I thought I’d try something a little different today. Instead of me writing up a lengthy post, I thought I’d offer up a question that I’ve been deliberating on.
“Should I invest a large portion of my extra income in my 401(k) or should I only put in a minimum amount and save the rest for a business venture?”
Some necessary information:
- The company I work for offers 50¢ on every dollar that I put into my 401(k) (up to 4% of my net income) – I won’t be quite up to the 401(k) Contribution Limits though.
- I am currently building some passive income through this website and intend to keep it up for many years
- My wife would like to open her own business, which would involve some up-front capital (we would love to start it with cash)
- I’m concerned about adding to my 401(k) because I plan to retire early. With a 401(k), I won’t be able to withdraw the money without penalty until late in life
- I suppose a Roth IRA is an option as well (though I’ll be nowhere near the IRA contribution limits)
So what do you think? I would love to hear your solution! The best response will receive 10 additional entry points in my $25 Amazon Gift Card giveaway. I will make my decision by the end of day Saturday, January 15, 2011.
My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.