馃攳
401K Investing Basics 馃搱 401K Investing Strategies (Part 1) - YouTube
Channel: Money and Life TV
[0]
what is up my fellow youtubers welcome
back to MKchip money and life TV where
[6]
we talk about how you can improve your
financial position career and life I am
[11]
Mike also known as MK the CPA and you
guys know my sidekick chipper I'm here
[15]
is a video I'm super excited to share
with you we're going to be covering how
[21]
you can pick the best 401k funds are the
best 401k investments and your company's
[27]
401k plan just so you guys know this is
going to be the first video in a series
[31]
that I'm producing on this so kind of
think of it like a class so in this
[35]
first video what I'm going to do is I'm
going to do an overview of the five
[39]
steps and then in their videos after
this we're going to go into detail in
[45]
the tutorial type of fashion where I
show you how I go about doing each step
[50]
so that you can mimic my process if you
choose to do so
[54]
alright guys and with that being said
let's dive right into this so most of us
[59]
have heard I'll kind of have an
understanding of what a 401k is right I
[63]
mean it's where you put part of your
income into this retirement plan or
[68]
basically we are deferring our
income for a later time period and when
[73]
we defer our income we don't have to pay
tax on that money yet so the idea is
[79]
guys as you've probably heard instead of
being able to invest only 75 cents after
[85]
taxes because we're deferring our income
were able to invest a whole dollar at a
[91]
time and so with that whole dollar you
know we're able to buy more units or
[95]
shares of this mutual fund in other
words we're able to let our money grow
[100]
quicker because we're putting we're able
to put more in and then it's taxed when
[104]
we take it out at a later date and of
course you guys probably know if we
[108]
invest in this thing in our 401 K for
the next 20 30 40 years we should become
[114]
rich are very are wealthy enough to be
able to retire we'll be they say will be
[119]
loaded in cash so much cash you'll be
able to buy a boat
[138]
now there's only one little problem with
this this whole investment idea in our
[143]
401k we don't frickin know how to invest
hey school never teaches us how to do
[150]
any of this and yet we're supposed to
rely on this 401k retirement plan for
[155]
the rest of our life are you kidding me
so that is why I'm producing this video
[159]
is because I've come up with a process
that has worked very well for me not
[162]
that you have to use it but I think it
could help you by the way guys I am by
[167]
no means a professional investor and so
please do not take this as legal or
[171]
investment advice however by using this
process I reallocated my funds at the
[177]
end of 2016 are towards the end of 2016
and so far just in this year alone in
[184]
2017 for the first six months I'm
already ahead 20% on my 401k investments
[190]
and it's the best my plan has ever done
so I think this process could work for
[194]
you or at least hopefully help you get
better returns in the future so since
[198]
school didn't teach us what else can we
do to learn about our 401 K investments
[203]
let me think for a second oh I know
we know talk to the financial advisor
[207]
that comes to our company thanks know
what I'm talking about
[210]
it's that person who comes to your
company or organization usually every
[215]
four months to give you a market update
or when the markets really taking a dive
[220]
they comes in well we can ask them right
we can ask them to choose then best 401k
[227]
investments for us can't we actually
we'd be completely wrong if we were to
[230]
assume that the financial advisors have
a thing called a liability although they
[235]
can advise us and it's not a bad idea at
all to talk to them and learn about the
[240]
funds in your 401k plan we cannot expect
them to pick the investments for it both
[248]
of them will not because if they say ok
well you invest in a B and C and then do
[253]
nothing else well what would happen is
if later on 30
[257]
20 30 years down the road you're full on
key investments tank well then that's
[262]
going to open them up to liability this
video is about choosing and picking the
[268]
best or m'kay investments this is truly
about us you and I picking our own
[274]
investment because nobody else is going
to do it for us so we if we want the
[279]
best rate of return in our 401k plan and
the best overall investing strategy
[284]
we're probably going to have to pull the
trigger ourself we can like I said we
[288]
can bounce ideas off of them off to
financial advisors but we still need to
[292]
be the ones in charge of this and with
that being said let's start going over
[296]
the five steps to this investing process
okay guys the first step to choosing the
[301]
best 401k funds in your 401k plan is to
actually know what the funds are so the
[306]
first step is really fun choices it's
knowing what funds are available for you
[311]
and I in our 401 k plans so how do we do
that well guys what we do is if you
[316]
don't know where to go to learn about
this first you need to go to I would
[320]
recommend going to a human resources
department of your company or whoever is
[325]
in charge of that and say hey I want to
learn more about my 401k plan and the
[330]
funds that are available in that plan
can you tell me or point me where to go
[334]
so I can learn more about this and also
after whoo-hoo therefore one key
[338]
provider for our company and just so you
guys know if you don't know what a
[342]
provider is it's usually the plant
administrator who's helping your company
[346]
manage their 401k plan and so some
examples would be one John Hancock -
[351]
Vanguard are three fidelity those are
some of the most common for 1k plan
[357]
providers in the nation so after you go
and talk to your human resource
[361]
department what they're probably going
to tell you is that there is a website
[365]
online for that provider so like you can
go to Vanguard comm fidelity comm and if
[371]
you don't have an account created
already you'll go ahead and you'll set
[374]
up an account and from there you can
look in the website and find the area
[379]
where you'll see all the funds available
to you each company an organization is
[384]
going to have a different 401k plan so
your fun toys are truly going to vary by
[389]
the provider
you're for 1k but also how your company
[392]
set it up and what in my example I have
60 choices available to me 60 total fund
[397]
choices in your plan you might have 100
choices or more you might have less than
[402]
50 it all varies based on your company
and as you guys are doing this process
[406]
be thinking of having a pen and paper
available that will really help so that
[411]
you can take notes as you go when you're
doing your research i really suggest
[416]
using Microsoft Excel to do this because
you can easily manipulate the data later
[420]
and that will help save you time going
forward now you're probably thinking Oh
[424]
Mike if there's one hundred fun choices
how long is this kind of take me is it
[428]
going to take me all day well you know
this could take you a couple hours guys
[432]
but it is so worth your time to do this
you think of all the years we've been
[436]
working for a money and if we're not
trying to get the best return on
[439]
investment it can literally cost us
hundreds of thousands of dollars by not
[444]
taking the time to do this so we need to
freak and do this and do it right are
[449]
the best we can
what I would recommend doing because
[451]
this is going to take some time is break
your research into one to two hour
[455]
chunks and then come back at later time
and do some more all in all this might
[459]
take you a couple hours I don't think
it's going to take you more than ten
[463]
hours to really go through all of your
funds but I would take the time to learn
[467]
how to do this okay on to the second
step is criteria to narrow down our
[472]
search choices are in our research time
required we're going to select some
[476]
criteria in that crate because we don't
want to be spending the rest of our life
[480]
researching 401k funds none of us want
to do that it is not very fun it could
[486]
be interesting for some people but it's
not the thing you want to be doing at
[489]
the end of the day all the time and so
we're going to pick criteria that's
[493]
important to you you know like for
example criteria that's important to me
[496]
is I want to know the fee structure the
fee ratio of each fund I want to know
[501]
what funds have been around over ten
years and of the funds that have been
[505]
around over ten years who is performing
the best over a ten year period
[510]
consistently those are the funds I
usually start to target so if you have a
[515]
hundred funds in your 401k plan by
selecting specific criteria we're going
[520]
to try to narrow those down for you so
you're really only a research
[523]
maybe 25 out of the hundred funds that
way it's going to save you a lot of time
[528]
and then after the process after you
filtered through this process we want to
[532]
find what we believe to be the top 10 or
15 funds in your entire 401k plan and go
[538]
from there okay
step three is an obvious one but we need
[541]
to learn about the fund most people have
no freaking clue what they're actually
[546]
invested in and it doesn't make sense to
me but they don't even they're just
[550]
blindly investing and hoping that works
out well we can't do that guys we cannot
[555]
get ahead financially or anything else
in life unless we are truly intentional
[560]
we can't be slacking off at this you can
usually learn the most about the funds
[565]
in your 401k providers website you can
log into your online 401k account and
[570]
read about the funds you can see what
companies the each of these funds hold
[576]
is if you don't know about mutual funds
mutual funds are made up of individual
[580]
stocks so in a sense you are investing
in individual stocks except it's all in
[585]
a group we want to learn what doesn't
each one made up is it mainly made up
[589]
healthcare stocks is it mainly made up
of blue chips is it made up of
[593]
technology stocks you guys get the idea
so that's number three learn about the
[597]
funds as much as possible so that you
actually know what your money's invested
[602]
in number four use free resources for
your research there are so many free
[608]
resources available to us online we have
more access to free information than any
[613]
other generation in human history so a
simple one would be that I use a lot is
[617]
Yahoo Finance because these mutual funds
have ticker symbols just like a stock so
[622]
you can go to Yahoo Finance put in that
ticker symbol and you can see a visual
[626]
graph of its stock performance it's like
a stock chart basically and you'll see
[631]
that in a future video and I'll show you
how I analyze that you can learn about
[634]
the more about the company our mutual
fund from that vantage point you can see
[639]
visually visually how it does and good
times and bad and see if you would want
[644]
to own it
plus there's other information on Yahoo
[646]
Finance that will be available about
that fund and the great part is it's
[651]
easy to compare it to other funds on the
same stock chart so I'll make sure to
[655]
show you guys that in a future video
this one guys is pick
[657]
investment after we realized hey what
funds are available in our 401k plan
[661]
after we've selected the criteria of
what funds we're looking for or what we
[666]
want our funds to have after we've
learned about the funds and after we've
[670]
used our free investment and resources
to learn more about this and do our
[675]
analysis and research now we're ready to
invest if you're already invested great
[679]
no problem
because after doing this process you
[682]
might find hey I don't want to be
invested in this anymore so instead of
[686]
investing in this I'll invest in that so
you can then move your money out of that
[690]
fund and put it in another fund or you
can just stop putting your cash to that
[695]
fund you already had and just redirect
that cash to the new fund that way you
[700]
don't have to sell off your original
investment if you don't want to but
[703]
we're going to go into detail about that
in the future and if you guys have never
[707]
invested at all this is the perfect time
to learn and not only do I do this
[711]
process for my 401k plan guys I use a
similar process for my brokerage account
[716]
investments as well as my wife and I
Roth IRAs so far it's been working for
[721]
us guys and I think it can work for you
so give it a shot in 2017 I just wanted
[725]
to leave you guys with this it has never
been more important to learn how to
[730]
invest then right now
pensions are dead unless you work in
[734]
certain government sectors you're
basically not getting the pension in
[738]
other words the company is no longer
going to fund your retirement
[741]
unfortunately you and I have to bear
that burden now and that's just the way
[746]
it is that's the challenges our
generation faces so we have to learn how
[750]
to properly invest whether it's in our
401k whether it's a combination of our
[755]
401k investments or something else but
we just have to learn to become
[759]
investors and like I said unfortunately
school is not going to be teaching this
[764]
information anytime soon or ever I have
no idea guys this is a great opportunity
[769]
to take control of your investments your
future and if you guys can get higher
[773]
rates of return on your investment you
can literally shave off years of your on
[778]
your retirement because your money will
compound that much faster and so
[783]
hopefully the idea is you won't have to
work as hard or as long the rest of your
[787]
life
[794]
alright guys make sure to hit that like
button if you have not already I would
[798]
really appreciate your support if you
have any questions or comments make sure
[802]
to leave them in the comment section
down below I will definitely make sure
[805]
to respond your homework for this week
I'm giving you a homework what so by
[810]
next week what I would like you guys
they have find out what your fun choices
[814]
are and make a list of all of your 401k
investments that's your homework for
[818]
this week and that will get you started
you can help us promote financial
[823]
literacy and career and life success
skills by thinking of just one person
[828]
who you feel could benefit from this
information and by sharing this video
[833]
with them you can share this video with
them by hitting the share button on your
[837]
computer or by hitting the share button
from your cell phone thank you for all
[842]
the love and support that you guys give
me on this channel don't forget you can
[846]
follow us on Facebook and Twitter by
hitting those address links over there
[850]
and if you're not already subscribed
make sure to do so by hitting the
[854]
subscribe button down below or the
subscribe button that is found below the
[858]
video alright guys as always thank you
so much for your support I love you I
[862]
can't wait to see you next week as we
dive further into this process so that
[866]
we may choose the best investments in
our 401k plan I hope you guys will stick
[871]
with me on this I really think it's
going to be worth your time what guess
[874]
that I've already gotten a 20% return
for the first six months of this year
[878]
and I think you guys can get higher
returns as well I'll see you all in this
[882]
week's video peace
[898]
Oh
Most Recent Videos:
You can go back to the homepage right here: Homepage