The Rich Woman team and I receive many questions about money and investing from women around the world, and--given these times--more now than ever. Here are answers to a couple of general questions many women can relate to.

Q: My 401(k): Do I keep it or not? I am currently paying $300 every month into my 401(k). When my latest statement arrived I did some calculations and realized I have lost more than 30 percent of the money I've contributed to my 401(k) plan. On top of that I've now discovered that even though my net result is a loss, I still have to pay taxes on the gains that were made on the trades that made money during the year! It's been hammered into my head for years, "Keep contributing to your 401(k). That's your retirement." My question is would it be better to stop contributing each month and possibly pull the money out of my 401(k) and invest it in something that would make me money instead of losing me money?

A: You are not alone. According to the Congressional Budget Office in Washington DC, Americans lost more than $2 trillion in their 401(k) accounts in 2008. The problem with 401(k) losses vs. individual stock losses is that the losses in a 401(k) are not just attributed to the stock values in the fund going down. There's also an enormous amount of fees paid out of 401(k)s. An individual stock has a chance of recovering and recouping those losses, but a 401(k) can never fully recoup the loss because the fees will never be recovered.

Here are the facts concerning 401(k)s: You, the 401(k) owner, put up 100 percent of the money, take 100 percent of the risk, and get only 20 percent of the profit. The other 80 percent is eaten up by a myriad of fees and commissions. If it's not obvious by now, I am no fan of either 401(k)s or mutual funds.

That being said, should you pull your money out of the fund, incur the penalty costs of doing so and invest in something that will give you a positive return on your money? My answer is--it depends.

The answer is "yes" if you have the financial knowledge to find investments that will deliver a healthy return on the money you've invested. If you can make more money elsewhere, then move it.

If, on the other hand, you have very little financial intelligence, then I suggest you start educating yourself to find investments that will give you more bang for your buck. And I mean truly educate yourself: Don't go looking for a hot tip or bet on an investment scheme that sounds too good to be true. Become your own expert instead of relying on the so-called experts who made a lot of money on the same investments you lost money on.

Q: I am 32 years old. The only investment I have is a little savings and my 401(k) plan that seems to be in a downward spiral. I'm nervous to begin investing now because the markets are so shaky. I also have two friends who bought houses with the idea of repairing and improving them and then selling them for a profit. Today they can't sell them. One has rented his for less than the mortgage he's paying, so he's losing money every month. My other friend's house sits empty. She's lowered her sale price three times. All of this makes me even more concerned as to whether this is the time to start or not.

A: You have every right to be nervous with what's happening today. If you're considering investing in real estate, now could be the best time to start . . . but not the way your two friends did it.

What your friends did was buy property with the idea that after some repairs they would sell them for a higher price and make a profit. For that to happen the market has to keep going up, or appreciating. They were after capital gains. Capital gains are, very simply, the profit you make on the sale of an investment. Most capital gains investors only make money when the market is going up. When the market turns down, they lose.

Today's market is the ideal market for the cash-flow real estate investor. A cash-flow investor buys a property and rents it out. Her strategy is to buy and hold, whereas the capital gains investor buys the property to sell. Every month the cash-flow investor collects the rent from her property, pays the expenses and mortgage of the property and, if she's managed the property well, she has a profit, or positive cash flow. She's concerned not with the ups and downs in the market but whether her rents cover her expenses and mortgages. She determines this before she buys the property.

In today's market, real estate prices are coming down in most cities, which makes the prospect of finding a cash-flow property much more promising than when real estate prices were going through the roof. Also, many people are moving out of the homes they own and into rentals. So is this the time to start? Absolutely--as long as you do your homework, know what to look for and are well-versed in the market you're looking in. In other words, depend upon your own knowledge and abilities, not someone else's. If you do that, then you will begin to see so many opportunities right in front of you.

Send any e-mails with questions you have to Sara@richwoman.com.

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