How to save 5.6 million over your career by not paying off student debt?

[Plopper]

i think you all should read this, i found it, while searching for info on paying off student loans. I've always been raised that you should pay off student loans asap.

http://test.agd.org/publications/articles/?ArtID=4360

interesting read, let me know what you think

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[Waitlisted2009]

.

 

[Vicviper]

Link Worked for me - interesting thought, I'll definitely keep that in the back of my mind when looking at my financial aid prospects.

 

[Mackchops]

This is what they're talking about when they refer to student loans as "good debt". If you're paying 4.5% interest on your loans but could invest at 10% doesn't it make sense to pay the bare minimum to your student loans and invest everything else you can? Investing earlier allows more time for compound accrual which more than makes up for lost interest on your low-rate student loan.

 

[dentwannabe]

This is what they're talking about when they refer to student loans as "good debt". If you're paying 4.5% interest on your loans but could invest at 10% doesn't it make sense to pay the bare minimum to your student loans and invest everything else you can? Investing earlier allows more time for compound accrual which more than makes up for lost interest on your low-rate student loan.

Show me what company is able to make gains of 10% a year.... TODAY.

 

[lotexigeus]

and loans that you can get for 4.5...

 

[HupHolland]

Show me what company is able to make gains of 10% a year.... TODAY.

It's not about TODAY. It's about the next 20-30 years.

Hup

 

[cobalt31]

and you also have to factor in the risks involved in investing loan money. true, the market crashed already and it probably won't again, but my dad was telling me stories about people in his business school in the 80's that invested school loan money, and the market crashed, and they were all screwed. if you invest your money you're not guaranteed to make anything on it - plus you have to pay taxes and fees on stocks you cash. in the end, it all adds up and the reward is rarely worth the risk of gambling with loan money.

 

[HupHolland]

and loans that you can get for 4.5...

It's called consolidating at a low rate when the opportunity arises. I attended a presentation last night and one of the docs had his loans consolidated at around 2%

Hup

 

[apaul]

those rates are gone and who knows when they'll be back

 

[lotexigeus]

It's called consolidating at a low rate when the opportunity arises. I attended a presentation last night and one of the docs had his loans consolidated at around 2%

Hup

i know this, but when will we see these rates again? not looking good

 

[Saddleshoes]

I's like to see the Dr Feel Good/Dr Do Right comparison if it factors in a....

1. divorce 5-10 years out.
2. car wreck injury that keeps you out of work for 1 year.
3. the main employer in your town closes up and moves to Mexico.
4. a financial adviser that gives you very bad advice for 20 years.

The final results could be way different.

 

[Daurang]

This is what they're talking about when they refer to student loans as "good debt". If you're paying 4.5% interest on your loans but could invest at 10% doesn't it make sense to pay the bare minimum to your student loans and invest everything else you can? Investing earlier allows more time for compound accrual which more than makes up for lost interest on your low-rate student loan.

It's not always that simple. If you put money in the stock market (which traditionally return 10%) in 1998, now you'd end up with exactly the same amount minus inflation; so you'd end up with losing money. Tell me where you'd invest for a guaranteed 10% return and I'd give you $1000 cash.

 

[carbide]

and you also have to factor in the risks involved in investing loan money. true, the market crashed already and it probably won't again, but my dad was telling me stories about people in his business school in the 80's that invested school loan money, and the market crashed, and they were all screwed. if you invest your money you're not guaranteed to make anything on it - plus you have to pay taxes and fees on stocks you cash. in the end, it all adds up and the reward is rarely worth the risk of gambling with loan money.

I don't think the article was suggesting that you invest your loan money. It was suggesting that you extend repayment for your student loans with a lower monthly payment and then invest the "extra" money each month. That is when you are out of school and have a job.

 

[robhmnt]

IMO, The big point is not to get married, and not to have children if you wanna have some good time (Comapring my single uncle who always balled around to my married father, both of who used to have the same income).
Also, investing is all about timing. You are not supposed to hold any stock for 10 years (like as Daurang mentioned, from 1998 to 2008). You are supposed to cash out once you get good returns. Anything that rises will come down one day. Another thing to add, you are not always supposed to invest. You can make money no matter which way the market moves, if you can figure out the direction. My dad has made I would say a fortune shorting stocks in the last two years.

 

[Sbosu]

IMO, The big point is not to get married, and not to have children if you wanna have some good time (Comapring my single uncle who always balled around to my married father, both of who used to have the same income).
Also, investing is all about timing. You are not supposed to hold any stock for 10 years (like as Daurang mentioned, from 1998 to 2008). You are supposed to cash out once you get good returns. Anything that rises will come down one day. Another thing to add, you are not always supposed to invest. You can make money no matter which way the market moves, if you can figure out the direction. My dad has made I would say a fortune shorting stocks in the last two years.

What the hell are you going to do, sit around and be lonely and bored in a big house all alone. You can't take your money with you when you die, money comes and goes. That sounds like an awful life to me, but to each his own. Life is all about experiences and relationships, not about how much money you have in the bank when you die (unless your Ricky bobby and think you can live to 250-300 due to the modern advances in technology and your high level of income).

 

[Daurang]

Also, investing is all about timing. You are not supposed to hold any stock for 10 years (like as Daurang mentioned, from 1998 to 2008). You are supposed to cash out once you get good returns. Anything that rises will come down one day. Another thing to add, you are not always supposed to invest. You can make money no matter which way the market moves, if you can figure out the direction. My dad has made I would say a fortune shorting stocks in the last two years.

Investing is all about timing? The most basic financial advice is not to time the market. Don't we all wish to time it at the right moment? You come back and tell us that when you can put your money where your mouth is.

I've done it all...the best research stock, the best performing mutual fund, real estate in Florida, Georgia, California, Massachusetts, foreign currency exchange, oil, cd, t-bill, etc. You win some and you lose some big and it kinds of evens out with the fees and taxes and heachaces and worries in the end. If I had just sat on my money instead of investing then I'd have $2 million in cash to retire right now. I have to work a few more years to make up for the losses like everyone else. I pulled everything out early to cut my losses and had a 5% total return last year, which is spectacular when compared to everyone else losing 40% of their 401K.

 

[robhmnt]

Investing is all about timing? The most basic financial advice is not to time the market. Don't we all wish to time it at the right moment? You come back and tell us that when you can put your money where your mouth is.

I've done it all...the best research stock, the best performing mutual fund, real estate in Florida, Georgia, California, Massachusetts, foreign currency exchange, oil, cd, t-bill, etc. You win some and you lose some big and it kinds of evens out with the fees and taxes and heachaces and worries in the end. If I had just sat on my money instead of investing then I'd have $2 million in cash to retire right now. I have to work a few more years to make up for the losses like everyone else. I pulled everything out early to cut my losses and had a 5% total return last year, which is spectacular when compared to everyone else losing 40% of their 401K.

Doc, sad to hear about your losses. By timing I meant not putting that much money in the stock market while the stock market is at an all time high, and the country is spending 10 billion dollars/month on a war, doing nothing to help manufacturing, giving out bad loans, etc... I wasn't talking about day or swing trading. Don't forget that there are people who have made a lot of money shorting stocks in this market.

 

[robhmnt]

What the hell are you going to do, sit around and be lonely and bored in a big house all alone. You can't take your money with you when you die, money comes and goes. That sounds like an awful life to me, but to each his own. Life is all about experiences and relationships, not about how much money you have in the bank when you die (unless your Ricky bobby and think you can live to 250-300 due to the modern advances in technology and your high level of income).

I neither talked about "sitting around and being lonely", nor about "taking your money with you when you die". Relationships are also not defined by whether you are married or not. 69 percent of marriages end up in divorce in the U.S. (this "Slim" probability of divorce will split your hard-earned house by a saw right in the middle, in case you you make it through the marriage to buy a house while married). You seem to have no clue about how you can have a good time and enjoy life (and I mean with your mate, not as a love-sex-derprived person) without being married or having children. Oh, and you don't need to carry your money with you when you die. You can donate it to whoever, whatever organization, etc you want. This is just my point of view. Everyone can marry and have whatever number of children they want. It's just not my way of thinking and planning.

 

[Plopper]

I neither talked about "sitting around and being lonely", nor about "taking your money with you when you die". Relationships are also not defined by whether you are married or not. 69 percent of marriages end up in divorce in the U.S. (this "Slim" probability of divorce will split your hard-earned house by a saw right in the middle, in case you you make it through the marriage to buy a house while married). You seem to have no clue about how you can have a good time and enjoy life (and I mean with your mate, not as a love-sex-derprived person) without being married or having children. Oh, and you don't need to carry your money with you when you die. You can donate it to whoever, whatever organization, etc you want. This is just my point of view. Everyone can marry and have whatever number of children they want. It's just not my way of thinking and planning.

"We want pre-nup!"

 

[Plopper]

so basically, if the economy rebounds and the interest rates climb to above the rate of your student loans, then pay the minimum balance on your student loan and leave the money in the higher interest account

 

[MrKnowitall11]

These replies show why dentist do not always make good business men. Of course you cannot walk into a bank right now and throw down $1000 and make 10% nor is all investing in the stock market. There are several different ways to go. With Obama as President and letting the Bush tax cuts go away, a smart way to invest would be in tax free bonds with the government. The percent yield might be smaller than the private sector but no taxes is no taxes. Sure investing is risky but not as risky as you might think. Get with a good investment company and put together several different portifolos. Some low risk, some high risk. You should be able to still find opportunities for 8-10% rate back but you have to start with atleast $50,000 and you will not be able to pull from it for atleast 3-5 years. Now with your loan rates. Maintain good credit (750+) and it should be reasonable to find something under 5%. So lets say you are able to pay the minimum amount of your loans for 5 years and invest 65% of your income at a rate of 8%, basic knowledge will tell you that you will make more than you lose, plus the compounding effect of the investment. It won't be much at the start ( like the article shows) but in 10-15 years that compounding interest with be huge and you can pay off your loans from the money that your money made.

 

[scottd]

69 percent of marriages end up in divorce in the U.S.

Your statistic is way off.

And by the way, the majority of Americans don't have a large retirement fund either. (Large retirement funds being something else most people spend their entire lives working toward). Just because most people haven't achieved something that is desirable in their lifetime doesn't mean that everybody has the same failure rate. It simply means that most people made mistakes along the way.

From my own experience, most people I have met that tell others not to get married and/or have children do so because they are either trying to force their desires onto others or are (most of the time) lacking the incredible understanding and experience required to make such a thing work.

 

[Plopper]

These replies show why dentist do not always make good business men. Of course you cannot walk into a bank right now and throw down $1000 and make 10% nor is all investing in the stock market. There are several different ways to go. With Obama as President and letting the Bush tax cuts go away, a smart way to invest would be in tax free bonds with the government. The percent yield might be smaller than the private sector but no taxes is no taxes. Sure investing is risky but not as risky as you might think. Get with a good investment company and put together several different portifolos. Some low risk, some high risk. You should be able to still find opportunities for 8-10% rate back but you have to start with atleast $50,000 and you will not be able to pull from it for atleast 3-5 years. Now with your loan rates. Maintain good credit (750+) and it should be reasonable to find something under 5%. So lets say you are able to pay the minimum amount of your loans for 5 years and invest 65% of your income at a rate of 8%, basic knowledge will tell you that you will make more than you lose, plus the compounding effect of the investment. It won't be much at the start ( like the article shows) but in 10-15 years that compounding interest with be huge and you can pay off your loans from the money that your money made.

good read, contrasts with my desire to buy a Lamborghini Gallardo 5 years after dental school, but maybe i'll have to wait 7 or 8, haha

 

[robhmnt]

Your statistic is way off.

And by the way, the majority of Americans don't have a large retirement fund either. (Large retirement funds being something else most people spend their entire lives working toward). Just because most people haven't achieved something that is desirable in their lifetime doesn't mean that everybody has the same failure rate. It simply means that most people made mistakes along the way.

From my own experience, most people I have met that tell others not to get married and/or have children do so because they are either trying to force their desires onto others or are (most of the time) lacking the incredible understanding and experience required to make such a thing work.

Sorry, I meant to say 69% in California, and you can let it be a rough representative for other states.
On another note, I never "told" anyone not to get married or have children. I said, IMO (In My Opinion), you don't need to sign contracts to "make such a thing (a relationship) work" and that not getting married is the path to enjoying life more in this century. Why would I want to force my desires on anyone? I could not care less if you or anyone else ends up getting a divorce in future. I am just presenting a point of view. Have at it hoss. Get married tomorrow.

 

[ArmyDDS2013]

I'm just glad I can get rid of all my student debt in 4 years through the 10 billion/month military hedge funds. So glad I'll be avoiding 300-400k in net interest payments my classmates will have to deal with.

 

[scottd]

I said, IMO (In My Opinion)

That's great. Because it certainly is an opinion that having a family is the worst decision one can make.

Get married tomorrow.

No, thank you.

 

[robhmnt]

That's great. Because it certainly is an opinion that having a family is the worst decision one can make

I love your Bill O'Reilly style spins. I never said that.

 

[mirk3]

It doesn't have to be the two extremes that have been described above. You don't have to choose between using all discretionary income to pay off debt vs. saving and investing. You can pay the minimum payment plus $500 for your student loans, which will save you tons in interest and pay off the loan quicker. Then you can save the rest and invest more in safer things, such as bonds, preferred stock, some bond funds etc. and maybe about 20% in common stocks that you have analyzed carefully. That's what I plan on doing. Real estate is great too if you find a good deal in a good locaiton and find a good manager/management company.

 

[bucknut2009]

Investing is all about timing? The most basic financial advice is not to time the market. Don't we all wish to time it at the right moment? You come back and tell us that when you can put your money where your mouth is.

I've done it all...the best research stock, the best performing mutual fund, real estate in Florida, Georgia, California, Massachusetts, foreign currency exchange, oil, cd, t-bill, etc. You win some and you lose some big and it kinds of evens out with the fees and taxes and heachaces and worries in the end. If I had just sat on my money instead of investing then I'd have $2 million in cash to retire right now. I have to work a few more years to make up for the losses like everyone else. I pulled everything out early to cut my losses and had a 5% total return last year, which is spectacular when compared to everyone else losing 40% of their 401K.

I am not sure why you would "pull all of your money out"? By early what do you mean? We are currently in one of the worst economic times in our Country's history. If you look back you will see that every time we have crashed like this we have come back and had many often very prosperous years soon afterwords. I am not saying that the March lows mark the bottom in the market and trying to time the exact bottom is a fool's game, but I am saying that if you have lost considerable amounts of money, now is not the time to divest, but rather continue to invest perhaps even more aggressively. There is not and has never been a better place to receive consistent investment returns than in the equities market. It is one thing if you did not have the proper risk allocation going in to retirement but it is quite another scenario if you are divesting because you do have the correct risk allocation but are just concerned about loses.

 

[midwestbrian]

very interesting...I unfortunately cannot follow how the numbers were derived from year to year and therefore am at a loss. I would love to believe this, or take it into consideration. Typically, would you be able to add that much to your investments after paying the minimums on that much debt?

 

[eleminopee]

Sorry, I meant to say 69% in California, and you can let it be a rough representative for other states.
On another note, I never "told" anyone not to get married or have children. I said, IMO (In My Opinion), you don't need to sign contracts to "make such a thing (a relationship) work" and that not getting married is the path to enjoying life more in this century. Why would I want to force my desires on anyone? I could not care less if you or anyone else ends up getting a divorce in future. I am just presenting a point of view. Have at it hoss. Get married tomorrow.

Dude, I'm not trying to be mean, but you don't understand marriage. I think you're understanding is skewed because of society's tendency towards a self-centered and liberal life. I don't think you have this figured out as well as you think you do.

You know why the CA divorce rate is so high? Because nobody wants to WORK any more than they have to. Marriage takes a lot of effort but so does everything that returns a great reward. When either spouse gets tired of putting in that effort they go back to the easy life of pleasing nobody but themselves.

I'm married. I got married at 23. I have a 18mo old son and I'm 27. I have a dozen friends in my dental school class around my age married and with children who would say these same things. I have done a lot in life and I promise there is NOTHING that brings as much lasting joy and fulfilling satisfaction as having a child and a wife who'd do anything for you (without you "forcing you desires" on her). That gives you purpose and reason to live.

You using the phrases "sign a contract" and "forcing my desires on anyone" shows that you don't see marriage for what it is, you see it as confinement and restriction. You think you are "free" if you don't get married? No my friend, you are alone. I hope you find somebody with your attitude but 20 years older. Ask them if they wish they were married. Or just keep telling yourself you can find happiness on your own, keep proving to yourself that you're "strong" enough that you don't need somebody else to make you happy.

Maybe you're scared of commitment, maybe you want a safe life without pain, I don't know, but "IMO" you need to find a person to love and then dedicate yourself to THAT above all else in life, then you'd realize that nothing else matters. Seriously, nothing else matters.

 

[Contach]

The tale of Do Right vs Feel Good is confusing. Bear with me here...

I don't understand what the author is trying to say. Is he trying to make the point that saving early is better than repaying debt because the interest you will make on the savings will compound - and in the long run this will grow to be massive? But isn't there also compounding interest on your student loans?

Can't this paradigm only work if your savings interest rate > loan interest rate? How would the banks make money if they offered such a deal?

 

[lotexigeus]

saving does not equal investing

 

[Contach]

saving does not equal investing

if you aren't investing with your savings, what are you doing with the monies?

 

[lotexigeus]

if you aren't investing with your savings, what are you doing with the monies?

did you read what you wrote?

 

[Stephie3]

Maybe you're scared of commitment, maybe you want a safe life without pain, I don't know, but "IMO" you need to find a person to love and then dedicate yourself to THAT above all else in life, then you'd realize that nothing else matters. Seriously, nothing else matters.

there's some truth to this guy's post. also, the government has a way of "punishing" celebate/childless people by making them pay more in taxes. so, go find a honey...or else you're basically doomed. sick sad world lol.

 

[Contach]

did you read what you wrote?

Ok fine,

Can't this paradigm only work if your investing interest rate > your loan interest rate? The higher your investing interest rate, the more risk you are assuming, so this isn't fair. Sure, you coulddddddd be getting a 13% return, but more likely than not your investing interest rate will be very similar to your loan interest late (lower even, if you want a guaranteed investment)...

 

[robhmnt]

Dude, I'm not trying to be mean, but you don't understand marriage (I certainly do not, and you are not being mean). I think you're understanding is skewed because of society's tendency towards a self-centered and liberal life (You think getting married is not a self-centered act? As you said, you are getting a much lasting joy and a fulfilling satisfaction from your wife and child. You are certainly giving something away, but you wouldn't give anything away if you were not going to get the joy, so marriage is as self centered as not getting married. The act of having your own child is a self-centered act since you do it to get the joy. Why wouldn't you and millions of other couples adopt, if you were such an unselfish person who wanted to dedicate himself to the child?) . I don't think you have this figured out as well as you think you do.

You know why the CA divorce rate is so high? Because nobody wants to WORK (How do you know that nobody wants to work here?) any more than they have to. Marriage takes a lot of effort but so does everything that returns a great reward. When either spouse gets tired of putting in that effort they go back to the easy life of pleasing nobody but themselves.

I'm married. I got married at 23. I have a 18mo old son and I'm 27. I have a dozen friends in my dental school class around my age married and with children who would say these same things. I have done a lot in life and I promise there is NOTHING that brings as much lasting joy and fulfilling satisfaction as having a child and a wife who'd do anything for you (without you "forcing you desires" on her). That gives you purpose and reason to live. (Good for you bro, although you are just at the begining. First of all, I said, "why would I want to force my desires on anyone?", meaning that I do not! So if it worked for you, and you get the joy, good for you. The dentist with no investings in the article was saying that he has never had the ability to have some fun in life, since he has been paying for student debt, practice debt, chidren's tuition, and etc, probably including tons of cash in jewelry, so that is why I said, IMO, not getting married and not having children is the way to go in this century, if anyone wants to have the other joys of life, excluding the joy of signing papers and having children. Any couple can be as happy as they are without signing papers, if they truley love each other, and if no one is craving for others' money or power, unless they feel urged to marry due to their religious beliefs or for their desire to have kids)
You using the phrases "sign a contract" and "forcing my desires on anyone (I mean NOT forcing...)" shows that you don't see marriage for what it is(How do you know that you are the one seeing it as what it is?), you see it as confinement and restriction. You think you are "free" if you don't get married? No my friend, you are alone. (Talking about relationships, I have never been alone so far in my life, and it is only going to get better in future once you have more time to spend with the one you love. If marriage helped you get out of lonliness, good for you again. Many people won't need that medicine though.) I hope you find somebody with your attitude but 20 years older. Ask them if they wish they were married. Or just keep telling yourself you can find happiness on your own, keep proving to yourself that you're "strong" enough that you don't need somebody else to make you happy (I never said I don't need somebody to make me happy. My point is you can have one to make you happy without getting married as well. I know many older single men in family and friends who are living peacefully with their mates without ever regretting not getting married. What has worked for you for four years so far, and not worked for many other couples in this era, does not necessarily mean to be a successful path to happiness. Happiness need not necessarily be achieved by marriage.)

Maybe you're scared of commitment, maybe you want a safe life without pain(everyone wants that), I don't know, but "IMO" you need to find a person to love (I agree) and then dedicate yourself to THAT above all else in life (dedication does not come with marriage only), then you'd realize that nothing else matters. Seriously, nothing else matters. (I like the Metallica song).

...

 

[WilsonJing]

hey guys,
When I first read the article I was like WTF, that cant be the best plan. Pay off your debt and then save up duh!

However, my co-worker said im a **** and should do the numbers and see for myself. I did the numbers on excel I was wrong.

So here is what I found out.
Debt after school: 275,000 (rate 7% yearly)
Money needed per year to pay off debt 20,650 in 40 years.
After 40 years, debt will be all paid with 4486 dollars left from the last payment. Woohoo!!! (thats a lot of junior bacon cheese burgers)

The money in a 7% retirement program (notice its same as debt rate)
$20,650 added per year for 40 years
Total amount in retirement at the end of 40 years: 4,411,458
However since we didnt pay out debt, in 40 years it ended up at: 4,117,976
Using retirement to pay for debt at the end of 40 years leaves you with: = $293,282. WooHooo (thats junior bacon cheese burgers for ur wife too)

****
The difference in money for junior bacon cheese burgers after 40 years is due to how interests works for u. In debt, the interest works against u, it increases the debt while u deposit money to lower the debt. However, in the case of retirement program, interests increase your retirement fund, and u put money to increase ur retirement fund.
****

Bought to you by taking time off working for the MAN.

Peace
USC 2013 Junior Cheese Burgers

 

[Plopper]

hey guys,
When I first read the article I was like WTF, that cant be the best plan. Pay off your debt and then save up duh!

However, my co-worker said im a **** and should do the numbers and see for myself. I did the numbers on excel I was wrong.

So here is what I found out.
Debt after school: 275,000 (rate 7% yearly)
Money needed per year to pay off debt 20,650 in 40 years.
After 40 years, debt will be all paid with 4486 dollars left from the last payment. Woohoo!!! (thats a lot of junior bacon cheese burgers)

The money in a 7% retirement program (notice its same as debt rate)
$20,650 added per year for 40 years
Total amount in retirement at the end of 40 years: 4,411,458
However since we didnt pay out debt, in 40 years it ended up at: 4,117,976
Using retirement to pay for debt at the end of 40 years leaves you with: = $293,282. WooHooo (thats junior bacon cheese burgers for ur wife too)

****
The difference in money for junior bacon cheese burgers after 40 years is due to how interests works for u. In debt, the interest works against u, it increases the debt while u deposit money to lower the debt. However, in the case of retirement program, interests increase your retirement fund, and u put money to increase ur retirement fund.
****

Bought to you by taking time off working for the MAN.

Peace
USC 2013 Junior Cheese Burgers

ya i came to a similar conclusion, i ran some numbers real quick in excel

using my estimated 120K debt, i ran the numbers for a 6.8% student loan paid at 20K/year, it took about 11 years to pay off, and then i calculated if i then took that 20K and put it in the bank at 3.4% a year

Note: I'm using a savings account with HALF the interest of my student loan.

now i did the calculations for saving, and paying off the student loan at 10K/year while saving the other 10K a year at 3.4%. It took 25 years to pay off the money

at the end:

paying off loan (6.8%) without saving until paid off, then saved at 20K/yr 3.4% for 14 years (Total 25 years, 11 loan 14 saving):
net: +$$350,000

paying minimum on loan and putting 10K/r in savings at 3.4% yearly (25 years)
net: +$$407,000

so i've made 57K by paying the minimum on my loan and putting the other portion in a bank which accrues half the interest of the loan!!!

 

[Cold Front]

Don't get caught up in the "little-too-late" trap. If you try to pay back your school loans ASAP, you are putting the opportunity to secure the best financial goals on hold.

Build wealth first, here are few reasons:
1. Dentistry is a great business. Invest in buying or building a practice if it fits your circumstances (this investment produces more money, eventually helps you pay off your other debts).
2. Advice #1 can be used for Business Tax shelters, no Tax savings if you pay off your loans immediately.
3. We are young (most of the new grads are in late 20s, early 30s), this rule itself speaks for itself. The gurus will tell you that the age you start investing will determine how much wealth you build.
4. Educational debt is a good debt. So pay yourself 1st to build wealth (obviously, this doesn't mean default on your payments).
5. By the time we reach retirement, it's difficult to tell if there will be any government programs available to help us pay for our golden retirement years. So, planning to pay for your own retirement is a priority for everyone.

If any of this don't make sense, sign-up at Trump University.

 

[Daurang]

I am not sure why you would "pull all of your money out"? By early what do you mean? We are currently in one of the worst economic times in our Country's history. If you look back you will see that every time we have crashed like this we have come back and had many often very prosperous years soon afterwords. I am not saying that the March lows mark the bottom in the market and trying to time the exact bottom is a fool's game, but I am saying that if you have lost considerable amounts of money, now is not the time to divest, but rather continue to invest perhaps even more aggressively. There is not and has never been a better place to receive consistent investment returns than in the equities market. It is one thing if you did not have the proper risk allocation going in to retirement but it is quite another scenario if you are divesting because you do have the correct risk allocation but are just concerned about loses.

Talk is so cheap my friend, until you have to put actual cash on the line and lose it like everyone else. I pulled out all my money because I am pessimistic and so I made money instead of losing money like everyone else. Remember, for every 50% loss you then need to gain back 100% just to break even so that makes it doubly difficult, since everyone seemed to have lost half their money. The financial industry has been and is basically deceiving the public by selling them a false story line of how stocks are the best long term investments; because doing otherwise would drastically reduce their fat commission. Analysis shows that bonds beat stocks by factor of 11 from 1981 to 2009 or you could have done better than the market by holding onto cash.

http://www.marketwatch.com/news/sto...CCA853F57C8B}&print=true&dist=printMidSection

http://www.bloomberg.com/apps/news?pid=20601213&sid=aSg6DWkihxUw&refer=home

Banks that were losing billions and billions two months ago are now suddenly making billions...AFTER Obama tells them they can change their accounting method AND they cannot mention the word "toxic asset." Suddenly all the foreclosure losses have disappeared or is no longer accounted for! Do you see a concerted effort to deceive us on how bad things are so we can jump into this ponzi scheme call the stock market? The media reported as positive news that unemployment claims dropped from 650k two weeks ago to 610k last week without mentioning that last week was a shortened workweek. Furthermore, there's a trillion dollars in consumer credit debt that isn't going away without additional accounting trickery as 610K newly unemployed join the 650K from the previous week to stop paying that unsecured loan. Do you see a concerted effort to deceive us to cough up more money into this mirage call the stock market? I personally know A LOT of of friends/family/patients who have been laid off or lost their home for daytrading or lost half their retirement to the stock market. I have yet to come across someone, in the past eight years in practice, who lives in a mansion on top of the hill because they profitted handsomely on shrewd investments in the stock market. If you have a suggestion to truly make money other than the daily CNBC and Obama optimistic balogney to boost up the stock market, I'll be happy to send you a thousand bucks.