"401K’s are an absolute scam!" is what a TikToker declared with full confidence. It took all of my chakra to avoid crashing out in this newsletter. Let’s talk 401k:

He claimed your 401k money "sits there doing nothing" while other people profit off it. I took this one personally. Your money is invested in the stock market, making you a partial owner of companies around the world that solve problems with their products and services. Calling that ”doing nothing” is like saying your crops aren't growing in Stardew Valley because you went to sleep. The game is still running. Don’t worry, your carrots are still coming.

He also said you're locked out until 60 with brutal penalties. Wrong again. The Roth Conversion Ladder lets you slowly move money into a Roth IRA and access it tax-free after five years. Substantially Equal Periodic Payments let you take early withdrawals penalty-free as long as you commit to equal payments over time.

Per Vanguard's 2025 How America Saves report, the average 65-year-old has $299,000 saved. The median is $95,000.

He’s right, this isn’t enough, but the 401k didn't do that, forty years of skipping contributions did. Don't blame the bucket because you forgot to fill it. In addition to 401k’s, people use other amazing accounts like Roth IRAs, HSAs, and Brokerage Accounts.

Then the TikToker’s pitch came right on cue: ONLY BUY real estate. It's always real estate or life insurance with these people. Always.

His claim: one rental property beats a 401k, “even with an employer match”. Sir, the match alone is an instant return before the market does a single thing. You will not find that on Zillow. He then makes the claim many of these real estate gurus make: “Passive Income”.

I know many real estate investors personally and not a single one has ever called it a passive form of income. The water heater breaks ($8,000). Tenant ghosts you like a Hinge date in November (two months vacancy, $4,000 gone). You made $5,000 in cash flow all year and you are now in the red. Congratulations on your passive income, which is actually a second job that texts you on Christmas.

Real estate, 401k, crypto, you can do all of it! Like everything else in life, none of them is perfect (except my cats, of course). Each comes with its own set of tradeoffs. The only bad move is letting a TikToker with a sales pitch talk you out of an amazing investment for your future, and potentially out of free money from your employer.

Talk soon,

— Your Money Senpai, Imran