Which is better?
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401k. stocks are way risky.
It all comes down to this question: how much risk are you prepared to take? Generally speaking, the more risk involved in an (legitimate) investment, the higher the POTENTIAL returns. Your savings account is probably almost 100% safe, but it will return no more than 5% per year, whereas, in theory, the return on a highly speculative stock could be more than 1000%. Are you a gambler? If not, be careful with your money. Always thoroughly research any investment opportunity BEFORE you invest.
401k is just a holding tank for several types of investments, including stocks or stock mutual funds. You could even have company stock in them.
You may be referring to holding mutual funds vs. holding stocks. Holding individual stocks takes understanding of the stock market, as does mutual fund investing (even in a 401-k), to a certain extent.
The main idea of having mutual funds is having someone manage the investments for you, so you don't have to try it yourself. It also can provide a way to diversify.
There are many that prefer to just invest for themselves, however, and many people have been quite successful at it. It just depends on your level of comfort and expertise.
With 401-k investing, if your employer offers matching, it's an obvious decision to take advantage of that. It's free money! All you have to do is save some yourself.
Outside of that, check into other types of savings accounts, such as IRAs and other tax-deferred/tax free accounts.
Also, see what a financial advisor has to say.
401k is much better. stocks are risky and savings accounts are way too low
I suggest that you should take an amount of money that you calculated you can risk and invest it between 2 companies after you have made a good check about them and the market they operate in , such as energy, oil, auto industry, defense industry etc..and split the investment between both companies from different industries.
In that way you may maximize your gain from both or split the risk by 50% in case of a lose or bad choice in one of them.
The money you do not want or can not risk put into your 401K, which is safe but low gaining .
it depends on how you invest. Do a combination of 401K, Stocks, Savings. A good diversified fund is better. Same within 401K buy mutual funds of different growth type.
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