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Im pulling out 47000 from my 401k to get the camaro and hopefully get my garage rebuilt. I've been losing some my money in my 401k and if pull it out i will be paying myself 4.5% so i rather do that than leave it in have someone loose it by playing the stock market.
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A woman I work with did the same thing to buy a car, stating the same reasoning - her 401k is losing money, so she'd rather pay herself interest than watch the money fall.
Except that, by cashing out, you have officially "lost" that money. Remember, you only lose money in the markets if you cash out when it's low.
My 401(k) is down 50% this year, and I'm loving every minute of it. A crap market means stocks are cheap and I'm buying all I can for dirt.