Can a Diva get a bailout for her 401k?

Hello Divas!

Wouldn’t YOU just love a financial bailout? I am considering changing my name to the Bank of 401k Diva so i can get in on the $800 billion bailout!

Now ladies, all jokes aside, I know these are difficult times. As a result, more Americans are tapping into their 401k money to relieve the financial pressure. While you may find this idea extremely tempting, I am here to let you know that the 401k diva considers this move anti-divalicious. Let me explain.

Most 401k plans allow you to make a withdrawal for hardship. However these early withdrawals come with something that makes the 401k diva cringe — penalties!

Not only will you:

a. pay taxes on the money you withdraw you will also…

b. get slapped with a 10% penalty! and on top of all of that…..

c. some employers charge a service fee.

This is not diva acceptable.

You work hard for that money, and you will need every drop of it, if not more, when you get ready to retire. Financial adviser Tom Orecchio told CNN that 40% of the money you withdraw will go to Uncle Sam. Diva’s, this is one Uncle who does not deserve your money!

If you are experiencing financial difficulties and must tap into your 401k as a last resort, please get some professional advice and understand how much this decision will actually cost you. Take a look at the CNN article which provides tips on 401k withdrawals.

Keep in mind, the 401k diva urges you to proceed with extreme caution when considering this anti-divalicious behavior.

Here’s to your financial fabulousness!

To Invest or not to invest - What’s a Diva to Do?

Hello Divas!

Let’s talk Passion!

I know its rough watching the stock market go up one minute and down the next. It can feel like you’re in the midst of a passionate love affair.

One minute you hate him…

“I’m getting tired of yo sh** you don’t never buy me nothing” (Erica Badyu)

And then the next minute…

“I ain’t to proud to beg” (TLC)

We have all been there ladies! So now, welcome to the wonderful world of a passionately turbulent relationship with your 401k money.

But let’s focus on the positives of this financial relationship.

Buffet the Billionaire

Warren Buffet, one of the most successful investors in history, said in an op-ed recently that “bad news is an investor’s friend.” So, despite the current financial crisis which has reduced the value of a 401k like a designer dress at an outlet mall, the good news is that current stock prices reflect a tremendous buying opportunity for the well informed diva.

Buffet is buying American stocks. He points out that there are some great American companies whose stocks are selling at a tremendous discount due to fear. And while no one can predict what will happen in the short term, history shows that over the long term, the stock market will recover. Long term usually means more than 3 years and since your 401k money is invested 10, 20 or 30 years you have plenty of time! So keep investing ladies, your commitment to this relationship will be rewarded in the future.

I also encourage each of you to click the title below and check out Buffet’s op-ed in the New York Times, “Buy American. I am”.

Here’s to your financial fabulousness!