BitFreedom

Summary

The bottomline is a 401(k) loan to yourself makes sense in the following situation:

• You need to take out a loan anyway.
• Your only other options have an interest rate of over 3%
• The amount you can take is sufficient to cover the loan
• You can pay back the loan within the time limit

Did you know that you can use your 401(k) as an account to take a loan from?  It’s true.  When I first found out I did a little investigation, to see if there were any catches.  Although some people advise against using your 401(k) this way, I think it’s better than taking out a loan and paying someone else a higher interest rate.  So let’s take the list of pros and cons from MSN Money with my own comments:

Advantages

1. There is no credit check. You don’t have to apply for the loan, and you can make plans knowing that you will get the loan.
   The point here is you’re using your own money.  I’m a big fan of using your own money first instead of borrowing from someone else.
2. There is a low interest rate. You pay the rate set by the plan, usually a couple of percentage points above the prime rate.
   I’m not sure how this interest rate is decided.  I know in my case, the company that manages my 401(k) has a set interest rate.  Is this a legal mandate?  What if I just created a personal “loan company” that would lend to me at 0% interest, issued myself shares which I bought with my 401(k) instead?  Shouldn’t I be able to choose my interest rate since I’m really just “investing” my money in another vehicle?
3. It provides a great return. If your money market account is earning 3% and you pay yourself back at 6% or 7%, it looks like a good deal.
   Wrong.  This is not an advantage.  Paying yourself back an interest rate (all of which must be after-tax) is really no advantage at all.  The advantage you get is that you didn’t take out the loan and pay someone else interest.
4. The interest is tax-sheltered. You don’t have to pay taxes on the interest until retirement, when you take money out of the plan.
   Again, see above.  You already paid taxes on the interest because you’re using after-tax money.  You will be taxed on the interest twice. You will be paying an extra 20 – 30% in double taxes on the interest you are putting back in!  So if you are borrowing at 6% from your 401(k), it could be equivalent to borrowing from a bank at 2% because that amount will eventually go to taxes one day.
5. It’s convenient. Some plans only require you to make a phone call, while others require a short loan form.
   Yes, it’s convenient to use your own money.  Just make sure you really want to take out the loan.

Disadvantages

1. About that credit check: Of course there isn’t one. You’re not borrowing anything. You’re spending your own money.
   I really don’t see how this is a disadvantage.  If you need to take out a loan, using your own money is better than using someone else’s and paying them interest.
2. You’re losing interest. The net effect is that you have less money to invest and to earn interest. The money you borrow — or take out — of your retirement plan no longer appreciates in value from interest, dividends and/or capital gains in conjunction with the rest of your investment portfolio. Remember that you aren’t really borrowing. All you are doing is using money from one account, such as your checking or savings account, to repay the money you borrowed from your 401(k). And when you take money out of that checking or savings account, that money loses interest, too.
   Yes, you’re losing interest on the money by virtue that you’re using it for something.  Again though, this can be better than paying the interest to someone else, depending on how the market is doing.  If you’re making 8% interest on your 401(k), you could be losing up to 10% effectively.  So if someone else will loan you the money for 8%, it’s better to take out the loan instead.
3. It’s not tax-sheltered money anymore. Whether you repay the 401(k) loan out of your salary or from a bank account, those payments are all made back into the 401(k) with after-tax dollars. So, let’s say your monthly interest payment is $300 and you’re in the 28% tax bracket. You’ll have to make $416 in gross earnings to make the $300 payment. Then, when you retire and take withdrawals, you pay taxes yet again.
   This is neither here nor there.  The money you get from the loan is pre-tax anyway, so paying it back is equivalent, even if you’re paying it back with post-tax money.  Get it?  The only money you get double taxed on is the interest.
4. Unless you repay the loan, it is considered a premature distribution. You would owe federal and state income taxes as well as that 10% penalty if you are under age 59 1/2.
   Yes, you better make sure you pay back this loan on time or it’s a horrible deal.
5. The loan isn’t tax deductible. It’s considered a consumer loan, so there is no tax advantage.
   Ok, but why is this a disadvantage?  All things being equal, why should we expect our loans to be tax deductible?
6. It affects your psychology toward retirement saving. If possible, your retirement money should sit untouched until you retire. It’s too easy to get in the habit of dipping into your 401(k) instead of saving for things you need along the way. Keep your 401(k) in a loan free zone.
   Yes, so basically if you can “do without” the loan to begin with that would be best.  It is good to pretend that your savings aren’t there for use.

So overall the biggest disadvantage I can see (to those of us who know how to control our spending) is the loss of potential interest in whatever investments you have in your 401(k).  That means the current economic conditions it wouldn’t be such a bad move.

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Download Dragonskin 3.0

Example Site Using Dragonskin

Downloads

• Dragonskin 3.0
• Development and other versions

Features

• Author profile pages that feature the authors as well as their posts.
• Navigation bar with drop-down menus
• Support for multiple colors
• Header image support for site logos

Integrated Support for Plugins

• Random Redirect
• Coauthors
• Smart 404

Image Credits

• Bowie J. Poag
• Brilliant Button Maker – for the 80×15 badges
• Arcsin Website Templates – for the border image

If you like this theme please rate it at WordPress!

This will work with other filesystems, not just ext2, so you may want to choose a filesystem that is similar to what you currently run (if you care). The idea is that instead of creating an ISO image that is very flexible (can be read by Windows), you create a filesystem image and burn it to disc. The advantage of this is that you can preserve filesystem properties such as permissions, ownership, etc. The disadvantage is that the straightforward approach (everything on one disk) only gives you about 4.5 G of space to work with (depending on the media size).

(1) Create a 2 GB image:
sudo dd if=/dev/zero of=snapshot.img bs=1024k count=2000 &
You can create a larger image size if you need it, and your burnable media can handle it.

(2) Format it using ext2
sudo mke2fs -m 0 -q -F -b 2048 snapshot.img 1>&2
Honestly, I can’t remember why I was redirecting output to stderr. Maybe I had a good reason for that. But suffice it to say, you simply want to use the file you created to make a file system. For example, instead of the above, you can use something like `mkfs -t xfs snapshot.img`

(3) Mount the image
sudo mount -t ext2 -o loop snapshot.img /mnt/snapshot
For the mount, you want to make sure to use whatever filesystem type you created the image with.

(4) Copy the data, preserving information
sudo rsync -avH --numeric-ids --progress --stats --delete --exclude /proc/ \
--exclude /sys/ --exclude /tmp/ --exclude /var/run/ --exclude /var/tmp/ \
--exclude /mnt/snapshot/ / /mnt/snapshot/
This is an example of copying the entire system (if it’s small enough to fit). In this example, you want to make sure you exclude the mount point for the snapshot, because otherwise you’ll have a recursive rsync that will go on forever. It’s definitely good to make sure you exclude /proc/ and /sys/ too. You could exclude /dev/ since today’s Linux just regenerates it on boot anyway. (If you were porting to other hardware you may want to do this to be “safe” but usually it’s safer to just keep a copy of it.) –progress and –stats are extraneous options, and if you’re a neat freak, you can use –delete-excluded too to make sure those directories are cleared out in case you accidentally copied things over.

(5) Unmount and burn using cdrecord
sudo umount /mnt/snapshot
sudo cdrecord -v -eject dev=/dev/cdrom snapshot.img
You can alternatively use any burning software to apply the image directly to burnable media.

Now keep in mind, that when you want to mount this CD/DVD you will need to mount it by hand, as root, using the filesystem type you burned it with. It’s a good idea to write the fs type on the CD along with whatever else you’re going to call it so you know how to mount it later.


rsync --verbose --progress --stats --compress -a --delete -H --numeric-ids --exclude "#*#" --exclude "*~" --exclude "/proc/*" --exclude "/dev/*" --exclude "/var/cache/*" --exclude "/tmp/*" --exclude "/var/tmp/*" descartes:/ /mnt/backup/rsync/descartes/


Did you know that Windows also has equivalent to /etc/hosts where you can set IP addresses for domain names? It’s a plain text file in the same format, and it’s typically found in one of these two places:

• C:\winnt\system32\drivers\etc\hosts
• C:\windows\system32\drivers\etc\hosts

Notice how they kept the etc/ directory? Hmmmmm ;)

OpenOffice.org distributes their binaries as rpms. That’s great for a majority of the people who can install them, but in a couple of situations I’ve found myself wanting to use the most updated version but didn’t have root access to do the install of the package properly.

Here is how I installed it for my own user. You will need the cpio utilities installed including ‘cpio’ and ‘rpm2cpio’ which are installed on many rpm based systems.

1. Download the gzipped rpm files from OpenOffice.org
2. Unpack:

   tar xzvf OOo_2.2.0_LinuxIntel_install_wJRE_en-US.tar.gz

3. You should now have a directory similar to OOF680_m14_native_packed-1_en-US.9134/
   cd to the RPMs directory inside this new directory and unpack the RPM files locally:

   ls *.rpm | while read file; do rpm2cpio $file | cpio -idmv; done

4. You should see the files from the RPMs created, e.g.

   ./etc
   ./etc/.java
   ./etc/.java/.systemPrefs
   ./etc/.java/.systemPrefs/.system.lock
   ./etc/.java/.systemPrefs/.systemRootModFile
   ./etc/init.d/jexec
   ...
   opt/openoffice.org2.2/share/xslt/export/xhtml/header.xsl
   opt/openoffice.org2.2/share/xslt/export/xhtml/master_chapter_numbering.xsl
   opt/openoffice.org2.2/share/xslt/export/xhtml/master_document.xsl
   opt/openoffice.org2.2/share/xslt/export/xhtml/master_refs_workaround.xsl
   opt/openoffice.org2.2/share/xslt/export/xhtml/master_usability_links.xsl
   opt/openoffice.org2.2/share/xslt/export/xhtml/ooo2xhtml.xsl
   opt/openoffice.org2.2/share/xslt/export/xhtml/table.xsl

5. I like to keep all of my personal packages in a single directory. Usually I make a directory in my home called pkg/ which I will move openoffice to. So first, move the openoffice directory under opt/ that was created above to ~/pkg/:

   mv opt/openoffice.org2.2/ ~/pkg/

6. I also like to use symlinks for my current most updated version of a software:

   cd ~/pkg/
   ln -s openoffice.org2.2/ openoffice.org

7. Then I create some scripts in my ~/bin/ directory that I include in my path environment. The first one is openoffice.org itself. I create an executable file called ~/bin/openoffice.org that looks like this:

   #!/bin/bash
   exec ~/pkg/openoffice.org/program/soffice "$@"

8. It’s also nice to create one for the openoffice.org printer administration gui. I create an executable script called ~/bin/openoffice.org-printeradmin that looks like this:

   #!/bin/bash
   exec ~/pkg/openoffice.org2.1/program/spadmin

Now, if you have ~/bin/ in your PATH environment you should be able to load files using openoffice.org <filename>

I got my XO laptop from laptopgiving.org today. I plugged it in and waited the whole day, but I think it was already charged. There’s no way to tell if it’s done charging or not (I think).

It’s interesting. The keyboard is exceedingly small, and the keys are like those flexible keyboards. But I guess it wasn’t meant to teach typing skills. Also it has a touchpad mouse with two mouse buttons: X and O (of course). It has 3 USB ports, a headphone jack, a microphone jack, a rotating screen, built-in speakers, a built-in microphone, and what appears to be a built-in camera.

I posted some pictures on Picasa:

XO

I managed to surf the net with it a little bit and investigate:

• Memory is just under 256 MB
• 1 GB disk space
• Fedora release 7 (Moonshine)
• processor Geode AMD 430 MHz w/ 128K cache

The final word on this review: this laptop is great for kids.

Updates

I’ve been getting questions about it, so I’ll answer them as they come in.

• Is the display black and white? It does support color, but it seems to have a lot of black/white/gray as a base color.

The CutlineNegative theme for WordPress is based on the Cutline theme by Chris Pearson. It’s main feature is that it produces a gray-on-black Cutline instead of the typical black-on-white.

Download CutlineNegative-1.1 ZIP file

It has a few other personal tweaks, but if all you really care about is the color scheme, then you can simply download the custom.css file instead. Simply replace custom.css in the Cutline theme with the file below.

Download CutlineNegative-1.1 CSS file