re: What do I do with my money next?

It's weird, there isn't hardly any trolling on MT.

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Together we have $200,000 in student loan debt but our interest rate in 1.75%.


Geez. Get this paid off asap.

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Couldn't disagree more.

You shouldn't rush to pay off a loan that charges less than the rate of inflation. That's wasting money.

ETA: Think of it this way - instead of paying off the loan early, set it aside to help build a practice. You won't get an SBA loan for 1.75%.

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Make a budget - pay yourself first, and follow the baby steps like the other poster said.

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Except #4 should be #2

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Except #4 should be #2

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No you're right, they can actually be done at the same time. Always contribute to a 401k as soon as possible. When I was still in college I worked for a company as an intern that offered me a 401K. I did not have any extra money to spend, but I could not turn down free money. I sold my truck and took the equity out of it and bought a less expensive vehicle and contributed 3k a year to my 401k which was matched dollar for dollar!

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Together we have $200,000 in student loan debt but our interest rate in 1.75%.



Geez. Get this paid off asap.

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I hope this is sarcasm. his rate is lower than inflation. that is insane

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Yea, I've never understood why you'd ever turn down free money.

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He says to never turn down the free matching - Step 4 is 15% of your income towards retirement - he doesn't want you to amp that up until you have retired all of your consumer debt/auto loans, etc., paid off and then you go from (typically 5% is matched) whatever your match is, up to 15%.

ETA: This is a slight conflict - the TMM material says to stop the contributions, BUT I've heard him on the radio say you can do the match (but no more) at Step 2.

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We both have permanent life insurance

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Not to sound like a douche, but most people who don't have "extra" money will not understand buying whole life policies. I don't know the details on your policies, but generally, whole life insurance can be a good PART of the investment/savings strategy when you have actual money and not just a pile of Dave Ramsey books.

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Together we have $200,000 in student loan debt but our interest rate in 1.75%.

With the owning a house talk, do you mean paying the house off quickly? We are probably going to get a new house (selling the old) for a growing family.

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My thought is with a growing family and looking to move into a bigger house, paying off the old house and then saving up cash to buy a new house would be more of a priority than paying off the student loan debt at 1.75%. As low as housing loan rates are right now, they will be going up (eventually) so it'd make more sense to have cash in hand (either from the sale of your old house/good equity in your old house) or cold hard cash to put down on the new casa. Getting loans post crash/bailouts has been tougher and nothing makes it easier than having lots of cash and making the new housing loan as risk-free as possible.

That being said, you'd probably be better served to have a loan on the house than any other business loan. You should think about what debt you will potentially have in the future, how soon you may have that debt, and what interest rate that debt would be carried at. If you will be wanting to start a practice soon or another business, you'd be better served to use your cash for that and having a housing loan outstanding at lower interest rate than paying off the house and getting a 7% + business loan.

You have to think over the next 3-5 and 5-10 years what type of debt yuo'd potentially take on. After establishing an emergency fund/rainy day fund, if you have a ton of cash in CDs getting 0.5% interest and don't plan on using the cash for anything else (buying a house/starting a business), it is a better return to use the cash to pay off the student loans. If you'll need cash to start a practice (and loans would start at 7% or a house in the next year or two at 4-5%, the cash would be better served to not borrow at those rates/borrow less at those rates.

There are also financial calculators out there where you can input the term of the loan, interest rate, loan balance etc. so you can see how much you'd pay in interest over the term of the loan. You can play around with it and see how much money you'd save paying current loans down early and how much cash savings that'd save up for future projects. Those calculators will show yuo how much yuo will pay in total interest and total cash paid related to the loan.

I thought my 3.5% student loan was at a good rate. Sounds like yall are in a good spot to be successful financially for the long haul.

ETA: If you eventually go into practice and you and other doctors will all be signing on the loan or the loan will first be secured by the practice's assets, it'd be better to have the loan secured by the practice's assets primarily so you have less personal loss risk, even if it is at a higher rate. If you're looking at doing a solo practice or practice of just you and the wife, it makes more sense to go after the lower rate interest and avoid loans with higher interest rates.