Editor: Crass Cash
Here's another episode of what I like to call, "Where did they make the mistake?".
This episode comes from CNN Money about an engineer who thinks it's better to pay the minimums on his student loans and invest the rest.
http://money.cnn.com/2014/12/11/investing/dont-pay-off-your-student-loans/index.html?iid=Lead
Read the article and let me know where he's making the mistakes.
1. Thinking the stock market will return 11% just because it has in the past. Logic Alert! You've never died so I guess that means you'll live forever? The market is very overpriced at this point and to think that it's going to return 11% going forward is fucking retarded.
2. Your mom declared bankruptcy because of your student debt. Hello! Time to start paying her back fucker!
3. Student loan interest is tax deductible, but it would have been completely phased out for the amount of money that he's probably making now. If his AGI is over $75,000 he receives absolutely no tax benefit from it.
4. All of his calculations are going to flip flop when the stock market drops 50%.
Student loan debt is awful. It can't be bankrupted and it's nearly impossible to get rid of except to pay it off. The only time I advocate you saving money over paying it off is to build an emergency fund (3-9 months worth of expenses) and to just match the company retirement plan (3-6% of your income). Other than that, get that shit paid off ASAP!
This episode comes from CNN Money about an engineer who thinks it's better to pay the minimums on his student loans and invest the rest.
http://money.cnn.com/2014/12/11/investing/dont-pay-off-your-student-loans/index.html?iid=Lead
Read the article and let me know where he's making the mistakes.
1. Thinking the stock market will return 11% just because it has in the past. Logic Alert! You've never died so I guess that means you'll live forever? The market is very overpriced at this point and to think that it's going to return 11% going forward is fucking retarded.
2. Your mom declared bankruptcy because of your student debt. Hello! Time to start paying her back fucker!
3. Student loan interest is tax deductible, but it would have been completely phased out for the amount of money that he's probably making now. If his AGI is over $75,000 he receives absolutely no tax benefit from it.
4. All of his calculations are going to flip flop when the stock market drops 50%.
Student loan debt is awful. It can't be bankrupted and it's nearly impossible to get rid of except to pay it off. The only time I advocate you saving money over paying it off is to build an emergency fund (3-9 months worth of expenses) and to just match the company retirement plan (3-6% of your income). Other than that, get that shit paid off ASAP!
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