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My automobile license plate has read "MR 401K" for the past 25 years, so it's not unusual for someone to approach me on the street and make conversation about -- you guessed it -- their 401(k) account. Last week, it happened at a gas station where I was filling up with what may soon be $5-per-gallon gas.

A young guy pulled up next to me in a Toyota pickup truck that had an AT&T decal on the side and asked me what I thought was a reasonable amount for someone age 36 to have in their 401(k). Doing some math in my head, I assumed about 10 years of steady employment and about $5,000 per year in contributions during the so-called "lost decade," with their paltry investment gains, of the past 10 years.

"How about $50,000?" -- my wild guess.

"Well, I have $168,000." Amazing. He went on to point out that he had been depositing 20 percent of his pay since coming to work for AT&T 12 years ago.

He then asked me how I thought it should be invested. At that point, I thought that maybe I should be asking him that question. But, whatever. A continuing conversation revealed that he had about 40 percent of his money in AT&T stock, which we both agreed was probably a little too much -- not enough diversification.

Beyond that, his money was allocated about 30 percent to foreign funds and the rest in a cross section of different mutual fund types.

When we're talking about 20 percent of pay, we don't know how much that amounts to in dollars in his case, but it can't be huge. This was not a senior manager at AT&T -- but an ambitious, clear-thinking young man who had created a lot of value for that telecommunications company over the past 12 years. Who knows what he does cruising around town in that pickup truck, but energetic younger people like him make things happen. They maintain the networks and do what they can to prevent us from dropping calls.

The 12-year period of his 401(k) participation has been one of the most profitable ever for young people who started to contribute back then. Think about it. If you started in 2000, you were signing up just as the market was hitting bottom. Then, you had a second market swoon in 2008 and early 2009. Brand-new money coming into the 401(k) was benefiting from both of those downdrafts thanks to dollar-cost averaging, the mechanism in which the steady input of a fixed-dollar amount buys mutual fund shares at cheaper and cheaper prices during the downturns. This reduces the average price of all the shares in the account and sets the stage for doing what every investor hopes to accomplish -- buying low and selling high.

Years later, when we start nibbling away at this money to fund an eccentric personal lifestyle in retirement, or even between jobs, we will be selling mutual fund shares at a substantial profit.

Here's a guy who has been substantially rewarded so far for doing everything right. Unlike many other young people, he didn't stop contributing out of discouragement when those quarterly statements in 2008 showed that his 401(k) account had lost as much as a year of salary. He stayed the course and stayed diversified. He didn't retreat into cash or try to time the market.

In short, he made some great investment decisions.

I'm sharing this story because it illustrates what I always thought would eventually happen: that 401(k) plans would actually have sex appeal someday. Imagine what it says about someone when they have almost $200,000 that they've managed to save (and invest) by age 36. How many young people just don't get it?

Giving up the last 20 percent of one's income reduces take-home pay by just 13 percent for most people (7 percent consists of tax savings.) Isn't that a reasonable sacrifice for a young person -- especially if they're single? If you're in your 30s, look around and think about what stuff you've bought and how you've spent, say, the last 13 percent of your take-home pay in recent years.

How does the marginal satisfaction compare with the thought of having close to $200,000 worth of financial security? What could be sexier than a nice 401(k) balance and the confidence you experience from having one.

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