Does any one else find 401(K) plans infuriating?
Do I want to be a conservative investor? Certainly. But I'm also only 26 and what's the point of even investing if I might as well just put my money in a sweet, sweet bank account (with that sweet, sweet 0.75% interest) that has no chance (as opposed to some chance) of imploding on me?* Oh yes, that's right. Reducing my gross taxable income. Damn you, government, for putting me in this position. And damn you, old people, for living forever and stealing all the Social Security. Just so we're clear, you may take my income, but you'll never take my kidneys.**
So I venture up to "Model II" on the chart of Predetermined Model Composition, which is described as "Moderate" (Hey, I'm a moderate! This investment choice speaks to me!) with a mix of 60% bonds and 40% stock. Then, just for the sake of argument, I glance at Model III, described as "Balanced," which is 40% bond and 60% stock. (And here I was thinking that "balanced" would be a 50-50 split. So glad I didn't go to Money School instead of Law School.)
I'mn not even considering Model IV or Model V with their tempting pie charts of large returns. (I've made that mistake before, evil, persuasive pie charts.)
I would ask family members for advice, but I fear they have none to give. My dad's financial choices have always baffled me. He's a saver. A big saver. So he doesn't have to worry about the moneys, but when I mentioned the concept of a 401(K) to him, he stared at me blankly, like, "What the hell are you talking about?" I am vaguely aware that my dad owns stock ... of some kind ... but I imagine it just appeared in his life somehow, as if left by Santa Claus. And even if this were not the case, I think I have sadly arrived in that point of life where my parents respond to all my dilemmas with, "Well, you've got to be happy."
(I KNOW THAT. TELL ME HOW TO BE HAPPY.)
And then I think of my grandparents, who I somehow view as simultaneously fiscally conservative and financial wizards. What would they do? I don't know. Their advice was always good, but what stands out most is, "Pull your hair out of your eyes" (Grandma) and "Marry up!" (Grandpa).*** I don't think we ever talked about money, besides the concept of "Make a lot of it." If only I could go back in time to High School Ru and tell her, "Ask Grandpa and Grandma about investment strategies before it's too late!"
What really kills me is that some people actually forgo the Predetermined Model Composition and create their own portfolio.
These people make me want to vomit.
(However, if you, Dear Reader, are one of these clever people, I would gladly welcome your advice on the Conservative-Moderate-Balanced Dilemma.) (Suck it, Growth-Equity Growth.)
* Barring the zombie apocalypse, but I'm already preparing for that one.
** Guess what book I finished this weekend?
*** Trying not to think about how I am not doing so well on either of these scores.
**** I stole this picture from Internet. I am not even close to that arty.