Wisdom to Wealth: August 11, 2020
The way the economy goes through cycles affects the stock market. In today’s Wisdom to Wealth segment sponsored by John Halterman of Beacon Wealth Management, John explains when is the right time to borrow from your 401k.
John Halterman: Is there ever a smart time to borrow from your 401k? Well I gotta tell ya a lot of times it doesn’t make sense because I’m a big believer in leverage money and so when you go and buy a boat, a car, a house or anything that has property tied to it, go to the bank and the bank will use that property as collateral. And of course today, interest rates are super low. So it’s always smarter to use someone else’s money. Now when you don’t have collateral and you are in an emergency situation and you have no where else to go. Well I would rather see you borrow from your 401k then to charge it to your credit cards. Because at least with your 401k we know the payments are going to end on a specific time. With your credit cards its open ended. So it could go on forever. So there is a smart time but use it wisely. For more answers, call me or visit my website
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