Archive - June 27, 2011

1
Should You Prepay Your Mortgage?
2
How To Use Your 401k To Buy a Business

Should You Prepay Your Mortgage?

A mortgage prepayment is usually a good idea which I often recommend. My forecast is for the stock and bond markets to produce a low rate of return for the next several years so one may be able to get a better return by paying down their mortgage. If the S&P returned about 2 or 3% annually in the past decade and bonds are now paying about 3 to 4% then a mortgage pay down is attractive.

The recommendation needs to be tailored to each client’s needs. So if a client is self-employed or financially shaky they may need to …

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How To Use Your 401k To Buy a Business

You can take money out of your 401k with no penalty at any age to buy a business. This is done by first becoming a business owner, then opening a new 401k with a Custodian who will allow this. (Very few do). Then you roll your IRA to your new 401k. Next the 401k purchases shares of stock in the business that you are trying to buy. You do not get to actually handle the cash from your 401k, instead the Custodian transfers cash from your 401k to the seller of the business.

The Problem

There is a big potential …

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