No. of Recommendations: 0
... If so, you could take a $50,000 loan at say 5% from your 401k, then invest the proceeds....

I do not see where you would really gain anything.

If you have $100K in both a 401K and a taxable stock account you would have $200K invested. If you do this $50K loan, then you would still have a total of $200K invested ($50K in 401K and $150K in taxable) Any gains in the taxable account would be taxed and the interest repaid into the 401K will(on average) be less than the $50K would have earned if it was left invested in some sort of balanced mutual fund.

Not that it is a good idea, but you need to compare this to just buying on margin in your taxable account. If you were in the same situation and invested $50K on margin in the taxable account, then you would have $250K invested($100K in 401k, $150K in taxable).

Print the post  


The Retirement Investing Board
This is the board for all discussions related to Investing for and during retirement. To keep the board relevant and Foolish to everyone, please avoid making any posts pertaining to political partisanship. Fool on and Retire on!
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.