Originally Posted by
TenYearsGone
Far from pro,
But depending on your discipline,asset exposure and diversification; I am a proponent of borrowing money from one self (401K) to leverage into a Real Estate purchase. From what I recall you can borrow up to 50K on a 10 year payback with around 4% interest.
I dunno Ten...
(Disclaimer: I've never borrowed from my 401K)
From what I've read (on the Internet, so it must be true, right?) borrowing from one's 401K is a last resort. For example:
8 Reasons To Never Borrow From Your 401(k)
Thinking of Borrowing Against Your 401k? Here's What You Need to Know | DailyPerk
401(k) Loans - Nine Things to Know About Borrowing from Your 401(k)
Perhaps I'm missing something (likely) but I don't see the advantage...
Suppose I borrow $50K and I pay myself 4% interest. That money is "growing" at 4% per year.
In the period 1928 to 2010, stocks earned an average of 11.3 percent, according to U.S. News and World Report.
So assuming average long term returns, I'm losing a net 7.3% on that 50K loan.
This strikes me as a bad deal. Please tell me what I'm missing.