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My neighbor in Phoenix said he stopped his 401k contributions to pay off his car loan faster
He argued the 7% interest on the loan was a guaranteed loss, while his retirement fund was just 'hoping for gains'. I've always been told to max out retirement first, no matter what. Which approach actually makes more financial sense for someone with a steady income?
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perry.nancy3d ago
Bro your neighbor just traded a 7% loss for a 10% average gain. That's like skipping a free lunch to pay full price for a snack. The math is not mathing. Sure, the loan interest is a sure thing, but so is missing out on decades of compound growth. That 401k money grows tax-free, which is a huge deal. Gotta love the confidence of someone who thinks they can outsmart the entire financial planning industry.
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willow_ellis3d ago
Lol reminds me of my tenant who sold his crypto to buy beanie babies.
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