People Losing 401k Principles

A lot of people I know are not so fortunate throughout this whole Wall Street fiasco, where many have seen their 401k and personal retirement accounts dwindle by as much as thirty to forty percent. Many of these people too, like my own mother, are close to retirement age, or at least five to ten years away from it, have lost very much of their principle and it’s hard to get that back within the next few years, unless we happen to see a huge rally in the stock market sooner than everyone thinks.

For those of us that are in our thirties, or those of us that are fortunate enough to have started an investment account in our twenties, there is still plenty of time to recover, and the good news is that while we may have lost some of our initial principle in our accounts, we can certainly buy shares of whatever we have in our accounts at a great discount, and have more of a stake in those shares so that when the market does go back up and stays there for a while, we can come out of this whole thing way ahead.

It’s hard to think positive during times like this when people are losing their homes, their jobs and their life savings, or at least significant portions of it, but there is a silver lining around this storm cloud, and that is that this is a huge buying opportunity for people who have some extra money to spare, and only if they can live without that money for at least 10 years.

This way, the market has enough time to recover and you can enjoy some nice profits with less taxes since you held those investments for longer than one year, where it becomes eligible for a lower tax since the government likes to award long term investing more than short term investing, which adds to market volatility and economic instability.