If I quit my job, can I close my 401k and take the money and invest it myself? I have 71000 in the account and I want to start my own business, but I would like to use the 401k to pay off my house and other debts.

You may only transfer the money to another 401K account whether that be at a new employer or through a bank or financial institution. That money is earmarked as 401K money and cannot be transferred to a savings account or anything like that.

Yes and no. You can definitely roll the balance over into an IRA (it does not have to be another 401K) and then self direct it as to investments. But if you do not roll it over into qualified plan then you will pay a 10% penalty, plus the $71K will be added to your 2007 income, thereby increasing your tax liability.

So I would not recommend using that money.