All Forum Posts by: Jeremy Burnheimer

@William Kuczmera - I have been toying with this idea myself. I think the question that bases the shape of this argument is, how old are you? 

If you are in your 20s, it may make a whole lot of sense to cash out the 401k. If you in your 30s or 40s, you'll have a decision to make, and if you're in your 50s, you should not take it out.

I made a pretty simple spreadsheet calculating this out. Now, I'm almost 25 years old and I've got a decent 401k for someone my age (thanks to a company match).

If I were to take it out on my 25th birthday and take the taxes and penalty (48% of my actual amount), I would need to earn a ~7.5% annual return over the next 35 years to break-even on my 401k that would earn an average of 7% over the same time frame. 

Given that a real estate investment will have the 4 wealth generators working for me, there is a high likelihood I can achieve a 7.5% annual return over the next 35 years. For that reason, it probably makes sense for me to take it out. 

Let me know if you'd like me to share the spreadsheet. It's kind of just thrown together, but happy to share. 

I'm currently taking the courses to get my license in the same market! I don't think it needs to be an all or nothing approach. I plan to work as an agent part-time to build experience, confidence, and clients before I consider leaving my salaried position. If it doesn't work out, it will still be useful for my own investing to have my license. 

I'd agree with Henry's points here, the # of real estate sales happening this year is around 40% less than prior years and thousands of agents are leaving the industry. This isn't a time where I would recommend jumping ship completely from a salaried position with steady pay to a 100% commission career in a slow market. Do it part time, be sure you want to go full time and get a bit of momentum first before jumping ship. 

Also becoming an agent won't make it easier to qualify for a real estate loan either, you'll likely need 2 years of tax returns as an agent to qualify. 

If the motivation is to better position yourself to obtain real estate loans, I don't believe leaving an employer who presumably offers you a W2 salary to become a realtor where you are an independent contractor/ commission based income earner is going to help. There are certainly other benefits that could come from fully immersing yourself in the real estate industry as a realtor, but being more marketable in the eyes of a lender certainly is not one of them.

Right now is a bad time to be changing jobs.  Even a worst time to fully go into real estate sales.  

Would still work on the license but not go full time.  Also you need to figure out your RE strategy.  Wouldn’t just be an agent.  

When you worn out on a Sunday evening with your day job and your REI and have some momentum in your next career. That's when I would think about switching.