Stop Robbing Yourself!

Stick 'em up! Whoa, whoa. Why would you get involved in a stick up? Well, maybe you're getting involved in it and you don't even know it. You want me to tell you how? Maybe, every two weeks, you're not funding your TSP, your 401(k), and you're taking money away from yourself. Let's say you make 100,000 a year and they match 5% of your pay at 100% rate. So every two weeks, let's say, let's take that 5,000 bucks and let's divide it. Okay $5,000 divided by 26 pay periods, if you're paid every two weeks, that's $192 that you should be getting matched on. Wow, that's a lot! Every two weeks! If you went down to the corner and somebody said, "Stick 'em up," and you got robbed, you wouldn't go to that corner anymore, would you?

No way. But you're doing that to yourself when you're not getting the free matching dollars from your employer through a savings plan or your 401k. In fact, even here at CD Financial, there is a 100% match on 3% of your pay, and then a 50% match on 2% of your pay. It's a safe harbor 401(k). You have to get your free money. "Charles, Charles, Dave Ramsey said pay off my bad debt." That may be true. I agree with getting rid of 18%, or 20% interest rate bad debt on credit cards and things like that. Even a student loan debt at 8% or 9% is horrible. Get rid of it. However, if you're getting a 50% match or even 100% match on your 401(k), your TSP, what's 100% compared to 20%? 100%'s way better. It's five times larger. You must fund your TSP, your 401(k). For whatever match there is, get the free money.

Those who have done this have looked so, so much better. I have sat down and spoken to thousands of folks for well over a decade, and the one thing that I've seen consistently is that those who fund their TSP, their 401(k) are in a much, much better place for retirement than those who haphazardly funded when they had the money or when all their bad debt was gone. No, have a plan and eliminate the bad debt, but also always get your free matching dollars from your employer. Some people say, "Well, Charles, I want to pay off my mortgage." And I say, "Well, what's your interest rate on your mortgage? 5%? 4%? 3%? You might be at 2.5%. And if you're paying that interest rate, but you're getting even a 50% match, or, 100% match for a lot of you inside of your TSP, your 401(k), then why wouldn't you get that free money?" Don't forget, stop sticking yourself up. We'll talk again soon.