Wow – I was just blown away reading this story @ Yahoo this morning. Debit cards you can use against your 401k. Borrowing against your 401k has traditionally been a ‘last resort’, because if you didn’t repay it within 60 days of leaving a company, you had to count it as regular income, pay tax, plus a penalty. This new scheme described gives you up to 5 years to pay the loan back, regardless of where you work, which is a good thing. But they’re also charging you for the privilege of borrowing your own money – 2.9% above prime, I believe.
I dunno – in general I think this is a bad idea. People will get themselves in trouble with this scheme, and *I* – and you – and many other people – will end up bailing them out in the next 20-40 years. Not something I’m looking forward to.
What do you think?
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Interesting money video
This video does a very understandable walk through of the current monetary system we have, and is pretty scary, imo. It’s rather long (47 minutes), but worth watching.
I'm currently working on a book for web freelancers, covering everything you need to know to get started or just get better. Want to stay updated? Sign up for my mailing list to get updates when the book is ready to be released!
