I am in a bad spot - again

[BlackSheep]

I borrowed $30k from someone I knew for a month for a specific purpose. When the money hit my account, the purpose was met and it was extra, not required anymore. I thought why return it right away, let me get some Space related stocks as they were hot going up and up a month back. My portfolio was already red for the year, not good spot to be in, I invested .... market is a shit show now, I am down close to ~65% or more total YTD ....  Now I need to return ... I need to return by the 15th atleast half ... and rest by next week .... 
There are only two options .... liquidate with a major loss ... like my portfolio will be left with $5k ... or the second option is to take a loan on my 401k which has $200k, this will be second loan, I made a commitment to self no more 401k loans ... if I take the loan and when the market bounces back in a month or two esp. Space stocks including NASA ETF ..... I will pay off 401k ..... 
I can't sleep at nights any more ......  any suggestions liquidate or take 401k loan? .... Stocks have never been profitable for me, but I keep on coming back hoping I will make it work one day .... 

Pls be kind, I know it was a mistake to invest.

Edited July 14 by BlackSheep

[Lotus-eater]

The expensive lesson you should learn is to keep it simple and invest in a total stock market fund, which is up 10.5% YTD, so the market is doing just fine. Unless you're Warren Buffett, stock picking is little better than gambling, which your pattern suggests. You used borrowed money to try to make up the loss after the "hot" stocks you invested in tanked. Violating your commitment and taking a 401K loan hoping that your stocks will bounce back in a short time is repeating the initial mistake of using the borrowed money to try to make back your loss. IMHO, it's more important to break the cycle. Keep your commitment to yourself not to take out any more 401K loans and accept the loss even though it will be painful in the short run. Take this as a hard reset. Once the debt is paid and the stress subsides, you can build back the right way.

Edited July 14 by Lotus-eater

[+ JamesB]

Sell the stocks and repay the debt immediately. Do not take a 401(k) loan to cover this. The money was borrowed for a specific purpose that no longer exists and using it for speculative stock trading was already a mistake. Keeping it tied up in a losing position only makes things worse.

This is a personal loan from someone you know and failing to repay on time risks damaging the relationship and your reputation. Your own track record shows that chasing a turnaround in stocks has not worked for you and continuing to hope for a quick recovery is closer to gambling than investing.

The loss hurts but selling now stops the bleeding and lets you move forward. A smaller remaining portfolio is far better than letting this situation create a bigger financial and personal problem.

[Beancounter]

I’m speechless.   

[+ Vegas_Millennial]

12 hours ago, BlackSheep said:

When the money hit my account, the purpose was met and it was extra, not required anymore. I thought why return it right away...?

This is why!   Pay off the personal loan.  Pay off the credit cards.  Sell every investment not in a retirement account, if necessary, to pay the debts.  Stop investing anything, into retirement accounts or elsewhere, until all debts besides a 15-yr fixed rate mortgage are paid off.  This includes car loans and 0% interest loans.  The MATH might convince you to stay in debt to chase returns.  But the MATH won't save you when you've maxed out your 0% introductory credit card offers and can't pay rent or buy food.  Imagine becoming the homeless man at the shelter:  "I could get a house and food, but that would mean selling my investments at a loss.  I can't do that!"

100% of foreclosures happen on homes with a mortgage.  Stop chasing high risk, sell now and pay off debt.

 

Edited July 14 by Vegas_Millennial

[BlackSheep]

I am regularly in big red in stock market since 5 years. My strategy has always been tech & biotecch stocks, but I am always at buy high sell low cycle with a regular losses. From 2021 I am down ~175k, I have burn a lot of cash ... and that is having an impact on all aspects of my finances & mental health including paying off CCs.

I have group of friends who are super successful, atleast thats what they share. I am a regular loser in this. When I ask for any stock tip, it has always resulted into buy high and sell at a loss :(. Not sure why I was blind sided by MU, SNDK and other stocks when I was burning cash on other useless tech stock like in Quantum from past year.

Now with these losses, I am thinking I should have invested in EFTs and good one like VGT or SMH instead ... I am left with no cash .. and no way to come out of this big hole ... even mortgage is getting into a problem ... I haven't mentioned LoC I had to tap into for divorce ...  I am in cycle of debt and not coming out of it ... None of stock buys from past years to save, invest and replenish has worked so far ...  

Edited July 14 by BlackSheep

[+ FrankR]

11 hours ago, BlackSheep said:

I borrowed $30k from someone I knew for a month for a specific purpose. When the money hit my account, the purpose was met and it was extra, not required anymore. I thought why return it right away, let me get some Space related stocks as they were hot going up and up a month back. My portfolio was already red for the year, not good spot to be in, I invested .... market is a shit show now, I am down close to ~65% or more total YTD ....  Now I need to return ... I need to return by the 15th atleast half ... and rest by next week .... 
There are only two options .... liquidate with a major loss ... like my portfolio will be left with $5k ... or the second option is to take a loan on my 401k which has $200k, this will be second loan, I made a commitment to self no more 401k loans ... if I take the loan and when the market bounces back in a month or two esp. Space stocks including NASA ETF ..... I will pay off 401k ..... 
I can't sleep at nights any more ......  any suggestions liquidate or take 401k loan? .... Stocks have never been profitable for me, but I keep on coming back hoping I will make it work one day .... 

Pls be kind, I know it was a mistake to invest.

Sell the positions and pay back the loan.  You did not invest: you speculated. You knew you’d have to sell within a few days so it was a gamble.  
 

You may be able to deduct some of your losses from your taxes. 

[KeepItReal]

5 minutes ago, BlackSheep said:

I am regularly in big red in stock market since 5 years. My strategy has always been tech & biotecch stocks, but I am always at buy high sell low cycle with a regular losses. From 2021 I am down ~175k, I have burn a lot of cash ... and that is having an impact on all aspects of my finances & mental health including paying off CCs.

I have group of friends who are super successful, atleast thats what they share. I am a regular loser in this. When I ask for any stock tip, it has always resulted into buy high and sell at a loss :(. Not sure why I was blind sided by MU, SNDK and other stocks when I was burning cash on other useless tech stock like in Quantum from past year.

Now with these losses, I am thinking I should have invested in EFTs and good one like VGT or SMH instead ... I am left with no cash .. and no way to come out of this big hole ... even mortgage is getting into a problem ... I haven't mentioned LoC I had to tap into for divorce ...  I am in cycle of debt and not coming out of it

What you are doing is not working.  You are a good candidate for Dave Ramsey's Financial Peace program.  You have to get serious about getting on top of your spending, paying off your debt and then you can invest in basic index funds. 

[Kevin Slater]

Rule #1: Don't gamble with other people's money.

Kevin Slater

[Lotus-eater]

1 hour ago, BlackSheep said:

Now with these losses, I am thinking I should have invested in EFTs and good one like VGT or SMH instead ... I am left with no cash .. and no way to come out of this big hole  ... even mortgage is getting into a problem ... I haven't mentioned LoC I had to tap into for divorce ...  I am in cycle of debt and not coming out of it ... None of stock buys from past years to save, invest and replenish has worked so far ... 

Speculating in stocks or even a broader sector fund promising high returns like a casino is the problem, not the solution. You won't be able to recoup your losses and pay off your debts by hoping for a big win in the stock market using more leverage. If this has been going on for years, you may benefit from some professional help to break the cycle. 

[+ PhileasFogg]

Remember the stories of people jumping out of windows in the great depression?   It wasn't because the value of stocks when down....it was because the stocks were bought on margin (debt) or mortgaged the family estate to buy...and the debt doesn't go down just because the value of the stock did...THEY were the ones wiped out.

I've always been quick to acknowledge a bad trade and move on (there are books written about the psychology of those who don't).   

If it were me, I'd:

- sell the stock and take your loss,

- borrower against the 401K to pay back your friend and maintain your reputation

Honestly, if you've not lost money in an investment, you're not taking enough risk...don't beat yourself up...but do NOT EVER buy with borrowed funds...IMO...

 

My Dumbest Deal was 1999:   TUT Systems International - my brother in law hyped it to me before I understood tech stocks.   It was 15...It wasn't profitable, so I said no thanks.   A year later I look and it's 160...I say to myself @#%&*.    Then there was a market correction a few months later.   It's trading at 80...still not profitable.   But NOW, it's a bargain to me because it's "half price."   BAM, BUY...$20,000 position ($34,000 adjusted for inflation).   By the end of THAT WEEK, that $20,000 was worth $8,000...I kept it as a reminder that I'm not as smart as I think until I liquidated it at $1,900.

Today, if I make an investment that slides fast, I cut bait and take my losses and reevaluate   

 

[coriolis888]

On 7/13/2026 at 10:48 PM, BlackSheep said:

I borrowed $30k from someone I knew for a month for a specific purpose. When the money hit my account, the purpose was met and it was extra, not required anymore. I thought why return it right away, let me get some Space related stocks as they were hot going up and up a month back. My portfolio was already red for the year, not good spot to be in, I invested .... market is a shit show now, I am down close to ~65% or more total YTD ....  Now I need to return ... I need to return by the 15th atleast half ... and rest by next week .... 
There are only two options .... liquidate with a major loss ... like my portfolio will be left with $5k ... or the second option is to take a loan on my 401k which has $200k, this will be second loan, I made a commitment to self no more 401k loans ... if I take the loan and when the market bounces back in a month or two esp. Space stocks including NASA ETF ..... I will pay off 401k ..... 
I can't sleep at nights any more ......  any suggestions liquidate or take 401k loan? .... Stocks have never been profitable for me, but I keep on coming back hoping I will make it work one day .... 

Pls be kind, I know it was a mistake to invest.

A famous proverb says:

"Neither a borrower nor a lender be"

[+ SirBillybob]

Selling the stocks accepts one realized failure and it’s punctuated. Done. No additional money owing unless an outstanding balance from your first 401K loan. And other debts based on credit. No additional gamble if you outright cease speculative concentrated stock positions.

I don’t know how it works in the US but I believe you can carry forward the stock capital losses for a certain period of time. But I guess that’s based on ever cashing resources that grew. 

Borrowing $30,000 to repay the recent lender is loss aversion dressed as financial planning. There appears to be some degree of ongoing gamble borrowing from the 401K, as you would be propping that loan with risk. You also did not clarify the initial loan balance (your first loan). You are putting your assumptions of employment security and paycheque cash flow behind any advance taken from your 401K that is actually diversified and presumably growing … perhaps gains to date are in fact a silver lining.

Not borrowing from any accrued gains that represents a proportion of your portfolio balance allows you to enjoy growth that was independent of any personal action. A loss attributable to your own choices (ie,  continuing to second-guess with stock purchases) is more likely to keep you up at night. There’s a certain freedom in not being impelled to keep your market graphs open on your device 24/7. 

My own equivalent: all mutual funds, RRSP, converted to RRIF at age 72 with minimum annual taxable withdrawals, has grown remarkably the past 30 months, certainly loads better than the net gain I ever enjoyed playing the stock market for shits and giggles a few years prior to retirement.

Focus on job security because it obligates investment retirement savings and prevents a loan balance from premature taxation in the event of employment loss, and a clear expenses budget that has a bit more breathing room because you are not dinged with loan payback paycheque deductions and associated loan interest even considering that interest goes back into the fund. 

Edited July 16 by SirBillybob

[Nightowl]

Find a good financial advisor 

[Thelatin]

I have only ever speculated on a few individual stocks over the years, and one REIT.  All with equally poor results lol.  Thankfully I've most just used Vanguard Index funds and have done well.  I'm not quite on board with Dave Ramsey, as I think people need to start investing in order to get excited about saving money.  When it starts compounding and you get that first 50 or 100 grand built up, the idea of paying interest becomes less appealing.   Some people never start as they are always stuck on baby steps.

I would liquidate and pay of the debt.  Stop borrowing against your 401K - and invest what you do have in boring index funds.  It's not exciting - but I sleep well.

Edited Wednesday at 08:36 PM by Thelatin

[+ purplekow]

Consider Gambler's Anonymous.   

Borrowing money and investing that money when you cannot afford to lose it, is gambling no matter if it is couched as investing.  Liquidate what you can and pay back as much as you can and then ask the person who loaned you the money if you can set up a payment plan for the rest with a reasonable return on his money.  That way you do not have as large a tax burden from taking all the money from your 401K and then you can work your way out.  It will be embarrassing to admit what you have done to the relative stranger (knew him for a month, what was he thinking?) and he may not remain the kind of person who will lend you money in the future.  Unless of course he is a loan shark, then pay the bill and pay the taxes and walk away while you can still walk. 

[BlackSheep]

I know this person very well on family level, he is kind enough to not mention the loan to my family so far. 

I can't wrap my head on the fact that I have let things to get this far. I am burning atleast 40% monthly extra what I am earning, I am paying extra for my child home support, also supporting every month my niece who is struggling in a different country to pay rent around $1.5k USD, my side business is eating atleast 2k more every month .... it seems break even is just around the corner every month. I owe ton of money to different friends, and this stock gamble was my only hope to come out of debt some what. This extra 40% burn was coming slowly and gradually from my home line of credit ... which has now maxed out .... 

Just hoping my business picks up but chances are very slim, I just paid $14k penalties included on my home tax by borrowing more and putting remaining on cc, another friend has given me a heads up to pay him back his $10k by the 12th Aug. This individual stock picking was the worst idea by following random people, and I should have learnt my lesson two years ago.

Debt hole has gone big enough that I am not seeing any way out. Switching jobs might help, but I am totally demotivated, down, and in a frozen state, just looking at the train standing on the track which is fast approaching and I am not taking any actions .... I just want to run away and hide some place .. don't want to face my fears or demons.. I am just tired

[Thelatin]

It just struck me that you are broke and on a webpage that deals with a fairly expensive pass time.  Are you spending money on providers too? 

[BlackSheep]

haha, no I am not. Very occasionally getting a massage like once or twice a year ... I come here to talk with strangers, in my late 40s as I have no friends - except may be one who I can call any time, but he doesn't know the extend of I debt I am in. I also come here to admire others and regret on my past and also present. 

[TonyDown]

https://gamblersanonymous.org/find-a-meeting/

On 7/14/2026 at 10:40 AM, BlackSheep said:

When I ask for any stock tip, it has always resulted into buy high and sell at a loss :(. 

The S&P index is up 74% in the 5 years you're stocks are in the red.

Your friends' stock picks and your stock market speculation are failing.  

If you are not able to change your behavior, then Gambler's Anonymous might help.

Good luck.

 

 

[KiaOra]

I'm on the reverse end of this scenario. A few years ago, a friend borrowed a massive five-figure amount from me for a get rich quick scheme. Of course, that friend disappeared, and I'm still paying on that loan. It was one of the dumbest, most autistic things that I've ever done (I'm on the spectrum). It broke my trust in people and left me very jaded and guarded.