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I have borrowed from my 401K on more than one occasion, so I can understand your reasoning. The interest rate on my 401K loan (at the time) was 10%, so I figured a guaranteed 10% annual return on my money was not small potatoes. OTOH, I had enough money saved/invested elsewhere to enable me to pay off the loan in full in the event I left the company or became disabled, which is important as other posters have pointed out.


We have a $150,000 line of credit set up on my house and a $100,000 line of credit set up on the farm. We like to dabble in real estate so these lines are handy and provide us with "cheap money" when an opportunity knocks. While I have a very good paying job, if I were to lose it today I would be busy working tomorrow on projects of my own. I've always felt a person shouldn't rely on a job for finacial security. To me, the only security one has in life is one's own ability to produce and be productive.

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