Should I cancel my 401k?

[Marquis Harris]

Hello Everyone,

Im not sure if this is a stupid question to ask, but I am generally curious about the subject and would like to know what is the best step to take. Should I cancel my 401k?

To give you a little background information on the situation, I recently decided a few weeks ago that I want to become a real estate investor after being in a RE seminar. The guru mentioned some really great stuff that got me thinking, and gave out some good information.  I later realized after joining BP that the information he gave is all available for free on here, and in books! (I paid $200 for the seminar, but I have spent more money on worse, so please don't judge me). He pushed for people to sign up for his 20k-50k program which I knew definitely wasn't for me.

Anyways, he mentioned that he didn't have a 401k and many people he knew didn't as well. He didn't like the fact that he wasn't in control of it, and figured his money was suitable elsewhere (investing). It got me thinking as well. I am a new investor, still in the process of saving and educating myself before I make my first purchase. I see myself being a RE investor long term and once I make up my mind, I stick to it. I currently work full time and have a 401k set up. There's not much in there because I recently graduated and started working full time a couple months ago. Would it be in my best interest to close my 401k and put that money with the rest of my savings and continue to save that way? Please let me know what you all recommend. I would greatly appreciate it!

Best Regards,

Marquis

[Brian Eastman]

@Marquis Harris

My number one piece of advise is never take financial or tax advice from a "real estate guru".  Their programs are designed to get you excited to do real estate deals and drain your savings.  Period.

Your 401k may not provide great investment options today, but you are effectively getting as much as 30-40% ROI just based on employer matching (if provided) and the tax-savings on the money. The more you can put in a retirement plan when you are young, the greater value that account will grow to over time.

At some point you will likely change jobs. At that time, you can take that 401k savings and roll it to a self-directed IRA or Solo 401k and invest that tax-sheltered pile of money into what you will hopefully by then be an expert at - real estate.