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I am relatively new to investing Foolishly. The bulk of my money, about $8,000, is tied up in my 401K fund. I cannot buy individual stocks there, so the money is in an S&P 500 tracking fund. I have a small Roth fund in which I have been encouraged with the success of eBay and CRA - stocks I purchased with the help of TMF.

It has been a little disappointing for me to not have more money to invest in the economy's great companies; but with four children and a modest income those funds are hard to come by. So here's my idea . . .

I am considering taking that $8,000 out of my 401K in the form of a loan, and putting it into a Roth for long-term investing. (I can immediately add $3,000 between my wife and I for 1999, and another $4,000 for the year 2000.) I would be paying my 401k back, with interest, over several years, and have the advantage of becoming part owner of companies I select with the help of my Motley Fool brethren.

I agree with those in this forum who have advised against borrowing from the 401k for paying off credit cards or other purposes. But I see this as an opportunity to transfer my money from a place where I cannot pick individual stocks to one that I can, with the enhanced potential of returns for my long-term investments. In addition, I like the idea of having that money in an account where Uncle Sam cannot squeeze me for income taxes or capital gains taxes thirty years from now (tax-free Roth vs. tax-deferred 401K).

I would appreciate any thoughts you may have on this idea.
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