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Chapter 10. Everything You Need to Know ... > The Basics of Investing - Pg. 99

Everything You Need to Know About Investing Your 401(k) Money 99 Now, if we said to you, "In order to reach your goal you must get an 8 percent average rate of return on your money over the next 30 years," most of you would respond, "How?" As we will show you, some investments are better than others at getting an 8 percent return. The same holds true with a 5, 9, or 10 percent return. Whatever your target rate of return is, there are 401(k) investment choices in your plan that are best suited to achieve your goal. The Basics of Investing Before you determine which investments in your 401(k) plan are right for you, you need to spend some time on the basics. Remember that our objective is to teach you everything you need to know about investing, not everything there is to know about investing. Just about all investments that you find in a 401(k) plan fall into one of three major investment categories (a.k.a. investment objectives or asset classes ): · Safety:"Absolutely, positively under NO circumstances could I afford to lose any of my money." · Income:"I don't care what you do with my money, just give me $2,000 every single month. And no surprises!" · Growth:"The hi-tech business is going gangbusters and is selling for $12 a share. I know it will go to $25." There are two other types of investment categories, but you will rarely find them in a 401(k). They are ... · Real estate (residential, that is). · Hard assets (gold, silver, antiques, Oriental carpets, etc.).