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The first time I read about the problems inherent in 401(K)s, it was reading Rich Dad’s Guide To Investing by Robert Kiyosaki.  Whatever else you think of him, his discussions of how the tax laws were written and rewritten to benefit the rich and not the middle or lower classes are invaluable, as well as his concern over why 401(k)s don’t work for the vast majority of people.  (Pick it up for a couple bucks used, and while you’re at it read Rich Dad’s Prophecy too for a real hair raiser…)

Here is an article today in the Washington Post saying the same thing, (although where were these articles  five, six ten years ago…)

Jim Cramer too has ALWAYS said to only put into your retirement account what your employer matches.  Beyond that, use a ROTH or some other self-managed vehicle where you can invest in individual stocks, bonds, CDs or investmetns that YOU control, not the ubiquitous index fund or “diversified” global funds.

You may argue with some of the recommendations of these writters, but the underlying logic makes sense, and is borne out by the results in the real world for the vast  majority of people.  It’s worth taking a step back and looking at the big picture.

I have some links and ideas I’m in the process of compiling, from financial types who recommend where to invest now, if at all.  Also some additional ideas for finding cash.  Here’s one for today:

- Get rid of gas cards, which have extremely high interest rates.  Pay cash, and start carpooling once a week or more. Just be sure to bank the savings.  Sounds trivial like most of htese savings tips, but they add up, and in changing your lifestyle you’ll become more financially sound.

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• How Not To Panic About The Stock Market [Investing]

I can’t believe there are so many talking heads – notably, on CNN (Gerri Willis), but also Fox Business (Dave Ramsey), CNBC and others – still telling us to keep putting our money away in a retirement fund, because if you’re retiring in 10+ years, you want to keep averaging your investments… OK, so let me get this straight: The S&P 500 has had its worst DECADE on record, and it’s likely to keep going down or flat for the next 2-5 years, and you should keep putting money there??  When a huge portion of the index is financial companies?

This is why Jim Cramer has for a long time said to ONLY put into a 401(K) enough to get a match if you have one, otherwise  GO ELSEWHERE. I recommend a self-directed ROTH account, where you can invest in individual bond funds, stocks, commodity ETFs etc.  Whatever you think of Cramer, at least he’s telling people to be cautious and not to just keep blindly throwing money down the short-term drain.

Robert Kiyosaki also makes sense: he dislikes defined benefit plans for the precise reason that (1) people don’t know enough about investing to avoid danger (like, emailing or calling in to the cable news shows for advice about how to invest???)  and (2) you have NO CONTROL over your money and how it works for you!  If the market underperforms for 10 years, and you only have variations of the S&P 500 to invest in through your employer’s 401(K) plan, you can’t avoid a bad market.  How does that help anyone financially?

I am going to post a page with links to the people telling you to invest in the market, because in a year or two from now, I want to review their advice… so stay tuned…