As to borrowing and paying off debt, I totally get you there. Being debt free is a great feeling and puts you in the driver’s seat. How much is in your 401k? How much do you bring home every paycheck? I mean, 20K could be a couple of pay checks to you or half a year’s salary. That’s an important factor. I am risk adverse and I don’t think that borrowing against the K is EVER a good idea.

As to buying gold…. I have friends, including friends who have guest posted here, who are bullish on gold — literally! They want to have something tangible and they think gold is it. I say to each his own, BUT this is not a route I would ever take. Gold fluctuates and if you think it is a hedge against inflation, think again.

Money, money as we think of it, needs to flow and your hedge against inflation has two parts: being out of debt and investing. Your biggest wealth building tool is your paycheck! Where does your money go every month, Mark? You may already have a written budget, but if not, see where the money goes. Maybe you can find where you spend $300 a month on eating out and if you could eliminate that expense, the $300 can go to paying off your cc debt. How much debt do you have? Getting out of debt should hurt a little so that you NEVER do it again. If you can wave a magic wand and it disappears then there is nothing to stop you from building the debt up again.

Once you are out of debt, then you can look at all sorts of investments and if gold still seems like a good idea, then you should go for it. Why? Because you will be in a position to take risks. (Would you gamble your life on the roll of the dice? That is what you are talking about.) But borrowing against your 401k to buy gold and emergency food is really no different than borrowing against your 401k to buy a car — the goods that you spent the money on are not going to be worth the money you spent. In other words if, two days after you bought them, you wanted to resell them to recoup your money, I doubt that you could get the same price. You would lose money in the deal. Maybe in the long term the gold will increase in value, but take a look at the long term history of gold — it is not a money maker.