Investing inside Lottery over Mutual Funds???

Even though I am not a good investment advisor rather than hold myself out as you, clients continue to ask me what to do to plan retirement. Should I max out my 401(k) contribution? Should I do an IRA? Should I put more during my profit sharing plan or pension plan?



Contrary to popular belief, none of the are wise investments. Why? Among other reasons, all of them involve putting money into a smart investment vehicle over which they've got little control as to investment and timing and a lot people wind up choosing Mutual Funds for their investment within diets. In fact, putting your hard earned money into the Lottery has to be better investment.



Really? The Lottery as a good investment vehicle? Sound crazy? Gamble my retirement funds away in a very government-sponsored game of chance where I have little possibility of winning? Where millions of other folks are putting in money in hopes of winning the top one? Where a lot of the money goes to someone else and also the chances are strong that I will suffer part or all my money?



Wait a few minutes - are we talking now in regards to the Lottery or about Mutual Funds? Hmm, a government sponsored program where I have little chance of winning. Sounds like similar to Mutual Fund investment in a very 401(k) or IRA. After all, what exactly are my probability of retiring on Mutual Fund investments? Not very high, actually.



A couple of years ago, I was playing a financial program for the radio on my way into work. The interviewer was asking the representative of a big Mutual Fund about the performance from the Fund. The Rep responded how the Mutual Fund had risen in value by typically 20% per year for the prior 2 yrs. But in the event the interviewer asked concerning the average return to the average investor inside Fund, the Rep responded that the average investor had actually lost 2% each year. Why? Because with the timing of going in and out from the market. Compare this for the Lottery, where everyone should know the exact likelihood of winning as well as the exact amount that could be won!



But what concerning the great tax features of putting my money in a 401(k) or an IRA? Yeah, right! Get a tax deduction when you're young and in the relatively low tax bracket so that you can pay taxes on the money you adopt out when you are retired and inside a higher tax bracket? Yeah, this is a good deal. Or, take into account the difference in tax rates on capital gains and dividends in case you are not in a 401(k) or IRA versus the ordinary income tax rates around the earnings once you pull them through your 401(k) or IRA.



So congratulations, you are thinking that you should just purchase Mutual Funds outside your 401(k) or IRA? Wrong again. Mutual Funds bring about capital gains taxes in the event the Fund Managers trade them even if you don't see the money! You have to pay taxes even though the Fund might actually have gone down in value! And what concerning the lost opportunity expense of that money that you will be now paying in taxes that you might have place into other investments? At least with all the Lottery, you know the complete amount of taxes you can expect to pay if you win and you also only have to pay taxes in case you do win.



Yes, you say, though the Lottery is gambling and I have zero control over whether I win or lose. You are right. The Lottery is gambling. But so is a Mutual Fund. You have zero control over the stock market and neither does the Fund Manager. The market goes down, so does your Fund. At least you recognize that you are gambling when you play the Lottery. You don't have the government, banking institutions and your employer telling you the Lottery is a great investment. And your employer doesn't go so far regarding match the amount you put into the Lottery as it might using your 401(k). Nobody is lying to you regarding the Lottery being gambling, but those involved with positions of authority are lying to you regarding the chances of success in a very Mutual Fund!



But surely, you say, there is a better chance of making money in a Mutual Fund than there is inside Lottery? Hardly. There may be less of a probability of losing all the money you put right into a Mutual Fund than there's losing all of the money you put into the Lottery. But you are never gonna win big in the Mutual Fund. In fact, Mutual Funds are built to minimize your returns by developing a "balanced portfolio." If they could minimize your risk of the market itself, this might be okay. But the problem is that nobody can minimize the risk from the market without sophisticated hedge strategies that aren't typically used in Mutual Funds. At least using the Lottery, you have a chance of winning big. And you can sleep at night, when you aren't wondering if the odds of winning 're going down overnight because of something that occurs in Tokyo.



You say you don't like the idea that most of your Lottery gamblings are inclined to support government programs? Where do you think a lot of the earnings out of your Mutual Fund are going? No, to not support government programs, but rather to support ignore the advisor's and the Mutual Fund manager's retirement? You take every one of the risk, you place in all of the capital, but almost all of the earnings from your Mutual Fund go to the Fund manager plus your investment advisor. At least using the Lottery, the funds are going to worthy causes, for example the Arts.



Of course, I would never advise a customer to rely on the Lottery for retirement. But neither would I advise them to depend on Mutual Fund investments. For my dollar, the Lottery is a bit more fun and at least I know I'm gambling. But in the event you want to retire, look at other investments and use someone who would like check here to put in the time that may help you retire soon and retire rich. Financial freedom can be obtained to those who will be willing to work and understand it, but not likely for many who want to rely on such risky investment strategies as Mutual Funds.



Warmest Regards,



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