Lost money?

[AJ444]

My wife lost 80k on her house in Colorado that she purchased in 2007 and sold in 2012, that was after renting it at a loss for two years so at least we got to deduct the it on our taxes. She was unable to walk away because her job would have been at risk.

I am losing 50k on a townhouse I purchased in 2002 that is closing in January. If I could have a do over I would have walked away in 2009 since the only thing that happened to friends that did was a temporary drop in credit score. No lender ever came after them.

130k lost in real estate, we are now renting and plan to keep doing so unless there is another housing crash where we could purchase something cheap. A lot of friends of mine feel the same way since they got scorched on their first homes as well.

We have made a killing in the stock market since 2009 which has contributed to a very positive net worth even with the drag from real estate.

[MakeAStash]

Some investments increase in value, some do not, there's no avoiding it. Even the losers have value in that they teach you something about what not to do next time.

[TexasHusker]

I believe there is a lawsuit pending litigation US Supreme Court whether Employer have the fiduciary responsibility to its employees about their 401K plan. Certainly losing a $250K in 401K qualify a huge lawsuits.

Yeah I would have zero chance. Too many what-ifs.

I forgot (mostly) about it and moved on.

[Singuy]

Bought my first house at 371k, paid if off in 7.5years, and then sold it after closing for about 295k.

Wouldn't have sold if I didn't need the money asap for a foreclosure that is too good to pass up. Made up the lost and then some.

[scfr]

I need to amend my earlier comment. While driving to work today, I remembered that I did once sell at a loss. In the early 90's, when I was a completely green investor, I chose 2 mutual funds based which would let us invest with a regular $50 per month deposit. We decided that wasn't the best criteria for selecting funds, wanted to put our money elsewhere, and if my memory is correct we ended up selling in less than a year. On one of those funds we had a loss. I don't remember if it was a 2-figure loss or a low 3-figure loss. It was part of the learning process, and did not scar me for life.

[disneysteve]

when I was a completely green investor

I don't remember if it was a 2-figure loss or a low 3-figure loss. It was part of the learning process, and did not scar me for life.

It's great to make those learning mistakes early on when the numbers are very small. That $50 or $100 lesson has probably saved you many thousands over the years since then.

[Jluke]

I really wish you would have shared this story when you first started posting here because it would helped so many of your posts make sense. Now I understand why you are so against 401k plans.

You've pointed out one of the biggest problems with the plans. You have no control over the investment options. You can only choose from what they offer and they can change their offerings at any time. This is just one of the reasons that the standard advice we give is to invest enough in your 401k to get the full company match but then move to funding a Roth. With a Roth, you totally control the investment choices and your choices are practically limitless.

It totally sucks that you got screwed like that by your 401k and had no recourse.

Our 401k core offerings changed this past summer (as everything was going up), and although I didn't know the exact details of Texas' situation I did remember him warning about changes to the plans and that he got screwed by that. I was forced to move out of the funds I had been investing in (lost all that DCA over the years). This wasn't the first time the company switched out funds, but this time they gave us access to Brokerage Link. So before they made the changes effective, I sent everything to cash for funds that were no longer available in the core offerings.

after that I sent the cash to brokerage link and picked up fidelity funds in there. As I see it, I no longer have to worry whether the company changes funds again in the core offerings since I am investing in funds of my choice. I just needed to be aware of the transaction fees for purchase of non-fidelity funds. It was $75 to buy Vanguard's Wellesley fund, but I did it any ways; along with vanguard energy and vanguard healthcare since they took a hit, but still are down.

Waiting to see if this was a smart move on my part as far as avoiding future changes in the core funds.

[corn18]

While I hear all the grousing about crappy 401k funds, I will always advise someone to contribute enough to get the company match. It would take a really crappy set of funds and fees to offset a 100% return.

183110 My contribution to 401k
129939 Employer match

71% ROI just because I participated.

Doesn't mean you have to put ALL your money into a 401k, but getting the match is wise.

[Singuy]

For tax efficiency, going back on Steve's comment about advising people to only participate in a 401k for the company match and then do your own IRA on the side. I think Steve is only taking about a ROTH IRA on the side. You cannot take any tax deductions from a regular IRA if you are with a company that offers a 401k.

[disneysteve]

the standard advice we give is to invest enough in your 401k to get the full company match but then move to funding a Roth.

For tax efficiency, going back on Steve's comment about advising people to only participate in a 401k for the company match and then do your own IRA on the side. I think Steve is only taking about a ROTH IRA on the side.

Yes, that's exactly what I said. Fund the 401k to get the full match and then fund a Roth.

[TexasHusker]

The company match can be a trap. Yes, you are getting a "100 percent return", but that is a one-shot deal. If the investment options are ho-hum, you may well be many dollars ahead in the long run by finding better investments - whatever they may be - that the employer plan does not offer.

[disneysteve]

The company match can be a trap. Yes, you are getting a "100 percent return", but that is a one-shot deal. If the investment options are ho-hum, you may well be many dollars ahead in the long run by finding better investments - whatever they may be - that the employer plan does not offer.

Not likely, though. And most places aren't a 100% match. I'd say a 50% match is far more common. But I'll take a guaranteed 50% return on my money any day. Even if the account growth is sub-par, it would have to be pretty catastrophic to wipe out that 50% return.

[rennigade]

The company match can be a trap. Yes, you are getting a "100 percent return", but that is a one-shot deal. If the investment options are ho-hum, you may well be many dollars ahead in the long run by finding better investments - whatever they may be - that the employer plan does not offer.

I disagree with this. Maybe this is true if you have horrific options to choose...but most...actually all 3 employers I have worked for offered your basic S&P funds, target accounts, low fee very popular funds.

Mine have all been a 50% match...this year I was able to get $1200 in employer contributions. Its not a ton of money but combined with low cost funds through fidelity I couldnt see myself ever passing that up. It would be the same sort of funds I would invest in regardless if I had a 401k...so whats the difference?

[corn18]

The company match can be a trap. Yes, you are getting a "100 percent return", but that is a one-shot deal. If the investment options are ho-hum, you may well be many dollars ahead in the long run by finding better investments - whatever they may be - that the employer plan does not offer.

Seriously? What is safer and easier than making a 100% return instantly? The risk of hohum funds available in the 401k? WTF. There ain't any deal you got going that offers a 100% instant return. I wonder what goes on in your head to be so myopic.

[msomnipotent]

Msomnipotent why do you think you'll not be able to sell the house?

Life keeps getting in the way. Decluttering and repairing the problems the handyman caused is going slow, mainly because I keep getting sick or injured and my husband is working too much to help out. I'm sick right now, and I'm waiting to find out when my surgeries will be. Long story short, I have to have both of my ulnas shortened so I probably won't be able to do much. I can't do much right now because of it, either!

I think it will sell fairly quickly once I manage to get it on the market. We did a lot of updating because the original owners were either cheap or had horrible taste. We also plan to undercut the other homes in the neighborhood just so we can move out sooner, provided that we find a suitable home to move to.