How do I best utilize my 401k?

[Lane McDonald]

I am looking to get another deal secured soon. I have 30k in my 401k that I put in before I knew that real estate would retire me instead. I want to use that money for a down payment but don't know the best route to access it without taking a massive hit. I know I can loan against it but I'd rather not as it would hurt my cashflow, I want it in cash. I figure I can just take it all out, but I'll take a big hit on it, and it will bump me in a higher tax bracket. What should I do/what would you do/any advice at all? or just let me know if there's something I'm missing. Thanks!

[Matthew Irish-Jones]

@Lane McDonald what you are missing is leaving your 401K in tact and continuing to build it.

RE may or may not retire you faster, that depends on the market and how savvy of an investor you are.

If you are going to take funds out it should be through a loan where you pay interest to youself.

A better way to invest in RE is with saved Capital from living below your means, while continuing to add funds to your 401K.  You want to hedge your bets and have diversification.  I'm heavily invested in RE, but I still have a 401K and a portfolio.  Some years my RE performs better, some years my portfolio performs far better with far less work.

Which one will retire me faster is unknown, so I'm glad I have both.

If your employer is offering a match you are getting FREE money that vests tax free.  Almost no one misses 6% if their income.

Don't tap the 401K for RE investing, penalties are too high and it makes you less diversified.