We already recognize that we won’t work at a “job” for 40 years, receive a pension and a gold watch and live happily ever after, like some of our parents and grandparents.  Yet what are we doing about it?  We will have on average 7 careers during which we will be responsible for our own retirement savings.  401(k) plans are plans that were created to be portable, so they could move with us, from job to job, career to career.  Yet, guess what?  We do have to fund them!

I know that many people are uber focused on their 401(k)a having shrunk to a proverbial 201(k) these days and take every opportunity to lament that fact, seemingly using that as a ready excuse to suspend or reduce saving any more into said plans.

Guess when is the BEST time to invest in any systematic investment plan?  When the prices are going straight down!  Yes, it does seem somewhat counterintuitive, yet I’m always telling folks who are investing money each week or month, that what they want is a downward market.  You see, a downward market makes the price of the investments cheaper, so you buy more shares each week or month.  This game of systematic saving is ALL about accumulating SHARES.  The price each day is superfluous.

Say you are investing $400/month–that’s less than $100 a week–and the price of your 401(k) investment is $10 a share.  The first month you buy 40 shares ($400. divided by $10=40 shares).  Say the price dropped to $8 a share the second month, and you still invested $400.   You will buy 50 shares in that second month ($400 divided by $8=50).  The third month the price drops to $5 a share, and you bought 80 shares.  See how your SHARES are multiplying like rabbits?

When the rest of the world is griping about how that very share price dropped from $10 to $5 dollars–and most people’s investments did NOT drop by 50%–you are laughing at how many more shares you’ve just picked up!

Since we save for the future–and within a retirement plan most of us are saving for at least 5 years–the price of the shares will cycle through high prices and low prices over those years, so my advice is to keep saving each and every week or month, systematically, preferably payroll deducted.  The mistake that novice investors make, of course, is to stop saving when the share price drops, out of ignorance, I guess, cause they wouldn’t stop if they knew the math that you now know, right?  (The technical term for this systematic savings at varying prices is dollar cost averaging.)

So, play like a squirrel and save for the future, and fagget about the prices for now…just plow in those dollars like your lives depended on it, cause they do.  Trust me when I say it, you CAN afford to invest now.  Remember, you didn’t think you could pay over $3/gallon of gas either, and we all did.

Unless we die prematurely, we’re all slowly marching towards our own futures.  Let’s seed them with as much weekly and monthly retirement savings as we can right now.  I’ll show you the miracle of compounding soon, and you’ll not believe your eyes.  In the meantime, think of your future and that of your family, and plant the seeds now.