The touting of 401k plans are ubiquitous. Workers are encouraged to put a good portion of their earnings (usually 10-15%) into a 401k retirement account to fund their eventual retirement. 401k accounts allow workers to buy (it is claimed to be an investment) shares in mutual funds which are comprised of a variety of stocks. The stocks can be from a specific industry, or sector, or have a mix of stocks.
So, what is so bad about 401k accounts? They are not investments–they are gambling.
Imagine if all the workers who ‘invest’ in their 401k plan suddenly stopped, and used that money to actually invest. The stock market would be destroyed. The stock market is being propped up on the back of workers, who have been led to believe that they have to put money in the stock market if they would like to have a comfortable retirement. Even some well-meaning people keep making this recommendation.
The goal of having workers put their money in the stock market is to funnel money into the hands of a few, propping up companies which have no way of staying in business without leeching funds from the regular worker.
Now, imagine if the money that gets dumped into 401k plans (and stocks in general) was actually invested. Since the stock market offers no guarantee of return, and at the same time zero input from the small ‘investor’ on how the business operates, any money spent on buying stock is purely gambling. So what does it mean to actually invest? It means that the money being invested stays within the community, or, better yet, family. Everyone knows entrepreneurially minded people who would love to get support and investment from friends and family. This would help keep the money local, and allow the investor to have actual input in the business and decisions (if he so chooses). This will also create an incentive for the investor to do what he can to help the business succeed.
So, forget about a 401k plan, and invest in someone you know.