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Taipan is a retired commodity broker, forex trader and portfolio manager who enjoys following the forex, stock, and commodities markets and drawing upon his 40 years or so of trading experience to post articles to a series of blogs. While Taipan is not always right with his forecasts he usually offers some interesting insights into markets. Actually if he weren't so modest he would tell you that in the big strategic picture he is almost always right. Taipan is very distrustful of statements made by stock brokers, stock analysis, so called forex experts, and in general talking heads. The investor who thinks that the playing field is level and that he can depend upon MSNBC and CNN for inside trading information has got to be at least a little nuts. If you want to trade well you had better develop your own style and your own sources of reliable information. This blog will attempt to provide market trading information that will be helpful. However, always keep in mind that any decisions made to trade using this information are your sole responsibility. Taipan has been around long enough to know that the markets can make a fool out of anyone so never blindly follow what someone else suggests. To trade well you have to think well and the thoughts need to be your own.

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Borrowing From 401k Plans

The following chart shows that the poor practice of borrowing from 401K plans is in an uptrend.

This is worrying in that this means that people considered to be well off are having a difficult time in the current economic environment. If relatively rich people are struggling to make ends meet then the vast majority of the middle class and certainly poor people must be under a lot of financial pressure and stress.

In taking money out of a 401K plan you are basically stealing money from yourself. Not only are there unfavorable tax consequences but you have tapped into funds that were meant for retirement. The decision to try and maintain your current lifestyle by taking money out of a 401K instead of cutting back on expenditures may well haunt you in later years.

As the recession deepens this trend in 401k borrowings will probably only get worse. In America people don’t usually cut back in a major way until they are financially doomed. Then, of course, it is too late to avoid financial disaster. While the disaster may be deferred by borrowing from a 401k plan it probably will happen anyway.

It’s better to face up to financial reality and leave your funds in a 401k intact.

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