Student loan payments: Actual numbers

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mirage1287
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Re: Student loan payments: Actual numbers

Postby mirage1287 » Fri Dec 19, 2014 2:38 pm

zweitbester wrote:I love it when people call me Internet tough guy. I love meeting people. Let's meet IRL and I'll still speak my mind. I think people on TLS know me well enough IRL to know that I'm not shy in expressing my opinion.

For better or worse ;)



You can still speak your mind without being condescending or sarcastic when someone is genuinely seeking advice...

Anonymous User
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Re: Student loan payments: Actual numbers

Postby Anonymous User » Fri Dec 19, 2014 2:58 pm

I'll take the free snarky advice:

Salary: $135,000 - not eligible for a bonus this stub year.
One dependent - (hopefully) soon to be employed spouse
Law loans = $55k at 6.25% interest and a $299/month graduated payment (had a full scholarship, but took out modest COL/mortgage coverage loans)
Prior grad loans = $40k at 1.62% interest and a $242/month payment
Mom and Dad loans = $14k at 1% interest and a $500/month payment
Mortgage = 30y fixed, 4.25% interest, $2k/month + utilities, grotesquely underwater

Doesn't leave much to squirrel away, though we are preapproved to buy a smaller house with a lower interest rate, more likely to accrue in value, and not contingent on selling our current house (i.e., rent out the money pit if it doesn't sell promptly and still break even).

Obviously I won't pay the 1.62% or ma/pa loans any faster than necessary. But, I welcome any other suggestions and post these numbers to illustrate how much interest rates have changed in 10 years.

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Old Gregg
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Re: Student loan payments: Actual numbers

Postby Old Gregg » Fri Dec 19, 2014 4:07 pm

mirage1287 wrote:
zweitbester wrote:I love it when people call me Internet tough guy. I love meeting people. Let's meet IRL and I'll still speak my mind. I think people on TLS know me well enough IRL to know that I'm not shy in expressing my opinion.

For better or worse ;)



You can still speak your mind without being condescending or sarcastic when someone is genuinely seeking advice...


Was being neither. Relax and unwad your internet panties.

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prezidentv8
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Re: Student loan payments: Actual numbers

Postby prezidentv8 » Fri Dec 19, 2014 4:36 pm

Anonymous User wrote:grotesquely underwater


Any way to negotiate a principal reduction or something?

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XxSpyKEx
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Re: Student loan payments: Actual numbers

Postby XxSpyKEx » Fri Dec 19, 2014 5:58 pm

Anonymous User wrote:At this point I have a similar debt load and if I receive a bonus I'm sinking the whole thing into my loans. Sure, you could get a better return than 4.3% but how much better?


Depends. Stocks have netted some SERIOUS gains the past couple years (like 6-8 times your 4.3% interest rate in 2013, depending on where you invested). But it's probably safe to say that you missed that boat; I highly doubt 2015 will post double digit returns. I'd be surprised if you didn't do better than 4.3% , though (unless you're retarded and invest in bonds or something stupid like that).

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IrwinM.Fletcher
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Re: Student loan payments: Actual numbers

Postby IrwinM.Fletcher » Fri Dec 19, 2014 6:17 pm

XxSpyKEx wrote:
Anonymous User wrote:At this point I have a similar debt load and if I receive a bonus I'm sinking the whole thing into my loans. Sure, you could get a better return than 4.3% but how much better?


Depends. Stocks have netted some SERIOUS gains the past couple years (like 6-8 times your 4.3% interest rate in 2013, depending on where you invested). But it's probably safe to say that you missed that boat; I highly doubt 2015 will post double digit returns. I'd be surprised if you didn't do better than 4.3% , though (unless you're retarded and invest in bonds or something stupid like that)


Down years happen in secular bull markets though, and we're def entering the dumb-money-is-chasing phase of this one. The yardstick is also more like 6% pre-tax.

I don't think there's a wrong answer to paying down low-interest debt or investing but I also think telling inexperienced investors they can expect superior returns might not be great advice.

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XxSpyKEx
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Re: Student loan payments: Actual numbers

Postby XxSpyKEx » Fri Dec 19, 2014 7:21 pm

IrwinM.Fletcher wrote:
XxSpyKEx wrote:
Anonymous User wrote:At this point I have a similar debt load and if I receive a bonus I'm sinking the whole thing into my loans. Sure, you could get a better return than 4.3% but how much better?


Depends. Stocks have netted some SERIOUS gains the past couple years (like 6-8 times your 4.3% interest rate in 2013, depending on where you invested). But it's probably safe to say that you missed that boat; I highly doubt 2015 will post double digit returns. I'd be surprised if you didn't do better than 4.3% , though (unless you're retarded and invest in bonds or something stupid like that)


Down years happen in secular bull markets though, and we're def entering the dumb-money-is-chasing phase of this one. The yardstick is also more like 6% pre-tax.

I don't think there's a wrong answer to paying down low-interest debt or investing but I also think telling inexperienced investors they can expect superior returns might not be great advice.


In what world is exceeding 4.3% "superior returns"? Average inflation across the past 30 years has been at 3%, so 4.3% is 1.3% above the average inflation rate (which isn't say that we're actually going to see 3% inflation next year). If an inflation adjusted return of 1.3% is a "superior return" in your portfolio, you should really consider rebalancing that portfolio.

EDIT- my previous post was intended to suggest that the anon poster should invest the money, but just giving him an idea of "how much better" than 4.3% he could see in a really good year (like 2013). It's obviously all a pretty personal decision depending on adverseness to risk, long-term career goals, etc.
Last edited by XxSpyKEx on Fri Dec 19, 2014 7:26 pm, edited 2 times in total.

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ExBiglawAssociate
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Re: Student loan payments: Actual numbers

Postby ExBiglawAssociate » Fri Dec 19, 2014 7:23 pm

I will finally have positive net worth after bonuses this year.

Image

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fats provolone
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Re: Student loan payments: Actual numbers

Postby fats provolone » Fri Dec 19, 2014 7:25 pm

lol there is zero chance i crack $0 net worth in my lifetime. never gonna happen

anonnymouse
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Re: Student loan payments: Actual numbers

Postby anonnymouse » Fri Dec 19, 2014 7:55 pm

ITT: advice-givers who persistently disregard risk-adjusted and tax-adjusted returns.

Paying down loan @ 4.3% is equivalent to buying 10-year Treasuries at 6.5%. Current 10-year yield: 2.16%. Think about that. It's the same as the U.S. Treasury holding a special auction just for you where they give you 6.5% yield on assets that the market is pricing at 2.16%.

GOATlawman
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Re: Student loan payments: Actual numbers

Postby GOATlawman » Fri Dec 19, 2014 10:56 pm

I love people that started earning and investing for the first time since 2009 and made 15% in an index fund and think IM SUCH A BALLER INVESTOR I WILL BE ABLE TO DO THIS FOREVER

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Old Gregg
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Re: Student loan payments: Actual numbers

Postby Old Gregg » Sat Dec 20, 2014 1:27 am

GOATlawman wrote:I love people that started earning and investing for the first time since 2009 and made 15% in an index fund and think IM SUCH A BALLER INVESTOR I WILL BE ABLE TO DO THIS FOREVER

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JohannDeMann
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Re: Student loan payments: Actual numbers

Postby JohannDeMann » Sat Dec 20, 2014 2:13 am

corps have been running record profits for years now. there is really no reason to think it wont continue for 2015 and even more realistically 2015-2020. just because you lived through the worst financial crisis since the great depression and are being a scared little biatch doesnt mean market work that way. 1990-2001 was a repeatedly insane return every year. markets run. just how they go. the point isnt that the stocks will definitely beat the student loan payment the point is to diversify between stock investments and student loan payments in case stocks go off the chain. no one can predict what will happen so you hedge your bet. make some minimum payments on loans and invest in the market with confidence with the rest. fyi - over the past 50 years the easiest stock investment ever the SP500 has returned on average over 10% a year. You are definitely outed for having no balls though.

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JohannDeMann
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Re: Student loan payments: Actual numbers

Postby JohannDeMann » Sat Dec 20, 2014 2:16 am

anonnymouse wrote:ITT: advice-givers who persistently disregard risk-adjusted and tax-adjusted returns.

Paying down loan @ 4.3% is equivalent to buying 10-year Treasuries at 6.5%. Current 10-year yield: 2.16%. Think about that. It's the same as the U.S. Treasury holding a special auction just for you where they give you 6.5% yield on assets that the market is pricing at 2.16%.


this is also dumb because you only have topay tax when you take the money out not every year. you can defer that tax in the future for years. time value money. stop being scared risk averse bitches and put your money in the market. you are only hurting yourselves. you could also theoretically hit 0% tax rate on those investments if you dont sell until you retire under the current tax method.

anonnymouse
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Re: Student loan payments: Actual numbers

Postby anonnymouse » Sat Dec 20, 2014 2:39 am

JohannDeMann wrote:corps have been running record profits for years now. there is really no reason to think it wont continue for 2015 and even more realistically 2015-2020. just because you lived through the worst financial crisis since the great depression and are being a scared little biatch doesnt mean market work that way. 1990-2001 was a repeatedly insane return every year. markets run. just how they go. the point isnt that the stocks will definitely beat the student loan payment the point is to diversify between stock investments and student loan payments in case stocks go off the chain. no one can predict what will happen so you hedge your bet. make some minimum payments on loans and invest in the market with confidence with the rest. fyi - over the past 50 years the easiest stock investment ever the SP500 has returned on average over 10% a year. You are definitely outed for having no balls though.


(gambling addict who will have 100% equity asset allocation at 65, chasing returns while subsisting on cat food and the $7.99 early bird special buffet at the Taj)

JohannDeMann wrote:Didn't realize there were so many degens here with me. This makes me feel better. For now probably the 3rd time in 3 years I have grinded between a 750 and 1250 deposit into over 5k over the course of a couple months. I cash out like 500 of profit and lose it all in two weeks tops. Last weekend was the end of my run. 1250 to over 7500. Lost 4300 last weekend in like 12 hours.
I stopped playing poker in college when I went on less ridic swings but what was a lot of money to me back then. Built up a 25 buy in to over 1200 my summer of sophomore year. Blew it all in one night and would repeat. Prolly lost like 2k total on poker in college before realizing I tilted and couldn't handle the up and downs. I turned to sports betting because the fewer games limited my action and I wouldn't stay up all night trying to recoup my losses because no sports between sleeping hours.
The most disciplined sports betting I've ever been was the summer I graduated law school and was making like 1k a month part time no job lined up living in Chicago where my rent alone was like 800. Grinded steady 500-700 profits for 6 months or so until I got a full time job.my gf and I keep like a monthly spreadsheet tracking our finances. My gambling account is one of the columns and last week I was def too ashamed to be bringing up its time to do our finances shit cause she would see I lost at least 5k

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JohannDeMann
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Re: Student loan payments: Actual numbers

Postby JohannDeMann » Sat Dec 20, 2014 2:56 am

and if you were a gambling addict you would know following the stock market is like watching paint dry. especially the SP500. it moves like a percent a day tops. diversifying is a tried and true strategy everyone has been preaching. what are you going to do when elizabeth warren wins the presidency and forgives student debt?
im going to love laughing at your pathetic ass when you reach 0 net worth with no assets and student loan forgiveness hits. also, you do realize right now with government loans there is almost 0 penalty to being multiple hundreds of thousands in debt. if you asked anyone who knew shit about finance they would gladly take being in debt at 300k with 300k in cash in todays market at 4.3% interest opposed to 0'd out in both. you must have majored in history or poli sci.

hdunlop
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Re: Student loan payments: Actual numbers

Postby hdunlop » Sat Dec 20, 2014 3:48 am

lol elizabeth warren, excellent troll

GOATlawman
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Re: Student loan payments: Actual numbers

Postby GOATlawman » Sat Dec 20, 2014 11:03 am

JohannDeMann wrote:what are you going to do when elizabeth warren wins the presidency and forgives student debt?
.


something like this is basically my #1 fear. I paid a significant amount of my law school tuition out of pocket and I'm kicking myself for not taking full loans and hopping on the PAYE gravy train

if the shitlibs manage to push some fucking student loan bailout through, i may kill myself

and given the current social trends......

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Old Gregg
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Re: Student loan payments: Actual numbers

Postby Old Gregg » Sat Dec 20, 2014 11:30 am

JohannDeMann wrote:corps have been running record profits for years now. there is really no reason to think it wont continue for 2015 and even more realistically 2015-2020. just because you lived through the worst financial crisis since the great depression and are being a scared little biatch doesnt mean market work that way. 1990-2001 was a repeatedly insane return every year. markets run. just how they go. the point isnt that the stocks will definitely beat the student loan payment the point is to diversify between stock investments and student loan payments in case stocks go off the chain. no one can predict what will happen so you hedge your bet. make some minimum payments on loans and invest in the market with confidence with the rest. fyi - over the past 50 years the easiest stock investment ever the SP500 has returned on average over 10% a year. You are definitely outed for having no balls though.


This post is sufficient proof that you're absolutely one of the most retarded people on TLS.

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JohannDeMann
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Re: Student loan payments: Actual numbers

Postby JohannDeMann » Sat Dec 20, 2014 12:17 pm

I'm fairly certain you follow the same general strategy as me and keep some debt so that you can have cash/stocks. If you think the market is going to tank you still shouldn't be throwing all yore money at loans you should be saving cash for the possibility of losing your job or buying stocks at a discount. Whatever way you slice it, you should not be throwing all of your money at loans even if those loans are up to 7.5%. Let alone 4.3%. If you are throwing all your money at student loans, you're doing it wrong. The market isn't guaranteed to do anything yes that's been established but over the long haul the odds are the market will outperform paying down loans at 4.3%. Then just diversify so you aren't fucked if the market crashes or if student loan forgiveness of incentives come into play etc .

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IrwinM.Fletcher
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Re: Student loan payments: Actual numbers

Postby IrwinM.Fletcher » Sat Dec 20, 2014 2:27 pm

Your straw man where the only two options are paying minimums or paying every penny toward loans is dumb to real dumb.

hdunlop
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Re: Student loan payments: Actual numbers

Postby hdunlop » Sat Dec 20, 2014 2:28 pm

GOATlawman wrote:
JohannDeMann wrote:what are you going to do when elizabeth warren wins the presidency and forgives student debt?
.


something like this is basically my #1 fear. I paid a significant amount of my law school tuition out of pocket and I'm kicking myself for not taking full loans and hopping on the PAYE gravy train

if the shitlibs manage to push some fucking student loan bailout through, i may kill myself

and given the current social trends......


why wait?

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JenDarby
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Re: Student loan payments: Actual numbers

Postby JenDarby » Sat Dec 20, 2014 8:04 pm

I just paid 15k down on my debt and it was so anticlimactic. Debts still suffocating and cash on hand is diminished. Womp womp.

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fats provolone
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Re: Student loan payments: Actual numbers

Postby fats provolone » Sat Dec 20, 2014 8:38 pm

yea that sounds like the least satisfying thing ever. im paying bare minimum and hoping to die before the tax bomb. it feels pretty good actually.

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Dr. Review
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Re: Student loan payments: Actual numbers

Postby Dr. Review » Sat Dec 20, 2014 11:42 pm

JenDarby wrote:I just paid 15k down on my debt and it was so anticlimactic. Debts still suffocating and cash on hand is diminished. Womp womp.

Did you consolidate/refi or do you still use the fedloan servicer? I'd feel better if I could just eliminate one of my higher interest loans.




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