There are generally four reasons given to avoid 401k loans if possible:

* Lower investment return. According to General Accounting Office, interest rate you pay yourself on your plan loan is often less than rate your plan funds would have otherwise earned, and you lose benefits of compound interest. * Smaller contributions. Because you now have a loan payment, you may be tempted to reduce amount you are contributing to plan and thus reduce your long-term balance. * If you quit working or change jobs, you must pay back loan right away. It's not uncommon for plans to require full repayment of a loan within 60 days of termination of employment. If you don't repay, loan is considered defaulted, and you are taxed on outstanding balance, including excise taxes in many cases. * Repayment of principal and interest is made with after-tax dollars. By contrast, a home equity loan from a bank is often structured so that interest you pay is tax-deductible. On a larger loan, this could add up to significant savings.

Go to www.401khelpcenter.com for more information on this and other 401k issues.

Fear Creates Worry

"Greed is good!" says Gordon Gecko (Michael Douglas) in Wall Street. Recent investment losses, corporate scandals, and a stagnant economy refute that statement. Instead, a warning is emerging in personal finance forums as we search and hope for indications that relief is in sight. Fear is bad! Fear has driven many investors either to dump stocks and load up on bonds, certificates of deposit and other conservative investments or, even worse, to stop saving and investing. This creates new problems. People will be incapable of achieving their long-term financial goals because their portfolio may now be so conservative that it won't deliver returns needed to retire in comfort, or they are simply saving too little. Faced with this fear and uncertainty, financial knowledge is more important than ever. Instead of reacting to market’s ups and downs, learn more about characteristics of stocks, bonds, and other investments; as well as broad array of personal finance and money management topics.

------------------- About The Author -------------------

This review is courtesy of John Q. Miller at http://www.JQmarketing.com where you can find out how to create your own (no writing required) newsletter and earn multiple streams of Internet income.

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