Home Equity Loan – Still a Better Idea Than a 401(K) Loan

Written by Charles Essmeier

Anyone who borrows money is always looking forrepparttar cheapest source of funding. That makes sense; no one wants to pay more in interest than is absolutely necessary. And anyone with a sizeable amount of debt, such as credit card debt or a student loan, would be wise to consolidate their debt with a lower interest loan. One source of such a loan is a 401(K) account, which many consumers may have through their employer. Sincerepparttar 149937 interest rate on Federal student loans rose on July 1, many students who missed that deadline may be wondering if consolidating through a 401(K) loan is a good alternative. Is it?

In a previous article, we have outlined several reasons why borrowing against a 401(K) account may be less favorable than using a home equity loan instead. The reasons includerepparttar 149938 fact thatrepparttar 149939 interest on a 401(K) loan is not tax deductible, and thatrepparttar 149940 borrower losesrepparttar 149941 ability for his or her investment to compound over time. If you have borrowedrepparttar 149942 money, it can’t earn interest andrepparttar 149943 cost over twenty or thirty years could be dear. In addition to those, there are other reasons why a home equity loan would be a better source of consolidation funds.

The 401(K) loan is tempting. There is no credit check,repparttar 149944 interest rate is usually favorable, and you are paying

Booming Real Estate Profits From Baby Boomer Investing

Written by Chris Anderson, PhD

In last week's article, called "Irrational Exuberance, Part II?," I discussed some of our concerns about what is happening inrepparttar preconstruction investment real estate market. What many people have asked me is "if you're so concerned aboutrepparttar 149936 real estate market, then why invest so much with yourself and withrepparttar 149937 preconstruction MasterMind Group?" The answer to this is really quite simple: we find preconstruction projects that make complete sense EVEN WITHrepparttar 149938 current market conditions. Many people think aboutrepparttar 149939 markets as one big entity and you either decide you are in or out. In preconstruction real estate, this is dead opposite of how we think. Instead, we look for preconstruction investment opportunities that make complete sense in this market and then, if we are wrong, we look (in advance) for ways to exit with our skin still attached. In this week's article, let's explore such a scenario. If you have been on one of our teleseminars, you have probably heard me speak aboutrepparttar 149940 "Baby Boomers" andrepparttar 149941 impact that they are EXPECTED to have inrepparttar 149942 southeast andrepparttar 149943 southwest. Without getting overly technical, here isrepparttar 149944 short story: "We have an incredibly large % of our population moving towards retirement age overrepparttar 149945 next 15 years; "A large % of these people have no intent on staying in their current locale; "Even though many boomers are ill prepared for retirement, there is still a significant % of people with tremendous wealth; "These people want to live in places with good "lifestyles. With that body of knowledge above, you can make great preconstruction investments however most people want to overly complicate things. So let's look at a typical conversation after someone has been exposed to baby boomer investing. Q: How do I make a good preconstruction investment with minimal risk? A: Well, from above, it really is pretty simple. Find a place thatrepparttar 149946 boomers want to live, then buy, and wait. Q: But what ifrepparttar 149947 price drops because of allrepparttar 149948 investing going on right now? A: If you believe you truly have a place that boomers want, ignore it and ride it out. With that many boomers (demand) looking for so few properties (supply) in a few years, you will likely do just fine. Q: So when will I see a good return on my preconstruction investment? A: I don't know. Maybe this year, maybe 10 years depending on what you buy, market conditions, etc. Fromrepparttar 149949 baby boomer investing mentality, we just know that there is a large PROBABILITY that somebody is going to want that property badly within a 15 year window. Q: But I don't want to wait that long. How can I get in and out in a couple of years or less? A: Well this is a horse of a different color. So not only do you want to invest inrepparttar 149950 boomers but you want to time when they are coming. That is a little harder but still doable. Now what you are saying is that I buy now and once I buy, for some reason a lot of boomers start jumping atrepparttar 149951 chance to buy in. The only way I know this can happen is if for some reason, there is a lot of people suddenly going to become aware of your property. In this case, you are strongly relying on somebody's marketing to bring "eyeballs" to your preconstruction investment. Q: Is there risk in this type of shorter investment? A: Of course. You could buy in, andrepparttar 149952 lending rules change, or suddenly we start seeing horror stories in other regions about people losing money in real estate, and then on a short term basis, your preconstruction investment may decrease in value. As they like to say on Wall Street, that is not a loss until you sell. If you truly believe inrepparttar 149953 longer term, then your decision might be to exit quickly or just wait untilrepparttar 149954 boomers start looking where they are going to live. To me, it is very comforting that I know that I have that backup plan.

Cont'd on page 2 ==>
ImproveHomeLife.com © 2005
Terms of Use