I have normal arguments and crazy arguments against having a 401k.
First my normal arguments:
- 401ks lock up your money until you’re 65.
- You get penalized if you withdraw it early.
- The money you put into your 401k could be invested in yourself instead.
- With a 401k you’ll get rich when you’re 65 and in a wheelchair, you won’t have money while you’re still young.
Let’s say you have 5% of your paycheck being taken out to put into your 401k.
Here’s what you could do with that money instead of accessing it while you’re old:
- Buy a course that teaches you a skill that will increase your income
- Hire someone and delegate things to them so that you have more time
- Buy a rental property that gives you money each month
Even if you can’t delegate things that your employer pays you to do, you could still delegate other non-money making activities in your life, such as cleaning, cooking, and laundry. You could do that for about $1.5k per month. Alex Hormozi recently went into this concept during a talk.
You’ll make so much more investing that money into yourself than you would with the 401k at 65.
Now my crazy arguments:
I’ll be 65 in 32 years.
What has happened in the last 32 years in society?
There has been massive changes in how everything works every decade of my life.
Computers, internet, smart phones, bitcoin, AI.
Technology is advancing at a rapid rate.
We’re at a point to where energy and manufacturing in the future could be at a near 0 cost with robotics, AI, and nuclear energy.
Who knows what the next 30 years will bring.
Will we even need money by that point?
Now to get really crazy:
The dog not barking is how no politician is talking about how to pay down our country’s massive debt.
Are they planning on it defaulting?
Or are they playing the long game and waiting until money is a trivial matter?