A while back someone thought up a “great new idea”. Rather than borrowing money from a bank, perhaps you could just borrow money from your 401k. After all you won’t need the money for years, and why not be your own banker and pay interest to yourself! It’s win win!
In this first part of the two part series I’d just like to point out that you’re investing for retirement so that a small amount of funds will grow into a large amount of funds a long time from now. If you take those funds out, then you lose the whole point of investing for retirement. And as everyone also knows, time is one of the largest factors when it comes to the value of compound. Therefore taking even a small loan out could have a gigantic effect on your total portfolio value in a few decades.