The following is a guest post from Ben at Trees Full of Money

Most financial planners will advise you not to borrow money from your 401k with the concern that you may “miss out” on market gains. However, if you need cash and your financial situation leaves you no other alternatives, borrowing money from your 401k might help you get your financial life back on track.

Each 401k plan is different so be sure to read your plan’s terms completely before taking a loan.

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The following is a guest post from Rob Bennett. He writes the “A Rich Life” blog. He is the co-developer of The Stock-Return Predictor.

Lots of people read Robert Shiller’s Irrational Exuberance. I’m different. I took what the guy said seriously.

Shiller taught me how to value stocks in a way that makes sense. Lots of people use the Price/Earnings Ratio. Shiller explains why that doesn’t work (changes in the economy cause earnings to go through shifts from artificially low levels to artificially high levels and that throws the valuation numbers off). He instead uses P/E10 (today’s price over the average of the last 10 years of earnings). That has always done a good job of warning investors when stocks are priced so high that the long-term value proposition is poor. So P/E10 is what I use too.

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Is there a difference between investing money and saving money? There certainly is. You are being proactive with your money when you invest it. You are taking an active role in what happens with your money and are putting it to work for you to earn you more money.

On the other hand, when you save you are taking a passive role with your money. Saving money means to put it away somewhere for safe keeping for a future date. That is where the whole idea of “saving money for a rainy day” comes from. Saving money focuses on keeping the principal safe (or the money you had to begin with) while investing is more concerned about the return on money. Investing involves a risk factor while saving involves a slight risk but not nearly as much as the former.

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