| student loans (pay off or not?) |
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Eve(r)
First Time Poster
Cash: $ 0.25
Posts: 1
Joined: 10 Oct 2008
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| student loans (pay off or not?) |
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Hello All,
At the moment I am a few years out of school, with no other debt (or assets) except for student loans which total around $17,000. However, it has proved a problematic expense given my current lifestly, working my way around the world trying to live on as little as possible.
I am planning on teaching in Korea, and if the numbers (and my resolve) add up, I should be able to save this amount in a year, plus several thousand dollars. My initial thought was to just pay off the loans in one sweep when I got paid the money, but lately I've been wondering if I shouldn't invest the money somehow instead? Maybe I will want to buy a house or a car down the road (on higher interest than the student loans). I think I'd like to buy a house in another 5 years or so... And then there is considering graduate school... In that case it might be stupid to pay it off, if I get only a short lived feeling of relief over not having debt?
On the other hand, it is a major hassle trying to pay stateside bills when I am abroad (often in countries with crappy or insecure internet connections...) I want to eliminate them so that I can focus on building my career. (ie. taking jobs with a lot less regard for the paycheck..)
I am young, 25... And I keep reading that I should be investing money now while I'm young but I don't know how or where really. Even if I tried to invest a couple hundred now or a thousand of it in a year from now... What's the best short term option for a large sum (high security) or the best long term option for a smaller amount (like hundreds or thousands of dollars)?
Thanks in advance, and I hope I was clear enough about my questions.
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Fri Oct 10, 2008 4:43 am |
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JamesKim
Senior Member
Cash: $ 46.35
Posts: 216
Joined: 26 Sep 2007
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I'm also a student, age 21, currently in my last year of college and also have student loans. I'm about $18,000 deep with a 6% interest rate, roughly. Thank god for scholarships and grants! but I was thinking about paying it all off in one year too, but paying around 120-150 per month isn't much, to me at least, so I'd rather take the extra cash and just invest. I have a ETF Powershares symbol QQQQ. Basically it's fund with a basket of stocks. It is the best time to invest, many assets are undervalued. For that fund, I bought it when the price was considerably low, still is, and the last time it was at that price was 1994, so it's one hell of a bargain.
My student loan plan is in a way alleviating because they spread my payments in like 10years or so. I saw a preview of my monthly payment which is like $120 per month. I ain't rich, but I have $2,000 invested in a fund, great time to buy and I'm hoping it'll appreciate by the time I graduate. I literally have a few hundred bucks just for personal usage so I'm a poor man right now LOL.
It depends on your situation. What's the time line for paying the loan back? How much do you have to pay per month. You can do 2 things:
1. Pay it off gradually: You'll be meeting the requirement payments easily, from what you've said. Plus the extra money can go towards investing with possible profit. With that profit, you can reinvest or pay off the payment which is basically "free" money. of course there's the risk of loosing it.
2. Pay it off all at once. Chains are loose and you're a free man. Then you can build your capital and invest later, maybe 2 years from now.
and Korea ROCKS! ahn young ha sae yo!!
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Mon Oct 13, 2008 11:43 pm |
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