ST Alpha - "Pippy my two cents which is probably worth less than two cents on your 401k." (Reading a Post)

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Pippy my two cents which is probably worth less than two cents on your 401k.

Posted by Bacon (aka Redmond) Apr 21 '20, 18:57

I was putting in 15% of my paycheck into my 401k which is being matched at 3%.

What I did last year is I changed my 401k withdrawal from work to 3% to get the 3% match so 6%. Then I take the other money 9-10% and put it into a Roth after I have been taxed on it.

I putting into zero commission (still have fees but I pick small fee ETFs) that have a decent dividend and use the DRIP system that TD Ameritrade (other companies have this too) to reinvest all dividends right back into the ETF.

This is how it works in a volatile market like this. When the ETF price goes down, that dividend payment can buy a bigger chunk of the ETF because it got cheaper. When the market goes up you win because the ETF and the extra chunks of ETF go up with the market.

It's a great way to take advantage of the market going up and down. Keep pumping in that money into some steady ETFs and it will grow.

That is what I am doing in my Roth.

Responses:

Thank you -- nm - Pippy-‘ Apr 21, 19:35 1
- Btw I do Roth but that works with any plan -- nm - Bacon Apr 21, 19:39

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Pippy my two cents which is probably worth less than two cents on your 401k.

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