About 15-20 years ago (so late 90s-ish), I had some extra money (a few thousand US dollars) that I was considering putting into a short term investment to at least keep pace with inflation. Something like a CD or money market. At the time, I think they were offering somewhere in the 3-5% range per year return.
I went to one bank where they suggested that I borrow money out of my 401(k) to invest in their CD or money market, with the salesman enthusiastically telling me that I'd end up paying the interest to myself so it was somehow better than just putting money directly into the CD/money market.
From where I sat, it sounded like taking money out of a long-term, high risk/high reward scenario and moving it into a short-term, low-risk/reward scenario, and then owing interest on the result. I'm sure that would work out great for the bank, but I didn't see how it would benefit me. I went somewhere else.
Was I being naive and this was some great strategy I didn't understand, or did I understand it correctly and was better off not doing it?