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Featured Advisor

Srbo Radisavljevic
Managing Principal/Investment Advisor

Edge Portfolio Management


State: IL

At Edge, a low client to advisor ratio allows for personal and customized service for each individual.  Our goal is to work as a team for each client to provide not only portfolio management but wealth coordination and financial planning.  We make every effort to have frequent communication with our clients and to provide timely response to calls and emails.  I also enjoy spending time with my wife and three kids, following Chicago sports, enjoying ethnic cooking, and serving as a school board member for Norridge School District 80.

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Millionaire Investors: Put Your Money to Work in a 401(k)

Millionaire investors advise young adults to put their money to work in a 401(k), not park it in a bank or tie it up in a house, according to Millionaire Corner research.

| BY Adriana Reyneri

Millionaire investors believe young adults should put their money to work by investing in a 401(k) or other retirement plan, rather than parking money in a bank or tying up assets in a house, according to a Millionaire Corner research.

Nearly three-fourths (74 percent) of Millionaires say they would advise beginning investors to contribute to a 401(k)retirement plan, while only 16 percent would recommend buying a home in the current market, and less than 3 percent believe young investors should stash money in bank CD or savings account. About 8 percent of Millionaire investors, who tend to favor equities, say young adults should invest in the stock market.

The housing market crisis has made Millionaire investors wary of the housing market, according to ongoing Millionaire Corner research.  Millionaires have reported significant losses in their home values over the past five years  and, in a wealth study conducted in the first quarter of 2012, less than half (42 percent) said they believe it’s a good time to invest in real estate.  Nearly one-fourth (23 percent) believes the housing market has further to fall.

The economic downturn may make real estate less appealing to Millionaire investors, but hard times appear to affirm the value of retirement savings. Millionaire investors surveyed by Millionaire Corner in May rank “making consistent investments in a retirement plan” as the best financial decision they’ve ever made (40 percent). Millionaire investors consider “having a frugal lifestyle to allow me to save my money” as their second best financial decision (25 percent), while buying a home ranks third (20 percent).  (The other side of the coin: The worst regret of Millionaire investors is not saving enough for retirement.)

Millionaire investors, who have a net worth of $1 million to $5 million not including primary residence, don’t just talk the talk. They walk the walk. A wealth study conducted at the end of 2011 shows that Millionaire investors have allocated 10 percent of their total net worth in a 401(K) or other employ-sponsored retirement plan, and 28 percent of their investable assetsto an IRA. These retirement plans can reduce taxable income, and a 401(k) can also have the added benefit of matching employer contributions. 

Roughly $10.1 trillion in assets were held in employer-sponsored retirement plans at the end of 2011, according to our 2012 Retirement Market Insights report. Another $4.8 trillion of retirement savings are held in Individual Retirement Accounts or IRAs. About one-third (34 percent) of 401(k) assets are invested in stock funds, according to our 2012 report, while 8 percent is allocated to bond funds and 2 percent, to money market funds. Company stock accounts for 13 percent, and target date or other types of asset allocation funds account for 19 percent of 401(k) assets. Stable value funds make up another 23 percent. (Our research also shows that retirement accounts can result in a multitude of funds for investors.)