The Story of Joe and Phil
Joe
and Phil make that same
salary.
Joe
and Phil had been
supervisors for 15 years
at the same company.
Phil and Joe both
contribute 10% to their
401K.
They both want a nice
retirement nest egg.
Phil receives
independent 401K advice
and Joe trusted his
investment instincts.
JOE’S STORY...watched
his account every day.
He
sold a lot of his
holdings when the market
was high—he felt the
market was at a “Top”.
The average fund
went up 20 percent more
than he thought it would
because, unbeknownst to
him the economy was in a
sweet spot.
Joe said that
the “Dow Jones” was too
high.
He also refused
to buy any mutual funds
in his 401K after the
market had dropped
significantly.
He only bought
money market or stable
value funds when the
market was low—he said
it was going lower, much
lower—the market did not
go significantly lower,
it went on a upward
swing and continued up
another 1,000 points.
Joe at times was
very stressed about his
401K account.
Joe consistently
did the wrong thing in
his 401K.
His returns over
time really showed his
decisions were not the
best.
PHIL’S STORY...
looked at his
account every month but
didn’t get too excited
about the market because
he had a plan.
He
knew after talking to
Clark at 401Krenewal.com
that how you win over
the long term is to have
a great allocation of
diversified mutual
funds, make sure it is
appropriate for your age
and risk tolerance, have
your allocation looked
at annually and make
sure to ask any
questions if you had
them.
Phil has
confidence about his
401K planning and does
not stress about it—he
is very comfortable with
what he is doing.
The final results for Joe and Phil as they
approach retirement age:
Phil’s 401K balance was
three times larger than
Joe’s after 15 years.
Why:
Joe
does the wrong thing by
letting his emotions
take over.
Joe
also has never studied
mutual fund allocations
and neither has Phil,
but Joe makes big bets
on investment instincts,
Phil leaves it to the
professionals at
401Krenewal.com.
Joe
earns consistently 4-6%
less annually than Phil
because of his mistakes.
It
probably will cost Joe
hundreds of thousands of
dollars in retirement
savings.
Phil is confident that
if his plan stays on
track he will retire
early and help kids as a
mentor.
Joe swears he
will hit a big score
someday in his 401K by
placing big bets on hot
sectors.
Joe will always
be a dreamer without a
plan.
Phil knows the markets
go up and down, but he
knows he is doing the
right thing—he is
excited about his
future, and being able
to retire when planned.
