EP144: Panic! Don't Borrow from Your 401k!

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Traditional financial advice will tell you that you should never, under any circumstances touch your 401k. I recently came across an article that used fear-based tactics to convince people that disturbing their retirement account is a serious, dire mistake.

On this episode of Investing in Real Estate, I’m explaining why I vehemently disagree with the idea that taking a loan from a 401k will end in disaster. I’ll share my personal experience, as well as how you can turn your own money into cash flowing real estate assets. Don’t miss episode 144 of Investing in Real Estate!

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I’ve taken loans from my 401k; in fact, I do so every year in order to purchase cash-flowing real estate investments. This is a fantastic strategy, because it allows you to borrow from yourself. It also lets you pay interest to yourself, instead of a bank. 

But 401k providers and employers want to discourage you from doing this. They want you to think they care about you and your retirement. The truth is, they don’t care at all about your future. The only reason they’re concerned is because they think if you haven’t prepared for retirement, they won’t be able to instead employ younger, lower cost workers.

It’s disturbing that some company thinks they are a better steward of your money than you could be. It’s offensive to think that they want to prohibit you from borrowing from your 401k. Remember, it’s your money! Add to your net worth! Take that money that’s just sitting in an employer-selected fund, and turn it into cash flow!

I’m not saying you should take a 401k loan and blow that money on frivolous purchases. But purchasing rental real estate is a great way to plan for not only retirement, but also life in general. I implore you to not be panicked by companies who want to scare you. Be the ultimate authority of your finances.

On today’s show, I’ll share more details from the article I read. You’ll learn about financial steps you should take in order to be in control of your finances. I’ll share specific examples of companies’ scare tactics, and much more! 

If you’re ready to begin building a passive income through rental real estate, book a FREE call with our team today. We’re ready to talk about your goals and want to help you learn more about earning legacy wealth for you and your family. 

On this episode you’ll learn:

  • What are the three main benefits of taking a 401k loan?
  • What is the federal annual limit for 401k contributions?
  • What can you do with an old 401k account from a previous employer?
  • What percentage of 401k borrowers default on their loan?
  • And much more! 

Episode Resources
EP092: The Mind-Blowing Power of a Solo 401k – Interview with Dmitriy Fomichenko
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Traditional financial advice will tell you that you should never, under any circumstances touch your 401k. Here's why you might want to if you're investing in real estate.