Joe DownsCEO & Co-Founder, Belrose Storage Group. Founder, Storage Moguls.

Clearing ROBS Misconceptions

20 Feb 2026 · 1 min

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0:32

A ROBS isn't a loan against your 401(k). Your 401(k) buys stock in a new C-corp instead, with no monthly payments required. You can't use an existing LLC; the structure must be a newly created C-corporation.

The first myth is that this is a loan against your 401. It is not. It's actually an equity investment since your 401 is buying stock in your C corp. Second myth is that you have to pay the money back monthly. You do not. The reality is that there are no loan payments because it's not a loan. The money stays in the business to fund your operations and growth. Third and most critical myth is that you can use your existing LLC. You cannot.

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