I was an idiot with money not so long ago and far away.
At the root of all this was my enabling behaviour. I took care of my ex’s money needs trying to “help” him before taking care of my own.
Before I remembered that 6th grade math is VALUABLE.
I had to get a PhD
as Dave Ramsey would say.
I borrowed about $10,000 on my 401k in my 30’s because I wanted to pay off credit cards, student loans or something dumb.
UNLESS YOU ARE FACING BANKRUPTCY AND CANNOT GET ANY OTHER LOAN,
DO NOT DO THIS!!!
Here’s what happens:
Your $ stops earning 12% or more in the market.
If I had been let go at that time, the company could have called that loan in 60 DAYS!!!
If you don’t pay back the $10,000 in 60 days, bad things happen:
Now you owe $11,000 with the 10% penalty FROM the IRS
Plus your tax rate.
Now you owe
Isn’t THAT fun?
You could go TO JAIL if you don’t pay.
Another way to think of this:
“Would you borrow $10,000 at 40% interest to pay off something?”
THAT IS STUPID.
My life IS a WARNING to others.
DO NOT DO THIS.
EVER EVER EVER!!!