Baby Steps for Divesting

This brief list of things to do with your retirement accounts—or any account in which you blindly invest—are merely first steps (steps which we’ll be adding to over time). St. John Paul II teaches us that “The decision to invest, that is, to offer people an opportunity to make good use of their own labour, is also determined by an attitude of human sympathy and trust in Providence, which reveal the human quality of the person making such decisions.” Our investments are an exteriorization of our interior qualities (ie our virtues and vices). Righteous investing will always be a matter of cultivating the virtues that most closely align ourselves with the Holy Trinity. However, entangled in the monetary web of our modern culture, many of us need direction. While we at New Polity would strongly encourage everyone to close their retirement accounts and to discontinue trading on the secondary market (what we colloquially call the Stock Market), we understand that this is an extremely difficult endeavor. Ultimately, we don’t want to leave our readers hanging. If you are one such person, this list is for you. Take these steps in prayer, and ask the Holy Spirit for strength to follow His will and direct you to Himself.

1. Take out a loan from your 401(k)
   1. You will not incur the early withdrawal penalty, nor will you have to pay income tax on the withdrawn amount. According to the IRS: “You may borrow up to 50% of your vested account balance up to a maximum of $50,000. The loan must be repaid within 5 years.” However, the IRS specifies that the 5-year timeline does not apply if you are taking out the money to buy your main house. That’s a great deal
   1. Now, one catch is that you will need to pay a percent or two over the Fed rate. That means you will need to pay yourself back at ~1–2% interest, which is considerably generous compared to typical bank loans (especially as you’re giving yourself the money)
   2. With the money you lend yourself, you could:
   1. Finance your home
   2. Expand your home and rent-out as a living space
   3. Invest in a local business
2. Open a ROBS (Roll over for business startups) Account
1. You could (try) to leave your company’s 401(k) program and self-direct the savings to a company, with C-corp status, with which you are affiliated
1. The key requirement is that you work for the C-corp, receiving a demonstrable wage. However, this could be an undemanding part-time position
2. Like the first suggestion, this reallocation avoids withdrawal penalties and income taxes
3. Investing in a local company, which you actually work for, breeds fealty, excitement, and love for that company and its employees. That’s really what it’s all about
3. Open a roll-over 401(k), to which you can reallocate your funds from your company’s 401(k); in paying for a rollover 401(k), you’ll spend about $100. From here, you can have clear discretion over what you invest in
1. Specific publicly-traded corporations which embody an admirable business model or mission; you do not have to do all the research yourself. Take a look at Christ Centered Capital, where the CEO will send your monthly reports on certain companies. He’ll make the argument to you whether or not the companies are aiding the common good; you can assess them as to whether or not they’re convincing arguments. Then, you invest in the companies yourself
2. Commodities such as gold, silver, wheat
3. If you’re most tempted by this plan because it’s easiest, safest, and most normal, then we’d like to encourage you to keep praying, asking God to help you defeat anxiety, trust in him, and use your money to build up his Kingdom