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Reader Question: IRA vs 401k

Have a question about money? Send it to me and you could be the next featured reader question. Check out this great one from Julia:

I recently paid off all my debt, now I’m looking to increase my investing beyond my company-sponsored, traditional 401K.

I understand the tax advantage of a Roth – I must’ve read it 50 times while researching this topic.

I don’t understand the difference between 401K and IRA. It looks like the biggest difference is options: 401K is more restricted in how I can invest, whereas IRA has a smaller contribution limit.

It seems like everybody recommends Roth IRA over Roth 401K and I don’t understand why.

Let me add this: I’ve had a traditional 401K for several years and I generally don’t pay any attention to it. I know what I’m contributing; I know that the growth rate has reasonably matched the market in general; and I occasionally get a notice that my allocations have changed, so I guess somebody is managing it. If I’m being perfectly honest, I will never have the interest or patience to learn about investing – my brain doesn’t work that way (seriously, I think I could learn brain surgery faster than I could learn investing). And for that, the idea of picking my own investments intimidates the hell out of me. And if I’m not bothering to pick my own investments, than what difference does it make in how many funds there are to choose from?

So, what exactly is the advantage of an IRA (compared to 401K)?

Do you layaway? 3 reasons I don’t

November 19, 2012

Just in time for Black Friday and the upcoming holiday season, let’s take a look at the newly popular layaway. It went out of favor throughout the 90s and 2000s as we reached for credit cards as a way to pay instead of… well, saving money and buying it!

If you’re not familiar with the term, layaway-ing allows you reserve a product at a store and then pay over time. When you pay for the product in full, you get to take it home! There are some positives of layaway, such as the ability to reserve a highly sought after item and paying for it up front like people used to.

However, I’m still not a fan, and I don’t plan to use it myself. These are the three reasons I won’t layaway this year:

1. I don’t want my money stuck at one store

If you’re feeling helpless, help someone

I was stuck somewhere between a crow and a lizard when I was finally able to focus on something besides the extreme pain that was beginning to set in. My mind was shaking almost as much as my legs as I tried to rationalize why I seemed to be the weakest one in a room full of all types (and sizes) of women. I tried my hardest to keep a mental and physical grip on the mat as my hands started to slide out, fighting the sweat.

If you saw my Facebook post last week, you know I was headed to a Yoga class on Friday evening with my wife. It turns out it wasn’t for beginners. I should’ve realized it was going to be tough when the middle-aged woman behind us was doing an unassisted headstand as easily as I was sitting!

In the middle of the class, I was distracted by a song that came on between chants. The most memorable line, “If you’re feeling helpless, help someone.” If you’re feeling helpless, help someone.

Vote You

Vote for…

Vote for you… because you’re awesome and no politician can affect your life more than you can. They can’t help you control your money, find what you love, or make the decision to change your life.

Vote for you to:

Pay off debt

Save up your emergency fund

Invest Wisely

Kick butt at work

Work on that thing you’ve always wanted to do

Live the life you want to live

Finish the book you always wanted to write (Susan and Cheryl)

Do the splits! (Bethany)