These Money Moves Feel Like Financial Cheat Codes
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What is a financial cheat code and why does it matter for building wealth?
There are a handful of money moves that feel like cheat codes. They're almost too good to be true, but they are 100% real and totally legal.
Brian, I am so excited because the strategy that we're going to share today can make a big difference if you know about them.
So I'm Brian, he's Beau, and this is The Money Guy Show, where two financial advisors give you the money cheat codes to help you beat every level of wealth. And with that, let's press start.
All right, Brian, let's talk about this first one. Now, if you've been listening to our content for any amount of time, this is not going to be incredibly surprising, but it really is like a cheat code. And that is getting your employer match.
Guys, seriously, get in there and get that free money. Show me the money. There's a reason. This is step number two.
So why is this a cheat code? What makes it so unique, so interesting, so earth shattering? Well, on the surface, it's pretty obvious. It literally unlocks Facebook. Free money for you. It is money that all you have to do is show up and your employer says, come take this and it is yours to have. And it is literally that easy.
Well, I mean, your employer is already doing this for you. They're counting this as part of their calculation on whether or not when they hire you and put together your compensation package, they are expecting you to take advantage of this. So get in there and do that. This is legitimately free money or even prepaid money if you want to be kind of trollish about it. It's taken into account. But here's the reality of it. This could truthfully set you up for a 50% to 100% guaranteed rate of return. And that's just unheard of in the financial world to get a dollar for dollar or 50 cents on the dollar match. You got to take advantage of that.
Even as amazing as this is, because if we were to set up a table and we were to say, hey, all you got to do is swing by our table after the show. We have bags of money with your name on it. No one would not swing by the table and grab that. Yet the truth is 34% of employees do not contribute enough to their 401k to actually get their full employer match. That means that one out of three employees says, hey, no, thank you, boss.
How can I maximize my 401(k) employer match and avoid leaving free money on the table?
No, thank you, employer. I don't don't want free money, do not let yourself fall into that camp.
So if I ask you right now, what is your funding formula at your place of work? If you don't know the answer, I want you right, don't go, don't go past go, go ahead and reach out to your HR department, reach out to your boss, find out what do you need to contribute? What incentives are built into your retirement?
And what you'll often hear is something like, okay, if you put in a dollar, we'll put in a dollar. You put in $1, we'll put in 50 cents. Or for every $2 you put in, we'll put in $1. However, it is structured. Figure out what the formula is and then make sure that you're putting in enough to get that full match. If you have to put in a full 5% to get a 4% match, then start putting in that 5%. Do not leave free money on the table.
And then the second, realize when you fund your retirement, now a lot of times you make the election. Not only are you going to save this much out of your paycheck, but you're going to elect to invest. But every now and then there's roll-in options and other things. I'm always shocked at how many people their 401k defaults to like cash or stable reserve funds. Ensure that your money is actually being invested. That's the key part to actually put your army of dollars to work for you.
And then we want to make sure that you're revisiting this at least annually or every time you get a pay raise or every time your compensation changes, make sure you revisit how much you're putting into your employer sponsor plan. For many folks, this is the very first account that actually gets them into the two comma club, but you have to start participating, take advantage of the free money and then get better at it through time.
All right, bud. Let's hit them with cheat code number two, automate the investing.
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