I wanna pay down a HELOC with a 401K loan.

[mr_boring]

I bought fleet cars from the company every so often with a 401k loan. I'd borrow 2k or whatever I needed (they cost about 3-4k, but I generally got a couple thousand from selling that car after I'd put 30-40k on it) and I thought that was a sweet way to game my 401k. I was paying back like 125$ to borrow 2k for 12 months (that was the shortest loan length we could take) - in retrospect I wish I'd left that 2k every few years in my 401k and borrowed money from the bank at 2-5% interest.

I'd never borrow a chunk of my 401k that I couldn't readily pay back.

What if your railroad goes bankrupt and another railroad buys them up and you get cut? it just ain't worth it. I also have a buddy who worked for Yellow Freight for like 30 years. They went out of business at noon one day with zero warning. They were (I think) the oldest logistics company in the US - went back so far they used mules to haul freight. Poof......... gone just like that.

 

[SC Maintenance]

That's what other people that work with me that have borrowed have said, too. I keep checking my balance after loan and It's still where it was before loan.

They might show the balance - but its not earning anything. I have no idea how the book-keeping works - but there not going to pay you interest or a gain on money that isn't there. If it was, I would borrow 100% of my 401K tomorrow, put it in T-bills, and pay myself back taking as long as they would let me. In the investment world its known as an arbitrage.

 

[daves66nova]

You should be paying the loan back with after tax dollars, not pre-tax dollars as well, regardless of whether it is a traditional 401k or a roth 401k.

I bought fleet cars from the company every so often with a 401k loan. I'd borrow 2k or whatever I needed (they cost about 3-4k, but I generally got a couple thousand from selling that car after I'd put 30-40k on it) and I thought that was a sweet way to game my 401k. I was paying back like 125$ to borrow 2k for 12 months (that was the shortest loan length we could take) - in retrospect I wish I'd left that 2k every few years in my 401k and borrowed money from the bank at 2-5% interest.

I'd never borrow a chunk of my 401k that I couldn't readily pay back.

What if your railroad goes bankrupt and another railroad buys them up and you get cut? it just ain't worth it. I also have a buddy who worked for Yellow Freight for like 30 years. They went out of business at noon one day with zero warning. They were (I think) the oldest logistics company in the US - went back so far they used mules to haul freight. Poof......... gone just like that.

I really doubt BNSF will go bankrupt. If it did, all I would do is pull the money back out of the HELOC to repay 401k, simple as that. I can pull out and put in as I wish on the HELOC.

 

[Dave Hess]

What if your railroad goes bankrupt and another railroad buys them up and you get cut? it just ain't worth it. I also have a buddy who worked for Yellow Freight for like 30 years. They went out of business at noon one day with zero warning. They were (I think) the oldest logistics company in the US - went back so far they used mules to haul freight. Poof......... gone just like that.

What happened to your friend’s pension with Yellow Freight ?

 

[mr_boring]

@Dave Hess the last I heard everything was still tied up in court. I hope everyone who worked for Yellow gets compensated.