the need to prove *everything* you say, regardless of subject.
you think that proving god isn't jiggling things at the quantom level will prove his nonexistance. Well this ones easy. Obviously we disprov
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Good for you teddy. do you get to use the big boy potty too? lets see how this works out.
Your side already conceded, remember? You claim you can't prove a negative, I gave you three ways to do so; you tried to sidestep them.
So what would proving that god isn't down there jidgling the particles prove?
It would prove the unreasonable assumption that there is no god, for which extraordinary proof is required.
Really? Come on? You have a answer right? Remember yo
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so as we learn more about the universe, god gets smaller and smaller?
Only if you assume a finite universe.
or would it simply prove that god doesnt have to be down there jiggling the particles himself?
Then he wrote the rules to jiggle the particles. Deterministic, not random.
so we can eliminate god by knowing everything? his existence is defined completely by the boundds of our knowledge?
Yep. Of course, you have a finite brain, as do most human bei
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You still havent proven that understanding everything in the universe would disprove god.
Only to an illiterate.
which is it dumbass? hes jiggling the particles or he wrote rules that particles follow?
The two are equal in theognostic logic; so it doesn't matter.
evidence of existence and actual existence are two different things
Not to an atheist- a lack of evidence is a lack of existence to Pioneer.
so god didnt exist when he created th
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Well try again then.
Why should I, when you've proven you can't think, and therefore, don't exist?
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i dont think you can prove much of anything if you resort to solipsism.
Well, that's all atheism ends up being, is solipsism.
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More of a Devil's Advocate with shades of Pascal. I see no proof or reason for solipsism or atheism; thus I am not one. But I am Katholikos- in that I think all myths have some truth to them, from a subjective perspective, and that no man lies on purpose without motivation.
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heres some advice: leave the avocacy to the people who can actualy defend their faith.
What made you think I was advocating for anything? I'm just pointing out what people have wrong.
all youve provided is abunch of retorical masturbation. you didnt know what you were talking about on usenet and you dont now.
And you've proven that you have no clue what you're talking about either- just making a bunch of statements with no proof as to what you say, that convince nobody.
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how about this: 'Yep, atheism is indeed a faith and a myth, for any science needs supporting evidence.' yep sounds like advocacy to me.
And what, specifically, am I advocating there? All I'm doing is saying that atheism is a faith and a myth. I'm not advocating, say, Bible beating Christianity as an option. I'm not even advocating my own faith as an option in that statement- if I'm advocating anything, it's objective evidence based SCIENCE!
i started off calling you names.
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Mmmmm...... sounds like advocacy to me. learn some definitions why don't you.
Definitions are for losers like you.
nothing that you have written even comes clsoe to science
Except insisting upon objective evidence for unproven assertions that is.
you would know that if you werent so blinded by your own idiotic aand illogical faith.
you can believe whatever you want. just dont dare call your illconcieved illogical bullshit 'science'.
I don't claim that my
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of course definitions dont apply to your mindless bleating. just those of us who want to use language for commmunication.
Language like staying "Anonymous Coward" instead of putting a face on your beliefs?
what fucking assertion is that?
The same one that insists that atheism is not scientific in the least, and is just another religion.
of course atheismm isnt a science. but that doesnt make it a religion either idiot. atheism is making no claim or assertion.