The 100% Guaranteed Investment Nobody Talks About
44sReveals a little-known 'guaranteed' return that most people overlook, sparking curiosity and FOMO.
▶ Play ClipAI Summary
This video explains the concept of an employer 401(k) or 403(b) match, framing it as a '100% guaranteed investment' because it provides an immediate 100% return on your contribution. The speaker illustrates with a $100,000 salary example, showing how a 4% match can grow to nearly $489,000 in 30 years, and emphasizes that taking advantage of the match should be a priority after building an emergency fund and paying off high-interest debt.
Chapters
[00:02]
The 100% Guaranteed Investment
The video opens by claiming that the day you take advantage of an employer match is the day you 'make it,' framing it as a guaranteed investment opportunity.
[00:16]
Understanding the Match
Using a $100,000 salary example, the speaker explains that a 100% match up to 4% means the employer contributes $4,000 if you contribute $4,000, resulting in an immediate 100% return before any market gains.
[00:43]
Long-Term Growth
With an 8% average annual return, the employer's $4,000 annual contribution grows to about $489,000 in 30 years, and over $1 million in 40 years.
[01:10]
Priority Order
The speaker advises that after building an emergency fund and paying off high-interest debt, taking advantage of the employer match should be the next priority in investing.
The video concludes that the employer match is a powerful, low-risk way to boost retirement savings, and encourages viewers to take advantage of it if available.
Study Flashcards (4)
What is a 401k match?
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What is a 401k match?
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An employer contribution to your retirement account that matches your own contributions up to a certain percentage of your salary.
00:16
If your salary is $100,000 and your employer offers a 100% match up to 4%, how much will they contribute if you contribute $4,000?
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If your salary is $100,000 and your employer offers a 100% match up to 4%, how much will they contribute if you contribute $4,000?
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$4,000, resulting in an immediate 100% return.
00:31
With an 8% average annual return, how much will the employer's $4,000 annual contribution grow to in 30 years?
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With an 8% average annual return, how much will the employer's $4,000 annual contribution grow to in 30 years?
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About $489,000.
00:43
What is the recommended priority order for investing?
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What is the recommended priority order for investing?
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Build an emergency fund, pay off high-interest debt, then take advantage of the employer match.
01:10
💡 Key Takeaways
💡
The 'Make It' Moment
Frames the employer match as a pivotal financial milestone, making the concept memorable.
00:02
📊
Immediate 100% Return
Quantifies the match as a guaranteed 100% return, emphasizing its value.
00:31
📊
Compounding Growth Example
Provides a concrete example of how the match grows over decades, illustrating the power of compound interest.
00:43Full Transcript
[00:02] the day that you make it. I know that sounds ridiculous, but let me explain. A lot of people don't opt in for this and it's usually available to you if you with a retirement plan. And that would be a 401k match or a 403b match if you
[00:16] work for the government. So, let's say your salary is $100,000 per year and your company offers to match 100% of up to 4% of your salary. This phrase just means that of your $100,000 salary, 4% of it or $4,000 of any contribution will
[00:31] be matched by your employer. So, if you put in 4,000, they put in 4,000 and that's a 100% return before any investment gains in the market. When it comes to market returns, let's run the numbers on how this impacts your
[00:43] retirement balance. So, $4,000 a year from your employer invested in a target date fund or an index fund and an 8% average return means that in 30 years, your employer's half alone is worth about $489,000.
[00:57] That's money you never had to work for if you just took advantage of the match. and you do this for 40 years, that's over a million dollars. So, after you have an emergency fund and you've paid off any high interest rate debt, this is
[01:10] going when it comes to investing. Let me know if you take advantage of the match know if you take advantage of the match and follow me for more.
