401k loan thiskodam manchike ayindi antunna desi uncles

[Ravi860]

Monna weekend party lo recent ga illu konna uncles o rechipotunnaru. 401k loan thiskuni manchike ayindi.. now that stocks are low we are actually buying stocks lows now with the 401k loan monthly payments and interests antunnaru. Thiskunna appu gurinchi kuda dappu kontunnaru kadha ra anukunna 

[vatchesa]

2 minutes ago, Ravi860 said:

Monna weekend party lo recent ga illu konna uncles o rechipotunnaru. 401k loan thiskuni manchike ayindi.. now that stocks are low we are actually buying stocks lows now with the 401k loan monthly payments and interests antunnaru. Thiskunna appu gurinchi kuda dappu kontunnaru kadha ra anukunna 

Correct kada, and moreover they took loan from their own money

[phatposts]

401k lo ne heavy exposure unna funds/plans select chesthe aipotundi kada?

Loan teesukuni - interest katti, aa money tho stocks konte how is it beneficial?

When you take loan - the opportunity cost is the hedge on tax deferred growth. 

Manollu chala mandi short term or superficial discussion untundi. 

[Ravi860]

5 minutes ago, phatposts said:

401k lo ne heavy exposure unna funds/plans select chesthe aipotundi kada?

Loan teesukuni - interest katti, aa money tho stocks konte how is it beneficial?

When you take loan - the opportunity cost is the hedge on tax deferred growth. 

Manollu chala mandi short term or superficial discussion untundi. 

They are talking about 401k loan.. that money went into housing payment can be downpayment or whatever. So originally they got that money by selling stocks or bonds from 401k plan at higher price let’s say last year or before. Now that they have to pay back original with interest. Ipudu stocks pathalaniki deggarlo unnayi so lows lo kontunnaru ani valla aanandam 

[csrcsr]

7 minutes ago, phatposts said:

401k lo ne heavy exposure unna funds/plans select chesthe aipotundi kada?

Loan teesukuni - interest katti, aa money tho stocks konte how is it beneficial?

When you take loan - the opportunity cost is the hedge on tax deferred growth. 

Manollu chala mandi short term or superficial discussion untundi. 

 

2 minutes ago, Ravi860 said:

They are talking about 401k loan.. that money went into housing payment can be downpayment or whatever. So originally they got that money by selling stocks or bonds from 401k at higher price let’s say last year. Now that they have to pay back original with interest. Ipudu stocks pathalaniki deggarlo unnayi so lows lo kontunnaru ani valla aanandam 

I think interest alos goes to your same account manaki maname interest,  because market went down vala anandam kavochu, if they locked the home at high price adi kudda bokka e nemo

Aaku mullu laga edo rupam la bokka

[hyperbole]

Loan and 401k ki link endi? I don’t see any advantage or disadvantage except for the interest rate. 401k contribution or stocks allocation remain unchanged, it is just a collateral for your loan, the max you can borrow is 50k loan for buying a house, 401k going up or down doesn’t affect the max you can borrow as long as your 401k net value is greater than 50k.

 

more over they loan you only provided you have a proof that your are buying a house like sale agreement etc

[coffeeabhi]

14 minutes ago, hyperbole said:

Loan and 401k ki link endi? I don’t see any advantage or disadvantage except for the interest rate. 401k contribution or stocks allocation remain unchanged, it is just a collateral for your loan, the max you can borrow is 50k loan for buying a house, 401k going up or down doesn’t affect the max you can borrow as long as your 401k net value is greater than 50k.

 

more over they loan you only provided you have a proof that your are buying a house like sale agreement etc

You can take upto 50% or 50k, whichever is lower, of your 401k balance with the current employer as loan. No questions are asked, no papework is required. You can use that money for buying anything or even to just gamble, they dont care. 

Every month, you have to pay the EMIs on the loan. Both the principal and interest components are added back to your 401k account. 

They charge some minimal processing fee to start the loan, thats the only fees that we lose.

Lets say your 401k balance is 100k and each share that you hold in your account is $100. So, you have 1000 units of that fund/share. If you take 50k loan, they will sell 500 units and give you the money. Now, with the money that you pay monthly, they will buy those units back.

If the unit price is 100 when you started your loan, they sold 1 unit at 100. At the time of monthly payments, if the unit value goes down to 50, they will buy 2 units for the same 100 and add them back to your account. So, if the stock goes down during your loan, you will have more units. If the stock goes up, you will have less units at the end of the loan.

[JackSeal]

12 minutes ago, hyperbole said:

Loan and 401k ki link endi? I don’t see any advantage or disadvantage except for the interest rate. 401k contribution or stocks allocation remain unchanged, it is just a collateral for your loan, the max you can borrow is 50k loan for buying a house, 401k going up or down doesn’t affect the max you can borrow as long as your 401k net value is greater than 50k.

 

more over they loan you only provided you have a proof that your are buying a house like sale agreement etc

If you take 401k loan they sell stocks you own to fund your loan… when you repay when price is low you get more stocks… atleast fidelity did this to me

[megadheera]

1 hour ago, Ravi860 said:

Monna weekend party lo recent ga illu konna uncles o rechipotunnaru. 401k loan thiskuni manchike ayindi.. now that stocks are low we are actually buying stocks lows now with the 401k loan monthly payments and interests antunnaru. Thiskunna appu gurinchi kuda dappu kontunnaru kadha ra anukunna 

Recession lo gaacharam Gand maari job pothe 401k loan immediate ga clear cheyali..if he doesn’t pay they will treat it as early withdrawal. Appudu 10% penalty and tax. Doola teerudhi

[dasari4kntr]

if you strongly decide your are not changing job anytime soon…then take it…

[IamBhagatSingh]

15 minutes ago, coffeeabhi said:

You can take upto 50% or 50k, whichever is lower, of your 401k balance with the current employer as loan. No questions are asked, no papework is required. You can use that money for buying anything or even to just gamble, they dont care. 

Every month, you have to pay the EMIs on the loan. Both the principal and interest components are added back to your 401k account. 

They charge some minimal processing fee to start the loan, thats the only fees that we lose.

Lets say your 401k balance is 100k and each share that you hold in your account is $100. So, you have 1000 units of that fund/share. If you take 50k loan, they will sell 500 units and give you the money. Now, with the money that you pay monthly, they will buy those units back.

If the unit price is 100 when you started your loan, they sold 1 unit at 100. At the time of monthly payments, if the unit value goes down to 50, they will buy 2 units for the same 100 and add them back to your account. So, if the stock goes down during your loan, you will have more units. If the stock goes up, you will have less units at the end of the loan.

Good explanation! 

[Pavanonline]

57 minutes ago, coffeeabhi said:

You can take upto 50% or 50k, whichever is lower, of your 401k balance with the current employer as loan. No questions are asked, no papework is required. You can use that money for buying anything or even to just gamble, they dont care. 

Every month, you have to pay the EMIs on the loan. Both the principal and interest components are added back to your 401k account. 

They charge some minimal processing fee to start the loan, thats the only fees that we lose.

Lets say your 401k balance is 100k and each share that you hold in your account is $100. So, you have 1000 units of that fund/share. If you take 50k loan, they will sell 500 units and give you the money. Now, with the money that you pay monthly, they will buy those units back.

If the unit price is 100 when you started your loan, they sold 1 unit at 100. At the time of monthly payments, if the unit value goes down to 50, they will buy 2 units for the same 100 and add them back to your account. So, if the stock goes down during your loan, you will have more units. If the stock goes up, you will have less units at the end of the loan.

Interesting, so basically they are selling the stocks and giving back in name of loan. Will there be interest on this?

[coffeeabhi]

10 minutes ago, Pavanonline said:

Interesting, so basically they are selling the stocks and giving back in name of loan. Will there be interest on this?

Yeah, there would be interest on the loan, and they will buy some units with the interest amount and add them back to your account. So, you are paying interest to yourself!

[Ravi860]

2 hours ago, coffeeabhi said:

You can take upto 50% or 50k, whichever is lower, of your 401k balance with the current employer as loan. No questions are asked, no papework is required. You can use that money for buying anything or even to just gamble, they dont care. 

Every month, you have to pay the EMIs on the loan. Both the principal and interest components are added back to your 401k account. 

They charge some minimal processing fee to start the loan, thats the only fees that we lose.

Lets say your 401k balance is 100k and each share that you hold in your account is $100. So, you have 1000 units of that fund/share. If you take 50k loan, they will sell 500 units and give you the money. Now, with the money that you pay monthly, they will buy those units back.

If the unit price is 100 when you started your loan, they sold 1 unit at 100. At the time of monthly payments, if the unit value goes down to 50, they will buy 2 units for the same 100 and add them back to your account. So, if the stock goes down during your loan, you will have more units. If the stock goes up, you will have less units at the end of the loan.

i can see now how this became good for some people who took 401k loan atleast 2 years back (market basically all time highs and low housing interests)..since they are rebuying for cheap shares now because of down market. Idhe pani ipudu thiskunte bokka padinatle.. basically you are selling your retirement money in down market. Timing and luck is everything in this market.

[Bendapudi_english]

2 hours ago, hyperbole said:

Loan and 401k ki link endi? I don’t see any advantage or disadvantage except for the interest rate. 401k contribution or stocks allocation remain unchanged, it is just a collateral for your loan, the max you can borrow is 50k loan for buying a house, 401k going up or down doesn’t affect the max you can borrow as long as your 401k net value is greater than 50k.

 

more over they loan you only provided you have a proof that your are buying a house like sale agreement etc

Motham wrong information isthunav ga anna