My Rat Race

Many people have been starting to blog for profit, including yours truly. The most common way I believe most bloggers do I adding Google’s Adsense and other Pay Per Click revenue advertising. Although some clicks do not really pay a large amount, some are a few cents as low as $0.01 cent. While I have already experienced a $4 click, and has read about $8 clicks, these are extremely rare. And even if you do have an ad posted on your site that is high paying, the next step will depend on how to get traffic to your site. Although I believe as long as you blog and blog, the traffic just comes in naturally. Somewhat like a snowball effect, this will eventually grow. But it can be tiring posting and posting and not getting paid much.

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I know there are mixed views of various people about this topic. Simply because people think differently. So I know people that like the 401K and I also know people that do not want to participate in it.

What is the 401K?

I will come up with a very simplified explanation what this is. This is basically an employer-sponsored retirement plan. 401K is actually a section of the Internal Revenue Code that talks about this plan where the money you place in the 401K is tax free. The money you put in your 401K is taken out from your gross income, not from your net. So as many 401K advocates say, 401K is good since you get to save a lot since it is deducted from your gross and is not taxed. This money you put in the 401K are invested in various ways. Through mutual funds, stocks, T-bills, etc. And companies that are 401K brokers that companies hire gives the subscriber the freedom where to invest your money from their list of companies you may invest in.

Will you earn more money with the 401K?

It depends. Since your money is also invested in various forms of investment, these can still lose money as well. Every 401K company does not give any guarantee you will earn more money. All they give is statistical numbers, something like for the past 10 years, 95% of our subscribers had an increase in their 401K funds. Though 95% may be a good number, the longer the time range they mention, the more higher the percentage they may report. Additionally, in giving a statistic with a certain time range, they can mention based on statistics from this year to this year, and excluding the bad years.

How to do the 401K?

As many 401K salespeople explain it. There are several markets you can invest in, some present 3 brackets, other present 6. The present them differently, but as a simplyfied explanation, they split the brackets into the following, the conservative, the agressive, and the somewhat in between. The conservative gives you a slower growth of your money with less probable risk while the agressive gives you faster growth, but also increases your risk of losing money. These 401K salespeople will recommend most of the time to diversify. Put money into each kind so if ever any of them goes down, you still have money growing some place else.

Is the 401K really tax free?

It has no tax on the payments. But it is taxable at the highest rate when you get your 401K retirement money.

Is the 401K and the IRA the same? Is there one better than other?

The IRA is the Individual Retirement Account, also a retirement plan. There are several types of IRAs but just to give you a quick difference of IRA and 401K, 401Ks are taxed when you retire. And the payments you place in the 401K are tax free. In the IRA, you are taxed in the money you place in the IRA but is tax free in the money you get when you retire. This may be an over simplified explanation, but you can do your own research about this. Some say the 401K is better since you are not tax in the money you place in it, while others say, IRA is better since you are not tax in the money you will get from it. I believe this is more of a personal preference. If you need money everyday, and it on a tight budget on a daily basis and you envision your future to have earned more money and thus more comfort, you may want the 401K. If you have more money today to spend, and is more than enough in daily expenses and you see your future having no money or money may be a problem and you highly depend on it, you may want to do the IRA instead.

Why not to 401K?

Just by looking at the people that like the 401K and those that do not like the 401K, most of the people that like the 401K are the poor and middle class. And the people that do not like the 401K are the rich and affluent. Why? Because the rich know how to make money. And the money they might have used in the 401K could have made more money if they invested it elsewhere. While the poor and middle class are usually the people with an everyday job and picture themselves that way for the rest of their life and everyday seems impossible for them to do a business or study investing, are looking for ways to make more money the easy way without thinking. As many investors say, why have the 401K invest my money, I would rather invest it myself. Bottomline is, the money you into 401K can generate more money if invested outside the 401K. And the only issue is, do you know how to do this?

Did I sign up for the 401K?

I am one of the people that believes that I can make more money outside the 401K. But I still signed up for it. It is not really a conflicting belief, but with my current situation, I am still in my learning curve in understanding investing in the stock market, in real estate and I am also targeting the gas/oil industry. Right now I am still an employee and is self-employed as well. I am still in the works of building more business that does not require me much time to work but still earn more money. I signed up in the 401K with just a little percentage of my salary, to help in my retirement, while I am still increasing my financial knowledge so at least my money still went somewhere, rather than putting it in the bank. The funds inside the 401K is in a compound interest that banks do not offer. You can also do loans from the 401K in the future, which can be used for future real estate investments which is one of my interest. So I kept my 401K investment conservative as I plan for my bigger business and investment plans while I am still in the process of learning more financial knowledge. I have been attending seminars and reading books and is planning in learning more about business and investments through enrolling in the:

Although Robert Kiyoski has told many time that there is something wrong with the educational system, he never adviced not to go to school. School is still good, and what’s wrong with it is what people learn from school. Learning is a continuous process, and everytime you learn more, you always find out there is even a lot more to learn. And to make it big, investing in financial knowledge is important. And to invest in financial knowledge, you can get these in short term trainings and seminars, or you can get these from associates or bachelor degrees. Although the cost of education can be high price, this is where an education loan comes in. You can approach several companies like private student loans from Act Education Loans. As discussed in my previous post about good debt and bad dept, so what is an education loan? A Good debt of bad debt? The answer lies in what you will do with your education. If you go to school and learn and make the most out of what you have learn to earn more, I guess an education loan is a good debt. But if you went to college without knowing why you took a certain course, and just enrolled. And was able to graduate without understanding a thing, then your student load will be a bad debt.

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Me being a fan of Robert Kiyosaki where I attended his seminars and read his books, I would love to play in the real estate business like how he does. Although I am still building my capital investment to even get started. But once I pass this hurdle. I know it will be easier once I get my first rental property.

Over the weekend, I found an excellent website to network with people in the real estate industry. It is Active Rain, a real estate network of agents, brokers, appraisers, investors and everyone else related to the real estate industry. Once I signed up and logged in. I saw a wealth of information that I can gather from people in the real estate industry. I can automatically see the number of people based on my locality and state that I can network with. They have a blog and forum which is essential for all online communities.

With the amount of spam email and comment spam I get everyday about mortgage, loans and real estate that most of the time I simply delete, many real estate websites seem to look credibility because of these spamming activities. But with Active Rain, this is a community of people in the industry and I believe it is the perfect place to network with having more credible, actual people working in the industry. You have a large network for contact, you can get your word out as well in the forums and your own blog! And it has a bunch of resources that every person in the real estate industry can benefit from.

Some people do not like loans since you end up spending more money. Some people like loans because they know how to make more money by borrowing money.

As how Robert Kiyosaki puts it, there is bad debt and good debt. Bad debt, you lose money and in good debt, you earn more money. Borrowing money to buy things that do not give you more money, like a car for everyday use, consumes money. But borrowing money to make more money, lets say investing in rental property, can generate more money and this money may be used to buy a car even easier.

I personally believe loans are good, but it all depends on how you use them. For loans, I easily check my options online on
E-Loan.
From mortage for purchasing or refinancing, home equity or auto loans. I like them for being conveniently online since I am an online person.

Loans a good, if you have good debt.

Even for the smartest people in the world, mortgage can be confusing for the non-trained brain in this area as many people lack financial knowledge, but are very intelligent in the their own fields of expertise. Not that these information is complicated, they just require a little learning curve you should be willing to take when comes the time you will have your own mortgage.

And learning about mortgage is not that hard too as long as you are willing to learn. There are simple yet sufficient website on mortgages. These sites usually have information about Mortgage Refinancing, Mortgage Rates, Brokers, Calculator and more.

Although this blog is about business and investing, and a common spam in email and also in blog comments, in forums and guestbooks are about debt consolidation, loans and mortgage, credit cards and other related topics, there are still a lot of comment post not really giving comments at al and just want their link on this blog. Sorry we will not approve all comment post. Comments must be relevant comments about the post. And if you are promoting your site, please do not do it in the post. Trackback spam will be deleted. Promoting sites that do not have their own domain and just go to free web hosting accounts will be deleted. Let’s keep the quality of the content clean.