Have been reading newspaper articles about how CEO's and other exec's have been getting the lion's share of the income in this latest "recovery". Meanwhile the middle class continues to get squeezed. Occurred to me that we do have one weapon available to make a point to them: our 401k accounts. Weekly billions are being pumped into the market from our paychecks. Supposed to set us up for retirement but for many of us we don't make enough to properly fund our 401k. Thus we don't receive much for our efforts and we are also in danger of having our funds greatly reduced in a crisis. But collectively our contributions are used to buy stock on the open market. Those who own large amounts of stock i.e. our corporate exec's benefit greatly from this buying. And to insure that the mutual funds buy large amounts of their company's stock they pay out many millions in stock dividends while holding down our pay. We contribute to their success with little to show for it. It's time we show them we do matter and deserve better. If you want to make a point to those who benefit greatly from this system then withdraw from any stock funds in your 401k. Better yet put your contribution at 0% until they wake up and see we do matter. And spread the word!!
Drop Out of Your 401k
- Thread starter vantexan
- Start date
UpstateNYUPSer(Ret)
Well-Known Member
I have a different plan in mind. I will have my debt paid off before the year is over and plan to max out my 401k. I will then let the fund managers invest wisely to ensure I get the best possible return on my investments. In 8 years I will sit back and began to enjoy the fruits of my labor.
Sorry if my plan doesn't coincide with yours but yours will be akin to a barnacle on a humpback whale.
Sorry if my plan doesn't coincide with yours but yours will be akin to a barnacle on a humpback whale.
But you make enough to fund your 401k properly not to mention you get a nice pension. What you aren't getting is there are 10's of millions of us who put in enough to get the company match, but little more as that's all we can manage, if even that much. Collectively that's alot of money, and in today's job market there's more and more of us. Many more than those who max out their contribution to the annual limit. Let's see how well the market does if we stop contributing. P.S. Think companies offer a 401k match out of the goodness of their' hearts? It's a legal way for them to pump more money into the market by giving us an incentive to participate. Barnacle indeed!
UpstateNYUPSer(Ret)
Well-Known Member
Lowering your contribution to zero will be a symbolic gesture at best.
Sure, if it's just me. Let's see how the market reacts if millions of us stop contributing.
You're missing my point. We collectively have a way to make a point to the power structure. If we set our contributions to 0%, and transfer the money in our accounts to bond funds or money market funds, we dry up a huge source of funding in the stock market. If mutual funds can't buy as much the stock price drops, as does the net worth of those who hold huge amounts of stock. That's where the real wealth lies. I'm not saying do it forever, just until we get something in return. Whether that's better raises, or maybe a much better retirement plan, whatever it takes to get the point across that we matter in their scheme. Dry up those funds for a month, 6 months, or however long it takes. You UPS guys went on strike in '97 for better pay and benefits. UPS came around quickly when the money stopped flowing. I'm not asking for the moon, just a better pay plan and/or retirement plan than I have now. That won't happen unless it's in the company exec's best interest to make it happen.
brett636
Well-Known Member
I love your plan, but I've got a better one! Lets all shoot ourselves in the foot so we can clog all the emergency rooms in the nation so that just in case one of those evil CEOs need some emergency services they won't be able to get it! If that sounds moronic that's because it is just like this thread. Not contributing to your 401k will only hurt yourself and nobody else. As much as I love the brown cafe I highly doubt millions of people are reading this, and if they were I bet you couldn't get 10% of those reading to go along with your plan. Most people make plenty of money to contribute to their 401ks, but they simply choose not too. They are too wrapped up in buying that new car or maxing out their credit cards to go on vacation. The here and now trumps the needs and desires of tomorrow which is why a lot of 401ks go underfunded or not funded at all. If you want to stop contributing to your 401k that's your business, but if you believe you are hurting anyone but yourself in the long run you are delusional.
I see. We mustn't think in big terms. Do you really think I think millions are reading this? Did a Google search on best 401k company match and concluded this idea won't fly as many companies are reasonably generous with their contributions. I was talking about getting the message out and over time just maybe we can make a difference. Of course those who do make enough to fund their 401k properly might be a bit incensed by the idea as, like it or not, their fortunes are tied to their company's fortunes. What do they care if 10's of millions of people will have to continue to work and struggle just to get by as long as they've got their's? It may not be practical, but the premise is sound. We can make a difference if we stand up for ourselves. And if that means you'll have to do without a new toy or two or play less golf so be it.
I suspect that those who can afford it have expert advice as to when to sell and when to buy back in. I'm talking about drying up a huge source of funds that will help drive prices up. We are talking about buying and selling, but the execs in corporations tend to have a large amount of stock from when they set up their corporation, or have large amounts given to them in options for performance. It isn't about constant buying and selling for them, it's getting the stock price as high as possible so that when they do decide to sell 10,000 shares out of their hundreds of thousands, even millions of shares, that they pull out as much cash as possible. If you dry up the funds available to buy those shares the price tumbles. There's a symbiotic relationship between the exec's of major corporations and the mutual funds that handle 401k's. The exec's vote to pay out a quarterly dividend from the profits, which can run from 10's of millions to hundreds of millions annually. In turn the mutual funds buy those stocks to get the dividends, and have to but alot of stock to have the dividend amount to something. This keeps the price high. A CEO with alot of stock benefits by both receiving dividends himself and the higher stock price. This is what we're working for anymore, to increase profit to get a high stock price. And too many companies are trying to find the lowest pay that they can get away with paying to enhance profits to enrich themselves. Might not be a concern for UPS drivers who get paid well and have a stake in this system. But the rest of us are getting squeezed. Frankly I don't see the States ever having the kind of economy we've had in the past as long as this continues. Some will do well, most won't, and face a future of much lower expectations. Happy 4th everyone!!
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Catatonic
Nine Lives
I think removing sources to buy the stock would actually drive the price down.
I thought it was confusing before ... now I'm totally confused.
I could have worded that better. The 401k funds drive prices up when used to buy stock. If you take them out of the equation there is much less money available for stock purchase and prices drop.
You're welcome. The struggles of the poor are always amusing. When the States look like a 3rd world nation with a 40%+ poverty rate it'll be down right hilarious!
UpstateNYUPSer(Ret)
Well-Known Member
As long as the price of caviar remains stable I will be all set.
cachsux
Wah
Did Klein move to Texas?
I'm a socially conservative Christian who sees the writing on the wall.
LTFedExer
Well-Known Member
Sounds like my plan.
Yes.
Yes.
vantexan - This will not work. The people that you're trying to hurt would not put themselves in a position to lose the kind of money you're thinking of. Once you feel you've made your point, those same people would just buy the stock as it goes up once you start contributing again.
You're right, it won't. It would if millions said no more contributions until we get better pay, or even just a better 401k match. But they won't. Probably had at least one FedEx corporate officer wanting my head, if any of them ever read this. This isn't about social justice or sticking it to "the Man" or trying to hurt anyone. Kind of hard to hurt a millionaire or billionaire. It's just to say that if we work hard for a company and contribute to it's success we should be rewarded for it. All these commentators from UPS have never truly experienced what we are going through at FedEx. They're just worried somebody might upset their apple cart. Mexico has, last I read, a 40% poverty rate. The Philippines has a 70% poverty rate. Mexico also has the world's richest man, Carlos Slim. The Phils has billionaires too, as well as several of the 10 largest malls in the world. We are heading down the same path, with wealth concentrated into fewer and fewer hands, many impoverished, and much friend the rest barely getting by. And those who's well being is closely aligned with the wealthy will snort and scoff at any suggestions that all isn't well. I truly doubt that millions of Amricans died in wars for this result.
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