What if you don't want to participate in Wall Street?

[Barack_America]

What options other than 401Ks exist to save for retirement?

If your employer is only willing to contribute to your retirement through a 401K, are there ways to minimize your exposure to Wall Street?

FYI, I have no 401K and no money to invest/save, so this discussion is all hypothetical and not actual *advice*. I'm just interested in hearing of creative ways DUers have avoided Wall Street.

[NoNothing]

1. Treasury bonds

Easiest way that comes to mind. Of course, given how much treasury money has flowed to Wall Street lately, it may be a distinction without a difference...

[Barack_America]

2. Employers aren't willing to contribute to those investments though, right?

Shame.

[dmallind]

5. Almost all 401K options include straight bond investments. NT

[Barack_America]

21. Thanks!

That's really good to know...for sometime in the future, hopefully.

[dmallind]

3. Plenty really

You will miss out on big gauins, but likely miss out on some big losses along the way. So for anti-stock folks or just the risk averse here are some options

BTW 401Ks are NOT necessarily Wall Street. You can invest 100% of your 401K in bond funds or straight T-Bille if one is offered - which they almost always are

1) Bonds - US, State, Municipal, Foreign or yes even corporate in all levels of risk if you look for them
2) CDs from any bank including small local ones
3) Savings accounts for the same
4) Rental properties
5) Turnkey businesses such as vending machines

You can invets millions or a few dollars without ever going near an equities fund.

Generic "you" BTW - I noted you specifically are not an investor.

[Ruby the Liberal]

6. Muni bonds will not be offered in a 401k

As 401ks are pre-tax contribution and tax-deferred gains.

[dmallind]

7. Which is why IO made them a separate option - but bond funds are almost always offered, NT

[Ruby the Liberal]

11. Yep, and a good holding right now

[dmallind]

16. Agreed, I'm still mostly equities but less so than I was - about 65/35. NT

[Ruby the Liberal]

4. Your 401k has predetermined options set by the plan administrator

that you get to choose between (you can't just invest in anything).

Most will have a cash/cash equivalent option in the mix. The return won't be great, but it will still grow tax deferred.

[Greyhound]

8. Exactly.

It can be done, but it is purposely hard and, unless you have really significant assets, prohibitively expensive.

Oh, and you may have to forgo the tax exemption.
:grr::banghead:

[tranche]

9. Property/Real Estate

Everyone might jump on this and point out the obvious (that real estate prices have plummeted) but here in San Francisco you can buy a 4 unit building for around $900,000, when taking into account the income from rents there's a possibility of getting your monthly payments anywhere around $2000 to $3500. If you move into a unit yourself you're paying about the same for rent and have the other 3 units helping to pay for a building that will be worth most likely double in 20 or 30 years. That's an investment.

[Warpy]

10. There are always annuities

which, unfortunately, are created and managed by Wall Street firms.

Other than burying it in the back yard*, in which case it generates no income and is eaten by bugs as well as by inflation, there is little alternative to touching Wall Street in some way.

*don't use that mattress. It's the first place thieves look.

[blindpig]

12. Kill Capitalism

:think:

[dionysus]

13. spamp spam spam spam. you're like an annoying pop-up ad for communism...

[blindpig]

15. So, you got a better idea?

It's not spam, it's grafitti.;)

[dionysus]

26. sure, i have a better idea. strict and fair environment and financial regulations.

now, i would like for you to point out a large scale communist society that was sucessful long term and not an utter failure like the USSR.

[blindpig]

27. Regulation works so well...until the capitalists tire of it.

That has been the record of the last 100 years.

The Soviet Union, starting with a semi-feudal country ruined by war, beset by capitalist aggression, did amazing things to better the lot of the masses. Many of the brick bats thrown at it are gross exaggerations, some of which are based upon Nazi propaganda. Defeated yes, a failure no.

[MineralMan]

14. Well, we know that you know two English words.

That's a start, I guess. Perhaps you have other thoughts as well. Who knows?

[blindpig]

18. Few have more importance....

that's why I like 'em.;-)

[MineralMan]

19. A futile quest, you know.

Quixotic, in fact. Capitalism is not going away. It needs regulation, but it's not going away. There is absolutely no mechanism in this country that could make it go away, nor any will on the part of more than a tiny minority to make it go away.

You're wasting our time.

[dionysus]

20. i am trying to figure this out.. in this mythical communist paradise, do people not use fuel or

plastic... do power plants run on magic proletariat dust or something?

:shrug:

[MineralMan]

22. And everyone builds his own solar panels out of beach sand,

and constructs his own computer out of parts from discarded transistor radios from the 1960s. And the unemployed people in Detroit grow all their own food in neat garden plots.

I love idealism, but it's rarely possible to live those ideals. To hold ideals is a very good thing. To expect that they will come to pass is not ideal, especially if those ideals ignore reality.

Ideals do make great slogans, though, and give poster artists much-needed work.

[blindpig]

23. Funny

Some people can more easily imagine the end of the world than the end of capitalism. Think about that.

Of course there is no extant mechanism, it was destroyed in the Red Scare. It ain't gonna be easy, not at all, but I don't think we have any choice, too much is at stake.

[izquierdista]

17. Gold

Bury the bars in the back yard on a dark and stormy night and then sit on the porch, cleaning your guns.

[Xenotime]

24. It's the only solid investment that is holding it's own against wall street.

[Statistical]

25. Treasury bonds and/or corporate bonds.

Most (all?) 401K plans have a treasury bond fund and almost all have a corporate bond fund.

Also no need to be trader. Many have index funds (one that tracks for example overall S&P 500) which have the added bonus of low fees.

Something like the following at Age 30:
40% equities (S&P index fund and/or small portion in international fund)
30% corporate bonds
30% treasury bonds

getting more conservative as you age to say look like following at age 60:
20% equities
40% corporate bonds
40% treasuries

that combined with 5% employer match over 30 years historically would produce substantial returns no matter how bad your luck was (timing of retirement vs crashes).